HBA-CMT S.B. 605 77(R)    BILL ANALYSIS


Office of House Bill AnalysisS.B. 605
By: Sibley
Insurance
4/22/2001
Engrossed



BACKGROUND AND PURPOSE 

Currently, the federal Gramm-Leach-Bliley Act (GLBA) provides for states to
review acquisitions, mergers, and retention of control between banks,
securities firms, insurance companies, and other financial companies during
the 60 days prior to the effective date or change of control.  The Texas
Insurance Code in some cases provides the Texas Department of Insurance
(TDI) a longer period of time to review acquisitions, mergers, and
retention of control.  This could be interpreted as preventing or
restricting acquisitions, mergers, and a retention of control, which is
prohibited under provisions of the GLBA.  Senate Bill 605 modifies the
review time for acquisition or retention of control of or merger with
domestic insurer statement (statement) filings to 60 days to conform with
the GLBA, and requires TDI to review and take action on all statement
filings within 60 days.  

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

Senate Bill 605 amends the Insurance Code to require the statement of
acquisition or retention of control of or merger of a domestic insurer
(statement) to be filed with the commissioner of insurance (commissioner)
no later than the 60th day before the proposed effective date of the
acquisition or change of control.  The bill requires the commissioner to
approve or deny any acquisition or change of control no later than the 60th
day after the date the statement is filed.  The bill authorizes the 60-day
period to be waived by the party filing the statement and the domestic
insurer.  The bill sets forth requirements for the commissioner to consider
in considering whether to approve or deny a acquisition or retention of
control of or merger with a domestic insurer. The bill requires the
commissioner to hold a public hearing on a denial at the request of either
the party filing the statement or the domestic insurer.  The bill requires
a public hearing to be held no later than the 60th day, rather than 45 days
after the date of denial rather than the date the statement is filed.  The
bill removes the authorization that the matter may be placed on the
commissioner's contested case docket to hear any pre-hearing matters and
motions at any time after the submission or resubmission of a statement to
the commissioner.      

EFFECTIVE DATE

On passage, or if the Act does not receive the necessary vote, the Act
takes effect September 1, 2001.