HB3320 - Relating to a property and casualty self-insurance pool for certain religious institutions; authorizing fees; providing administrative penalties.

      By: Oliverson, et al. (Senate Sponsor - Parker) H.B. No. 3320          (In the Senate - Received from the House May 19, 2025;   May 19, 2025, read first time and referred to Committee on Business &   Commerce; May 26, 2025, reported favorably by the following vote:     Yeas 10, Nays 1; May 26, 2025, sent to printer.) Click here to see the committee vote     A BILL TO BE ENTITLED   AN ACT     relating to a property and casualty self-insurance pool for certain   religious institutions; authorizing fees; providing administrative   penalties.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Subtitle G, Title 10, Insurance Code, is amended   by adding Chapter 2214 to read as follows:   CHAPTER 2214. RELIGIOUS INSTITUTIONS SELF-INSURANCE POOL   SUBCHAPTER A. GENERAL PROVISIONS           Sec. 2214.001.  DEFINITIONS. In this chapter:                 (1)  "Board" means the board of trustees of the pool.                 (2)     "Church" means a nonprofit religious organization   consisting of a group of religious believers.                 (3)     "Fund" means a trust fund established under   Section 2214.052.                 (4)     "Member" means a church, nonprofit religious   organization, or religious denomination entitled to pool coverage   and obligated for pool liabilities under a pool coverage agreement.                 (5)     "Nonprofit religious organization" means an   active corporation or other entity organized under Section   501(c)(3), Internal Revenue Code of 1986, as a nonprofit   organization defined as any one of the following:                       (A)  a church or religious house of worship;                       (B)     an organization formed for religious   purposes;                       (C)     a nonprofit institution affiliated with a   faith-based organization; or                       (D)     an integrated auxiliary organization of a   church.                 (6)     "Organizing party" means a church, nonprofit   religious organization, or religious denomination that has entered   into a pool creation agreement.                 (7)     "Person" means an individual, corporation, trust,   partnership, association, or any other legal entity.                 (8)     "Pool" means the Religious Institutions   Self-Insurance Pool authorized under this chapter.                 (9)     "Pool coverage" means the self-insured coverage   provided by the pool in accordance with this chapter.                 (10)     "Pool coverage agreement" means an indemnity   agreement under which a church, nonprofit religious organization,   or religious denomination is entitled to pool coverage in exchange   for the payment of premiums to the pool and is obligated for pool   liabilities.                 (11)     "Pool creation agreement" means an agreement   entered into under Section 2214.051.                 (12)     "Religious denomination" means a group of   individual churches or houses of worship that are identified using   the same terms and have a particular set of beliefs or spiritual or   religious values.           Sec.   2214.002.     POOL NOT INSURANCE; APPLICABILITY OF   INSURANCE LAWS. The pool is not an insurer and pool coverage is not   insurance for purposes of this code. Except as provided by this   chapter, the pool is not subject to a provision of this code other   than this chapter.           Sec.   2214.003.     PARTNERSHIP NOT CREATED. Notwithstanding   any other law, the pool is not a partnership under the laws of this   state.           Sec.   2214.004.     POOL NOT COVERED BY GUARANTY ASSOCIATION.   The pool is not a member insurer of the Texas Property and Casualty   Insurance Guaranty Association.           Sec.   2214.005.     RULES. The commissioner may adopt rules   necessary to implement this chapter.   SUBCHAPTER B. CREATION OF POOL           Sec.   2214.051.     POOL CREATION AGREEMENT. (a) The pool may   be created by two or more churches or nonprofit religious   organizations or one or more religious denominations that enter   into an agreement described by Subsection (b).           (b)     An agreement under Subsection (a) must be in the form of   an indemnity agreement signed by each organizing party   acknowledging and agreeing to the assumption of the obligations of   the pool under this chapter.           (c)     Each organizing party that enters into the agreement   must have a positive net worth, be financially solvent, and be   capable of assuming the obligations of the pool.           Sec.   2214.052.     TRUST FUND. The organizing parties shall   establish a trust fund to serve as the group self-insurance account   for the members.             Sec.   2214.053.     SELECTION OF TEMPORARY BOARD. At the time   the organizing parties enter into the pool creation agreement, the   organizing parties shall select nine individuals to:                 (1)  serve as the temporary board; and                 (2)  draft a plan of operation for the pool.           Sec.   2214.054.     POWERS OF TEMPORARY BOARD. The temporary   board may:                 (1)     solicit applications from prospective members to   participate in the pool on the date the pool begins providing pool   coverage;                 (2)     accept payment of premiums for the prospective   pool coverage; and                 (3)     take any other action necessary to complete and   submit an application for a certificate of authority under   Subchapter C.           Sec.   2214.055.     DOMICILE. The pool must be domiciled in this   state.   SUBCHAPTER C. CERTIFICATE OF AUTHORITY           Sec.   2214.101.     CERTIFICATE OF AUTHORITY. (a) The pool may   not provide pool coverage before the department issues a   certificate of authority to the pool.             (b)     A certificate of authority issued under this subchapter   is continuous until:                 (1)  revoked or suspended by the commissioner; or                   (2)     the board voluntarily surrenders the certificate   in connection with the pool's dissolution under Section 2214.451.           (c)     The temporary board appointed by the organizing parties   under Section 2214.053 shall submit to the department a written   application, in the form and manner prescribed by the commissioner,   for a certificate of authority.           Sec.   2214.102.     APPLICATION CONTENTS. (a) An application   for a certificate of authority under this chapter must include:                 (1)  the pool creation agreement;                 (2)  the plan of operation; and                   (3)     evidence of the financial strength and liquidity   of the organizing parties to pay claims promptly and support the   pool's financial ability to satisfy the pool's obligations.             (b)     The evidence described by Subsection (a)(3) must be in   the form of:                 (1)  either:                       (A)     financial statements, dated not later than   one year before the date the temporary board submits the   application and audited by an independent certified public   accountant, showing a combined net worth of the organizing parties   of at least $1 million; or                       (B)     financial documents, in the form and manner   prescribed by the commissioner, sufficient to verify the combined   net worth of the organizing parties is at least $1 million;                 (2)     current financial documents of each prospective   member that has applied to participate in the pool dated not later   than one year before the date the board submits the application;                   (3)  schedules of all prospective members showing:                       (A)     the ratio of current assets to current   liabilities of all prospective members combined to be greater than   one-to-one;                       (B)     the working capital of all prospective   members combined to be an amount establishing the financial   strength and liquidity of the pool to pay claims promptly; and                       (C)     the net worth of all prospective members   combined to be at least $1 million; and                 (4)     other financial information and documents as   required by the commissioner.           (c)     The following items must be included with the   application:                 (1)  security as required by Section 2214.351(d);                 (2)     copies of excess insurance or reinsurance that   meets the requirements of Section 2214.355 and the commissioner;                 (3)     a bond covering each third-party administrator as   required by Section 2214.152;                 (4)     a certification from a designated depository   attesting to the amount of money on hand in the trust fund   established under Section 2214.052;                 (5)     copies of pool bylaws and any trust agreement or   other governance documents;                 (6)     an individual application, in the form and manner   prescribed by the commissioner, of each prospective member applying   to participate in the pool that includes a copy of the prospective   member's executed indemnity agreement;                 (7)     evidence of financial strength and liquidity of   the prospective members on the date the application is submitted to   satisfy the financial strength and liquidity requirements of this   chapter;                 (8)     proof that the pool will have the minimum annual   earned premium required by Section 2214.351 when the pool begins   operation;    &# [Text truncated for display. 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