HB4877 - Relating to the Texas Property and Casualty Insurance Guaranty Association.

      By: Paul H.B. No. 4877       A BILL TO BE ENTITLED   AN ACT   relating to the Texas Property and Casualty Insurance Guaranty   Association.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 462.004(4), Insurance Code, is amended   to read as follows:                (4)  "Claimant" means an insured making a first-party   claim , [ or ] a person instituting a liability claim , or a workers'   compensation claimant .          SECTION 2.  Section 462.007(b), Insurance Code, is amended   to read as follows:          (b)  Except as provided by Subchapter F, this chapter does   not apply to:                (1)  life, annuity, health, or disability insurance;                (2)  mortgage guaranty, financial guaranty, or other   kinds of insurance offering protection against investment risks;                (3)  a fidelity or surety bond, or any other bonding   obligation;                (4)  credit insurance, guaranteed asset protection   insurance that protects a lender's or borrower's interest if the   amount owed on an asset exceeds its value, vendors' single-interest   insurance, collateral protection insurance, or similar insurance   protecting a creditor's interest arising out of a creditor-debtor   transaction;                (5)  insurance of warranties or service contracts;                (6)  title insurance;                (7)  ocean marine insurance;                (8)  a transaction or combination of transactions   between a person, including an affiliate of the person, and an   insurer, including an affiliate of the insurer, that involves the   transfer of investment or credit risk unaccompanied by the transfer   of insurance risk, including transactions, except for workers'   compensation insurance, involving captive insurers, policies in   which deductible or self-insured retention is substantially equal   in amount to the limit of the liability under the policy, and   transactions in which the insured retains a substantial portion of   the risk; or                (9)  insurance provided by or guaranteed by government.          SECTION 3.  Section 462.017(b), Insurance Code, is amended   to read as follows:          (b)  Venue in a suit by or against the commissioner or   association [ relating to an action or ruling of the commissioner or   association ] under this chapter is in Travis County.  The   commissioner or association is not required to give an appeal bond   in an appeal of a cause of action arising under this chapter.          SECTION 4.  Section 462.054, Insurance Code, is amended to   read as follows:          Sec. 462.054.  ELIGIBILITY TO SERVE AS INDUSTRY   REPRESENTATIVE. To be eligible to serve as an insurance industry   board member, an individual must be an officer or a full-time   employee of a member insurer or affiliated entity .          SECTION 5.  Section 462.105, Insurance Code, is amended to   read as follows:          Sec. 462.105.  ACCOUNTS. For purposes of administration and   assessment, the association maintains the following four accounts   [ is divided into ]:                (1)   the administrative account;                 (2)   the workers' compensation insurance account;                 (3)  [ (2) ]  the automobile insurance account; and                 (4)  [ (3) ]  the account for all other lines of insurance   to which this chapter applies.          SECTION 6.  Section 462.156(a), Insurance Code, is amended   to read as follows:          (a)  The amounts provided under assessments made under this   chapter supplement the marshalling of assets by the receiver under   Chapter 443 [ 442 ] to make payments on the impaired insurer's   behalf.          SECTION 7.  Sections 462.308(a), (b), and (c), Insurance   Code, are amended to read as follows:          (a)  The association is entitled to recover:                (1)  the amount of a covered claim and the cost of   defense paid on behalf of a person:                      (A)  who is an affiliate of the impaired insurer;   and                      (B)  whose liability obligations to other persons   are satisfied wholly or partly by payment made under this chapter;   [ and ]                (2)  the amount of a covered claim for workers'   compensation insurance benefits and the costs of administration and   defense of the claim paid under this chapter from an insured   employer or any successor entity to the insured employer under   state, federal, or international law whose net worth on December 31   of the year preceding the date the insurer becomes an impaired   insurer exceeds $50 million ; and                 (3)     the amount paid under any policy, including the   costs of administration and defense of the claim, from an insured or   any successor entity excluded by Section 462.212(a) before the   insured's identification as an insured whose net worth on December   31 of the year preceding the date the insurer became an impaired   insurer exceeds $50 million .          (b)  The association is not entitled to recover under   Subsection (a)(2) or (3) against an insured who is exempt from   federal income tax under Section 501(a), Internal Revenue Code of   1986, by being described by Section 501(c)(3) of that code.          (c)  For purposes of Subsections [ Subsection ] (a)(2) and   (3) , an insured's net worth is deemed to include the aggregate net   worth of the insured and of the insured's parent, subsidiary, and   affiliated companies computed on a consolidated basis.          SECTION 8.  Section 462.309(a), Insurance Code, is amended   to read as follows:          (a)  To permit the association to properly defend a pending   cause of action, a proceeding in which an impaired insurer is a   party or is obligated to defend a party or a proceeding asserted   directly against the association arising out of a policy issued by   the impaired insurer in a court in this state, other than a   proceeding directly related to the receivership or instituted by   the receiver, is stayed for:                (1)  a six-month period beginning on the later of the   date of the designation of impairment or the date an ancillary   proceeding is brought in this state; and                (2)  a subsequent period as determined by the court, if   any.          SECTION 9.  Except as provided by this section, the changes   in law made by this Act apply only with respect to a property and   casualty insurance company that is designated as an impaired   insurer on or after the effective date of this Act.  The law as it   existed immediately before the effective date of this Act applies   with respect to a property and casualty insurance company that is   designated as an impaired insurer before the effective date of this   Act, and that law is continued in effect for that purpose.          SECTION 10.  This Act takes effect September 1, 2025.