H.B. No. 2636

	AN ACT
	relating to the nonsubstantive revision of statutes relating to the
	Texas Department of Insurance, the business of insurance, and
	certain related businesses, to nonsubstantive additions to and
	corrections in the codified Insurance Code, and to conforming the
	provisions of that code that were codified by the 79th Legislature
	to other Acts of that legislature, including conforming amendments,
	repeals, and penalties.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	ARTICLE 1.  REVISION OF THE INSURANCE CODE OF 1951
	PART A.  ADDITIONS AND CONFORMING AMENDMENTS TO TITLE 2,
	INSURANCE CODE
	SECTION 1A.001.  CONFORMING AMENDMENT.  Chapter 30,
	Insurance Code, is amended to read as follows:
	CHAPTER 30.  GENERAL PROVISIONS
	Sec. 30.001.  PURPOSE OF TITLES 2, 3, 4, 5, 6, 7, 8, 9, 10,
	11, 12, 13, [AND] 14, AND 20.  (a)  This title and Titles 3, 4, 5, 6,
	7, 8, 9, 10, 11, 12, 13, [and] 14, and 20 are enacted as a part of the
	state's continuing statutory revision program, begun by the Texas
	Legislative Council in 1963 as directed by the legislature in the
	law codified as Section 323.007, Government Code.  The program
	contemplates a topic-by-topic revision of the state's general and
	permanent statute law without substantive change.
	(b)  Consistent with the objectives of the statutory
	revision program, the purpose of this title and Titles 3, 4, 5, 6,
	7, 8, 9, 10, 11, 12, 13, [and] 14, and 20 is to make the law
	encompassed by the titles more accessible and understandable by:
	(1)  rearranging the statutes into a more logical
	order;
	(2)  employing a format and numbering system designed
	to facilitate citation of the law and to accommodate future
	expansion of the law;
	(3)  eliminating repealed, duplicative,
	unconstitutional, expired, executed, and other ineffective
	provisions; and
	(4)  restating the law in modern American English to
	the greatest extent possible.
	Sec. 30.002.  CONSTRUCTION.  Except as provided by Section
	30.003 and as otherwise expressly provided in this code, Chapter
	311, Government Code (Code Construction Act), applies to the
	construction of each provision in this title and in Titles 3, 4, 5,
	6, 7, 8, 9, 10, 11, 12, 13, [and] 14, and 20.
	Sec. 30.003.  DEFINITION OF PERSON.  The definition of
	"person" assigned by Section 311.005, Government Code, does not
	apply to any provision in this title or in Title 3, 4, 5, 6, 7, 8, 9,
	10, 11, 12, 13, [or] 14, or 20.
	Sec. 30.004.  REFERENCE IN LAW TO STATUTE REVISED BY TITLE 2,
	3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, [OR] 14, OR 20.  A reference in a
	law to a statute or a part of a statute revised by this title or by
	Title 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, [or] 14, or 20 is
	considered to be a reference to the part of this code that revises
	that statute or part of that statute.
	SECTION 1A.002.  ADDITION. Subchapter A, Chapter 32,
	Insurance Code, is amended by adding Sections 32.0015 and 32.004 to
	read as follows:
	Sec. 32.0015.  FILING ARTICLES OF INCORPORATION AND OTHER
	PAPERS; CERTIFIED COPIES. (a)  The department shall file and
	maintain in a department office:
	(1)  all insurance companies' acts or articles of
	incorporation; and
	(2)  any other paper required by law to be filed with
	the department.
	(b)  The department shall provide a certified copy of a
	document described by Subsection (a)(1) or (2) to a party
	interested in the document who:
	(1)  submits an application; and
	(2)  pays the fee prescribed by law. (V.T.I.C. Art.
	1.10, Sec. 2.)
	Sec. 32.004.  PUBLICATION OF RESULTS OF EXAMINATION. The
	department shall publish the results of an examination of a
	company's affairs if the commissioner determines that publication
	is in the public interest.  (V.T.I.C. Art. 1.10, Sec. 6.)
	PART B.  ADDITIONS TO TITLE 3, INSURANCE CODE
	SECTION 1B.001.  ADDITION.  Subtitle B, Title 3, Insurance
	Code, is amended by adding Chapter 228 to read as follows:
	CHAPTER 228.  PREMIUM TAX CREDIT FOR CERTAIN INVESTMENTS
	SUBCHAPTER A.  GENERAL PROVISIONS
	Sec.228.001.GENERAL DEFINITIONS.  In this chapter:
	(1)  "Allocation date" means the date on which
	certified investors are allocated premium tax credits.
	(2)  "Certified capital" means cash invested by a
	certified investor that fully funds the purchase price of an equity
	interest in a certified capital company or a qualified debt
	instrument issued by the company.
	(3)  "Certified capital company" means a partnership,
	corporation, or trust or limited liability company, whether
	organized on a profit or nonprofit basis, that:
	(A)  has as the company's primary business
	activity the investment of cash in qualified businesses; and
	(B)  is certified as meeting the criteria of this
	chapter.
	(4)  "Certified investor" means an insurer or other
	person that has state premium tax liability and that contributes
	certified capital pursuant to a premium tax credit allocation under
	this chapter.
	(5)  "Early stage business" means a business described
	by Section 228.152(a).
	(6)  "Person" means an individual or entity, including
	a corporation, general or limited partnership, or trust or limited
	liability company.
	(7)  "Premium tax credit allocation claim" means a
	claim for allocation of premium tax credits.
	(8)  "Qualified business" means a business described by
	Section 228.201.
	(9)  "Qualified debt instrument" means a debt
	instrument issued by a certified capital company, at par value or a
	premium, that:
	(A)  has an original maturity date that is a date
	on or after the fifth anniversary of the date of issuance;
	(B)  has a repayment schedule that is not faster
	than a level principal amortization over five years; and
	(C)  does not have interest, distribution, or
	payment features that are related to:
	(i)  the profitability of the company; or
	(ii)  the performance of the company's
	investment portfolio.
	(10)  "Qualified investment" means the investment of
	cash by a certified capital company in a qualified business for the
	purchase of any debt, debt participation, equity, or hybrid
	security of any nature or description, including a debt instrument
	or security that has the characteristics of debt but that provides
	for conversion into equity or equity participation instruments such
	as options or warrants.
	(11)  "State premium tax liability" means:
	(A)  any liability incurred by any person under
	Chapter 221, 222, 223, or 224; or
	(B)  if the tax liability imposed under Chapter
	221, 222, 223, or 224 is eliminated or reduced, any tax liability
	imposed on an insurer or other person that had premium tax liability
	under Subchapter A, Chapter 4, or Article 9.59 as those laws existed
	on January 1, 2003.
	(12)  "Strategic investment business" means a business
	described by Section 228.153(a). (V.T.I.C. Art. 4.51, Subdivs.
	(2), (3), (4), (5), (6) (part), (7), (8), (9) (part), (10), (12),
	(13), (15) (part).)
	Sec.228.002.DEFINITION OF AFFILIATE.  In this chapter,
	"affiliate" of another person means:
	(1)  a person that is an affiliate for purposes of
	Section 823.003;
	(2)  a person that directly or indirectly:
	(A)  beneficially owns 10 percent or more of the
	outstanding voting securities or other voting or management
	interests of the other person, whether through rights, options,
	convertible interests, or otherwise; or
	(B)  controls or holds power to vote 10 percent or
	more of the outstanding voting securities or other voting or
	management interests of the other person;
	(3)  a person 10 percent or more of the outstanding
	voting securities or other voting or management interests of which
	are directly or indirectly:
	(A)  beneficially owned by the other person,
	whether through rights, options, convertible interests, or
	otherwise; or
	(B)  controlled or held with power to vote by the
	other person;
	(4)  a partnership in which the other person is a
	general partner;
	(5)  an officer, director, employee, or agent of the
	other person; or
	(6)  an immediate family member of an officer,
	director, employee, or agent described by Subdivision (5).
	(V.T.I.C. Art. 4.51, Subdiv. (1).)
	[Sections 228.003-228.050 reserved for expansion]
	SUBCHAPTER B.  ADMINISTRATION AND PROMOTION
	Sec.228.051.ADMINISTRATION BY COMPTROLLER. The
	comptroller shall administer this chapter. (V.T.I.C. Art. 4.52
	(part).)
	Sec.228.052.RULES; FORMS. The comptroller shall adopt
	rules and forms as necessary to implement this chapter, including
	rules that:
	(1)  establish the application procedures for
	certified capital companies; and
	(2)  facilitate the transfer or assignment of premium
	tax credits by certified investors. (V.T.I.C. Art. 4.52 (part);
	Art. 4.53, Sec. (a); Art. 4.71, Sec. (a) (part).)
	Sec.228.053.REPORT TO LEGISLATURE.  (a)  The comptroller
	shall prepare a biennial report concerning the results of the
	implementation of this chapter.  The report must include:
	(1)  the number of certified capital companies holding
	certified capital;
	(2)  the amount of certified capital invested in each
	certified capital company;
	(3)  the amount of certified capital the certified
	capital company invested in qualified businesses as of January 1,
	2006, and the cumulative total for each subsequent year;
	(4)  the total amount of tax credits granted under this
	chapter for each year that credits have been granted;
	(5)  the performance of each certified capital company
	with respect to renewal and reporting requirements imposed under
	this chapter;
	(6)  with respect to the qualified businesses in which
	certified capital companies have invested:
	(A)  the classification of the qualified
	businesses according to the industrial sector and size of the
	business;
	(B)  the total number of jobs created by the
	investment and the average wages paid for the jobs; and
	(C)  the total number of jobs retained as a result
	of the investment and the average wages paid for the jobs; and
	(7)  the certified capital companies that have been
	decertified or that have failed to renew the certification and the
	reason for any decertification.
	(b)  The comptroller shall file the report with the governor,
	the lieutenant governor, and the speaker of the house of
	representatives not later than December 15 of each even-numbered
	year. (V.T.I.C. Art. 4.73.)
	Sec.228.054.PROMOTION OF PROGRAM.  The Texas Economic
	Development and Tourism Office shall promote the program
	established under this chapter in the Texas Business and Community
	Economic Development Clearinghouse. (V.T.I.C. Art. 4.72.)
	[Sections 228.055-228.100 reserved for expansion]
	SUBCHAPTER C. APPLICATION FOR AND GENERAL OPERATION OF CERTIFIED
	CAPITAL COMPANIES
	Sec.228.101.APPLICATION FOR CERTIFICATION.  (a)  An
	applicant for certification must file the application in the form
	prescribed by the comptroller.  The application must be accompanied
	by a nonrefundable application fee of $7,500.
	(b)  The application must include an audited balance sheet of
	the applicant, with an unqualified opinion from an independent
	certified public accountant, as of a date not more than 35 days
	before the date of the application. (V.T.I.C. Art. 4.53, Sec. (b).)
	Sec.228.102.QUALIFICATION.  To qualify as a certified
	capital company:
	(1)  the applicant must have, at the time of
	application for certification, an equity capitalization of at least
	$500,000 in unencumbered cash or cash equivalents;
	(2)  at least two principals or persons employed to
	manage the funds of the applicant must have at least four years of
	experience in the venture capital industry; and
	(3)  the applicant must satisfy any additional
	requirement imposed by the comptroller by rule. (V.T.I.C. Art.
	4.53, Sec. (c).)
	Sec.228.103.MANAGEMENT BY AND CERTAIN OWNERSHIP INTERESTS OF INSURANCE ENTITIES PROHIBITED
	OF INSURANCE ENTITIES PROHIBITED
	insurers, or other persons who may have state premium tax liability
	or the insurer's or person's affiliates may not directly or
	indirectly:
	(1)  manage a certified capital company;
	(2)  beneficially own, whether through rights,
	options, convertible interests, or otherwise, more than 10 percent
	of the outstanding voting securities of a certified capital
	company; or
	(3)  control the direction of investments for a
	certified capital company.
	(b)  Subsection (a) applies without regard to whether the
	insurer or other person or the affiliate of the insurer or other
	person is authorized by or engages in business in this state.
	(c)  Subsections (a) and (b) do not preclude an insurer,
	certified investor, or any other party from exercising its legal
	rights and remedies, including interim management of a certified
	capital company, if authorized by law, with respect to a certified
	capital company that is in default of the company's statutory or
	contractual obligations to the insurer, certified investor, or
	other party.
	(d)  This chapter does not limit an insurer's ownership of
	nonvoting equity interests in a certified capital company.
	(V.T.I.C. Art. 4.54; Art. 4.56, Sec. (d).)
	Sec.228.104.ACTION ON APPLICATION.  (a)  The comptroller
	shall:
	(1)  review the application, organizational documents,
	and business history of each applicant; and
	(2)  ensure that the applicant satisfies the
	requirements of this chapter.
	(b)  Not later than the 30th day after the date an
	application is filed, the comptroller shall:
	(1)  issue the certification; or
	(2)  refuse to issue the certification and communicate
	in detail to the applicant the grounds for the refusal, including
	suggestions for the removal of those grounds. (V.T.I.C. Art. 4.53,
	Secs. (d), (e).)
	Sec.228.105.CONTINUATION OF CERTIFICATION.  To continue
	to be certified, a certified capital company must make qualified
	investments according to the schedule established by Section
	228.151. (V.T.I.C. Art. 4.56, Sec. (a) (part).)
	Sec.228.106.REPORTS TO COMPTROLLER; AUDITED FINANCIAL STATEMENT
	STATEMENT
	comptroller as soon as practicable after the receipt of certified
	capital:
	(1)  the name of each certified investor from whom the
	certified capital was received, including the certified investor's
	insurance premium tax identification number;
	(2)  the amount of each certified investor's investment
	of certified capital and premium tax credits; and
	(3)  the date on which the certified capital was
	received.
	(b)  Not later than January 31 of each year, each certified
	capital company shall report to the comptroller:
	(1)  the amount of the company's certified capital at
	the end of the preceding year;
	(2)  whether or not the company has invested more than
	15 percent of the company's total certified capital in a single
	business;
	(3)  each qualified investment that the company made
	during the preceding year and, with respect to each qualified
	investment, the number of employees of the qualified business at
	the time the qualified investment was made; and
	(4)  any other information required by the comptroller,
	including any information required by the comptroller to comply
	with Section 228.053.
	(c)  Not later than April 1 of each year, each certified
	capital company shall provide to the comptroller an annual audited
	financial statement that includes the opinion of an independent
	certified public accountant. The audit must address the methods of
	operation and conduct of the business of the company to determine
	whether:
	(1)  the company is complying with this chapter and the
	rules adopted under this chapter;
	(2)  the funds received by the company have been
	invested as required within the time provided by Section 228.151;
	and
	(3)  the company has invested the funds in qualified
	businesses. (V.T.I.C. Art. 4.58.)
	Sec.228.107.RENEWAL FEE; LATE FEE; EXCEPTION.  (a)  Not
	later than January 31 of each year, each certified capital company
	shall pay a nonrefundable renewal fee of $5,000 to the comptroller.
	(b)  If a certified capital company fails to pay the renewal
	fee on or before the date specified by Subsection (a), the company
	must pay, in addition to the renewal fee, a late fee of $5,000 to
	continue the company's certification.
	(c)  Notwithstanding Subsection (a), a renewal fee is not
	required within six months of the date on which a certified capital
	company's initial certification is issued under Section
	228.104(b). (V.T.I.C. Art. 4.59.)
	Sec.228.108.OFFERING MATERIAL USED BY CERTIFIED CAPITAL COMPANY
	COMPANY
	the certified capital company must include the following statement:
	By authorizing the formation of a certified
	capital company, the State of Texas does not endorse
	the quality of management or the potential for
	earnings of the company and is not liable for damages
	or losses to a certified investor in the company. Use
	of the word "certified" in an offering does not
	constitute a recommendation or endorsement of the
	investment by the comptroller of public accounts. If
	applicable provisions of law are violated, the State
	of Texas may require forfeiture of unused premium tax
	credits and repayments of used premium tax credits.
	(V.T.I.C. Art. 4.55.)
	[Sections 228.109-228.150 reserved for expansion]
	SUBCHAPTER D.  INVESTMENT BY CERTIFIED CAPITAL COMPANIES
	Sec.228.151.REQUIRED SCHEDULE OF INVESTMENT.  (a)  Before
	the third anniversary of a certified capital company's allocation
	date, the company must make qualified investments in an amount
	cumulatively equal to at least 30 percent of the company's
	certified capital, subject to Section 228.153(b).
	(b)  Before the fifth anniversary of a certified capital
	company's allocation date, the company must make qualified
	investments in an amount cumulatively equal to at least 50 percent
	of the company's certified capital, subject to Sections 228.152(b)
	and 228.153(b). (V.T.I.C. Art. 4.56, Sec. (a) (part).)
	Sec.228.152.INVESTMENT IN EARLY STAGE BUSINESS REQUIRED.
	(a)  In this section, "early stage business" means a qualified
	business that:
	(1)  is involved, at the time of a certified capital
	company's first investment, in activities related to the
	development of initial product or service offerings, such as
	prototype development or establishment of initial production or
	service processes;
	(2)  was initially organized less than two years before
	the date of the certified capital company's first investment; or
	(3)  during the fiscal year immediately preceding the
	year of the certified capital company's first investment had, on a
	consolidated basis with the business's affiliates, gross revenues
	of not more than $2 million as determined in accordance with
	generally accepted accounting principles.
	(b)  A certified capital company must place at least 50
	percent of the amount of qualified investments required by Section
	228.151(b) in early stage businesses. (V.T.I.C. Art. 4.51, Subdiv.
	(6); Art. 4.56, Sec. (b) (part).)
	Sec.228.153.INVESTMENT IN STRATEGIC INVESTMENT BUSINESS REQUIRED
	REQUIRED
	(1)  "Strategic investment area" means an area of this
	state that qualifies as a strategic investment area under
	Subchapter O, Chapter 171, Tax Code, or, after the date that
	subchapter expires, an area that qualified as a strategic
	investment area under that subchapter immediately before that date.
	(2)  "Strategic investment business" means a qualified
	business that:
	(A)  has the business's principal business
	operations located in one or more strategic investment areas; and
	(B)  intends to maintain business operations in
	the strategic investment areas after receipt of the investment by
	the certified capital company.
	(b)  A certified capital company must place at least 30
	percent of the amount of qualified investments required by Sections
	228.151(a) and (b) in a strategic investment business. (V.T.I.C.
	Art. 4.51, Subdivs. (14), (15); Art. 4.56, Sec. (b) (part).)
	Sec.228.154.CERTIFIED CAPITAL NOT INVESTED IN QUALIFIED INVESTMENTS
	INVESTMENTS
	certified capital not invested in qualified investments only in:
	(1)  cash deposited with a federally insured financial
	institution;
	(2)  certificates of deposit in a federally insured
	financial institution;
	(3)  investment securities that are:
	(A)  obligations of the United States or agencies
	or instrumentalities of the United States; or
	(B)  obligations that are guaranteed fully as to
	principal and interest by the United States;
	(4)  debt instruments rated at least "A" or the
	equivalent by a nationally recognized credit rating organization,
	or issued by, or guaranteed with respect to payment by, an entity
	whose unsecured indebtedness is rated at least "A" or the
	equivalent by a nationally recognized credit rating organization,
	and which indebtedness is not subordinated to other unsecured
	indebtedness of the issuer or the guarantor;
	(5)  obligations of this state or a municipality or
	political subdivision of this state; or
	(6)  any other investment approved in advance in
	writing by the comptroller. (V.T.I.C. Art. 4.56, Sec. (h).)
	Sec.228.155.COMPUTATION OF AMOUNT OF INVESTMENTS.  (a)
	The aggregate cumulative amount of all qualified investments made
	by a certified capital company after the company's allocation date
	shall be considered in the computation of the percentage
	requirements under this subchapter.
	(b)  A certified capital company may invest proceeds
	received from a qualified investment in another qualified
	investment, and that investment counts toward any requirement of
	this chapter with respect to investments of certified capital.
	(V.T.I.C. Art. 4.56, Sec. (c).)
	Sec.228.156.LIMIT ON QUALIFIED INVESTMENT. A certified
	capital company may not make a qualified investment at a cost to the
	company that is greater than 15 percent of the company's total
	certified capital at the time of investment. (V.T.I.C. Art. 4.56,
	Sec. (f).)
	Sec.228.157.DISTRIBUTIONS BY CERTIFIED CAPITAL COMPANY.
	(a)  In this section, "qualified distribution" means any
	distribution or payment from certified capital by a certified
	capital company in connection with:
	(1)  the reasonable costs and expenses of forming,
	syndicating, managing, and operating the company, provided that the
	distribution or payment is not made directly or indirectly to a
	certified investor, including:
	(A)  reasonable and necessary fees paid for
	professional services, including legal and accounting services,
	related to the company's formation and operation; and
	(B)  an annual management fee in an amount that
	does not exceed 2.5 percent of the company's certified capital; and
	(2)  a projected increase in federal or state taxes,
	including penalties and interest related to state and federal
	income taxes, of the company's equity owners resulting from the
	earnings or other tax liability of the company to the extent that
	the increase is related to the ownership, management, or operation
	of the company.
	(b)  A certified capital company may make a qualified
	distribution at any time. To make a distribution or payment other
	than a qualified distribution, a company must have made qualified
	investments in an amount cumulatively equal to 100 percent of the
	company's certified capital.
	(c)  If a business in which a qualified investment is made
	relocates the business's principal business operations to another
	state during the term of the certified capital company's investment
	in the business, the cumulative amount of qualified investments
	made by the certified capital company for purposes of satisfying
	the requirements of Subsection (b) only is reduced by the amount of
	the certified capital company's qualified investments in the
	business that has relocated.
	(d)  Subsection (c) does not apply if the business
	demonstrates that the business has returned the business's
	principal business operations to this state not later than the 90th
	day after the date of the relocation. (V.T.I.C. Art. 4.51, Subdiv.
	(11); Art. 4.60, Secs. (a), (c).)
	Sec.228.158.REPAYMENT OF DEBT.  Notwithstanding Section
	228.157(b), a certified capital company may make repayments of
	principal and interest on the company's indebtedness without any
	restriction, including repaying the company's indebtedness on
	which certified investors earned premium tax credits. (V.T.I.C.
	Art. 4.60, Sec. (b).)
	[Sections 228.159-228.200 reserved for expansion]
	SUBCHAPTER E.  QUALIFIED BUSINESS
	Sec.228.201.DEFINITION OF QUALIFIED BUSINESS. (a)  In
	this chapter, "qualified business" means a business that complies
	with this section at the time of a certified capital company's first
	investment in the business.
	(b)  A qualified business must:
	(1)  be headquartered in this state and intend to
	remain in this state after receipt of the certified capital
	company's investment; and
	(2)  have the business's principal business operations
	located in this state and intend to maintain business operations in
	this state after receipt of the certified capital company's
	investment.
	(c)  A qualified business must agree to use the qualified
	investment primarily to:
	(1)  support business operations in this state, other
	than advertising, promotion, and sales operations which may be
	conducted outside of this state; or
	(2)  in the case of a start-up company, establish and
	support business operations in this state, other than advertising,
	promotion, and sales operations which may be conducted outside of
	this state.
	(d)  A qualified business may not have more than 100
	employees and must:
	(1)  employ at least 80 percent of the business's
	employees in this state; or
	(2)  pay 80 percent of the business's payroll to
	employees in this state.
	(e)  A qualified business must be primarily engaged in:
	(1)  manufacturing, processing, or assembling
	products;
	(2)  conducting research and development; or
	(3)  providing services.
	(f)  A qualified business may not be primarily engaged in:
	(1)  retail sales;
	(2)  real estate development;
	(3)  the business of insurance, banking, or lending; or
	(4)  the provision of professional services provided by
	accountants, attorneys, or physicians. (V.T.I.C. Art. 4.51,
	Subdiv. (9).)
	Sec.228.202.RELOCATION OF PRINCIPAL BUSINESS OPERATIONS.
	If, before the 90th day after the date a certified capital company
	makes an investment in a qualified business, the qualified business
	moves the business's principal business operations from this state,
	the investment may not be considered a qualified investment for
	purposes of the percentage requirements under this chapter.
	(V.T.I.C. Art. 4.56, Sec. (g).)
	Sec.228.203.EVALUATION OF BUSINESS BY COMPTROLLER.  (a)  A
	certified capital company may, before making an investment in a
	business, request a written opinion from the comptroller as to
	whether the business in which the company proposes to invest is a
	qualified business, an early stage business, or a strategic
	investment business.
	(b)  Not later than the 15th business day after the date of
	the receipt of a request under Subsection (a), the comptroller
	shall:
	(1)  determine whether the business meets the
	definition of a qualified business, an early stage business, or a
	strategic investment business, as applicable, and notify the
	certified capital company of the determination and provide an
	explanation of the determination; or
	(2)  notify the company that an additional 15 days will
	be needed to review the request and make the determination.
	(c)  If the comptroller fails to notify the certified capital
	company with respect to the proposed investment within the period
	specified by Subsection (b), the business in which the company
	proposes to invest is considered to be a qualified business, an
	early stage business, or a strategic investment business, as
	appropriate. (V.T.I.C. Art. 4.57.)
	Sec.228.204.CONTINUATION OF CLASSIFICATION AS QUALIFIED BUSINESS; FOLLOW-ON INVESTMENTS AUTHORIZED
	BUSINESS; FOLLOW-ON INVESTMENTS AUTHORIZED
	is classified as a qualified business at the time of the first
	investment in the business by a certified capital company:
	(1)  remains classified as a qualified business; and
	(2)  may receive follow-on investments from any
	certified capital company.
	(b)  Except as provided by Subsection (c), a follow-on
	investment made under Subsection (a) is a qualified investment even
	though the business may not meet the definition of a qualified
	business at the time of the follow-on investment.
	(c)  A follow-on investment does not qualify as a qualified
	investment if, at the time of the follow-on investment, the
	qualified business no longer has the business's principal business
	operations in this state. (V.T.I.C. Art. 4.56, Sec. (e).)
	[Sections 228.205-228.250 reserved for expansion]
	SUBCHAPTER F.  PREMIUM TAX CREDIT
	Sec.228.251.PREMIUM TAX CREDIT.  (a)  A certified investor
	who makes an investment of certified capital shall earn in the year
	of investment a vested credit against state premium tax liability
	equal to 100 percent of the certified investor's investment of
	certified capital, subject to the limits imposed by this chapter.
	(b)  Beginning with the tax report due March 1, 2009, for the
	2008 tax year, a certified investor may take up to 25 percent of the
	vested premium tax credit in any taxable year of the certified
	investor.  The credit may not be applied to estimated payments due
	in 2008. (V.T.I.C. Art. 4.65, Sec. (a).)
	Sec.228.252.LIMIT ON PREMIUM TAX CREDIT. (a)  The credit
	to be applied against state premium tax liability of a certified
	investor in any one year may not exceed the state premium tax
	liability of the investor for the taxable year.
	(b)  A certified investor may carry forward any unused credit
	against state premium tax liability indefinitely until the premium
	tax credits are used. (V.T.I.C. Art. 4.65, Sec. (b).)
	Sec.228.253.PREMIUM TAX CREDIT ALLOCATION CLAIM REQUIRED.
	(a)  A certified investor must prepare and execute a premium tax
	credit allocation claim on a form provided by the comptroller.
	(b)  The certified capital company must have filed the claim
	with the comptroller on the date on which the comptroller accepted
	premium tax credit allocation claims on behalf of certified
	investors under the comptroller's rules.
	(c)  The premium tax credit allocation claim form must
	include an affidavit of the certified investor under which the
	certified investor becomes legally bound and irrevocably committed
	to make an investment of certified capital in a certified capital
	company in the amount allocated even if the amount allocated is less
	than the amount of the claim, subject only to the receipt of an
	allocation under Section 228.255.
	(d)  A certified investor may not claim a premium tax credit
	under Section 228.251 for an investment that has not been funded,
	without regard to whether the certified investor has committed to
	fund the investment. (V.T.I.C. Art. 4.66.)
	Sec.228.254.TOTAL LIMIT ON PREMIUM TAX CREDITS.  (a)  The
	total amount of certified capital for which premium tax credits may
	be allowed under this chapter for all years in which premium tax
	credits are allowed is $200 million.
	(b)  The total amount of certified capital for which premium
	tax credits may be allowed for all certified investors under this
	chapter may not exceed the amount that would entitle all certified
	investors in certified capital companies to take total credits of
	$50 million in a year.
	(c)  A certified capital company and the company's
	affiliates may not file premium tax credit allocation claims in
	excess of the maximum amount of certified capital for which premium
	tax credits may be allowed as provided by this section. (V.T.I.C.
	Art. 4.67.)
	Sec.228.255.ALLOCATION OF PREMIUM TAX CREDIT.  (a)  If the
	total premium tax credits claimed by all certified investors
	exceeds the total limits on premium tax credits established by
	Section 228.254(a), the comptroller shall allocate the total amount
	of premium tax credits allowed under this chapter to certified
	investors in certified capital companies on a pro rata basis in
	accordance with this section.
	(b)  The pro rata allocation for each certified investor
	shall be the product of:
	(1)  a fraction, the numerator of which is the amount of
	the premium tax credit allocation claim filed on behalf of the
	investor and the denominator of which is the total amount of all
	premium tax credit allocation claims filed on behalf of all
	certified investors; and
	(2)  the total amount of certified capital for which
	premium tax credits may be allowed under this chapter.
	(c)  The maximum amount of certified capital for which
	premium tax credit allocation may be allowed on behalf of a single
	certified investor and the investor's affiliates, whether by one or
	more certified capital companies, may not exceed the greater of:
	(1)  $10 million; or
	(2)  15 percent of the maximum aggregate amount
	available under Section 228.254(a). (V.T.I.C. Art. 4.68, Secs.
	(a), (b), (e).)
	Sec.228.256.TREATMENT OF CREDITS AND CAPITAL.  In any case
	under this code or another insurance law of this state in which the
	assets of a certified investor are examined or considered, the
	certified capital may be treated as an admitted asset, subject to
	the applicable statutory valuation procedures. (V.T.I.C. Art.
	4.69.)
	Sec.228.257.TRANSFERABILITY OF CREDIT.  (a) A certified
	investor may transfer or assign premium tax credits only in
	compliance with the rules adopted under Section 228.052.
	(b)  The transfer or assignment of a premium tax credit does
	not affect the schedule for taking the premium tax credit under this
	chapter. (V.T.I.C. Art. 4.71, Secs. (a) (part), (b).)
	Sec.228.258.IMPACT OF PREMIUM TAX CREDIT ON INSURANCE RATEMAKING
	RATEMAKING
	amount of premium tax included by the investor in connection with
	ratemaking for an insurance contract written in this state because
	of a reduction in the investor's Texas premium tax derived from
	premium tax credits granted under this chapter. (V.T.I.C. Art.
	4.70.)
	Sec.228.259.RETALIATORY TAX.  A certified investor
	claiming a credit against state premium tax liability earned
	through an investment in a company is not required to pay any
	additional retaliatory tax levied under Chapter 281 as a result of
	claiming that credit. (V.T.I.C. Art. 4.65, Sec. (c) (part).)
	[Sections 228.260-228.300 reserved for expansion]
	SUBCHAPTER G.  ENFORCEMENT
	Sec.228.301.ANNUAL REVIEW BY COMPTROLLER.  (a)  The
	comptroller shall conduct an annual review of each certified
	capital company to:
	(1)  ensure that the company:
	(A)  continues to satisfy the requirements of this
	chapter; and
	(B)  has not made any investment in violation of
	this chapter; and
	(2)  determine the eligibility status of the company's
	qualified investments.
	(b)  Each certified capital company shall pay the cost of the
	annual review according to a reasonable fee schedule adopted by the
	comptroller. (V.T.I.C. Art. 4.61, Secs. (a), (b).)
	Sec.228.302.DECERTIFICATION OF CERTIFIED CAPITAL COMPANY
	COMPANY
	228.107, 228.151, 228.152, 228.153, 228.154, 228.155, 228.156,
	228.202, or 228.204 is grounds for decertification of a certified
	capital company.
	(b)  If the comptroller determines that a certified capital
	company is not in compliance with a law listed in Subsection (a),
	the comptroller shall notify the company's officers in writing that
	the company may be subject to decertification after the 120th day
	after the date the notice is mailed unless the company:
	(1)  corrects the deficiencies; and
	(2)  returns to compliance with the law.
	(c)  The comptroller may decertify a certified capital
	company, after opportunity for hearing, if the comptroller finds
	that the company is not in compliance with a law listed in
	Subsection (a) at the end of the period established by Subsection
	(b).
	(d)  Decertification under this section is effective on
	receipt of notice of decertification by the certified capital
	company.
	(e)  The comptroller shall notify any appropriate state
	agency of a decertification of a certified capital company.
	(V.T.I.C. Art. 4.61, Secs. (c), (d).)
	Sec.228.303.ADMINISTRATIVE PENALTY.  (a)  The comptroller
	may impose an administrative penalty on a certified capital company
	that violates this chapter.
	(b)  The amount of the penalty may not exceed $25,000. Each
	day a violation continues or occurs is a separate violation for the
	purpose of imposing the penalty. The amount of the penalty shall be
	based on:
	(1)  the seriousness of the violation, including the
	nature, circumstances, extent, and gravity of the violation;
	(2)  the economic harm caused by the violation;
	(3)  the history of previous violations;
	(4)  the amount necessary to deter a future violation;
	(5)  efforts to correct the violation; and
	(6)  any other matter that justice may require.
	(c)  A certified capital company assessed a penalty under
	this chapter may request a redetermination as provided by Chapter
	111, Tax Code.
	(d)  The attorney general may sue to collect the penalty.
	(e)  A proceeding to impose the penalty is a contested case
	under Chapter 2001, Government Code. (V.T.I.C. Art. 4.62.)
	[Sections 228.304-228.350 reserved for expansion]
	SUBCHAPTER H.  RECAPTURE AND FORFEITURE OF PREMIUM TAX CREDITS
	Sec.228.351.RECAPTURE AND FORFEITURE OF PREMIUM TAX CREDIT FOLLOWING DECERTIFICATION
	CREDIT FOLLOWING DECERTIFICATION
	certified capital company may, in accordance with this section,
	cause:
	(1)  the recapture of premium tax credits previously
	claimed by the company's certified investors; and
	(2)  the forfeiture of future premium tax credits to be
	claimed by the investors.
	(b)  Decertification of a certified capital company on or
	before the third anniversary of the company's allocation date
	causes the recapture of any premium tax credits previously claimed
	and the forfeiture of any future premium tax credits to be claimed
	by a certified investor with respect to the company.
	(c)  For a certified capital company that meets the
	requirements for continued certification under Section 228.151(a)
	and subsequently fails to meet the requirements for continued
	certification under Subsection (b) of that section:
	(1)  any premium tax credit that has been or will be
	taken by a certified investor on or before the third anniversary of
	the allocation date is not subject to recapture or forfeiture; and
	(2)  any premium tax credit that has been or will be
	taken by a certified investor after the third anniversary of the
	company's allocation date is subject to recapture or forfeiture.
	(d)  For a certified capital company that has met the
	requirements for continued certification under Section 228.151 and
	is subsequently decertified:
	(1)  any premium tax credit that has been or will be
	taken by a certified investor on or before the fifth anniversary of
	the allocation date is not subject to recapture or forfeiture; and
	(2)  any premium tax credit to be taken after the fifth
	anniversary of the allocation date is subject to forfeiture only if
	the company is decertified on or before the fifth anniversary of the
	company's allocation date.
	(e)  For a certified capital company that has invested an
	amount cumulatively equal to 100 percent of the company's certified
	capital in qualified investments, any premium tax credit claimed or
	to be claimed by a certified investor is not subject to recapture or
	forfeiture under this section. (V.T.I.C. Art. 4.63, Sec. (a).)
	Sec.228.352.NOTICE OF RECAPTURE AND FORFEITURE OF PREMIUM TAX CREDIT
	TAX CREDIT
	address of each certified investor whose premium tax credit is
	subject to recapture or forfeiture, using the address shown on the
	investor's last premium tax filing. (V.T.I.C. Art. 4.63, Sec.
	(b).)
	Sec.228.353.INDEMNITY AGREEMENTS AND INSURANCE AUTHORIZED
	AUTHORIZED
	indemnify, or purchase insurance for the benefit of, a certified
	investor for losses resulting from the recapture or forfeiture of
	premium tax credits under Section 228.351.
	(b)  Any guaranty, indemnity, bond, insurance policy, or
	other payment undertaking made under this section may not be
	provided by more than one certified investor of the certified
	capital company or affiliate of the certified investor. (V.T.I.C.
	Art. 4.64.)
	PART C.  ADDITIONS TO TITLE 4, INSURANCE CODE
	SECTION 1C.001.  ADDITION.  Subtitle A, Title 4, Insurance
	Code, is amended by adding Chapter 406 to read as follows:
	CHAPTER 406. SPECIAL DEPOSITS REQUIRED UNDER POTENTIALLY
	HAZARDOUS CONDITIONS
	Sec.406.001.DEFINITION. In this chapter, "insurer"
	includes:
	(1)  a capital stock insurance company;
	(2)  a reciprocal or interinsurance exchange;
	(3)  a Lloyd's plan;
	(4)  a fraternal benefit society;
	(5)  a mutual company, including a mutual assessment
	company;
	(6)  a statewide mutual assessment company;
	(7)  a local mutual aid association;
	(8)  a burial association;
	(9)  a county mutual insurance company;
	(10)  a farm mutual insurance company;
	(11)  a fidelity, guaranty, or surety company;
	(12)  a title insurance company;
	(13)  a stipulated premium company;
	(14)  a group hospital service corporation;
	(15)  a health maintenance organization;
	(16)  a risk retention group; and
	(17)  any other organization or person engaged in the
	business of insurance. (V.T.I.C. Art. 1.33, Sec. 1.)
	Sec.406.002.APPLICABILITY OF CHAPTER. This chapter
	applies to a person or organization engaged in the business of
	insurance without regard to whether the person or organization is
	listed in Section 406.001, unless another statute specifically
	cites this chapter and exempts the person or organization from this
	chapter. (V.T.I.C. Art. 1.33, Sec. 2.)
	Sec.406.003.REQUIRED DEPOSIT: STANDARDS AND CRITERIA.
	The commissioner, in the commissioner's sole discretion, may
	require an insurer to make a deposit under this chapter if the
	commissioner determines that one of the following conditions, if
	not rectified, may potentially be hazardous to the insurer's
	policyholders, enrollees, or creditors, or to the public:
	(1)  the insurer's financial or operating condition,
	reviewed in conjunction with the kinds and nature of risks insured;
	(2)  the insurer's method of operation;
	(3)  the insurer's relationship with affiliates;
	(4)  the nature and amount of the insurer's
	investments;
	(5)  the insurer's contracts that may lead to a
	contingent liability; or
	(6)  the insurer's agreements with respect to guaranty
	and surety. (V.T.I.C. Art. 1.33, Sec. 3.)
	Sec.406.004.REQUIRED DEPOSIT: FORM OF SECURITY. A
	deposit required under Section 406.003 must be made with the
	comptroller and approved by the commissioner. The deposit must be
	made in:
	(1)  cash;
	(2)  securities authorized under this code to be a
	legal investment for the insurer that:
	(A)  are readily marketable over a national
	exchange with a maturity date of not more than one year, are listed
	by the Securities Valuation Office of the National Association of
	Insurance Commissioners, and qualify as admitted assets; or
	(B)  are clean, irrevocable, and unconditional
	letters of credit issued or confirmed by a financial institution
	organized and licensed under the laws of the United States or a
	state of the United States; or
	(3)  another form of security acceptable to the
	commissioner. (V.T.I.C. Art. 1.33, Sec. 4.)
	Sec.406.005.DURATION OF DEPOSIT. Subject to Section
	406.006, the comptroller shall hold a deposit required under this
	chapter until the commissioner issues a written order finding that
	the condition for which the deposit was required no longer exists.
	(V.T.I.C. Art. 1.33, Sec. 5.)
	Sec.406.006.SUBSTITUTION OR WITHDRAWAL OF DEPOSIT. (a)
	An insurer may file a written application with the commissioner
	requesting:
	(1)  withdrawal of all or part of the deposit held by
	the comptroller under this chapter; or
	(2)  substitution of all or part of the deposited
	securities held by the comptroller under this chapter.
	(b)  The application must state the basis for the request to
	withdraw the deposit or to substitute the deposited security.
	(c)  An insurer's application for the substitution of a
	deposited security must provide specific information regarding the
	security to be deposited as a substitute for the security held by
	the comptroller.
	(d)  The commissioner shall issue an order approving or
	denying an application under this section not later than the 30th
	day after the date the department receives the application. If the
	commissioner does not approve or deny the application within that
	period, the application is denied.
	(e)  The commissioner may, in the commissioner's sole
	discretion, approve an application to withdraw a deposit or
	substitute a deposited security if the commissioner determines that
	the withdrawal or substitution will not be hazardous to the
	insurer's policyholders, enrollees, or creditors, or to the public.
	(f)  The comptroller may not release a deposit made under
	this chapter, or any part of the deposit, and may not accept a
	substitute for a deposited security unless the commissioner issues
	an order approving the withdrawal or substitution. (V.T.I.C. Art.
	1.33, Sec. 6.)
	Sec.406.007.APPEAL. An insurer may appeal an action of
	the commissioner under this chapter in accordance with Subchapter
	D, Chapter 36. (V.T.I.C. Art. 1.33, Sec. 7.)
	Sec.406.008.CUMULATIVE OF OTHER DEPOSITS. A deposit
	required to be made under this chapter is in addition to any other
	deposit that the insurer is required or authorized to make under
	this code. (V.T.I.C. Art. 1.33, Sec. 8.)
	PART D.  ADDITIONS TO TITLE 5, INSURANCE CODE
	SECTION 1D.001. ADDITION. Chapter 542, Insurance Code, is
	amended by adding Subchapter C-1 to read as follows:
	SUBCHAPTER C-1. REQUEST FOR CLAIMS INFORMATION BY CERTAIN
	OFFICIALS
	Sec. 542.131.  REQUEST BY CERTAIN OFFICIALS ENGAGED IN
	CRIMINAL INVESTIGATION. (a)  This section applies only to a claim
	for a burglary or robbery loss or a death claim seeking life
	insurance proceeds that is filed with an insurance company on or
	after September 1, 2001.
	(b)  In the course of a criminal investigation and subject to
	Subsection (c), the state fire marshal, the fire marshal of a
	political subdivision of this state, the chief of a fire department
	in this state, a chief of police of a municipality in this state, or
	a sheriff in this state may request in writing that an insurance
	company investigating a claimed burglary or robbery loss or a death
	claim seeking life insurance proceeds release information in the
	company's possession that relates to that claimed loss. The
	company shall release the information to any official authorized to
	request the information under this subsection if the company has
	reason to believe that the insurance claim is false or fraudulent.
	(c)  An official who requests information under this section
	may not request anything other than:
	(1)  an insurance policy relevant to an insurance claim
	under investigation and the application for that policy;
	(2)  policy premium payment records;
	(3)  the history of the insured's previous claims; and
	(4)  material relating to the investigation of the
	insurance claim, including:
	(A)  statements of any person;
	(B)  proof of loss; or
	(C)  other relevant evidence.
	(d)  This section does not authorize a public official or
	agency to adopt or require any form of periodic report by an
	insurance company.
	(e)  In the absence of fraud or malice, an insurance company
	or a person who releases information on behalf of an insurance
	company is not liable for damages in a civil action or subject to
	criminal prosecution for an oral or written statement made, or any
	other action taken, that relates to the information required to be
	released under this section.
	(f)  An official or department employee receiving
	information under this section shall maintain the confidentiality
	of the information until the information is required to be released
	during a criminal or civil proceeding.
	(g)  An insurance company or the company's representative
	may not intentionally refuse to release to an official described by
	Subsection (b) the information required to be released to that
	official under this section. (V.T.I.C. Art. 21.49C.)
	SECTION 1D.002.  ADDITION.  Subtitle C, Title 5, Insurance
	Code, is amended by adding Chapter 560 to read as follows:
	CHAPTER 560.  PROHIBITED RATES
	Sec.560.001.DEFINITION OF INSURER. In this chapter,
	"insurer" means an insurance company, reciprocal or interinsurance
	exchange, mutual insurance company, farm mutual insurance company,
	capital stock insurance company, county mutual insurance company,
	Lloyd's plan, surplus lines insurer, or other legal entity engaged
	in the business of insurance in this state. The term includes:
	(1)  an affiliate described by Section 823.003(a);
	(2)  the Texas Windstorm Insurance Association
	established under Chapter 2210;
	(3)  the FAIR Plan Association established under
	Chapter 2211; and
	(4)  the Texas Automobile Insurance Plan Association
	established under Chapter 2151. (V.T.I.C. Art. 1.02, Sec. (a).)
	Sec.560.002.USE OF CERTAIN RATES PROHIBITED; RATE REQUIREMENTS
	REQUIREMENTS
	chapter.
	(b)  A rate used under this code:
	(1)  must be just, fair, reasonable, and adequate; and
	(2)  may not be:
	(A)  confiscatory;
	(B)  excessive for the risks to which the rate
	applies; or
	(C)  unfairly discriminatory.
	(c)  For purposes of this section, a rate is:
	(1)  inadequate if the rate is insufficient to sustain
	projected losses and expenses to which the rate applies, and
	continued use of the rate:
	(A)  endangers the solvency of an insurer using
	the rate; or
	(B)  has the effect of substantially lessening
	competition or creating a monopoly in any market;
	(2)  excessive if the rate is likely to produce a
	long-term profit that is unreasonably high in relation to the
	insurance coverage provided; or
	(3)  unfairly discriminatory if the rate:
	(A)  is not based on sound actuarial principles;
	(B)  does not bear a reasonable relationship to
	the expected loss and expense experience among risks; or
	(C)  is based wholly or partly on the race, creed,
	color, ethnicity, or national origin of the policyholder or an
	insured. (V.T.I.C. Art. 1.02, Secs. (b), (c).)
	PART E.  ADDITIONS TO TITLE 6, INSURANCE CODE
	SECTION 1E.001. ADDITION. Subtitle H, Title 6, Insurance
	Code, is amended by adding Chapter 963 to read as follows:
	CHAPTER 963.  AUTOMOBILE CLUBS
	Sec.963.001.DEFINITION.  In this chapter, "automobile
	club" has the meaning assigned by Section 722.002, Transportation
	Code. (V.T.I.C. Art. 21.80, Sec. (a) (part).)
	Sec.963.002.PROVISION OF CERTAIN INSURANCE SERVICES BY AUTOMOBILE CLUB
	AUTOMOBILE CLUB
	services only as provided by this chapter.
	(b)  An automobile club may provide accidental injury and
	death benefit insurance coverage to a member through purchase of a
	group policy of insurance issued to the automobile club for the
	benefit of its members. The coverage must be purchased from an
	insurance company authorized to engage in the business of that type
	of coverage in this state. (V.T.I.C. Art. 21.80, Secs. (a) (part),
	(b) (part).)
	Sec.963.003.CERTIFICATE OF PARTICIPATION.  (a)  The
	automobile club shall provide each member covered by insurance
	described by Section 963.002 a certificate of participation.
	(b)  The certificate of participation must state on its face
	in at least 14-point black boldfaced type that the certificate is
	only a certificate of participation in a group accidental injury
	and death policy and is not automobile liability insurance
	coverage.  (V.T.I.C. Art. 21.80, Sec. (b) (part).)
	Sec.963.004.  CERTAIN ACTIVITIES PROHIBITED.  An automobile
	club may endorse insurance products and refer members to agents or
	insurers authorized to provide the insurance products in this
	state. The automobile club or an agent of the automobile club may
	not receive consideration for the referral.  (V.T.I.C. Art. 21.80,
	Sec. (c).)
	Sec.963.005.CERTAIN TRANSPORTATION-RELATED SERVICES.  In
	addition to reimbursement services described by Section
	722.002(2), Transportation Code, an automobile club may contract
	with a member to:
	(1)  reimburse the member for expenses the member
	incurs for towing, emergency road service, and lockout or lost key
	services; and
	(2)  provide immediate destination assistance and trip
	interruption service.  (V.T.I.C. Art. 21.80, Sec. (f) (part).)
	Sec.963.006.APPLICABILITY OF INSURANCE LAWS.  (a)  Except
	as provided by Subsection (b), an automobile club performing
	services permitted by this chapter is not subject to regulation
	under the insurance laws of this state because of the performance of
	those services.
	(b)  An automobile club may sell insurance products to a
	member for a consideration separate from the amount that the member
	pays for membership in the automobile club if the automobile club is
	properly licensed as an agent under the applicable provisions of
	this code.
	(c)  The insurance laws of this state do not apply to
	reimbursement provided under Section 963.005. (V.T.I.C. Art.
	21.80, Secs. (d), (e), (f) (part).)
	PART F.  ADDITIONS TO TITLE 7, INSURANCE CODE
	SECTION 1F.001.  ADDITION.  Subtitle A, Title 7, Insurance
	Code, is amended by adding Chapters 1112 and 1113 to read as
	follows:
	CHAPTER 1112. CERTAIN GUARANTEES IN LIFE INSURANCE POLICIES
	Sec.1112.001.CERTAIN GUARANTEES NOT PROHIBITED. Section
	841.253 does not prohibit the issuance of a life insurance policy
	that guarantees, by coupons or otherwise, definite payments or
	reductions in premiums. (V.T.I.C. Art. 3.11 (part).)
	Sec.1112.002.CERTAIN GUARANTEES CONSTITUTE DEFINITE CONTRACT BENEFIT; VALUATION OF BENEFIT
	CONTRACT BENEFIT; VALUATION OF BENEFIT
	Subsection (e), a guarantee described by Section 1112.001 that is
	in a policy or coupon issued after September 5, 1955, shall be
	treated as a definite contract benefit and valued according to this
	section and the reserve requirements of Chapter 425.
	(b)  Except as provided by Subsection (c), for a policy or
	coupon issued before the date determined under Section 1105.002(a)
	or (b), as applicable to the company, a contract benefit described
	by Subsection (a) shall be valued using the reserve valuation net
	premium for the benefits that is a uniform percentage of the gross
	premiums.
	(c)  A policy described by Subsection (b) that contains a
	contract benefit described by Subsection (a) may be valued on a
	basis that provides for not more than one year preliminary term
	insurance.
	(d)  For a policy or coupon issued on or after the date
	determined under Section 1105.002(a) or (b), as applicable to the
	company, a contract benefit described by Subsection (a) shall be
	valued using the commissioners reserve valuation method described
	by Section 425.064.
	(e)  A provision of this section relating to reserves does
	not apply to a policy issued before September 7, 1955. (V.T.I.C.
	Art. 3.11 (part).)
	CHAPTER 1113. MANAGEMENT, CONTROL, AND DISPOSITION OF CERTAIN LIFE
	INSURANCE AND ANNUITY CONTRACTS
	Sec.1113.001.LIFE INSURANCE AND ANNUITY CONTRACTS OF SPOUSE
	SPOUSE
	spouse, has management, control, and disposition of any contract of
	life insurance or annuity issued in the spouse's name or to the
	extent provided by the contract or any assignment of the contract,
	regardless of whether the contract was issued before, on, or after
	January 1, 1968. (V.T.I.C. Art. 3.49-3.)
	PART G.  ADDITIONS TO TITLE 8, INSURANCE CODE
	SECTION 1G.001.  ADDITION.  Subtitle A, Title 8, Insurance
	Code, is amended by adding Chapter 1214 to read as follows:
	CHAPTER 1214. ADVERTISING FOR CERTAIN HEALTH BENEFITS
	Sec.1214.001.APPLICABILITY OF CHAPTER.  This chapter
	applies only to a health benefit plan that provides benefits for
	medical or surgical expenses incurred as a result of a health
	condition, accident, or sickness, including an individual, group,
	blanket, or franchise insurance policy or agreement, a group
	hospital service contract, or an individual or group evidence of
	coverage issued by:
	(1)  an insurance company;
	(2)  a group hospital service corporation operating
	under Chapter 842;
	(3)  a health maintenance organization operating under
	Section 1367.053, Subchapter A, Chapter 1452, Subchapter B, Chapter
	1507, Chapter 222, 251, or 258, as applicable to a health
	maintenance organization, Chapter 843, Chapter 1271, and Chapter
	1272; or
	(4)  an approved nonprofit health corporation holding a
	certificate of authority under Chapter 844.  (V.T.I.C.
	Art. 21.20-2, Sec. 1(a).)
	Sec.1214.002.EXCEPTION.  This chapter does not apply to:
	(1)  a health benefit plan that provides coverage:
	(A)  only for a specified disease;
	(B)  only for accidental death or dismemberment;
	or
	(C)  for wages or payments in lieu of wages for a
	period during which an employee is absent from work because of
	sickness or injury; or
	(2)  a long-term care insurance policy, including a
	nursing home fixed indemnity policy, unless the commissioner
	determines that the policy provides benefits so comprehensive that
	the policy is a health benefit plan as described by Section
	1214.001. (V.T.I.C. Art. 21.20-2, Sec. 1(b).)
	Sec.1214.003.RATE INFORMATION DISCLAIMERS.  (a)  Subject
	to Chapter 541 and Section 543.001, an advertisement for a health
	benefit plan may include rate information without including
	information about each benefit exclusion or limitation if the
	advertisement includes prominent disclaimers clearly indicating
	that:
	(1)  the rates are illustrative;
	(2)  a person should not send money to the health
	benefit plan issuer in response to the advertisement;
	(3)  a person cannot obtain coverage under the plan
	until the person completes an application for coverage; and
	(4)  benefit exclusions or limitations may apply to the
	plan.
	(b)  An advertisement that states a rate must also indicate
	the age, gender, and geographic location on which the rate is based.
	(V.T.I.C. Art. 21.20-2, Sec. 2.)
	SECTION 1G.002.  ADDITION.  Subtitle H, Title 8, Insurance
	Code, is amended by adding Chapter 1550 to read as follows:
	CHAPTER 1550.  CERTAIN REQUIREMENTS FOR INSURERS CONTRACTING WITH
	GOVERNMENTAL ENTITIES
	SUBCHAPTER A. REPORTING REQUIREMENTS
	Sec.1550.001.DEFINITIONS. In this subchapter:
	(1)  "Governmental entity" means:
	(A)  a state agency; or
	(B)  a county, municipality, school district,
	special purpose district, or other subdivision of state government
	that has jurisdiction limited to a geographic portion of the state.
	(2)  "Insurer" means:
	(A)  an insurance company;
	(B)  a health maintenance organization operating
	under Section 1367.053, Subchapter A, Chapter 1452, Subchapter B,
	Chapter 1507, Chapter 222, 251, or 258, as applicable to a health
	maintenance organization, Chapter 843, Chapter 1271, and Chapter
	1272; or
	(C)  an approved nonprofit health corporation
	that holds a certificate of authority issued under Chapter 844.
	(V.T.I.C. Art. 21.49-15, Sec. 1.)
	Sec.1550.002.REPORT REQUIRED. (a) This section applies
	to a contract subject to competitive bidding under which an insurer
	delivers, issues for delivery, or renews a health insurance policy
	or contract or an evidence of coverage.
	(b)  An insurer that enters into a contract described by
	Subsection (a) with a governmental entity shall provide to the
	governmental entity a detailed report that includes:
	(1)  the claims experience of the governmental entity
	during the preceding calendar year; and
	(2)  the dollar amount of each large claim, as defined
	by the governmental entity, paid by the insurer under the contract
	during the preceding calendar year. (V.T.I.C. Art. 21.49-15, Sec.
	2(a).)
	Sec.1550.003.CLAIM INFORMATION. (a) An insurer
	providing claim information to a governmental entity in the report
	under Section 1550.002 shall provide the information in the
	aggregate, without information through which a specific individual
	covered by the health insurance or evidence of coverage may be
	identified.
	(b)  Claim information provided by an insurer to a
	governmental entity in the report under Section 1550.002:
	(1)  may be viewed or used only for contract bidding
	purposes; and
	(2)  is confidential for purposes of Chapter 552,
	Government Code. (V.T.I.C. Art. 21.49-15, Sec. 2(b).)
	[Sections 1550.004-1550.050 reserved for expansion]
	SUBCHAPTER B. CERTAIN CONTRACTS
	WITH MUNICIPALITIES
	Sec.1550.051.DEFINITION OF INSURER. In this subchapter,
	"insurer" means:
	(1)  an insurance company, including a company
	providing stop-loss or excess loss insurance;
	(2)  a health maintenance organization operating under
	Section 1367.053, Subchapter A, Chapter 1452, Subchapter B, Chapter
	1507, Chapter 222, 251, or 258, as applicable to a health
	maintenance organization, Chapter 843, Chapter 1271, and Chapter
	1272;
	(3)  an approved nonprofit health corporation that
	holds a certificate of authority issued under Chapter 844; or
	(4)  a third-party administrator that holds a
	certificate of authority under Chapter 4151. (V.T.I.C. Art.
	21.49-16, Sec. 1(1).)
	Sec.1550.052.BID REQUIREMENTS. (a)  Except as provided by
	Section 1550.054, an insurer that bids on a contract subject to the
	competitive bidding and competitive proposal requirements adopted
	under Section 252.021, Local Government Code, may not submit a bid
	for a contract to provide stop-loss or other insurance coverage
	that is subject to any qualification imposed by the insurer that
	permits the insurer to modify or limit the terms of insurance
	coverage to be provided after the contract has been made.
	(b)  An insurer's bid submitted under Section 252.021, Local
	Government Code, must contain the insurer's entire offer.
	(V.T.I.C. Art. 21.49-16, Sec. 2(a).)
	Sec.1550.053.CERTAIN EXCLUSIONS AND INCREASED DEDUCTIBLES PROHIBITED
	DEDUCTIBLES PROHIBITED
	insurer that provides stop-loss or other insurance coverage for
	health benefits under a contract subject to this subchapter may
	not, based on an individual's prior medical history:
	(1)  exclude from coverage an individual who is
	otherwise eligible for the health benefits coverage; or
	(2)  assign a higher deductible to the individual.
	(V.T.I.C. Art. 21.49-16, Sec. 2(b).)
	Sec.1550.054.EXCEPTION FOR WRITTEN WAIVER. By executing
	a written waiver in favor of the insurer, a municipality as defined
	by Section 1.005, Local Government Code, may waive a requirement of
	Section 1550.052 or 1550.053(2). (V.T.I.C. Art. 21.49-16, Secs.
	1(2), 2(c).)
	SECTION 1G.003.  ADDITION. Subchapter C, Chapter 1579,
	Insurance Code, is amended by adding Sections 1579.106, 1579.107,
	and 1579.108 to read as follows:
	Sec. 1579.106.  PRIOR AUTHORIZATION FOR CERTAIN DRUGS.  (a)
	In this section, "drug formulary" means a list of drugs preferred
	for use and eligible for coverage by a health coverage plan.
	(b)  A health coverage plan provided under this chapter that
	uses a drug formulary in providing a prescription drug benefit must
	require prior authorization for coverage of the following
	categories of prescribed drugs if the specific drug prescribed is
	not included in the formulary:
	(1)  a gastrointestinal drug;
	(2)  a cholesterol-lowering drug;
	(3)  an anti-inflammatory drug;
	(4)  an antihistamine drug; and
	(5)  an antidepressant drug.
	(c)  Every six months the trustee shall submit to the
	comptroller and the Legislative Budget Board a report regarding any
	cost savings achieved in the program through implementation of the
	prior authorization requirement of this section. The report must
	cover the previous six-month period.  (V.T.I.C. Art. 3.50-7A, as
	added Acts 78th Leg., R.S., Ch. 213.)
	Sec.1579.107.DISEASE MANAGEMENT SERVICES. (a)  In this
	section, "disease management services" means services to assist an
	individual manage a disease or other chronic health condition, such
	as heart disease, diabetes, respiratory illness, end-stage renal
	disease, HIV infection, or AIDS, and with respect to which the
	trustee identifies populations requiring disease management.
	(b)  A health coverage plan provided under this chapter must
	provide disease management services or coverage for disease
	management services in the manner required by the trustee,
	including:
	(1)  patient self-management education;
	(2)  provider education;
	(3)  evidence-based models and minimum standards of
	care;
	(4)  standardized protocols and participation
	criteria; and
	(5)  physician-directed or physician-supervised care.
	(V.T.I.C. Art. 3.50-7B.)
	Sec.1579.108.LIMITATIONS. The trustee may not contract
	for or provide a health coverage plan that excludes from
	participation in the network a general hospital that:
	(1)  is located in the geographical service area or
	areas of the health coverage plan that includes a county that:
	(A)  has a population of at least 100,000 and not
	more than 175,000; and
	(B)  is located in the Texas-Louisiana border
	region, as that term is defined in Section 2056.002(e), Government
	Code; and
	(2)  agrees to provide medical and health care services
	under the plan subject to the same terms as other hospital providers
	under the plan. (V.T.I.C. Art. 3.50-7A, Sec. (b), as added Acts
	78th Leg., R.S., Ch. 201.)
	PART H.  ADDITIONS TO TITLE 10, INSURANCE CODE
	SECTION 1H.001.  ADDITION.  Subtitle C, Title 10, Insurance
	Code, is amended by adding Chapter 1953 to read as follows:
	CHAPTER 1953. RATE REGULATION AND RATEMAKING FOR AUTOMOBILE
	INSURANCE
	SUBCHAPTER A.  RATE REGULATION
	Sec.1953.001.EXCLUSION OF CERTAIN TYPES OR CLASSES OF INSURANCE FROM CERTAIN REGULATIONS
	INSURANCE FROM CERTAIN REGULATIONS
	to insurance against liability for damages arising out of the
	ownership, operation, maintenance, or use of a motor vehicle
	described by Article 5.01 or against loss of or damage to a motor
	vehicle described by Article 5.01 that, in the judgment of the
	commissioner, is a type or class of insurance that is also the
	subject of or is more properly regulated under other insurance
	rating laws that cover that type or class of insurance.
	(b)  A type or class of insurance to which this section
	applies is excluded from regulation under this chapter and:
	(1)  Articles 5.01, 5.01B, 5.03, 5.04, 5.04-1, 5.06,
	5.10, and 5.11;
	(2)  Chapters 251 and 254;
	(3)  Subchapters A and B, Chapter 1806; and
	(4)  Chapters 1951 and 1952.
	(c)  If the commissioner finds that a type or class of
	insurance to which this section applies is also the subject of or is
	more properly regulated under other insurance rating laws that
	cover that type or class of insurance, the commissioner shall issue
	an order declaring which other insurance rating laws apply to:
	(1)  the type or class of insurance; and
	(2)  any motor vehicle equipment described by Article
	5.01. (V.T.I.C. Art. 5.02.)
	[Sections 1953.002-1953.050 reserved for expansion]
	SUBCHAPTER B. RATEMAKING
	Sec.1953.051.CERTAIN RATING PLANS PROHIBITED. A rating
	plan regarding the writing of automobile insurance, other than
	insurance written under Chapter 2151, may not:
	(1)  assign a rate consequence to a charge or
	conviction for a violation of Subtitle C, Title 7, Transportation
	Code; or
	(2)  otherwise cause premiums for automobile insurance
	to be increased because of a charge or conviction described by
	Subdivision (1). (V.T.I.C. Art. 5.01-1.)
	Sec.1953.052.PREMIUM SURCHARGE REQUIRED. (a) An insurer
	described by Section 1952.001 shall assess a premium surcharge in
	an amount prescribed by the department against an insured for no
	more than three years immediately following the date the insured is
	convicted of:
	(1)  an offense relating to the operating of a motor
	vehicle while intoxicated in violation of Section 49.04 or 49.07,
	Penal Code; or
	(2)  an offense under Section 49.08, Penal Code.
	(b)  An insurer may apply the premium surcharge described by
	Subsection (a) only to a private passenger automobile policy, as
	defined by the department.
	(c)  If an insured assessed a premium surcharge under
	Subsection (a) is convicted of an offense under one of the statutes
	listed in Subsection (a)(1) or (2) during the period the insured is
	assessed the premium surcharge, the period for which the premium
	surcharge is assessed is increased by three additional consecutive
	years for each conviction. (V.T.I.C. Art. 5.03-1.)
	[Sections 1953.053-1953.100 reserved for expansion]
	SUBCHAPTER C.  LOSS AND EXPENSE EXPERIENCE
	Sec.1953.101.RECORDING AND REPORTING OF LOSS AND EXPENSE EXPERIENCE AND OTHER DATA
	EXPERIENCE AND OTHER DATA
	reasonable rules and statistical plans for the recording and
	reporting of loss experience and other required data by insurers.
	The rules and plans must ensure that each insurer's total loss and
	expense experience is made available at least as frequently as
	annually in the form and with the detail necessary to aid in
	determining whether rates and rating systems in use under the
	following provisions comply with the standards adopted under those
	provisions:
	(1)  this chapter;
	(2)  Articles 5.01, 5.03, and 5.04, if applicable;
	(3)  Subchapters A and B, Chapter 1806; and
	(4)  Chapters 1951 and 1952.
	(b)  In adopting the rules, the commissioner shall adopt
	rules that are as uniform as is practicable to the rules and forms
	of statistical plans used in other states.
	(c)  Each insurer shall use the statistical plans adopted
	under this section to record and report loss experience and other
	required data in accordance with the rules adopted by the
	commissioner.
	(d)  The commissioner may modify statistical plans adopted
	under this section. (V.T.I.C. Art. 5.05, Sec. (a).)
	Sec.1953.102.RULES ALLOWING INTERCHANGE OF LOSS EXPERIENCE INFORMATION
	EXPERIENCE INFORMATION
	rules to allow the interchange of loss experience information as
	necessary for the application of rating plans. (V.T.I.C. Art.
	5.05, Sec. (b).)
	Sec.1953.103.EXCHANGE OF INFORMATION AND EXPERIENCE DATA WITH OTHER STATES
	WITH OTHER STATES
	laws, the department or an insurer may:
	(1)  exchange information and experience data with
	insurance supervisory officials, insurers, and rating
	organizations in other states; and
	(2)  consult and cooperate with the individuals or
	entities described by Subdivision (1) with respect to ratemaking
	and the application of rating systems. (V.T.I.C. Art. 5.05, Sec.
	(c).)
	Sec.1953.104.SWORN STATEMENTS. (a)  The department may
	require a sworn statement from an insurer affected by this
	subchapter that shows:
	(1)  the insurer's experience on any classification or
	classifications of risks; and
	(2)  other information that is necessary or helpful in
	performing duties or exercising authority imposed by law.
	(b)  The department shall prescribe the necessary forms for
	statements and reports required under Subsection (a) with due
	regard for the rules, methods, and forms in use in other states for
	similar purposes so that uniformity of statistics is not disturbed.
	(V.T.I.C. Art. 5.05, Sec. (d).)
	SECTION 1H.002.  ADDITION.  Subtitle D, Title 10, Insurance
	Code, is amended by adding Chapter 2008 to read as follows:
	CHAPTER 2008.  COVERAGE FOR CERTAIN DAMAGE
	TO PROPERTY BUILT WHOLLY OR PARTIALLY OVER WATER
	Sec.2008.001.APPLICABILITY OF CHAPTER. This chapter
	applies only to an insurer described by Section 2251.003(a).
	(V.T.I.C. Art. 5.14, Sec. (a).)
	Sec.2008.002.COVERAGE; LIMITS AND DEDUCTIBLES. (a) An
	insurance policy written by an insurer against loss or damage by
	windstorm, hurricane, or hail may include coverage for:
	(1)  a building or other structure that is built wholly
	or partially over water; and
	(2)  the corporeal movable property contained in a
	building or structure described by Subdivision (1).
	(b)  An insurer that writes coverage described by Subsection
	(a) may impose appropriate limits of coverage and deductibles for
	the coverage. (V.T.I.C. Art. 5.14, Secs. (b), (c).)
	PART I.  ADDITIONS TO TITLE 13, INSURANCE CODE
	SECTION 1I.001.  ADDITION.  Subtitle A, Title 13, Insurance
	Code, is amended by adding Chapter 4007 to read as follows:
	CHAPTER 4007.  NOTICE TO DEPARTMENT BY CERTAIN PROPERTY AND
	CASUALTY INSURANCE COMPANIES REGARDING AGENTS
	Sec.4007.001.APPLICABILITY OF CHAPTER. This chapter
	applies only to an insurance company authorized to engage in the
	business of insurance in this state under:
	(1)  a provision of:
	(A)  Chapter 5, 1805, or 2171; or
	(B)  Subtitle B, C, D, E, F, H, or I, Title 10; or
	(2)  Chapter 861, 862, 883, 911, 912, 941, 942, 984, or
	3503. (V.T.I.C. Art. 21.70, Sec. (a) (part).)
	Sec.4007.002.NOTICE TO DEPARTMENT REQUIRED. (a) On forms
	prescribed by the commissioner, an insurance company shall notify
	the department not later than the 30th day after the date on which:
	(1)  balances due from an insurance agent for more than
	90 days exceed $1 million or 10 percent of the company's
	policyholder surplus computed on December 31 of the preceding year
	or the most recent quarter if a report is specifically required by
	the department;
	(2)  an agent's authority to settle claims for the
	company is withdrawn; or
	(3)  the contract with an agent is canceled or
	terminated.
	(b)  An insurance company may comply with the notification
	requirement of Subsection (a)(1) by submitting a single annual
	report if:
	(1)  the company routinely operates above the limit
	established by Subsection (a)(1); and
	(2)  the commissioner verifies that fact under a
	procedure adopted by the commissioner. (V.T.I.C. Art. 21.70, Secs.
	(a) (part), (b).)
	PART J.  ADDITION OF TITLE 20, INSURANCE CODE
	SECTION 1J.001. TITLE 20.  The Insurance Code is amended by
	adding Title 20 to read as follows:
	TITLE 20.  REGULATION OF OTHER OCCUPATIONS
	CHAPTER 6001. FIRE EXTINGUISHER SERVICE AND INSTALLATION
	SUBCHAPTER A. GENERAL PROVISIONS
	Sec. 6001.001.  PURPOSE
	Sec. 6001.002.  DEFINITIONS
	[Sections 6001.003-6001.050 reserved for expansion]
	SUBCHAPTER B. POWERS AND DUTIES OF COMMISSIONER,
	DEPARTMENT, AND STATE FIRE MARSHAL
	Sec. 6001.051.  ADMINISTRATION OF CHAPTER
	Sec. 6001.052.  ADOPTION OF RULES
	Sec. 6001.053.  RULES RESTRICTING ADVERTISING OR
	COMPETITIVE BIDDING
	Sec. 6001.054.  GENERAL POWERS AND DUTIES OF DEPARTMENT
	Sec. 6001.055.  FEES
	Sec. 6001.056.  DEPOSIT IN OPERATING ACCOUNT
	[Sections 6001.057-6001.100 reserved for expansion]
	SUBCHAPTER C. FIRE EXTINGUISHER ADVISORY COUNCIL
	Sec. 6001.101.  ADVISORY COUNCIL; APPOINTMENT
	Sec. 6001.102.  ADVISORY COUNCIL DUTIES
	[Sections 6001.103-6001.150 reserved for expansion]
	SUBCHAPTER D. REGISTRATION, LICENSE, AND PERMIT REQUIREMENTS
	Sec. 6001.151.  FIRM REGISTRATION CERTIFICATE REQUIRED
	Sec. 6001.152.  BRANCH OFFICE REGISTRATION CERTIFICATE
	REQUIRED
	Sec. 6001.153.  HYDROSTATIC TESTING; REGISTRATION
	CERTIFICATE REQUIRED
	Sec. 6001.154.  REQUIRED INSURANCE COVERAGE FOR
	REGISTRATION CERTIFICATE
	Sec. 6001.155.  EMPLOYEE LICENSE REQUIRED
	Sec. 6001.156.  ACTIVITIES NOT REGULATED BY CHAPTER
	Sec. 6001.157.  LICENSE EXAMINATION
	Sec. 6001.158.  EXAMINATION RESULTS
	Sec. 6001.159.  CONTINUING EDUCATION REQUIREMENTS
	Sec. 6001.160.  RECIPROCAL LICENSE
	Sec. 6001.161.  APPRENTICE PERMIT REQUIRED
	Sec. 6001.162.  NOT TRANSFERABLE
	[Sections 6001.163-6001.200 reserved for expansion]
	SUBCHAPTER E. RENEWAL OF REGISTRATION, LICENSE, OR PERMIT
	Sec. 6001.201.  RENEWAL REQUIRED; FEE
	Sec. 6001.202.  NOTICE OF EXPIRATION
	Sec. 6001.203.  RENEWAL PROCEDURES
	[Sections 6001.204-6001.250 reserved for expansion]
	SUBCHAPTER F. PROHIBITED PRACTICES
	AND DISCIPLINARY PROCEDURES
	Sec. 6001.251.  PROHIBITED PRACTICES
	Sec. 6001.252.  DISCIPLINARY ACTIONS
	Sec. 6001.253.  DISCIPLINARY HEARING
	Sec. 6001.254.  REAPPLICATION REQUIREMENTS
	Sec. 6001.255.  REEXAMINATION AFTER REVOCATION
	[Sections 6001.256-6001.300 reserved for expansion]
	SUBCHAPTER G. CRIMINAL PENALTY
	Sec. 6001.301.  CRIMINAL PENALTY
	CHAPTER 6001. FIRE EXTINGUISHER SERVICE AND INSTALLATION
	SUBCHAPTER A. GENERAL PROVISIONS
	Sec.6001.001.PURPOSE. The purpose of this chapter is to
	safeguard lives and property by:
	(1)  regulating:
	(A)  the leasing, selling, installing, and
	servicing of portable fire extinguishers; and
	(B)  the planning, certifying, installing, and
	servicing of fixed fire extinguisher systems; and
	(2)  prohibiting portable fire extinguishers, fixed
	fire extinguisher systems, or extinguisher equipment that is not
	labeled or listed by a testing laboratory approved by the
	department.  (V.T.I.C. Art. 5.43-1, Sec. 1.)
	Sec.6001.002.DEFINITIONS. In this chapter:
	(1)  "Firm" means an individual, partnership,
	corporation, or association.
	(2)  "Fixed fire extinguisher system" means an assembly
	of piping, conduits, or containers that convey liquid, powder, or
	gases to dispersal openings or devices protecting one or more
	hazards by suppressing or extinguishing fires.
	(3)  "Hydrostatic testing" means pressure testing by
	hydrostatic methods.
	(4)  "Insurance agent" means:
	(A)  an individual, firm, or corporation licensed
	under:
	(i)  Subchapter E, Chapter 981; or
	(ii)  Subchapter A, B, C, D, E, or G, Chapter
	4051; or
	(B)  an individual authorized to represent an
	insurance fund or pool created by a municipality, county, or other
	political subdivision of this state under Chapter 791, Government
	Code.
	(5)  "Portable fire extinguisher" means any device that
	contains liquid, powder, or gases for suppressing or extinguishing
	fires.
	(6)  "Registered firm" means a firm that holds a
	registration certificate.
	(7)  "Service" and "servicing" mean servicing a
	portable fire extinguisher or a fixed fire extinguisher system by
	inspecting, charging, filling, maintaining, recharging, refilling,
	repairing, or testing. (V.T.I.C. Art. 5.43-1, Sec. 3.)
	[Sections 6001.003-6001.050 reserved for expansion]
	SUBCHAPTER B. POWERS AND DUTIES OF COMMISSIONER,
	DEPARTMENT, AND STATE FIRE MARSHAL
	Sec.6001.051.ADMINISTRATION OF CHAPTER. (a)  The
	department shall administer this chapter.
	(b)  The commissioner may issue rules the commissioner
	considers necessary to administer this chapter through the state
	fire marshal. (V.T.I.C. Art. 5.43-1, Sec. 2 (part).)
	Sec.6001.052.ADOPTION OF RULES. (a) In adopting
	necessary rules, the commissioner may use recognized standards,
	including standards:
	(1)  published by the National Fire Protection
	Association;
	(2)  recognized by federal law or regulation;
	(3)  published by any nationally recognized
	standards-making organization; or
	(4)  contained in the manufacturer's installation
	manuals.
	(b)  The commissioner shall adopt and administer rules
	determined essentially necessary for the protection and
	preservation of life and property regarding:
	(1)  registration of firms engaged in the business of:
	(A)  installing or servicing portable fire
	extinguishers or planning, certifying, installing, or servicing
	fixed fire extinguisher systems; or
	(B)  hydrostatic testing of fire extinguisher
	cylinders;
	(2)  the examination and licensing of individuals to:
	(A)  install or service portable fire
	extinguishers; and
	(B)  plan, certify, install, or service fixed fire
	extinguisher systems; and
	(3)  requirements for:
	(A)  installing or servicing portable fire
	extinguishers; and
	(B)  planning, certifying, installing, or
	servicing fixed fire extinguisher systems.
	(c)  The commissioner by rule shall prescribe requirements
	for applications and qualifications for licenses, permits, and
	certificates issued under this chapter. (V.T.I.C. Art. 5.43-1,
	Secs. 2 (part), 7(a), 8 (part).)
	Sec. 6001.053.  RULES RESTRICTING ADVERTISING OR
	COMPETITIVE BIDDING. (a)  The commissioner may not adopt rules
	restricting advertising or competitive bidding by the holder of a
	license, permit, certificate, or approval issued under this chapter
	except to prohibit false, misleading, or deceptive practices.
	(b)  In the commissioner's rules to prohibit false,
	misleading, or deceptive practices, the commissioner may not
	include a rule that:
	(1)  restricts the use of any medium for advertising;
	(2)  restricts the use of a license, permit,
	certificate, or approval holder's personal appearance or voice in
	an advertisement;
	(3)  relates to the size or duration of an
	advertisement by the license, permit, certificate, or approval
	holder; or
	(4)  restricts the license, permit, certificate, or
	approval holder's advertisement under a trade name. (V.T.I.C. Art.
	5.43-1, Sec. 8A.)
	Sec.6001.054.GENERAL POWERS AND DUTIES OF DEPARTMENT.
	(a)  The department shall evaluate the qualifications of a firm:
	(1)  applying for a registration certificate to engage
	in the business of installing or servicing portable fire
	extinguishers or planning, certifying, installing, or servicing
	fixed fire extinguisher systems; or
	(2)  seeking approval as a testing laboratory.
	(b)  The department shall issue:
	(1)  registration certificates for firms that qualify
	under commissioner rules to engage in the business of installing or
	servicing portable fire extinguishers or planning, certifying,
	installing, or servicing fixed fire extinguisher systems; and
	(2)  licenses, apprentice permits, and authorizations
	to perform hydrostatic testing to firms or individuals that
	qualify. (V.T.I.C. Art. 5.43-1, Sec. 8 (part).)
	Sec.6001.055.FEES. (a) The commissioner shall set the
	fee for:
	(1)  an initial firm registration certificate in an
	amount not to exceed $450;
	(2)  the renewal of a firm registration certificate in
	an amount not to exceed $300 annually;
	(3)  an initial branch office registration certificate
	in an amount not to exceed $100;
	(4)  the renewal of a branch office registration
	certificate in an amount not to exceed $100 annually;
	(5)  an initial registration certificate to perform
	hydrostatic testing of fire extinguishers manufactured in
	accordance with the specifications and procedures of the United
	States Department of Transportation in an amount not to exceed
	$250;
	(6)  the renewal of a registration certificate to
	perform hydrostatic testing of fire extinguishers manufactured in
	accordance with the specifications and procedures of the United
	States Department of Transportation in an amount not to exceed $150
	annually;
	(7)  an initial employee license fee in an amount not to
	exceed $70;
	(8)  the annual renewal of an employee license in an
	amount not to exceed $50; and
	(9)  an apprentice permit in an amount not to exceed
	$30.
	(b)  Unless the examination or reexamination for an employee
	license is administered by a testing service, the commissioner
	shall set a nonrefundable fee for:
	(1)  the initial examination in an amount not to exceed
	$30; and
	(2)  each reexamination in an amount not to exceed $20.
	(c)  The commissioner shall set a fee in an amount not to
	exceed $20 for:
	(1)  a duplicate registration certificate, license, or
	apprentice permit issued under this chapter; or
	(2)  any request requiring changes to a registration
	certificate, license, or permit.
	(d)  On a change of ownership of a registered firm, the
	department shall issue a new registration certificate with a new
	number for a fee set by the commissioner in an amount not to exceed
	$450.  On a change of ownership of a branch office, the commissioner
	shall charge a fee in an amount not to exceed $100. (V.T.I.C. Art.
	5.43-1, Secs. 4(a) (part), (b), (c-1), (d) (part), (e) (part),
	(f).)
	Sec.6001.056.DEPOSIT IN OPERATING ACCOUNT. All money
	collected under this chapter, other than penalties and monetary
	forfeitures, shall be paid to the department and deposited in the
	state treasury to the credit of the Texas Department of Insurance
	operating account for use in administering this chapter.  (V.T.I.C.
	Art. 5.43-1, Sec. 11.)
	[Sections 6001.057-6001.100 reserved for expansion]
	SUBCHAPTER C. FIRE EXTINGUISHER ADVISORY COUNCIL
	Sec.6001.101.ADVISORY COUNCIL; APPOINTMENT. (a)  The
	commissioner may delegate the exercise of all or part of the
	commissioner's functions, powers, and duties under this chapter,
	other than the issuance of licenses, certificates, and permits, to
	a fire extinguisher advisory council.
	(b)  The commissioner shall appoint the members of the
	advisory council.  The members of the council must:
	(1)  be experienced and knowledgeable in one or more of
	the following:
	(A)  fire services;
	(B)  fire extinguisher manufacturing;
	(C)  fire insurance inspection or underwriting;
	or
	(D)  fire extinguisher servicing; or
	(2)  be members of a fire protection association or
	industrial safety association. (V.T.I.C. Art. 5.43-1, Secs. 9(a)
	(part), (b).)
	Sec.6001.102.ADVISORY COUNCIL DUTIES. (a) The fire
	extinguisher advisory council shall assist in the formulation and
	review of rules adopted under this chapter.
	(b)  The advisory council shall periodically:
	(1)  review rules implementing this chapter; and
	(2)  recommend rule changes to the commissioner.
	(V.T.I.C. Art. 5.43-1, Sec. 9(a) (part).)
	[Sections 6001.103-6001.150 reserved for expansion]
	SUBCHAPTER D. REGISTRATION, LICENSE, AND PERMIT REQUIREMENTS
	Sec.6001.151.FIRM REGISTRATION CERTIFICATE REQUIRED.
	Unless the firm holds a registration certificate issued by the
	department, a firm may not engage in the business of:
	(1)  installing or servicing portable fire
	extinguishers; or
	(2)  planning, certifying, installing, or servicing
	fixed fire extinguisher systems. (V.T.I.C. Art. 5.43-1, Sec. 4(a)
	(part).)
	Sec. 6001.152.  BRANCH OFFICE REGISTRATION CERTIFICATE
	REQUIRED.  (a)  Each separate office location of a firm holding a
	registration certificate, other than the location identified on the
	firm's certificate, must have a branch office registration
	certificate issued by the department.
	(b)  Before issuing a branch office registration
	certificate, the department must determine that the branch office
	location is part of a registered firm. (V.T.I.C. Art. 5.43-1, Sec.
	4(a) (part).)
	Sec. 6001.153.  HYDROSTATIC TESTING; REGISTRATION
	CERTIFICATE REQUIRED. (a)  A firm may not perform hydrostatic
	testing of fire extinguishers manufactured in accordance with the
	specifications and procedures of the United States Department of
	Transportation unless the firm:
	(1)  complies with the procedures specified by that
	department for compressed gas cylinders; and
	(2)  holds a registration certificate issued by the
	state fire marshal authorizing hydrostatic testing.
	(b)  The license of an individual qualified to do work
	described by Subsection (a) must indicate the authority of the
	individual to perform that work.
	(c)  Hydrostatic testing of fire extinguishers that is not
	performed under the specifications of the United States Department
	of Transportation must be performed in the manner recommended by
	the National Fire Protection Association.  (V.T.I.C. Art. 5.43-1,
	Sec. 4(e) (part).)
	Sec. 6001.154.  REQUIRED INSURANCE COVERAGE FOR
	REGISTRATION CERTIFICATE. (a)  The department may not issue a
	registration certificate under this chapter unless the applicant
	files with the department evidence of a general liability insurance
	policy that includes products and completed operations coverage.
	The policy must be conditioned to pay on behalf of the insured those
	amounts that the insured becomes legally obligated to pay as
	damages because of bodily injury and property damage caused by an
	occurrence involving the insured or the insured's officer, agent,
	or employee in the conduct of any activity that requires a
	registration certificate or license under this chapter.
	(b)  Unless the commissioner, after notice and an
	opportunity for a hearing, increases or decreases the limits, the
	limits of insurance coverage required by Subsection (a) must be at
	least:
	(1)  $100,000 combined single limits for bodily injury
	and property damage for each occurrence; and
	(2)  $300,000 aggregate for all occurrences for each
	policy year.
	(c)  The evidence of insurance required by this section must
	be in the form of a certificate of insurance executed by an insurer
	authorized to engage in the business of insurance in this state and
	countersigned by an insurance agent licensed in this state. A
	certificate of insurance for surplus lines coverage procured in
	compliance with Chapter 981 through a surplus lines agent that is
	licensed under Subchapter E, Chapter 981, and resident in this
	state may be filed with the department as evidence of the coverage
	required by this section.
	(d)  An insurance certificate executed and filed with the
	department under this section remains in force until the insurer
	has terminated future liability by the notice required by the
	department.
	(e)  Failure to maintain the liability insurance required by
	this section constitutes grounds for the denial, suspension, or
	revocation, after notice and opportunity for hearing, of a
	registration certificate issued under this chapter. (V.T.I.C. Art.
	5.43-1, Secs. 4A, 8 (part).)
	Sec.6001.155.EMPLOYEE LICENSE REQUIRED. (a) Except as
	provided by Section 6001.156, an individual, other than an
	apprentice, must hold a license issued by the department before:
	(1)  installing or servicing portable fire
	extinguishers;
	(2)  installing, servicing, or certifying
	preengineered fixed fire extinguisher systems; or
	(3)  planning, supervising, servicing, or certifying
	the installation of fixed fire extinguisher systems other than
	preengineered systems.
	(b)  An individual who holds a license to install or service
	portable fire extinguishers or install and service fixed fire
	extinguisher systems must be an employee or agent of a registered
	firm. (V.T.I.C. Art. 5.43-1, Secs. 4(c), 5(c).)
	Sec.6001.156.ACTIVITIES NOT REGULATED BY CHAPTER. (a)
	The licensing provisions of this chapter do not apply to:
	(1)  the filling or charging of a portable fire
	extinguisher by the manufacturer before initial sale of the fire
	extinguisher;
	(2)  the servicing by a firm of the firm's portable fire
	extinguishers or fixed systems by the firm's personnel who are
	specially trained for that servicing;
	(3)  the installation of portable fire extinguishers in
	a building by the building owner, the owner's managing agent, or an
	employee of the building owner or the owner's managing agent;
	(4)  the installation or servicing of water sprinkler
	systems installed in compliance with the National Fire Protection
	Association's Standards for the Installation of Sprinkler Systems;
	(5)  a firm that is engaged in the retail or wholesale
	sale of portable fire extinguishers that carry an approval label or
	listing of a testing laboratory approved by the department, but
	that is not engaged in the installation or servicing of those
	extinguishers;
	(6)  a fire department that services portable fire
	extinguishers as a public service without charge, if the members of
	the fire department are trained in the proper servicing of the fire
	extinguishers;
	(7)  a firm that is a party to a contract under which:
	(A)  the installation of portable fire
	extinguishers or a fixed fire extinguisher system is performed
	under the direct supervision of and certified by a firm
	appropriately registered to install and certify portable
	extinguishers or fixed systems; and
	(B)  the registered firm assumes full
	responsibility for the installation; or
	(8)  an engineer licensed under Chapter 1001,
	Occupations Code, while acting solely in the engineer's
	professional capacity.
	(b)  Except as provided by Subsection (a), only the holder of
	a license or an apprentice permit issued under this chapter may:
	(1)  install or service portable fire extinguishers; or
	(2)  install and maintain fixed fire extinguisher
	systems. (V.T.I.C. Art. 5.43-1, Secs. 5(b), 6.)
	Sec.6001.157.LICENSE EXAMINATION. (a) The state fire
	marshal shall:
	(1)  establish the scope and type of an examination
	required by this chapter; and
	(2)  examine each applicant for a license under this
	chapter.
	(b)  The state fire marshal may administer the examination or
	may enter into an agreement with a testing service.
	(c)  If a testing service is used, the state fire marshal may
	contract with the testing service regarding requirements for the
	examination, including:
	(1)  examination development;
	(2)  scheduling;
	(3)  site arrangements;
	(4)  grading;
	(5)  reporting;
	(6)  analysis; or
	(7)  other administrative duties.
	(d)  The state fire marshal may require the testing service
	to:
	(1)  correspond directly with a license applicant
	regarding the administration of the examination;
	(2)  collect a reasonable fee from an applicant for
	administering the examination; or
	(3)  administer the examination at a specific location
	or time.
	(e)  The state fire marshal shall adopt rules as necessary to
	implement examination requirements under this chapter.  (V.T.I.C.
	Art. 5.43-1, Secs. 7(e), (f), (j), 8 (part).)
	Sec.6001.158.EXAMINATION RESULTS.  (a)  Not later than
	the 30th day after the date on which a licensing examination is
	administered under this chapter, the state fire marshal shall send
	notice to each examinee of the results of the examination.
	(b)  If an examination is conducted, graded, or reviewed by a
	testing service, the state fire marshal shall send notice to the
	examinees of the results of the examination not later than the 14th
	day after the date on which the state fire marshal receives the
	results from the testing service.
	(c)  If the notice of the examination results will be delayed
	for more than 90 days after the examination date, the state fire
	marshal, before the 90th day, shall send notice to the examinee of
	the reason for the delay.
	(d)  The state fire marshal may require a testing service to
	notify an examinee of the results of the examinee's examination
	under Subsections (a) and (b).
	(e)  If requested in writing by an individual who fails the
	licensing examination administered under this chapter, the state
	fire marshal shall send to the individual an analysis of the
	individual's performance on the examination.  (V.T.I.C. Art.
	5.43-1, Secs. 7(g), (g-1).)
	Sec.6001.159.CONTINUING EDUCATION REQUIREMENTS. (a) The
	commissioner may adopt procedures for certifying and may certify
	continuing education programs for individuals licensed under this
	chapter.
	(b)  Participation in the continuing education programs is
	voluntary. (V.T.I.C. Art. 5.43-1, Sec. 7(h).)
	Sec.6001.160.RECIPROCAL LICENSE. The department may waive
	any license requirement for an applicant who holds a license issued
	by another state that has license requirements substantially
	equivalent to the license requirements of this state. (V.T.I.C.
	Art. 5.43-1, Sec. 7(i).)
	Sec.6001.161.APPRENTICE PERMIT REQUIRED. (a)  An
	individual may not install or service portable fire extinguishers
	or fixed fire extinguisher systems as an apprentice unless the
	individual holds an apprentice permit issued by the department.
	(b)  An apprentice may perform a service described by
	Subsection (a) only under the direct supervision of an individual
	who holds a license issued under this chapter and who works for the
	same firm as the apprentice.  (V.T.I.C. Art. 5.43-1, Secs. 4(d)
	(part), 5(b) (part).)
	Sec.6001.162.NOT TRANSFERABLE. A registration
	certificate, license, or permit issued under this chapter is not
	transferable. (V.T.I.C. Art. 5.43-1, Sec. 5(d).)
	[Sections 6001.163-6001.200 reserved for expansion]
	SUBCHAPTER E. RENEWAL OF REGISTRATION, LICENSE, OR PERMIT
	Sec.6001.201.RENEWAL REQUIRED; FEE. (a) A renewal of a
	registration certificate or license issued under this chapter is
	valid for a period of two years. The license or registration fee
	for each year of the two-year period is payable on renewal.
	(b)  An apprentice permit expires on the first anniversary of
	the date of issuance.
	(c)  The commissioner by rule may adopt a system under which
	registration certificates, licenses, and permits expire on various
	dates during the year. For the year in which an expiration date of a
	registration certificate, license, or permit is less than one year
	from its issuance or anniversary date, the fee shall be prorated on
	a monthly basis so that each holder of a registration certificate,
	license, or permit pays only that portion of the renewal fee that is
	allocable to the number of months during which the registration
	certificate, license, or permit is valid. On each subsequent
	renewal, the total renewal fee is payable. (V.T.I.C. Art. 5.43-1,
	Secs. 4(d) (part), 7A(a), (c).)
	Sec.6001.202.NOTICE OF EXPIRATION. At least 30 days
	before the expiration date of a registration certificate or
	license, the state fire marshal shall send written notice of the
	impending expiration to the holder of the registration certificate
	or license at the holder's last known address. (V.T.I.C. Art.
	5.43-1, Sec. 7A(b) (part).)
	Sec.6001.203.RENEWAL PROCEDURES. (a)  The holder of an
	unexpired registration certificate or license may renew the
	certificate or license by paying the required renewal fee to the
	department before the expiration date of the certificate or
	license.
	(b)  A firm or individual whose registration certificate or
	license has been expired for 90 days or less may renew the
	certificate or license by paying to the department:
	(1)  the required renewal fee; and
	(2)  a fee equal to one-half of the initial fee for the
	certificate or license.
	(c)  A firm or individual whose registration certificate or
	license has been expired for more than 90 days but less than two
	years may renew the certificate or license by paying to the
	department:
	(1)  all unpaid renewal fees; and
	(2)  a fee that is equal to the initial fee for the
	certificate or license.
	(d)  A firm or individual whose registration certificate or
	license has been expired for two years or longer may not renew the
	certificate or license. The firm or individual may obtain a new
	registration certificate or license by complying with the
	requirements and procedures for obtaining an initial registration
	certificate or license.
	(e)  This section may not be construed to prevent the
	department from denying or refusing to renew a license under
	applicable law or commissioner rules. (V.T.I.C. Art. 5.43-1, Sec.
	7A(b) (part).)
	[Sections 6001.204-6001.250 reserved for expansion]
	SUBCHAPTER F. PROHIBITED PRACTICES
	AND DISCIPLINARY PROCEDURES
	Sec.6001.251.PROHIBITED PRACTICES. (a)  An individual or
	firm may not:
	(1)  engage in the business of installing or servicing
	portable fire extinguishers without holding a registration
	certificate;
	(2)  engage in the business of planning, certifying,
	installing, or servicing fixed fire extinguisher systems without
	holding a registration certificate;
	(3)  install, service, or certify the servicing of
	portable fire extinguishers or plan, certify, service, or install
	fixed fire extinguisher systems without holding a license;
	(4)  perform hydrostatic testing of fire extinguisher
	cylinders manufactured in accordance with the specifications and
	requirements of the United States Department of Transportation
	without holding a hydrostatic testing registration certificate;
	(5)  obtain or attempt to obtain a registration
	certificate or license by fraudulent representation;
	(6)  install or service portable fire extinguishers or
	plan, certify, service, or install fixed fire extinguisher systems
	in violation of this chapter or the rules adopted and administered
	under this chapter;
	(7)  except as provided by Subsection (b), install,
	service, or hydrostatically test a fire extinguisher that does not
	have the proper identifying labels;
	(8)  sell, install, service, or recharge a carbon
	tetrachloride fire extinguisher; or
	(9)  except as provided by Subsection (b), lease, sell,
	service, or install a portable fire extinguisher, a fixed fire
	extinguisher system, or extinguisher equipment unless it carries an
	approval label or listing label issued by a testing laboratory
	approved by the department.
	(b)  The commissioner by rule shall permit an individual or
	firm to service a portable fire extinguisher regardless of whether
	the extinguisher carries a label described by Subsection (a).
	(V.T.I.C. Art. 5.43-1, Secs. 5(a), (e), 10.)
	Sec.6001.252.DISCIPLINARY ACTIONS. (a)  The state fire
	marshal may suspend, revoke, or refuse to issue or renew a
	registration certificate, license, or permit if, after notice and
	hearing, the state fire marshal finds that the applicant,
	registrant, license holder, or permit holder has engaged in acts
	that:
	(1)  violate this chapter;
	(2)  violate rules or standards adopted under this
	chapter; or
	(3)  constitute misrepresentation made in connection
	with:
	(A)  the sale of products; or
	(B)  services rendered.
	(b)  Subject to Section 6001.253, the commissioner may
	suspend, revoke, or refuse to issue or renew a certificate,
	license, permit, or approval.  (V.T.I.C. Art. 5.43-1, Secs. 7(b),
	12(a).)
	Sec.6001.253.DISCIPLINARY HEARING. (a) If the state fire
	marshal proposes to suspend, revoke, or refuse to renew a license,
	permit, certificate, or approval issued under this chapter, the
	holder of the license, permit, certificate, or approval is entitled
	to a hearing conducted by the State Office of Administrative
	Hearings.
	(b)  Proceedings for a disciplinary action are governed by
	Chapter 2001, Government Code.
	(c)  Rules of practice adopted by the commissioner
	applicable to the proceedings for a disciplinary action may not
	conflict with rules adopted by the State Office of Administrative
	Hearings. (V.T.I.C. Art. 5.43-1, Sec. 13.)
	Sec.6001.254.REAPPLICATION REQUIREMENTS. (a)  An
	applicant or holder of a registration certificate, license, or
	permit whose certificate, license, or permit has been refused or
	revoked under this chapter, other than for failure to pass a
	required written examination, may not file another application for
	a registration certificate, license, or permit before the first
	anniversary of the effective date of the refusal or revocation.
	(b)  After the first anniversary of the effective date of the
	refusal or revocation, the applicant may:
	(1)  reapply; and
	(2)  in a public hearing, show good cause why the
	issuance of the registration certificate, license, or permit is not
	against the public safety and welfare. (V.T.I.C. Art. 5.43-1, Sec.
	7(c).)
	Sec.6001.255.REEXAMINATION AFTER REVOCATION.  An
	individual whose license to service portable fire extinguishers or
	to install or service fixed fire extinguisher systems has been
	revoked must retake and pass the required written examination
	before a new license may be issued.  (V.T.I.C. Art. 5.43-1, Sec.
	7(d).)
	[Sections 6001.256-6001.300 reserved for expansion]
	SUBCHAPTER G. CRIMINAL PENALTY
	Sec.6001.301.CRIMINAL PENALTY. (a) A person commits an
	offense if the person knowingly violates Section 6001.251(a).
	(b)  An offense under this section is a Class B misdemeanor.
	(c)  Venue for an offense under this section is in Travis
	County or the county in which the offense is committed. (V.T.I.C.
	Art. 5.43-1, Secs. 12(b), (c); New.)
	CHAPTER 6002.  FIRE DETECTION AND ALARM DEVICE INSTALLATION
	SUBCHAPTER A. GENERAL PROVISIONS
	Sec. 6002.001.  PURPOSE
	Sec. 6002.002.  DEFINITIONS
	Sec. 6002.003.  EFFECT ON LOCAL REGULATION
	Sec. 6002.004.  PROVISION OF CERTAIN SERVICES BY
	POLITICAL SUBDIVISION
	[Sections 6002.005-6002.050 reserved for expansion]
	SUBCHAPTER B. POWERS AND DUTIES OF COMMISSIONER, DEPARTMENT,
	AND STATE FIRE MARSHAL
	Sec. 6002.051.  ADMINISTRATION OF CHAPTER; RULES
	Sec. 6002.052.  ADOPTION OF RULES; STANDARDS
	Sec. 6002.053.  RULES RESTRICTING ADVERTISING OR
	COMPETITIVE BIDDING
	Sec. 6002.054.  FEES
	Sec. 6002.055.  DEPOSIT IN OPERATING ACCOUNT
	[Sections 6002.056-6002.100 reserved for expansion]
	SUBCHAPTER C. FIRE DETECTION AND ALARM DEVICES ADVISORY COUNCIL
	Sec. 6002.101.  ADVISORY COUNCIL; APPOINTMENT
	Sec. 6002.102.  ADVISORY COUNCIL DUTIES
	[Sections 6002.103-6002.150 reserved for expansion]
	SUBCHAPTER D. REGISTRATION, LICENSE, AND APPROVAL REQUIREMENTS
	Sec. 6002.151.  FIRM REGISTRATION CERTIFICATE REQUIRED;
	LIMITED CERTIFICATE
	Sec. 6002.152.  BRANCH OFFICE REGISTRATION CERTIFICATE
	REQUIRED
	Sec. 6002.153.  REQUIRED INSURANCE COVERAGE FOR
	REGISTRATION CERTIFICATE
	Sec. 6002.154.  FIRE ALARM TECHNICIAN, RESIDENTIAL FIRE
	ALARM SUPERINTENDENT, AND FIRE ALARM
	PLANNING SUPERINTENDENT
	Sec. 6002.155.  ACTIVITIES NOT REGULATED BY CHAPTER
	Sec. 6002.156.  LICENSE EXAMINATION
	Sec. 6002.157.  EXAMINATION RESULTS
	Sec. 6002.158.  TRAINING SCHOOLS AND INSTRUCTORS;
	APPROVAL
	Sec. 6002.159.  CONTINUING EDUCATION PROGRAMS
	Sec. 6002.160.  RECIPROCAL LICENSE
	Sec. 6002.161.  NOT TRANSFERABLE
	[Sections 6002.162-6002.200 reserved for expansion]
	SUBCHAPTER E. RENEWAL OF REGISTRATION CERTIFICATE OR LICENSE
	Sec. 6002.201.  RENEWAL REQUIRED; FEE
	Sec. 6002.202.  NOTICE OF EXPIRATION
	Sec. 6002.203.  RENEWAL PROCEDURES
	Sec. 6002.204.  RENEWAL OF CERTAIN LICENSES
	[Sections 6002.205-6002.250 reserved for expansion]
	SUBCHAPTER F. SELLING OR LEASING OF FIRE ALARM
	OR FIRE DETECTION DEVICES
	Sec. 6002.251.  REQUIRED LABEL; EXCEPTIONS
	Sec. 6002.252.  REQUIRED PURCHASE AND INSTALLATION
	INFORMATION
	Sec. 6002.253.  TRAINING AND SUPERVISION OF CERTAIN
	EXEMPT EMPLOYEES
	[Sections 6002.254-6002.300 reserved for expansion]
	SUBCHAPTER G. PROHIBITED PRACTICES AND DISCIPLINARY PROCEDURES
	Sec. 6002.301.  PROHIBITED PRACTICES
	Sec. 6002.302.  DISCIPLINARY ACTIONS
	Sec. 6002.303.  DISCIPLINARY HEARING
	Sec. 6002.304.  REAPPLICATION REQUIREMENTS
	[Sections 6002.305-6002.350 reserved for expansion]
	SUBCHAPTER H.  CRIMINAL PENALTY
	Sec. 6002.351.  CRIMINAL PENALTY
	CHAPTER 6002.  FIRE DETECTION AND ALARM DEVICE INSTALLATION
	SUBCHAPTER A. GENERAL PROVISIONS
	Sec.6002.001.PURPOSE. The purpose of this chapter is to
	safeguard lives and property by:
	(1)  regulating the planning, certifying, leasing,
	selling, servicing, installing, monitoring, and maintaining of
	fire detection and fire alarm devices and systems; and
	(2)  except as provided by rules adopted under Section
	6002.051 or 6002.052, prohibiting fire detection and fire alarm
	devices, equipment, and systems not labeled or listed by a
	nationally recognized testing laboratory.  (V.T.I.C. Art. 5.43-2,
	Sec. 1.)
	Sec.6002.002.DEFINITIONS. Except as otherwise provided
	by this chapter, in this chapter:
	(1)  "Fire alarm device" means any device capable,
	through audible or visible means, of warning that fire or
	combustion has occurred or is occurring.
	(2)  "Fire alarm planning superintendent" means a
	licensed individual designated by a registered firm to:
	(A)  plan a fire alarm or detection system that
	conforms to applicable adopted National Fire Protection
	Association standards or other adopted standards; and
	(B)  certify that each fire alarm or detection
	system as planned meets the standards as provided by law.
	(3)  "Fire alarm technician" means a licensed
	individual designated by a registered firm to:
	(A)  inspect and certify that each fire alarm or
	detection system as installed meets the standards provided by law;
	or
	(B)  perform or directly supervise the servicing
	or maintaining of a previously installed fire alarm device or
	system and certify that service or maintenance.
	(4)  "Fire detection device" means any arrangement of
	materials, the sole function of which is to indicate the existence
	of fire, smoke, or combustion in its incipient stages.
	(5)  "Individual" means a natural person, including an
	owner, manager, officer, employee, occupant, or other individual.
	(6)  "Installation" means:
	(A)  the initial placement of equipment; or
	(B)  the extension, modification, or alteration
	of equipment already in place.
	(7)  "Insurance agent" means:
	(A)  an individual, firm, or corporation licensed
	under:
	(i)  Subchapter E, Chapter 981; or
	(ii)  Subchapter A, B, C, D, E, or G, Chapter
	4051; or
	(B)  an individual authorized to represent an
	insurance fund or pool created by a municipality, county, or other
	political subdivision of this state under Chapter 791, Government
	Code.
	(8)  "Maintenance" means the maintenance of a fire
	alarm device or a fire detection device in a condition of repair
	that provides performance as originally designed or intended.
	(9)  "Monitoring" means the receipt of fire alarm and
	supervisory signals and the retransmission or communication of
	those signals to a fire service communications center in this state
	or serving property in this state.
	(10)  "Organization" means a corporation, a government
	or a governmental subdivision or agency, a business trust, an
	estate, a trust, a partnership, a firm or association, two or more
	individuals with a joint or common interest, or any other legal or
	commercial entity.
	(11)  "Registered firm" means an individual or
	organization that holds a registration certificate.
	(12)  "Residential fire alarm superintendent" means a
	licensed individual designated by a registered firm to:
	(A)  plan a residential single-family or
	two-family fire alarm or detection system that conforms to
	applicable adopted National Fire Protection Association standards
	or other adopted standards; and
	(B)  certify that each fire alarm or detection
	system as planned meets the standards as provided by law.
	(13)  "Sale" means the sale or offer for sale, lease, or
	rent of any merchandise, equipment, or service at wholesale or
	retail, to the public or any individual, for an agreed sum of money
	or other consideration.
	(14)  "Service" or "servicing" means inspection,
	maintenance, repair, or testing of a fire alarm device or a fire
	detection device. (V.T.I.C. Art. 5.43-2, Secs. 2(1), (2), (5),
	(6), (7), (8), (9), (10), (11), (12) (part), (13) (part), (14),
	(15), (16) (part).)
	Sec.6002.003.EFFECT ON LOCAL REGULATION. (a) This
	chapter and the rules adopted under this chapter have uniform force
	and effect throughout this state. A municipality or county may not
	enact an ordinance or rule inconsistent with this chapter or rules
	adopted under this chapter. An inconsistent ordinance or rule is
	void and has no effect.
	(b)  Notwithstanding Subsection (a), a municipality or
	county may:
	(1)  mandate that a fire alarm or detection system be
	installed in certain facilities, if the installation conforms to
	applicable state law;
	(2)  require a better type of alarm or detection system
	or otherwise safer condition than the minimum required by state
	law; and
	(3)  require regular inspections by local officials of
	smoke detectors in dwelling units, as that term is defined by
	Section 92.251, Property Code, and require the smoke detectors to
	be operational at the time of inspection.
	(c)  A municipality, county, or other political subdivision
	of this state may not require, as a condition of engaging in
	business or performing any activity authorized under this chapter,
	that a registered firm, a license holder, or an employee of a
	license holder:
	(1)  obtain a registration, franchise, or license from
	the political subdivision;
	(2)  pay any fee or franchise tax to the political
	subdivision; or
	(3)  post a bond.
	(d)  Notwithstanding any other provision of this section or
	Section 6002.155, a municipality or county may require a registered
	firm to obtain a permit and pay a permit fee for the installation of
	a fire alarm or fire detection device or system and require that the
	installation of such a system be in conformance with the building
	code or other construction requirements of the municipality or
	county and state law.
	(e)  Notwithstanding Subsection (d), a municipality or
	county may not impose qualification or financial responsibility
	requirements other than proof of a registration certificate.
	(V.T.I.C. Art. 5.43-2, Secs. 3(a), (c).)
	Sec. 6002.004.  PROVISION OF CERTAIN SERVICES BY POLITICAL
	SUBDIVISION. (a) In this section, "monitoring" means the receipt
	of fire alarm or supervisory signals or retransmission or
	communication of those signals to a fire service communications
	center that is located in this state or serves property in this
	state.
	(b)  Except as provided by Subsection (c), a political
	subdivision may not offer residential alarm system sales, service,
	installation, or monitoring unless the political subdivision has
	been providing monitoring services to residences within the
	boundaries of the political subdivision as of September 1, 1999.
	Any fee charged by the political subdivision under this subsection
	may not exceed the cost of the monitoring.
	(c)  A political subdivision may:
	(1)  offer service, installation, or monitoring for
	property owned by the political subdivision or another political
	subdivision;
	(2)  allow for the response to an alarm or detection
	device by:
	(A)  a law enforcement agency or fire department;
	or
	(B)  a law enforcement officer or firefighter
	acting in an official capacity; or
	(3)  offer monitoring to a financial institution, as
	defined by Section 59.301, Finance Code, that requests, in writing,
	that the political subdivision provide monitoring service to the
	financial institution.
	(d)  Subsection (b) does not apply to a political
	subdivision:
	(1)  in a county with a population of less than 80,000;
	or
	(2)  in which monitoring is not otherwise provided or
	available.
	(e)  This section is not intended to require a political
	subdivision to hold a license under this chapter. (V.T.I.C. Art.
	5.43-2, Secs. 7(b), (c), (d), (e).)
	[Sections 6002.005-6002.050 reserved for expansion]
	SUBCHAPTER B. POWERS AND DUTIES OF COMMISSIONER, DEPARTMENT,
	AND STATE FIRE MARSHAL
	Sec.6002.051.ADMINISTRATION OF CHAPTER; RULES. (a)  The
	department shall administer this chapter.
	(b)  The commissioner may adopt rules as necessary to
	administer this chapter, including rules the commissioner
	considers necessary to administer this chapter through the state
	fire marshal. (V.T.I.C. Art. 5.43-2, Secs. 4 (part), 6(a) (part).)
	Sec.6002.052.ADOPTION OF RULES; STANDARDS. (a) In
	adopting necessary rules, the commissioner may use:
	(1)  recognized standards, such as, but not limited to:
	(A)  standards of the National Fire Protection
	Association;
	(B)  standards recognized by federal law or
	regulation; or
	(C)  standards published by a nationally
	recognized standards-making organization;
	(2)  the National Electrical Code; or
	(3)  information provided by individual manufacturers.
	(b)  Under rules adopted under Section 6002.051, the
	department may create specialized licenses or registration
	certificates for an organization or individual engaged in the
	business of planning, certifying, leasing, selling, servicing,
	installing, monitoring, or maintaining fire alarm or fire detection
	devices or systems. The rules must establish appropriate training
	and qualification standards for each kind of license and
	certificate.
	(c)  The commissioner shall also adopt standards applicable
	to fire alarm devices, equipment, or systems regulated under this
	chapter. In adopting standards under this subsection, the
	commissioner may allow the operation of a fire alarm monitoring
	station that relies on fire alarm devices or equipment approved or
	listed by a nationally recognized testing laboratory without regard
	to whether the monitoring station is approved or listed by a
	nationally recognized testing laboratory if the operator of the
	station demonstrates that the station operating standards are
	substantially equivalent to those required to be approved or
	listed. (V.T.I.C. Art. 5.43-2, Secs. 4 (part), 6(a) (part), (b).)
	Sec. 6002.053.  RULES RESTRICTING ADVERTISING OR
	COMPETITIVE BIDDING. (a)  The commissioner may not adopt rules
	restricting advertising or competitive bidding by the holder of a
	license or registration certificate issued under this chapter
	except to prohibit false, misleading, or deceptive practices.
	(b)  In the commissioner's rules to prohibit false,
	misleading, or deceptive practices, the commissioner may not
	include a rule that:
	(1)  restricts the use of any medium for advertising;
	(2)  restricts the use of a license or registration
	certificate holder's personal appearance or voice in an
	advertisement;
	(3)  relates to the size or duration of an
	advertisement by the license or registration certificate holder; or
	(4)  restricts the license or registration certificate
	holder's advertisement under a trade name. (V.T.I.C. Art. 5.43-2,
	Sec. 6A.)
	Sec.6002.054.FEES. (a) The commissioner shall set the
	fee for:
	(1)  an initial registration certificate in an amount
	not to exceed $500;
	(2)  the renewal of a registration certificate for each
	year in an amount not to exceed $500;
	(3)  the renewal of a registration certificate for an
	individual or organization engaged in the business of planning,
	certifying, leasing, selling, servicing, installing, monitoring,
	or maintaining exclusively single station devices in an amount not
	to exceed $250 annually;
	(4)  an initial branch office registration certificate
	in an amount not to exceed $150;
	(5)  the renewal of a branch office registration
	certificate for each year in an amount not to exceed $150;
	(6)  an initial or renewal training school approval in
	an amount not to exceed $500 annually;
	(7)  an initial or renewal of a training school
	instructor approval in an amount not to exceed $50 annually;
	(8)  an initial license in an amount not to exceed $120;
	and
	(9)  the renewal of a license for each year in an amount
	not to exceed $100.
	(b)  Unless the examination or reexamination for a license is
	administered by a testing service, the commissioner shall set a
	nonrefundable fee for:
	(1)  the initial examination in an amount not to exceed
	$30; and
	(2)  each reexamination in an amount not to exceed $20.
	(c)  The commissioner shall set a fee in an amount not to
	exceed $20 for:
	(1)  a duplicate registration certificate or license
	issued under this chapter; and
	(2)  any request requiring changes to a registration
	certificate or license. (V.T.I.C. Art. 5.43-2, Secs. 5(a) (part),
	(b) (part), (c) (part), (d), (i), 5D(b) (part), (c) (part).)
	Sec.6002.055.DEPOSIT IN OPERATING ACCOUNT. The fees
	collected under this chapter shall be deposited in the state
	treasury to the credit of the Texas Department of Insurance
	operating account.  (V.T.I.C. Art. 5.43-2, Sec. 8.)
	[Sections 6002.056-6002.100 reserved for expansion]
	SUBCHAPTER C. FIRE DETECTION AND ALARM DEVICES ADVISORY COUNCIL
	Sec.6002.101.ADVISORY COUNCIL; APPOINTMENT. The
	commissioner shall appoint an advisory council consisting of seven
	individuals as follows:
	(1)  three individuals who are employed by a registered
	firm in the fire protection industry and who have at least three
	years' experience in the sale, installation, maintenance, or
	manufacture of fire alarm or fire detection devices;
	(2)  two individuals who:
	(A)  are experienced in the engineering of fire
	prevention services; or
	(B)  are members of a fire protection association;
	(3)  one individual who is an experienced fire
	prevention officer employed by a municipality or county; and
	(4)  one individual who:
	(A)  is employed by a registered firm; and
	(B)  has at least three years' experience in the
	operation of a central fire alarm monitoring station.  (V.T.I.C.
	Art. 5.43-2, Sec. 6(d).)
	Sec.6002.102.ADVISORY COUNCIL DUTIES. The advisory
	council shall periodically:
	(1)  review rules implementing this chapter; and
	(2)  recommend rule changes to the commissioner.
	(V.T.I.C. Art. 5.43-2, Sec. 6(c).)
	[Sections 6002.103-6002.150 reserved for expansion]
	SUBCHAPTER D. REGISTRATION, LICENSE, AND APPROVAL REQUIREMENTS
	Sec. 6002.151.  FIRM REGISTRATION CERTIFICATE REQUIRED;
	LIMITED CERTIFICATE.  (a)  An individual or organization may not
	engage in the business of planning, certifying, leasing, selling,
	installing, servicing, monitoring, or maintaining fire alarm or
	fire detection devices or systems unless the individual or
	organization holds a registration certificate issued by the
	department.
	(b)  The department may issue a limited registration
	certificate to an individual or organization whose business is
	restricted to monitoring.
	(c)  Applications for registration certificates and
	qualifications for those certificates are subject to rules adopted
	by the commissioner.  (V.T.I.C. Art. 5.43-2, Secs. 5(a) (part),
	7(a) (part), 10(a) (part).)
	Sec. 6002.152.  BRANCH OFFICE REGISTRATION CERTIFICATE
	REQUIRED.  (a)  Except as provided by Subsection (c), each separate
	office location of a registered firm, other than the location
	identified on the firm's registration certificate, must have a
	branch office registration certificate issued by the department.
	(b)  Before issuing a branch office registration
	certificate, the department must determine that the branch office
	location is part of a registered firm.
	(c)  A registered firm that is engaged in the business of
	planning, certifying, leasing, selling, servicing, installing,
	monitoring, or maintaining exclusively single station devices is
	not required to apply for or obtain a branch office registration
	certificate for a separate office or location of the firm.
	(V.T.I.C. Art. 5.43-2, Sec. 5(b) (part).)
	Sec. 6002.153.  REQUIRED INSURANCE COVERAGE FOR
	REGISTRATION CERTIFICATE. (a)  The department may not issue a
	registration certificate under this chapter unless the applicant
	files with the department evidence of a general liability insurance
	policy that includes products and completed operations coverage.
	The policy must be conditioned to pay on behalf of the insured those
	amounts that the insured becomes legally obligated to pay as
	damages because of bodily injury and property damage caused by an
	occurrence involving the insured or the insured's officer, agent,
	or employee in the conduct of any business that requires a
	registration certificate or license under this chapter.
	(b)  Unless the commissioner increases or decreases the
	limits under rules adopted under Section 6002.051(b), the limits of
	insurance coverage required by Subsection (a) must be at least:
	(1)  $100,000 combined single limits for bodily injury
	and property damage for each occurrence; and
	(2)  $300,000 aggregate for all occurrences for each
	policy year.
	(c)  The evidence of insurance required by this section must
	be in the form of a certificate of insurance executed by an insurer
	authorized to engage in the business of insurance in this state and
	countersigned by an insurance agent licensed in this state. A
	certificate of insurance for surplus lines coverage procured in
	compliance with Chapter 981 through a surplus lines agent that is
	licensed under Subchapter E, Chapter 981, and resident in this
	state may be filed with the department as evidence of the coverage
	required by this section.
	(d)  An insurance certificate executed and filed with the
	department under this section remains in force until the insurer
	has terminated future liability by the notice required by the
	department.
	(e)  Failure to maintain the liability insurance required by
	this section constitutes grounds for the denial, suspension, or
	revocation, after notice and opportunity for hearing, of a
	registration certificate issued under this chapter.
	(f)  For an individual or organization licensed to install or
	service burglar alarms under Chapter 1702, Occupations Code,
	compliance with the insurance requirements of that chapter
	constitutes compliance with the insurance requirements of this
	section if the insurance held by the individual or organization
	complies with the requirements of this section in amounts and types
	of coverage.
	(g)  This section does not affect the rights of the insured
	to negotiate or contract for limitations of liability with a third
	party, including a customer of the insured.  (V.T.I.C. Art. 5.43-2,
	Secs. 5B(a), (b), (c), (d), (e), (g).)
	Sec. 6002.154.  FIRE ALARM TECHNICIAN, RESIDENTIAL FIRE
	ALARM SUPERINTENDENT, AND FIRE ALARM PLANNING SUPERINTENDENT. (a)
	Each registered firm, including a firm engaged in the business of
	planning, certifying, leasing, selling, servicing, installing,
	monitoring, or maintaining exclusively single station devices,
	must employ at least one employee who is a fire alarm technician,
	residential fire alarm superintendent, or fire alarm planning
	superintendent.
	(b)  A fire alarm technician, residential fire alarm
	superintendent, or fire alarm planning superintendent must hold a
	license issued by the department, conditioned on the successful
	completion of a written license examination.
	(c)  To engage in the activity for which the license is
	granted, an individual licensed under this chapter must be an
	employee or agent of an individual or entity that holds a
	registration certificate.
	(d)  A fire alarm technician may perform or supervise
	monitoring. A fire alarm planning superintendent may act as a fire
	alarm technician or a residential fire alarm superintendent. A
	residential fire alarm superintendent may act as a fire alarm
	technician.
	(e)  Applications for licenses and qualifications for those
	licenses are subject to rules adopted by the commissioner.
	(V.T.I.C. Art. 5.43-2, Secs. 2(12) (part), (13) (part), (16)
	(part), 5(a) (part), (c) (part), (f), 5D(a) (part), 10(a) (part).)
	Sec.6002.155.ACTIVITIES NOT REGULATED BY CHAPTER.  The
	licensing provisions of this chapter do not apply to:
	(1)  an individual or organization in the business of
	building construction that installs electrical wiring and devices
	that may include, in part, the installation of a fire alarm or
	detection system if:
	(A)  the individual or organization is a party to
	a contract that provides that:
	(i)  the installation will be performed
	under the direct supervision of and certified by a licensed
	employee or agent of a firm registered to install and certify such
	an alarm or detection device; and
	(ii)  the registered firm assumes full
	responsibility for the installation of the alarm or detection
	device; and
	(B)  the individual or organization does not plan,
	certify, lease, sell, service, or maintain fire alarms or detection
	devices or systems;
	(2)  an individual or organization that:
	(A)  owns and installs a fire detection or fire
	alarm device on the individual's or organization's own property; or
	(B)  if the individual or organization does not
	charge for the device or its installation, installs the device for
	the protection of the individual's or organization's personal
	property located on another's property and does not install the
	device as a normal business practice on the property of another;
	(3)  an individual who holds a license or other
	authority issued by a municipality to practice as an electrician
	and who installs fire or smoke detection and alarm devices only in a
	single family or multifamily residence if:
	(A)  the devices installed are:
	(i)  single station detectors; or
	(ii)  multiple station detectors capable of
	being connected in a manner that actuation of one detector causes
	all integral or separate alarms to operate if the detectors are not
	connected to a control panel or to an outside alarm, do not transmit
	a signal off the premises, and do not use more than 120 volts; and
	(B)  all installations comply with the adopted
	edition of Household Fire Warning Equipment, National Fire
	Protection Association Standard No. 74;
	(4)  an individual or organization that:
	(A)  sells fire detection or fire alarm devices
	exclusively over-the-counter or by mail order; and
	(B)  does not plan, certify, install, service, or
	maintain the devices;
	(5)  a law enforcement agency or fire department or a
	law enforcement officer or firefighter acting in an official
	capacity that responds to a fire alarm or detection device;
	(6)  an engineer licensed under Chapter 1001,
	Occupations Code, acting solely in the engineer's professional
	capacity;
	(7)  an individual or organization that provides and
	installs at no charge to the property owners or residents a
	battery-powered smoke detector in a single-family or two-family
	residence if:
	(A)  the smoke detector bears a label of listing
	or approval by a testing laboratory approved by the department;
	(B)  the installation complies with the adopted
	edition of National Fire Protection Association Standard No. 74;
	(C)  the installers are knowledgeable in fire
	protection and the proper use of smoke detectors; and
	(D)  the detector is a single station installation
	and not a part of or connected to any other detection device or
	system;
	(8)  a regular employee of a registered firm who is
	under the direct supervision of a license holder;
	(9)  a building owner, the owner's managing agent, or an
	employee of the owner or agent who installs battery-operated single
	station smoke detectors or monitor fire alarm or fire detection
	devices or systems in the owner's building, and in which the
	monitoring:
	(A)  is performed at the owner's property at no
	charge to the occupants of the building;
	(B)  complies with applicable standards of the
	National Fire Protection Association as may be adopted by rule
	under this chapter; and
	(C)  uses equipment approved by a testing
	laboratory approved by the department for fire alarm monitoring;
	(10)  an individual employed by a registered firm that
	sells and installs a smoke or heat detector in a single-family or
	two-family residence if:
	(A)  the detector bears a label of listing or
	approval by a testing laboratory approved by the department;
	(B)  the installation complies with the adopted
	edition of National Fire Protection Association Standard No. 74;
	(C)  the installers are knowledgeable in fire
	protection and the proper use and placement of detectors; and
	(D)  the detector is a single station installation
	and not a part of or connected to any other detection device or
	system; or
	(11)  an individual or organization licensed to install
	or service burglar alarms under Chapter 1702, Occupations Code,
	that provides and installs in a single-family or two-family
	residence a combination keypad that includes a panic button to
	initiate a fire alarm signal if the fire alarm signal:
	(A)  is monitored by a fire alarm firm registered
	under this chapter; and
	(B)  is not initiated by a fire or smoke detection
	device. (V.T.I.C. Art. 5.43-2, Sec. 3(b).)
	Sec.6002.156.LICENSE EXAMINATION. (a) The state fire
	marshal shall establish the scope and type of an examination
	required by this chapter.  The examination must cover this chapter
	and commissioner rules and include specific testing of all license
	categories.
	(b)  The state fire marshal may administer the examination or
	may enter into an agreement with a testing service.
	(c)  If a testing service is used, the state fire marshal may
	contract with the testing service regarding requirements for the
	examination, including:
	(1)  examination development;
	(2)  scheduling;
	(3)  site arrangements;
	(4)  grading;
	(5)  reporting;
	(6)  analysis; or
	(7)  other administrative duties.
	(d)  The state fire marshal may require the testing service
	to:
	(1)  correspond directly with an applicant regarding
	the administration of the examination;
	(2)  collect a reasonable fee from an applicant for
	administering the examination; or
	(3)  administer the examination at a specific location
	or time.
	(e)  Approval for a testing service is valid for one year.
	(f)  The state fire marshal shall adopt rules as necessary to
	implement examination requirements under this chapter.  (V.T.I.C.
	Art. 5.43-2, Secs. 5D(a) (part), (b) (part), (f), (g), (h).)
	Sec.6002.157.EXAMINATION RESULTS.  (a)  Not later than the
	30th day after the date on which an examination is administered
	under this chapter, the state fire marshal shall send notice to each
	examinee of the results of the examination.
	(b)  If an examination is conducted, graded, or reviewed by a
	testing service, the state fire marshal shall send notice to each
	examinee of the results of the examination within two weeks after
	the date on which the state fire marshal receives the results from
	the testing service.
	(c)  If the notice of the examination results will be delayed
	for more than 90 days after the examination date, the state fire
	marshal shall send notice to the examinee of the reason for the
	delay before the 90th day.
	(d)  The state fire marshal may require a testing service to
	notify an examinee of the results of the examinee's examination
	under this section.
	(e)  If requested in writing by an individual who fails the
	examination administered under this chapter, the state fire marshal
	shall send to the individual an analysis of the individual's
	performance on the examination.  (V.T.I.C. Art. 5.43-2, Secs. 5D(a)
	(part), (a-1).)
	Sec.6002.158.TRAINING SCHOOLS AND INSTRUCTORS; APPROVAL.
	(a)  An applicant for approval as a training school must submit an
	application to the state fire marshal, accompanied by the
	applicant's complete course or testing curriculum. A registered
	firm, or an affiliate of a registered firm, is not eligible for
	approval as a training school.
	(b)  The state fire marshal shall review the materials
	submitted for course approval and shall approve or deny approval in
	a letter provided not later than the 60th day after the date of
	receipt of the application. A denial of approval must disclose
	specific reasons for the denial. An applicant whose approval is
	denied may reapply at any time.
	(c)  Training school instructors must be approved by the
	state fire marshal. To be eligible for approval, an instructor must
	hold a fire alarm planning superintendent license and have at least
	three years of experience in fire alarm installation, service, or
	monitoring.
	(d)  Approval for a training school or instructor is valid
	for one year.
	(e)  The curriculum for a fire alarm technician course or a
	residential fire alarm superintendent course must consist of 16
	hours of classroom instruction for each license category.
	(f)  After approval, each training school must annually
	conduct, within 125 miles of each county with a population greater
	than 500,000, at least two classes that are open to the public.
	(V.T.I.C. Art. 5.43-2, Secs. 5D(b) (part), (c) (part), (d), (e);
	New.)
	Sec.6002.159.CONTINUING EDUCATION PROGRAMS. (a) The
	commissioner may adopt procedures for certifying and may certify
	continuing education programs.
	(b)  Participation in the continuing education programs is
	voluntary. (V.T.I.C. Art. 5.43-2, Sec. 5E.)
	Sec.6002.160.RECIPROCAL LICENSE.  The department may
	waive any license requirement for an applicant who holds a license
	issued by another state that has license requirements substantially
	equivalent to the license requirements of this state. (V.T.I.C.
	Art. 5.43-2, Sec. 5F.)
	Sec.6002.161.NOT TRANSFERABLE. A registration
	certificate or license issued under this chapter is not
	transferable. (V.T.I.C. Art. 5.43-2, Sec. 5(h).)
	[Sections 6002.162-6002.200 reserved for expansion]
	SUBCHAPTER E. RENEWAL OF REGISTRATION CERTIFICATE OR LICENSE
	Sec.6002.201.RENEWAL REQUIRED; FEE. (a) A renewal of a
	registration certificate or license issued under this chapter is
	valid for a period of two years. The license or registration
	renewal fee for each year of the two-year period is payable on
	renewal.
	(b)  The commissioner by rule may adopt a system under which
	registration certificates and licenses expire on various dates
	during the year. For the year in which an expiration date of a
	registration certificate or license is less than one year from its
	issuance or anniversary date, the fee shall be prorated on a monthly
	basis so that each holder of a registration certificate or license
	pays only that portion of the renewal fee that is allocable to the
	number of months during which the registration certificate or
	license is valid. The total renewal fee is payable on renewal on
	the new expiration date. (V.T.I.C. Art. 5.43-2, Secs. 5A, 5C(b).)
	Sec.6002.202.NOTICE OF EXPIRATION. At least 30 days
	before the expiration date of a registration certificate or
	license, the state fire marshal shall send written notice of the
	impending expiration to the holder of the registration certificate
	or license at the holder's last known address. (V.T.I.C. Art.
	5.43-2, Sec. 5C(a) (part).)
	Sec.6002.203.RENEWAL PROCEDURES. (a)  The holder of an
	unexpired registration certificate or license may renew the
	certificate or license by paying the required renewal fee to the
	department before the expiration date of the certificate or
	license.
	(b)  An individual or organization whose registration
	certificate or license has been expired for 90 days or less may
	renew the certificate or license by paying to the department:
	(1)  the required renewal fee; and
	(2)  a fee that does not exceed one-fourth of the
	initial fee for the certificate or license.
	(c)  An individual or organization whose registration
	certificate or license has been expired for more than 90 days but
	less than two years may renew the certificate or license by paying
	to the department:
	(1)  all unpaid renewal fees; and
	(2)  a fee that does not exceed the initial fee for the
	certificate or license.
	(d)  An individual or organization whose registration
	certificate or license has been expired for two years or longer may
	not renew the certificate or license. The individual or
	organization may obtain a new registration certificate or license
	by complying with the requirements and procedures for obtaining an
	initial registration certificate or license.
	(e)  This section may not be construed to prevent the
	department from denying or refusing to renew a license under
	applicable law or commissioner rules.
	(f)  A license or registration certificate issued under this
	chapter expires at midnight on the date printed on the license or
	certificate. A renewal application and fee for the license or
	registration certificate must be postmarked on or before the
	expiration date to be accepted as timely.
	(g)  If a renewal application is not complete but there has
	been no lapse in the required insurance, the applicant is entitled
	to 30 days from the date that the applicant is notified by the
	department of the deficiencies in the renewal application to comply
	with any additional requirement. If an applicant fails to respond
	and correct all deficiencies in the renewal application within the
	30-day period, the department may charge a late fee.  (V.T.I.C. Art.
	5.43-2, Secs. 5C(a) (part), (c).)
	Sec.6002.204.RENEWAL OF CERTAIN LICENSES. A license
	holder with an unexpired license who is not employed by a registered
	firm at the time of the license renewal may renew that license, but
	the license holder may not engage in any activity for which the
	license was granted until the license holder is employed by a
	registered firm. (V.T.I.C. Art. 5.43-2, Sec. 5C(a) (part).)
	[Sections 6002.205-6002.250 reserved for expansion]
	SUBCHAPTER F. SELLING OR LEASING OF FIRE ALARM
	OR FIRE DETECTION DEVICES
	Sec.6002.251.REQUIRED LABEL; EXCEPTIONS. (a)  Except as
	provided by Subsections (b) and (c), a detection or alarm device,
	alarm system, or item of monitoring equipment, a purpose of which is
	to detect or give alarm of fire, may not be sold, offered for sale,
	leased, installed, or used to monitor property in this state unless
	the device, system, or item of equipment carries a label of approval
	or listing of a testing laboratory approved by the department.
	(b)  Except as provided by Subsection (c), a detection or
	alarm device, alarm system, or item of monitoring equipment in a
	one-family or two-family residence, a purpose of which is to detect
	or give alarm of fire, may not be sold, offered for sale, leased,
	installed, or used to monitor property in this state after April 14,
	1989, unless the device, system, or equipment carries a label of
	approval or listing of a testing laboratory approved by the
	department.
	(c)  Subsections (a) and (b) do not prohibit the continued
	use or monitoring of equipment in place if the equipment:
	(1)  complied with the law applicable on the date of the
	equipment's original placement; and
	(2)  has not been extended, modified, or altered.
	(d)  Fire alarm devices that are not required by this chapter
	or rules adopted under this chapter and that do not impair the
	operation of fire alarm or fire detection devices required by this
	chapter or the rules adopted under this chapter are exempt from the
	label and listing requirements described by Subsections (a) and (b)
	if the devices are approved by the local authority with
	jurisdiction.  (V.T.I.C. Art. 5.43-2, Secs. 9(a), (b), (c).)
	Sec. 6002.252.  REQUIRED PURCHASE AND INSTALLATION
	INFORMATION. A fire detection or fire alarm device may not be sold
	or installed in this state unless the device is accompanied by
	printed information that:
	(1)  is supplied to the owner by the supplier or
	installing contractor; and
	(2)  concerns:
	(A)  instructions describing the installation,
	operation, testing, and proper maintenance of the device;
	(B)  information to aid in establishing an
	emergency evacuation plan for the protected premises; and
	(C)  the telephone number and location, including
	notification procedures, of the nearest fire department. (V.T.I.C.
	Art. 5.43-2, Sec. 9(d).)
	Sec. 6002.253.  TRAINING AND SUPERVISION OF CERTAIN EXEMPT
	EMPLOYEES. Each registered firm that employs an individual who is
	exempt from the licensing requirements of this chapter under
	Section 6002.155(10) shall appropriately train and supervise the
	individual to ensure that:
	(1)  each installation complies with the adopted
	provisions of National Fire Protection Standard No. 74 or other
	adopted standards;
	(2)  each smoke or heat detector installed or sold
	carries a label or listing of approval by a testing laboratory
	approved by the department; and
	(3)  the individual is knowledgeable in fire protection
	and the proper use and placement of detectors. (V.T.I.C. Art.
	5.43-2, Sec. 9(e).)
	[Sections 6002.254-6002.300 reserved for expansion]
	SUBCHAPTER G. PROHIBITED PRACTICES AND DISCIPLINARY PROCEDURES
	Sec.6002.301.PROHIBITED PRACTICES. An individual or
	organization may not:
	(1)  plan, certify, lease, sell, service, install,
	monitor, or maintain a fire alarm or fire detection device or system
	without a license or registration certificate;
	(2)  obtain or attempt to obtain a registration
	certificate or license by fraudulent representation; or
	(3)  plan, certify, lease, sell, service, install,
	monitor, or maintain a fire alarm or fire detection device or system
	in violation of this chapter or the rules adopted under this
	chapter.  (V.T.I.C. Art. 5.43-2, Sec. 7(a).)
	Sec.6002.302.DISCIPLINARY ACTIONS. (a)  The state fire
	marshal may suspend, revoke, or refuse to issue or renew a
	registration certificate or license if, after notice and hearing,
	the state fire marshal finds that the applicant, registrant, or
	license holder has engaged in acts that:
	(1)  violate this chapter;
	(2)  violate rules or standards adopted under this
	chapter; or
	(3)  constitute misrepresentation made in connection
	with the sale of products or services rendered.
	(b)  An original or renewal registration certificate,
	license, or testing laboratory approval may be denied, suspended,
	or revoked, if after notice and public hearing the commissioner,
	through the state fire marshal, determines from the evidence
	presented at the hearing that this chapter or a rule adopted under
	this chapter has been violated.  (V.T.I.C. Art. 5.43-2, Secs.
	10(b), (c).)
	Sec.6002.303.DISCIPLINARY HEARING. (a) If the state fire
	marshal proposes to suspend, revoke, or refuse to renew a license or
	registration certificate issued under this chapter, the holder of
	the license or certificate is entitled to a hearing conducted by the
	State Office of Administrative Hearings.
	(b)  Proceedings for a disciplinary action are governed by
	Chapter 2001, Government Code.
	(c)  Rules of practice adopted by the commissioner
	applicable to the proceedings for a disciplinary action may not
	conflict with rules adopted by the State Office of Administrative
	Hearings.  (V.T.I.C. Art. 5.43-2, Sec. 10A.)
	Sec.6002.304.REAPPLICATION REQUIREMENTS. (a)  A holder
	of a registration certificate, license, or testing laboratory
	approval that has been revoked under this chapter may not file
	another application for a registration certificate, license, or
	approval before the first anniversary of the effective date of the
	revocation.
	(b)  An individual or organization reapplying under this
	section must request a public hearing to show cause why the issuance
	of a new registration certificate, license, or approval should not
	be denied. (V.T.I.C. Art. 5.43-2, Sec. 10(d).)
	[Sections 6002.305-6002.350 reserved for expansion]
	SUBCHAPTER H.  CRIMINAL PENALTY
	Sec.6002.351.CRIMINAL PENALTY. (a)  An individual or
	organization commits an offense if the individual or organization
	violates Section 6002.151, 6002.152, or 6002.154.
	(b)  An offense under this section is a Class B misdemeanor.
	(c)  Venue for an offense under this section is in Travis
	County or the county in which the offense is committed. (V.T.I.C. Art. 5.43-2, Sec. 11.)
	CHAPTER 6003. FIRE PROTECTION SPRINKLER SYSTEM SERVICE AND
	INSTALLATION
	SUBCHAPTER A. GENERAL PROVISIONS
	Sec. 6003.001.  DEFINITIONS
	Sec. 6003.002.  APPLICABILITY OF CHAPTER
	Sec. 6003.003.  EFFECT ON LOCAL REGULATION
	[Sections 6003.004-6003.050 reserved for expansion]
	SUBCHAPTER B. POWERS AND DUTIES OF COMMISSIONER,
	DEPARTMENT, AND STATE FIRE MARSHAL
	Sec. 6003.051.  ADMINISTRATION OF CHAPTER
	Sec. 6003.052.  ADOPTION OF RULES
	Sec. 6003.053.  RULES RESTRICTING ADVERTISING OR
	COMPETITIVE BIDDING
	Sec. 6003.054.  GENERAL POWERS AND DUTIES OF
	COMMISSIONER, STATE FIRE MARSHAL, AND
	DEPARTMENT
	Sec. 6003.055.  FEES
	Sec. 6003.056.  DEPOSIT IN OPERATING ACCOUNT
	[Sections 6003.057-6003.100 reserved for expansion]
	SUBCHAPTER C. FIRE PROTECTION ADVISORY COUNCIL
	Sec. 6003.101.  ADVISORY COUNCIL; APPOINTMENT
	Sec. 6003.102.  ADVISORY COUNCIL DUTIES
	[Sections 6003.103-6003.150 reserved for expansion]
	SUBCHAPTER D. REGISTRATION AND LICENSE REQUIREMENTS
	Sec. 6003.151.  FIRE PROTECTION SPRINKLER SYSTEM
	CONTRACTOR; REGISTRATION CERTIFICATE
	REQUIRED
	Sec. 6003.152.  REQUIRED INSURANCE COVERAGE FOR
	REGISTRATION CERTIFICATE
	Sec. 6003.153.  RESPONSIBLE MANAGING EMPLOYEE: LICENSE
	REQUIRED
	Sec. 6003.154.  POSTING OF LICENSE OR CERTIFICATE
	REQUIRED
	Sec. 6003.155.  DISPLAY OF REGISTRATION CERTIFICATE
	NUMBER ON CERTAIN DOCUMENTS REQUIRED
	Sec. 6003.156.  LICENSE EXAMINATION
	Sec. 6003.157.  EXAMINATION RESULTS
	Sec. 6003.158.  CONTINUING EDUCATION REQUIREMENTS
	Sec. 6003.159.  RECIPROCAL LICENSE
	Sec. 6003.160.  NOT TRANSFERABLE
	[Sections 6003.161-6003.200 reserved for expansion]
	SUBCHAPTER E. RENEWAL OF REGISTRATION CERTIFICATE OR LICENSE
	Sec. 6003.201.  RENEWAL REQUIRED; FEE
	Sec. 6003.202.  NOTICE OF EXPIRATION
	Sec. 6003.203.  RENEWAL PROCEDURES
	[Sections 6003.204-6003.250 reserved for expansion]
	SUBCHAPTER F. PROHIBITED PRACTICES
	AND DISCIPLINARY PROCEDURES
	Sec. 6003.251.  PROHIBITED PRACTICES
	Sec. 6003.252.  DISCIPLINARY ACTIONS
	Sec. 6003.253.  DISCIPLINARY HEARING
	Sec. 6003.254.  APPLICABILITY OF ADMINISTRATIVE
	PROCEDURE ACT
	Sec. 6003.255.  REAPPLICATION REQUIREMENTS
	[Sections 6003.256-6003.300 reserved for expansion]
	SUBCHAPTER G. CRIMINAL PENALTY
	Sec. 6003.301.  CRIMINAL PENALTY
	CHAPTER 6003. FIRE PROTECTION SPRINKLER SYSTEM SERVICE AND
	INSTALLATION
	SUBCHAPTER A. GENERAL PROVISIONS
	Sec.6003.001.DEFINITIONS. In this chapter:
	(1)  "Fire protection sprinkler system" means an
	assembly of underground or overhead piping or conduits that conveys
	water with or without other agents to dispersal openings or devices
	to:
	(A)  extinguish, control, or contain fire; and
	(B)  provide protection from exposure to fire or
	the products of combustion.
	(2)  "Fire protection sprinkler system contractor"
	means an individual or organization that offers to undertake,
	represents itself as being able to undertake, or undertakes the
	plan, sale, installation, maintenance, or servicing of:
	(A)  a fire protection sprinkler system; or
	(B)  any part of a fire protection sprinkler
	system.
	(3)  "Individual" means a natural person, including an
	owner, manager, officer, employee, or occupant.
	(4)  "Installation" means:
	(A)  the initial placement of equipment; or
	(B)  the extension, modification, or alteration
	of equipment after initial placement.
	(5)  "Insurance agent" means:
	(A)  an individual, firm, or corporation licensed
	under:
	(i)  Subchapter E, Chapter 981; or
	(ii)  Subchapter A, B, C, D, E, or G, Chapter
	4051; or
	(B)  an individual authorized to represent an
	insurance fund or pool created by a municipality, county, or other
	political subdivision of this state under Chapter 791, Government
	Code.
	(6)  "License" means the document issued to a
	responsible managing employee authorizing the employee to engage in
	the fire protection sprinkler system business in this state.
	(7)  "Maintenance" means the maintenance of a fire
	protection sprinkler system or any part of a fire protection
	sprinkler system in the condition of repair that provides
	performance as originally planned.
	(8)  "Organization" means a corporation, a partnership
	or other business association, a governmental entity, or any other
	legal or commercial entity.
	(9)  "Registration certificate" means the document
	issued to a fire protection sprinkler system contractor authorizing
	the contractor to engage in business in this state.
	(10)  "Responsible managing employee" means an
	individual designated by a company that plans, sells, installs,
	maintains, or services fire protection sprinkler systems to ensure
	that each fire protection sprinkler system, as installed,
	maintained, or serviced, meets the standards for the system as
	provided by law.
	(11)  "Service" means maintenance, repair, or testing.
	(V.T.I.C. Art. 5.43-3, Secs. 1(1), (2), (5), (6), (7), (8), (9),
	(10), (11), (12), (13) as added Acts 71st Leg., R.S., Ch. 823.)
	Sec.6003.002.APPLICABILITY OF CHAPTER. (a) This chapter
	does not apply to:
	(1)  an employee of the United States, this state, or
	any political subdivision of this state who acts as a fire
	protection sprinkler system contractor for the employing
	governmental entity;
	(2)  the plan, sale, installation, maintenance, or
	servicing of a fire protection sprinkler system in any property
	owned by the United States or this state;
	(3)  an individual or organization acting under court
	order as authorization;
	(4)  an individual or organization that sells or
	supplies products or materials to a registered fire protection
	sprinkler system contractor;
	(5)  an installation, maintenance, or service project
	for which the total contract price for labor, materials, and all
	other services is less than $100, if:
	(A)  the project is not a part of a complete or
	more costly project, whether the complete project is to be
	undertaken by one or more fire protection sprinkler system
	contractors; or
	(B)  the project is not divided into contracts of
	less than $100 for the purpose of evading this chapter;
	(6)  an engineer licensed under Chapter 1001,
	Occupations Code, acting solely in the engineer's professional
	capacity;
	(7)  a regular employee of a registered fire protection
	sprinkler system contractor; or
	(8)  an owner or lessee of property that:
	(A)  installs a fire protection sprinkler system
	on the owned or leased property for the owner's or lessee's own use
	or for family members' use; and
	(B)  does not offer the property for sale or lease
	before the first anniversary of the date of installation of the fire
	protection sprinkler system.
	(b)  This chapter does not authorize an individual or
	organization to practice professional engineering other than in
	compliance with Chapter 1001, Occupations Code. (V.T.I.C. Art.
	5.43-3, Secs. 2(b), 11.)
	Sec.6003.003.EFFECT ON LOCAL REGULATION. (a) This
	chapter and the rules adopted under this chapter have uniform force
	and effect throughout this state. A municipality or county may not
	enact an order, ordinance, or rule requiring a fire protection
	sprinkler system contractor to obtain a registration certificate
	from the municipality or county.  A municipality or county may not
	impose on a fire protection sprinkler system contractor
	qualification or financial responsibility requirements other than
	proof of a registration certificate.
	(b)  Notwithstanding any other provision of this chapter, a
	municipality or county may require a fire protection sprinkler
	system contractor to obtain a permit and pay a permit fee for the
	installation of a fire protection sprinkler system and require the
	installation of a fire protection sprinkler system to conform to
	the building code or other construction requirements of the
	municipality or county.
	(c)  A municipal or county order, ordinance, or rule in
	effect on September 1, 1983, is not invalidated because of any
	provision of this chapter. (V.T.I.C. Art. 5.43-3, Sec. 2(a).)
	[Sections 6003.004-6003.050 reserved for expansion]
	SUBCHAPTER B. POWERS AND DUTIES OF COMMISSIONER,
	DEPARTMENT, AND STATE FIRE MARSHAL
	Sec.6003.051.ADMINISTRATION OF CHAPTER. (a)  The
	department shall administer this chapter.
	(b)  The commissioner may issue rules necessary to
	administer this chapter through the state fire marshal. (V.T.I.C.
	Art. 5.43-3, Sec. 3(a) (part).)
	Sec.6003.052.ADOPTION OF RULES. (a) In adopting
	necessary rules, the commissioner may use recognized standards,
	including standards:
	(1)  adopted by federal law or regulation;
	(2)  published by a nationally recognized
	standards-making organization; or
	(3)  developed by individual manufacturers.
	(b)  Under rules adopted under Section 6003.051(b), the
	department may create a specialized licensing or registration
	program for fire protection sprinkler system contractors.
	(V.T.I.C. Art. 5.43-3, Secs. 3(a) (part), (b).)
	Sec. 6003.053.  RULES RESTRICTING ADVERTISING OR
	COMPETITIVE BIDDING. (a)  The commissioner may not adopt rules
	restricting advertising or competitive bidding by the holder of a
	license or registration certificate issued under this chapter
	except to prohibit false, misleading, or deceptive practices.
	(b)  In the commissioner's rules to prohibit false,
	misleading, or deceptive practices, the commissioner may not
	include a rule that:
	(1)  restricts the use of any medium for advertising;
	(2)  restricts the use of a license or registration
	certificate holder's personal appearance or voice in an
	advertisement;
	(3)  relates to the size or duration of an
	advertisement by the license or registration certificate holder; or
	(4)  restricts the license or registration certificate
	holder's advertisement under a trade name. (V.T.I.C. Art. 5.43-3,
	Sec. 7A.)
	Sec. 6003.054.  GENERAL POWERS AND DUTIES OF COMMISSIONER,
	STATE FIRE MARSHAL, AND DEPARTMENT.  (a)  The commissioner may
	delegate authority to exercise all or part of the commissioner's
	functions, powers, and duties under this chapter, including the
	issuance of licenses and registration certificates, to the state
	fire marshal.  The state fire marshal shall implement the rules
	adopted by the commissioner for the protection and preservation of
	life and property in controlling:
	(1)  the registration of an individual or an
	organization engaged in the business of planning, selling,
	installing, maintaining, or servicing fire protection sprinkler
	systems; and
	(2)  the requirements for the plan, sale, installation,
	maintenance, or servicing of fire protection sprinkler systems by:
	(A)  determining the criteria and qualifications
	for registration certificate and license holders;
	(B)  evaluating the qualifications of an
	applicant for a registration certificate to engage in the business
	of planning, selling, installing, maintaining, or servicing fire
	protection sprinkler systems;
	(C)  conducting examinations and evaluating the
	qualifications of a license applicant; and
	(D)  issuing registration certificates and
	licenses to qualified applicants.
	(b)  The commissioner shall establish a procedure for
	reporting and processing complaints relating to the business of
	planning, selling, installing, maintaining, or servicing fire
	protection sprinkler systems in this state. (V.T.I.C. Art. 5.43-3,
	Secs. 7(a), (b).)
	Sec.6003.055.FEES. (a) The commissioner shall set the
	fee for:
	(1)  a registration certificate application in an
	amount not to exceed $100;
	(2)  an initial or renewal registration certificate in
	an amount not to exceed $1,200 annually; and
	(3)  an initial or renewal responsible managing
	employee license fee in an amount not to exceed $200 annually.
	(b)  Unless the examination for a responsible managing
	employee license is administered by a testing service, the
	commissioner shall set a nonrefundable fee for each examination in
	an amount not to exceed $100.
	(c)  The commissioner shall set a fee in an amount not to
	exceed $70 for:
	(1)  a duplicate registration certificate or license
	issued under this chapter; or
	(2)  any request requiring changes to a registration
	certificate or license.  (V.T.I.C. Art. 5.43-3, Secs. 4(a) (part),
	(c) (part), (d) (part), (e), (i) (part), 5A(a) (part).)
	Sec.6003.056.DEPOSIT IN OPERATING ACCOUNT. All fees
	collected under this chapter shall be deposited in the state
	treasury to the credit of the Texas Department of Insurance
	operating account for use in administering this chapter.  (V.T.I.C.
	Art. 5.43-3, Sec. 4(i) (part).)
	[Sections 6003.057-6003.100 reserved for expansion]
	SUBCHAPTER C. FIRE PROTECTION ADVISORY COUNCIL
	Sec.6003.101.ADVISORY COUNCIL; APPOINTMENT. (a)  The
	commissioner shall appoint the members of the fire protection
	advisory council, who serve at the pleasure of the commissioner.
	(b)  The advisory council is composed of seven members as
	follows:
	(1)  three members who have been actively engaged in
	the management of a fire protection sprinkler system business for
	not less than five years preceding appointment;
	(2)  one member who represents the engineering section
	of the department's property and casualty program;
	(3)  one member who is a volunteer firefighter; and
	(4)  two members who each represent a different
	municipal fire department in this state.
	(c)  The State Firemen's and Fire Marshals' Association of
	Texas, on the commissioner's request, may recommend a volunteer
	firefighter for appointment to the advisory council.  (V.T.I.C.
	Art. 5.43-3, Secs. 6(a) (part), (c), (e).)
	Sec.6003.102.ADVISORY COUNCIL DUTIES. (a) In addition to
	other duties delegated by the commissioner, the fire protection
	advisory council shall:
	(1)  advise the state fire marshal regarding practices
	in the fire protection sprinkler system industry and the rules
	necessary to implement and administer this chapter; and
	(2)  make recommendations to the state fire marshal
	regarding forms and procedures for registration certificates and
	licenses.
	(b)  The advisory council shall periodically:
	(1)  review rules implementing this chapter; and
	(2)  recommend rule changes to the commissioner.
	(V.T.I.C. Art. 5.43-3, Secs. 6(b), (d).)
	[Sections 6003.103-6003.150 reserved for expansion]
	SUBCHAPTER D. REGISTRATION AND LICENSE REQUIREMENTS
	Sec. 6003.151.  FIRE PROTECTION SPRINKLER SYSTEM
	CONTRACTOR; REGISTRATION CERTIFICATE REQUIRED.  (a)  Unless the
	individual or organization holds a registration certificate issued
	by the department, an individual or organization may not plan,
	sell, install, maintain, or service a fire protection sprinkler
	system.
	(b)  An applicant for a registration certificate must apply
	to the department on a form prescribed by the commissioner.
	(c)  An organization that is a partnership or joint venture
	is not required to register under the name of the organization if
	each partner or joint venturer holds a registration certificate.
	(V.T.I.C. Art. 5.43-3, Secs. 4(a) (part), 8 (part).)
	Sec. 6003.152.  REQUIRED INSURANCE COVERAGE FOR
	REGISTRATION CERTIFICATE. (a)  The department may not issue a
	registration certificate under this chapter unless the applicant
	files with the department evidence of a general liability insurance
	policy that includes products and completed operations coverage.
	The policy must be conditioned to pay on behalf of the insured those
	amounts that the insured becomes legally obligated to pay as
	damages because of bodily injury and property damage caused by an
	occurrence involving the insured or the insured's officer, agent,
	or employee in the conduct of any activity that requires a
	registration certificate or license under this chapter.
	(b)  Unless the commissioner, after notice and an
	opportunity for a hearing, increases or decreases the limits, the
	limits of insurance coverage required by Subsection (a) must be at
	least:
	(1)  $100,000 combined single limits for bodily injury
	and property damage for each occurrence; and
	(2)  $300,000 aggregate for all occurrences for each
	policy year.
	(c)  The evidence of insurance required by this section must
	be in the form of a certificate of insurance executed by an insurer
	authorized to engage in the business of insurance in this state and
	countersigned by an insurance agent licensed in this state. A
	certificate of insurance for surplus lines coverage procured in
	compliance with Chapter 981 through a surplus lines agent that is
	licensed under Subchapter E, Chapter 981, and resident in this
	state may be filed with the department as evidence of the coverage
	required by this section.
	(d)  An insurance certificate executed and filed with the
	department under this section remains in force until the insurer
	has terminated future liability by the notice required by the
	department.
	(e)  Failure to maintain the liability insurance required by
	this section constitutes grounds for the denial, suspension, or
	revocation, after notice and opportunity for hearing, of a
	registration certificate issued under this chapter. (V.T.I.C. Art.
	5.43-3, Secs. 5, 7(c).)
	Sec. 6003.153.  RESPONSIBLE MANAGING EMPLOYEE: LICENSE
	REQUIRED. (a)  Each fire protection sprinkler system contractor
	must employ at least one licensed responsible managing employee on
	a full-time basis.
	(b)  A person may not act as a responsible managing employee
	unless the person holds a license issued by the department,
	conditioned on the successful completion of the license examination
	and compliance with the requirements of the rules adopted under
	this chapter.
	(c)  Notwithstanding Subsection (a), an individual or
	organization with a current registration certificate may act as a
	fire protection sprinkler system contractor for 30 days after the
	death or dissociation of its licensed responsible managing employee
	or for a longer period approved by the commissioner under the rules
	adopted under this chapter. (V.T.I.C. Art. 5.43-3, Secs. 4(b), (c)
	(part), 8 (part).)
	Sec.6003.154.POSTING OF LICENSE OR CERTIFICATE REQUIRED.
	Each registration certificate and license issued under this chapter
	must be posted in a conspicuous place in the fire protection
	sprinkler system contractor's place of business. (V.T.I.C. Art.
	5.43-3, Sec. 4(f).)
	Sec. 6003.155.  DISPLAY OF REGISTRATION CERTIFICATE NUMBER
	ON CERTAIN DOCUMENTS REQUIRED. Each bid, proposal, offer, and
	installation drawing for a fire protection sprinkler system must
	prominently display the registration certificate number of the fire
	protection sprinkler system contractor. (V.T.I.C. Art. 5.43-3,
	Sec. 4(g).)
	Sec.6003.156.LICENSE EXAMINATION. (a) The state fire
	marshal shall establish the scope and type of an examination
	required by this chapter.
	(b)  The state fire marshal may administer the examination or
	may enter into an agreement with a testing service.
	(c)  If a testing service is used, the state fire marshal may
	contract with the testing service regarding requirements for the
	examination, including:
	(1)  examination development;
	(2)  scheduling;
	(3)  site arrangements;
	(4)  grading;
	(5)  reporting;
	(6)  analysis; or
	(7)  other administrative duties.
	(d)  The state fire marshal may require the testing service
	to:
	(1)  correspond directly with an applicant regarding
	the administration of the examination;
	(2)  collect a reasonable fee from an applicant for
	administering the examination; or
	(3)  administer the examination at a specific location
	or time.
	(e)  The state fire marshal shall adopt rules as necessary to
	implement examination requirements under this chapter.  (V.T.I.C.
	Art. 5.43-3, Secs. 5B(a), (b), (e).)
	Sec.6003.157.EXAMINATION RESULTS.  (a)  Not later than the
	30th day after the date on which an examination is administered
	under this chapter, the state fire marshal shall send notice to each
	examinee of the results of the examination.
	(b)  If an examination is graded or reviewed by a testing
	service, the state fire marshal shall send notice to each examinee
	of the results of the examination not later than the 14th day after
	the date on which the state fire marshal receives the results from
	the testing service.
	(c)  If the notice of the examination results will be delayed
	for more than 90 days after the examination date, the state fire
	marshal, before the 90th day, shall send notice to the examinee of
	the reason for the delay.
	(d)  The state fire marshal may require a testing service to
	notify an examinee of the results of the examinee's examination.
	(e)  If requested in writing by an individual who fails the
	examination administered under this chapter, the state fire marshal
	shall send to the individual an analysis of the individual's
	performance on the examination.  (V.T.I.C. Art. 5.43-3, Secs.
	5B(c), (d).)
	Sec.6003.158.CONTINUING EDUCATION REQUIREMENTS. (a) The
	commissioner may adopt procedures for certifying and may certify
	continuing education programs.
	(b)  Participation in the continuing education programs is
	voluntary. (V.T.I.C. Art. 5.43-3, Sec. 5C.)
	Sec.6003.159.RECIPROCAL LICENSE. The department may waive
	any license requirement for an applicant who holds a license issued
	by another state that has license requirements substantially
	equivalent to the license requirements of this state. (V.T.I.C.
	Art. 5.43-3, Sec. 5D.)
	Sec.6003.160.NOT TRANSFERABLE. A registration
	certificate or license issued under this chapter is not
	transferable. (V.T.I.C. Art. 5.43-3, Sec. 4(h).)
	[Sections 6003.161-6003.200 reserved for expansion]
	SUBCHAPTER E. RENEWAL OF REGISTRATION CERTIFICATE OR LICENSE
	Sec.6003.201.RENEWAL REQUIRED; FEE.  (a)  Except as
	otherwise provided by this subsection, an initial registration
	certificate or license is valid for a period of one year from the
	date of issue and is renewable on payment of the renewal fee. An
	initial registration certificate or license issued on or after
	September 1, 1983, may be issued for a period of less than one year
	and the renewal fee shall be prorated proportionally.
	(b)  A renewal of a registration certificate or license
	issued under this chapter is valid for a period of two years. The
	license or registration fee for each year of the two-year period is
	payable on renewal.
	(c)  The commissioner by rule may adopt a system under which
	registration certificates and licenses expire on various dates
	during the year. For the year in which an expiration date of a
	registration certificate or license is less than one year from its
	issuance or anniversary date, the fee shall be prorated on a monthly
	basis so that each holder of a registration certificate or license
	pays only that portion of the renewal fee that is allocable to the
	number of months during which the registration certificate or
	license is valid. On renewal on the new expiration date, the total
	renewal fee is payable. (V.T.I.C. Art. 5.43-3, Secs. 4(d) (part),
	5A(a), (c).)
	Sec.6003.202.NOTICE OF EXPIRATION. At least 30 days
	before the expiration date of a registration certificate or
	license, the department shall send written notice of the impending
	expiration to the holder of the registration certificate or
	license at the holder's last known address. (V.T.I.C. Art. 5.43-3,
	Sec. 5A(b) (part).)
	Sec.6003.203.RENEWAL PROCEDURES. (a)  The holder of an
	unexpired registration certificate or license may renew the
	certificate or license by paying the required renewal fee to the
	department before the expiration date of the certificate or
	license.
	(b)  An individual or organization whose registration
	certificate or license has been expired for 90 days or less may
	renew the certificate or license by paying to the department:
	(1)  the required renewal fee; and
	(2)  a fee equal to one-half of the initial fee for the
	certificate or license.
	(c)  An individual or organization whose registration
	certificate or license has been expired for more than 90 days but
	less than two years may renew the certificate or license by paying
	to the department:
	(1)  all unpaid renewal fees; and
	(2)  a fee that is equal to the initial fee for the
	certificate or license.
	(d)  An individual or organization whose registration
	certificate or license has been expired for two years or longer may
	not renew the certificate or license. The individual or
	organization may obtain a new registration certificate or license
	by complying with the requirements and procedures for obtaining an
	initial registration certificate or license.
	(e)  This section may not be construed to prevent the
	department from denying or refusing to renew a license under
	applicable law or commissioner rules. (V.T.I.C. Art. 5.43-3, Sec.
	5A(b) (part).)
	[Sections 6003.204-6003.250 reserved for expansion]
	SUBCHAPTER F. PROHIBITED PRACTICES
	AND DISCIPLINARY PROCEDURES
	Sec.6003.251.PROHIBITED PRACTICES. An individual or
	organization may not:
	(1)  obtain or attempt to obtain a registration
	certificate or license by fraudulent representation; or
	(2)  plan, sell, install, maintain, or service a fire
	protection sprinkler system in violation of this chapter or the
	rules adopted under this chapter.  (V.T.I.C. Art. 5.43-3, Sec. 8
	(part).)
	Sec.6003.252.DISCIPLINARY ACTIONS. The state fire
	marshal may suspend, revoke, or refuse to issue or renew a
	registration certificate or license if, after notice and hearing,
	the state fire marshal finds that the applicant, registrant, or
	license holder has engaged in acts that:
	(1)  violate this chapter;
	(2)  violate rules or standards adopted under this
	chapter; or
	(3)  constitute misrepresentation made in connection
	with:
	(A)  the sale of products; or
	(B)  services rendered.  (V.T.I.C. Art. 5.43-3,
	Sec. 9(a).)
	Sec.6003.253.DISCIPLINARY HEARING. (a) If the state fire
	marshal proposes to suspend, revoke, or refuse to renew a license or
	registration certificate issued under this chapter, the holder of
	the license or certificate is entitled to a hearing conducted by the
	State Office of Administrative Hearings.
	(b)  Rules of practice adopted by the commissioner
	applicable to the proceedings for a disciplinary action may not
	conflict with rules adopted by the State Office of Administrative
	Hearings.  (V.T.I.C. Art. 5.43-3, Sec. 9A (part).)
	Sec. 6003.254.  APPLICABILITY OF ADMINISTRATIVE PROCEDURE
	ACT.  Proceedings for the denial, suspension, or revocation of a
	registration certificate or license, appeals from those
	proceedings, and any other proceedings for a disciplinary action
	are governed by Chapter 2001, Government Code.  (V.T.I.C. Art.
	5.43-3, Secs. 9(b), 9A (part).)
	Sec.6003.255.REAPPLICATION REQUIREMENTS. (a)  An
	applicant or holder of a registration certificate or license whose
	certificate or license has been denied, refused, or revoked under
	this chapter, other than for failure to pass a required written
	examination, may not file another application for a registration
	certificate or license before:
	(1)  the first anniversary of the effective date of the
	denial, refusal, or revocation; or
	(2)  if judicial review of the denial, refusal, or
	revocation is sought, before the first anniversary of the date of
	the final court order or decree affirming the action.
	(b)  The commissioner may deny an application described by
	Subsection (a) unless the applicant shows good cause why the
	denial, refusal, or revocation of the registration certificate or
	license should not be considered a bar to the issuance of a new
	registration certificate or license. (V.T.I.C. Art. 5.43-3, Sec.
	9(c).)
	[Sections 6003.256-6003.300 reserved for expansion]
	SUBCHAPTER G. CRIMINAL PENALTY
	Sec.6003.301.CRIMINAL PENALTY. (a)  A person commits an
	offense if the person knowingly violates Section 6003.151(a),
	6003.153, or 6003.251.
	(b)  An offense under this section is a Class B misdemeanor.
	(c)  Venue for an offense under this section is in Travis
	County or the county in which the offense is committed. (V.T.I.C.
	Art. 5.43-3, Sec. 10; New.)
	PART K.  ADDITIONS TO GOVERNMENT CODE AND LOCAL GOVERNMENT CODE
	SECTION 1K.001.  ADDITION.  Subchapter A, Chapter 533,
	Government Code, is amended by adding Section 533.019 to read as
	follows:
	Sec.533.019.MANAGED CARE ORGANIZATIONS: FISCAL SOLVENCY AND COMPLAINT SYSTEM GUIDELINES
	AND COMPLAINT SYSTEM GUIDELINES
	Insurance, in conjunction with the commission, shall establish
	fiscal solvency standards and complaint system guidelines for
	managed care organizations that serve Medicaid recipients.
	(b)  The guidelines must require that information regarding
	a managed care organization's complaint process be made available
	to a recipient in an appropriate communication format when the
	recipient enrolls in the Medicaid managed care program. (V.T.I.C.
	Art. 1.61.)
	SECTION 1K.002.  ADDITION.  Subtitle C, Title 5, Local
	Government Code, is amended by adding Chapter 177 to read as
	follows:
	CHAPTER 177. LIFE, HEALTH, AND ACCIDENT INSURANCE FOR OFFICIALS,
	EMPLOYEES, AND RETIREES OF POLITICAL SUBDIVISIONS
	SUBCHAPTER A.  GENERAL PROVISIONS
	Sec.177.001.CERTAIN COVERAGE AUTHORIZED.  (a)  A county or
	other political subdivision of this state may procure contracts
	insuring the political subdivision's officials, employees, and
	retirees or any class of the political subdivision's officials,
	employees, and retirees under a policy of group life, group health,
	accident, accidental death and dismemberment, or hospital,
	surgical, or medical expense insurance.
	(b)  The dependents of those officials, employees, and
	retirees may be insured under a group policy that provides:
	(1)  health insurance; or
	(2)  hospital, surgical, or medical expense insurance.
	(V.T.I.C. Art. 3.51-2, Sec. (a) (part).)
	Sec.177.002.PAYMENT OF PREMIUMS.  (a)  A county or other
	political subdivision of this state that is authorized to procure a
	contract insuring the political subdivision's officials,
	employees, and retirees or any class of the political subdivision's
	officials, employees, and retirees under a policy of group
	insurance that covers one or more risks may pay from the local funds
	of the political subdivision all or any portion of the premiums for
	the policy.  The political subdivision may also pay all or any
	portion of the premiums on group health, hospital, surgical, or
	medical expense insurance for dependents of the political
	subdivision's officials, employees, and retirees.
	(b)  If authorized by the official, employee, or retiree in
	writing to make the deduction, the county or other political
	subdivision may deduct from the person's salary an amount equal to
	any required contribution by the person to the premiums for the
	insurance issued under Section 177.001 to the political
	subdivision as the policyholder. (V.T.I.C. Art. 3.51-2, Secs. (a)
	(part), (b), (c) (part).)
	Sec.177.003.USE OF STATE FUNDS.  State funds may not be
	used to procure a contract under this subchapter or pay premiums
	under that contract. (V.T.I.C. Art. 3.51-2, Sec. (a) (part).)
	[Sections 177.004-177.050 reserved for expansion]
	SUBCHAPTER B. HEALTH AND INSURANCE FUND
	Sec.177.051.FUND AUTHORIZED.  (a)  A county or other
	political subdivision of this state may establish a fund to provide
	insurance authorized by Subchapter A.
	(b)  A fund established under Subsection (a) shall be known
	as the "health and insurance fund--employees and dependents."
	(V.T.I.C. Art. 3.51-2, Sec. (c) (part).)
	Sec.177.052.PAYMENT OF MONEY INTO FUND.  There shall be
	credited to a fund established under this subchapter:
	(1)  any salary deduction to which an official,
	employee, or retiree agrees in writing; and
	(2)  contributions from the county or other political
	subdivision. (V.T.I.C. Art. 3.51-2, Sec. (c) (part).)
	Sec.177.053.USE OF MONEY IN FUND.  Payment from a fund
	established under this subchapter:
	(1)  is authorized only for the payment of premiums on
	life, group health, accident, accidental death and dismemberment,
	or hospital, surgical, or medical expense insurance for officials,
	employees, retirees, and their dependents; and
	(2)  must be made in accordance with rules adopted by
	the county or other political subdivision establishing the fund.
	(V.T.I.C. Art. 3.51-2, Sec. (c) (part).)
	Sec.177.054.PAYMENT OF CLAIMS FROM FUND. A claim against
	a fund established under this subchapter shall be payable in the
	same manner as other claims of the county or other political
	subdivision. (V.T.I.C. Art. 3.51-2, Sec. (c) (part).)
	PART L.  REPEALER
	SECTION 1L.001.  REPEALER.  (a)  The following Acts and
	articles as compiled in Vernon's Texas Insurance Code are repealed:
	(1)  1.01, 1.02, 1.10, 1.12, 1.13, 1.33, and 1.61;
	(2)  3.11, 3.38, 3.49-3, 3.50-7B, and 3.51-2;
	(3)  3.50-7A, as added by Chapter 201, Acts of the 78th
	Legislature, Regular Session, 2003;
	(4)  3.50-7A, as added by Chapter 213, Acts of the 78th
	Legislature, Regular Session, 2003;
	(5)  5.01-1, 5.02, 5.03-1, 5.05, 5.14, 5.43-1, 5.43-2,
	5.43-3, and 5.66; and
	(6)  21.20-2, 21.49-15, 21.49-16, 21.49C, 21.70, and
	21.80.
	(b)  Subsection (b), Article 1.09-1, Insurance Code, is
	repealed.
	(c)  Subchapter B, Chapter 4, Insurance Code, is repealed.
	PART M.  LEGISLATIVE INTENT
	SECTION 1M.001.  LEGISLATIVE INTENT.  This article is
	enacted under Section 43, Article III, Texas Constitution.  This
	article is intended as a recodification only, and no substantive
	change in law is intended by this article.
	PART N.  EFFECTIVE DATE
	SECTION 1N.001.  EFFECTIVE DATE.  This article takes effect
	April 1, 2009.
	ARTICLE 2.  UPDATES OF CROSS-REFERENCES IN TITLES 2, 3, 5, 6, 7, 8,
	10, 11, AND 13, INSURANCE CODE
	PART A.  GENERAL PROVISIONS
	SECTION 2A.001.  This article is enacted as part of the
	state's continuing statutory revision program under Chapter 323,
	Government Code.  This article is a revision for purposes of Section
	43, Article III, Texas Constitution, and has the purpose of making
	necessary corrections to enacted codifications of the Insurance
	Code.
	SECTION 2A.002.  If any provision of this article conflicts
	with a statute enacted by the 80th Legislature, Regular Session,
	2007, the statute controls.
	PART B.  CROSS-REFERENCE UPDATES:  TITLE 2, INSURANCE CODE
	SECTION 2B.001.  Section 34.004(a), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(a)  A person is not liable in a civil action, including an
	action for libel or slander, for collecting, reviewing, analyzing,
	disseminating, or reporting information collected from annual
	statements filed under Chapter 802 [Article 1.11] if the person is:
	(1)  the department, the commissioner, or an employee
	of the department;
	(2)  a member or employee of or delegate to the National
	Association of Insurance Commissioners or an authorized committee,
	subcommittee, or task force of that association; or
	(3)  another person who is responsible for collecting,
	reviewing, analyzing, and disseminating information from filed
	annual statement convention blanks.
	SECTION 2B.002.  Section 36.002, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 36.002.  ADDITIONAL RULEMAKING AUTHORITY. The
	commissioner may adopt reasonable rules that are:
	(1)  necessary to effect the purposes of a provision
	of:
	(A)  Subchapter B, Chapter 5;
	(B)  Subchapter C, Chapter 1806;
	(C)  Subchapter A, Chapter 2301;
	(D)  Chapter 251, as that chapter relates to
	casualty insurance and fidelity, guaranty, and surety bond
	insurance;
	(E)  Chapter 253;
	(F)  Chapter 2008, 2251, or 2252; or
	(G)  Subtitle B, Title 10; or
	(2)  appropriate to accomplish the purposes of a
	provision of:
	(A)  Section 37.051(a), 403.002, 492.051(b) or
	(c), 501.159, 941.003(b)(1) [941.003(b)(3)] or (c), or
	942.003(b)(1) [942.003(b)(3)] or (c);
	(B)  Subchapter H, Chapter 544;
	(C)  Chapter 251, as that chapter relates to:
	(i)  automobile insurance;
	(ii)  casualty insurance and fidelity,
	guaranty, and surety bond insurance;
	(iii)  fire insurance and allied lines;
	(iv)  workers' compensation insurance; or
	(v)  aircraft insurance;
	(D)  Chapter 5, 252, 253, 254, 255, 256, 426, 493,
	494, 1804, 1805, 1806, [or] 2171, 6001, 6002, or 6003;
	(E)  Subtitle B, C, D, E, F, H, or I, Title 10;
	(F)  Section 417.008, Government Code; or
	(G)  [Chapter 406A, Labor Code; or
	[(H)]  Chapter 2154, Occupations Code.
	SECTION 2B.003.  Section 36.106, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 36.106.  WAIVER OF CERTAIN NOTICE REQUIREMENTS.  The
	commissioner may, on written agreement or stipulation of each party
	and any intervenor, waive or modify the notice publication
	requirement of Section 822.059 [Article 2.01], 822.157 [2.03],
	841.060 [3.04], or 884.058 [22.03].
	SECTION 2B.004.  Section 38.002(a)(1), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(1)  "Insurer" means an insurance company, reciprocal
	or interinsurance exchange, mutual insurance company, capital
	stock company, county mutual insurance company, Lloyd's plan, or
	other legal entity engaged in the business of personal automobile
	insurance or residential property insurance in this state. The
	term includes:
	(A)  an affiliate as described by [Section 2,
	Article 21.49-1, or] Section 823.003(a) if that affiliate is
	authorized to write and is writing personal automobile insurance or
	residential property insurance in this state;
	(B)  the Texas Windstorm Insurance Association
	created and operated under Chapter 2210 [Article 21.49];
	(C)  the FAIR Plan Association under Chapter 2211
	[Article 21.49A]; and
	(D)  the Texas Automobile Insurance Plan
	Association under Chapter 2151 [Article 21.81].
	SECTION 2B.005.  Section 38.003(b), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(b)  For purposes of this section, "insurer" means a
	reciprocal or interinsurance exchange, mutual insurance company,
	capital stock company, county mutual insurance company, Lloyd's
	plan, life, accident, or health or casualty insurance company,
	health maintenance organization, mutual life insurance company,
	mutual insurance company other than life, mutual, or natural
	premium life insurance company, general casualty company,
	fraternal benefit society, group hospital service company, or other
	legal entity engaged in the business of insurance in this state.
	The term includes an affiliate as described by [Section 2, Article
	21.49-1, or] Section 823.003(a) if that affiliate is authorized to
	write and is writing insurance in this state.
	SECTION 2B.006.  Section 38.051, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 38.051.  DEFINITION.  In this subchapter, "health
	benefit plan provider" means an insurance company, group hospital
	service corporation, or health maintenance organization that
	issues:
	(1)  an individual, group, blanket, or franchise
	insurance policy, an insurance agreement, a group hospital service
	contract, or an evidence of coverage, that provides benefits for
	medical or surgical expenses incurred as a result of an accident or
	sickness; or
	(2)  a long-term care benefit plan [insurance policy],
	as defined by Section 1651.003 [2, Article 3.70-12].
	SECTION 2B.007.  Section 38.101(2), Insurance Code, is
	amended to correct cross-references to read as follows:
	(2)  "Health benefit plan coverage" means a group
	policy, contract, or certificate of health insurance or benefits
	delivered, issued for delivery, or renewed in this state by:
	(A)  an insurance company subject to a law
	described by Section 841.002 [Chapter 3];
	(B)  a group hospital service corporation under
	Chapter 842 [20];
	(C)  a health maintenance organization under
	Section 1367.053, Subchapter A, Chapter 1452, Subchapter B, Chapter
	1507, Chapters 222, 251, and 258, as applicable to a health
	maintenance organization, and Chapters 843, 1271, and 1272 [the
	Texas Health Maintenance Organization Act (Chapter 20A, Vernon's
	Texas Insurance Code)]; or
	(D)  a self-insurance trust or mechanism
	providing health care benefits.
	SECTION 2B.008.  Section 38.152, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 38.152.  EXEMPTION.  This subchapter does not apply to
	a farm mutual insurance company or to a county mutual fire insurance
	company writing exclusively industrial fire insurance as described
	by Section 912.310 [Article 17.02].
	SECTION 2B.009.  Section 38.252(c), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(c)  The commissioner shall not require reporting of data:
	(1)  that could reasonably be used to identify a
	specific enrollee in a health benefit plan;
	(2)  in any way that violates confidentiality
	requirements of state or federal law applicable to an enrollee in a
	health benefit plan; or
	(3)  in which the health maintenance organization
	operating under [the Texas Health Maintenance Organization Act (]
	Section 1367.053, Subchapter A, Chapter 1452, Subchapter B, Chapter
	1507, Chapter 222, 251, or 258, as applicable to a health
	maintenance organization, Chapter 843, Chapter 1271, and Chapter
	1272 [20A, Vernon's Texas Insurance Code)] does not directly
	process the claim or does not receive complete and accurate
	encounter data.
	SECTION 2B.010.  Section 82.002(a), Insurance Code, is
	amended to correct cross-references to read as follows:
	(a)  This chapter applies to each company regulated by the
	commissioner, including:
	(1)  a domestic or foreign, stock or mutual, life,
	health, or accident insurance company;
	(2)  a domestic or foreign, stock or mutual, fire or
	casualty insurance company;
	(3)  a Mexican casualty company;
	(4)  a domestic or foreign Lloyd's plan insurer;
	(5)  a domestic or foreign reciprocal or interinsurance
	exchange;
	(6)  a domestic or foreign fraternal benefit society;
	(7)  a domestic or foreign title insurance company;
	(8)  an attorney's title insurance company;
	(9)  a stipulated premium insurance company;
	(10)  a nonprofit legal service corporation;
	(11)  a health maintenance organization;
	(12)  a statewide mutual assessment company;
	(13)  a local mutual aid association;
	(14)  a local mutual burial association;
	(15)  an association exempt under Section 887.102
	[Article 14.17];
	(16)  a nonprofit hospital, medical, or dental service
	corporation, including a company subject to Chapter 842 [20];
	(17)  a county mutual insurance company; and
	(18)  a farm mutual insurance company.
	SECTION 2B.011.  Section 83.001(4), Insurance Code, is
	amended to correct cross-references to read as follows:
	(4)  "Unfair act" means an unfair method of
	competition, an unfair or deceptive act or practice, or an unfair
	claim settlement practice as defined under Chapter 541 [Article
	21.21] or 542 [21.21-2] or a rule adopted under either chapter
	[article].
	SECTION 2B.012.  Section 83.002(a), Insurance Code, is
	amended to correct cross-references to read as follows:
	(a)  This chapter applies to each company regulated by the
	commissioner, including:
	(1)  a domestic or foreign, stock or mutual, life,
	health, or accident insurance company;
	(2)  a domestic or foreign, stock or mutual, fire or
	casualty insurance company;
	(3)  a Mexican casualty company;
	(4)  a domestic or foreign Lloyd's plan insurer;
	(5)  a domestic or foreign reciprocal or interinsurance
	exchange;
	(6)  a domestic or foreign fraternal benefit society;
	(7)  a domestic or foreign title insurance company;
	(8)  an attorney's title insurance company;
	(9)  a stipulated premium insurance company;
	(10)  a nonprofit legal service corporation;
	(11)  a statewide mutual assessment company;
	(12)  a local mutual aid association;
	(13)  a local mutual burial association;
	(14)  an association exempt under Section 887.102
	[Article 14.17];
	(15)  a nonprofit hospital, medical, or dental service
	corporation, including a company subject to Chapter 842 [20];
	(16)  a county mutual insurance company; and
	(17)  a farm mutual insurance company.
	SECTION 2B.013. Section 83.051(a), Insurance Code, is
	amended to correct cross-references to read as follows:
	(a)  The commissioner ex parte may issue an emergency cease
	and desist order if:
	(1)  the commissioner believes that:
	(A)  an authorized person engaging in the business
	of insurance is:
	(i)  committing an unfair act; or
	(ii)  in a hazardous condition or a
	hazardous financial condition under Section 843.406 [19, Texas
	Health Maintenance Organization Act (Article 20A.19, Vernon's
	Texas Insurance Code),] or Subchapter A, Chapter 404 [Article
	1.32], as determined by the commissioner; or
	(B)  an unauthorized person:
	(i)  is engaging in the business of
	insurance in violation of Chapter 101 or in violation of a rule
	adopted under that chapter; or
	(ii)  is engaging in the business of
	insurance in violation of Chapter 101 and is committing an unfair
	act; and
	(2)  it appears to the commissioner that the alleged
	conduct:
	(A)  is fraudulent;
	(B)  is hazardous or creates an immediate danger
	to the public safety; or
	(C)  is causing or can be reasonably expected to
	cause public injury that:
	(i)  is likely to occur at any moment;
	(ii)  is incapable of being repaired or
	rectified; and
	(iii)  has or is likely to have influence or
	effect.
	SECTION 2B.014. Section 101.001(a), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(a)  It is a state concern that many residents of this state
	hold insurance policies issued by persons or insurers who are not
	authorized to do insurance business in this state and who are not
	qualified as eligible surplus lines insurers under Chapter 981
	[Article 1.14-2]. These residents face often insurmountable
	obstacles in asserting legal rights under the policies in foreign
	forums under unfamiliar laws and rules of practice.
	SECTION 2B.015. Section 101.002(2), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(2)  "Unfair act" means an unfair method of competition
	or an unfair or deceptive act or practice as defined under Chapter
	541 [Article 21.21] or a rule adopted under that chapter [article].
	SECTION 2B.016. Section 101.052, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 101.052.  ADVERTISING RELATING TO MEDICARE SUPPLEMENT
	BENEFIT PLANS [POLICIES].  With respect to a Medicare supplement
	benefit plan [policy] authorized under Chapter 1652 [Article 3.74],
	the business of insurance in this state includes using, creating,
	publishing, mailing, or disseminating in this state an
	advertisement relating to an act that constitutes the business of
	insurance under Section 101.051 unless the advertisement is used,
	created, published, mailed, or disseminated on behalf of an insurer
	or person who:
	(1)  is authorized under this code to engage in the
	business of insurance in this state;
	(2)  has actual knowledge of the content of the
	advertisement;
	(3)  has authorized the advertisement to be used,
	created, published, mailed, or disseminated on that insurer's or
	person's behalf; and
	(4)  is clearly identified by name in the advertisement
	as the sponsor of the advertisement.
	SECTION 2B.017. Section 101.101, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 101.101.  DEFINITION.  In this subchapter, "person"
	means an individual or entity that is a person for purposes of
	Section 541.002 [2(a), Article 21.21].
	SECTION 2B.018. Section 101.203(c), Insurance Code, is
	amended to correct cross-references to read as follows:
	(c)  This section does not apply to:
	(1)  a transaction in this state that:
	(A)  involves a policy that:
	(i)  is lawfully solicited, negotiated,
	written, and delivered outside this state; and
	(ii)  covers, at the time the policy is
	issued, only subjects of insurance that are not resident, located,
	or expressly to be performed in this state; and
	(B)  takes place after the policy is issued; or
	(2)  surplus lines insurance procured through eligible
	surplus lines insurers [carriers] as defined by Section 981.002
	[Article 1.14-2].
	SECTION 2B.019. Section 101.301(b), Insurance Code, is
	amended to correct cross-references to read as follows:
	(b)  This section does not apply to:
	(1)  a transaction described by Section 101.053(b)(4);
	or
	(2)  surplus lines insurance procured through eligible
	surplus lines insurers [carriers] as defined by Section 981.002
	[Article 1.14-2].
	PART C.  CROSS-REFERENCE UPDATES:  TITLE 3, INSURANCE CODE
	SECTION 2C.001.  Section 252.002(b), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(b)  The commissioner shall annually adjust the rate of
	assessment of the maintenance tax so that the tax imposed that year,
	together with any unexpended funds produced by the tax, produces
	the amount the commissioner determines is necessary to pay the
	expenses during the succeeding year of regulating all classes of
	insurance specified under:
	(1)  Chapters 1807, 2001-2006, 2171, 6001, 6002, and
	6003;
	(2)  Subchapter C, Chapter 5;
	(3)  Subchapter H, Chapter 544;
	(4)  Subchapter D, Chapter 1806;
	(5)  Section 403.002;
	(6)  Sections 417.007, 417.008, and 417.009,
	Government Code; and
	(7)  Chapter 2154, Occupations Code.
	SECTION 2C.002.  Section 252.003, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 252.003.  PREMIUMS SUBJECT TO TAXATION. An insurer
	shall pay maintenance taxes under this chapter on the correctly
	reported gross premiums collected from writing insurance in this
	state against loss or damage by:
	(1)  bombardment;
	(2)  civil war or commotion;
	(3)  cyclone;
	(4)  earthquake;
	(5)  excess or deficiency of moisture;
	(6)  explosion as defined by Section 2002.006(b)
	[Article 5.52];
	(7)  fire;
	(8)  flood;
	(9)  frost and freeze;
	(10)  hail;
	(11)  insurrection;
	(12)  invasion;
	(13)  lightning;
	(14)  military or usurped power;
	(15)  an order of a civil authority made to prevent the
	spread of a conflagration, epidemic, or catastrophe;
	(16)  rain;
	(17)  riot;
	(18)  the rising of the waters of the ocean or its
	tributaries;
	(19)  smoke or smudge;
	(20)  strike or lockout;
	(21)  tornado;
	(22)  vandalism or malicious mischief;
	(23)  volcanic eruption;
	(24)  water or other fluid or substance resulting from
	the breakage or leakage of sprinklers, pumps, or other apparatus
	erected for extinguishing fires, water pipes, or other conduits or
	containers;
	(25)  weather or climatic conditions; or
	(26)  windstorm.
	SECTION 2C.003.  Section 253.002(b), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(b)  The commissioner shall annually adjust the rate of
	assessment of the maintenance tax so that the tax imposed that year,
	together with any unexpended funds produced by the tax, produces
	the amount the commissioner determines is necessary to pay the
	expenses during the succeeding year of regulating all classes of
	insurance specified under Section 253.003 [Subchapter B, Chapter
	5].
	SECTION 2C.004.  Section 253.003, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 253.003.  PREMIUMS SUBJECT TO TAXATION. An insurer
	shall pay maintenance taxes under this chapter on the correctly
	reported gross premiums from writing a class of insurance specified
	under:
	(1)  Chapters 2008, 2251, and 2252;
	(2)  Subchapter B, Chapter 5;
	(3)  Subchapter C, Chapter 1806;
	(4)  Subchapter A, Chapter 2301; and
	(5)  Subtitle B, Title 10.
	SECTION 2C.005.  Section 255.003(a), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(a)  An insurer shall pay maintenance taxes under this
	chapter on the correctly reported gross workers' compensation
	insurance premiums from writing workers' compensation insurance in
	this state, including the modified annual premium of a policyholder
	that purchases an optional deductible plan under Subchapter E,
	Chapter 2053 [Article 5.55C].
	SECTION 2C.006.  Section 256.002(b), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(b)  The commissioner shall annually adjust the rate of
	assessment of the maintenance tax so that the tax imposed that year,
	together with any unexpended funds produced by the tax, produces
	the amount the commissioner determines is necessary to pay the
	expenses during the succeeding year of regulating all classes of
	insurance specified under Chapter 2101 [Subchapter K, Chapter 5].
	SECTION 2C.007.  Section 256.003, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 256.003.  PREMIUMS SUBJECT TO TAXATION. An insurer
	shall pay maintenance taxes under this chapter on the correctly
	reported gross premiums from writing a class of insurance specified
	under Chapter 2101 [Subchapter K, Chapter 5].
	SECTION 2C.008.  Section 261.003(b), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(b)  The commissioner shall annually adjust the rate of
	assessment of the maintenance tax so that the tax imposed that year,
	together with any unexpended funds produced by the tax, produces
	the amount the commissioner determines is necessary to pay the
	expenses during the succeeding year of regulating all classes of
	insurance specified under Chapter 2204 [Article 1.14-3].
	SECTION 2C.009.  Section 261.004, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 261.004.  PREMIUMS SUBJECT TO TAXATION. The exchange
	shall pay maintenance taxes under this chapter on the correctly
	reported gross premiums paid through the exchange on all classes of
	insurance specified under Chapter 2204 [Article 1.14-3].
	PART D.  CROSS-REFERENCE UPDATES:  TITLE 5, INSURANCE CODE
	SECTION 2D.001.  Section 501.158, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 501.158.  CONFIDENTIALITY REQUIREMENTS.
	Confidentiality requirements applicable to examination reports
	under Sections 401.105 and 401.106 [Article 1.18] and to the
	commissioner under Section 441.201 [3A, Article 21.28-A,] apply to
	the public counsel.
	SECTION 2D.002.  Section 501.204(a), Insurance Code, is
	amended to correct a cross-reference and to conform more closely to
	the source law from which the section is derived to read as follows:
	(a)  This section applies to each insurer authorized to
	engage in business in this state under:
	(1)  [Chapter 25;
	[(2)] Chapter 841;
	(2) [(3)]  Chapter 842;
	(3)  Section 1367.053, Subchapter A, Chapter 1452,
	Subchapter B, Chapter 1507, Chapter 222, 251, or 258, as applicable
	to a health maintenance organization, [(4)] Chapter 843, Chapter
	1271, or Chapter 1272;
	(4) [(5)]  Chapter 882;
	(5) [(6)]  Chapter 884;
	(6) [(7)]  Chapter 885;
	(7) [(8)]  Chapter 887;
	(8) [(9)]  Chapter 888;
	(9) [(10)]  Chapter 961;
	(10)  Chapter 962;
	(11)  Chapter 982;
	(12)  Subchapter B, Chapter 1103;
	(13)  Subchapter A, Chapter 1104;
	(14)  Chapter 1201, or a provision listed in Section
	1201.005;
	(15)  Chapter 1551;
	(16)  Chapter 1578; or
	(17)  Chapter 1601.
	SECTION 2D.003.  Sections 523.051(a) and (c), Insurance
	Code, are amended to correct a cross-reference to read as follows:
	(a)  The market assistance program is a voluntary program
	designed to assist applicants for insurance and insureds in this
	state in obtaining residential property insurance coverage in
	underserved areas. The commissioner by rule shall designate
	underserved areas using the standards described by Section 2004.002
	[1, Article 5.35-3].
	(c)  The market assistance program may not provide
	assistance regarding windstorm and hail insurance coverage for a
	risk eligible for that coverage under Chapter 2210 [Article 21.49].
	SECTION 2D.004.  Section 523.202(b), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(b)  After each review, the executive committee shall report
	to the commissioner regarding:
	(1)  the need to continue operating the voluntary
	market assistance program;
	(2)  the need to establish a mandatory market
	assistance program;
	(3)  the need to establish a FAIR (Fair Access to
	Insurance Requirements) Plan under Chapter 2211 [Article 21.49A];
	or
	(4)  other recommendations the executive committee
	considers appropriate.
	SECTION 2D.005.  Section 541.005(a), Insurance Code, is
	amended to correct cross-references to read as follows:
	(a)  A risk retention group or purchasing group described by
	Subchapter B, Chapter 2201, or [, as those terms are defined by]
	Section 2201.251 that is [2, Article 21.54,] not chartered in this
	state may not engage in a trade practice in this state that is
	defined as unlawful under this chapter.
	SECTION 2D.006.  Section 541.454(a), Insurance Code, is
	amended to correct cross-references to read as follows:
	(a)  Civil penalties, premium refunds, judgments,
	compensatory judgments, individual recoveries, orders, class
	action awards, costs, damages, or attorney's fees assessed or
	awarded under this chapter:
	(1)  may be paid only from the capital or surplus funds
	of the offending insurer; and
	(2)  may not take precedence over, be in priority to, or
	in any other manner apply to:
	(A)  Chapter 462 or 463 [Article 21.28-C or
	21.28-D] or any other insurance guaranty act; or
	(B)  Chapter 422 [Article 21.39-A].
	SECTION 2D.007.  Section 542.052, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 542.052.  APPLICABILITY OF SUBCHAPTER. This subchapter
	applies to any insurer authorized to engage in business as an
	insurance company or to provide insurance in this state, including:
	(1)  a stock life, health, or accident insurance
	company;
	(2)  a mutual life, health, or accident insurance
	company;
	(3)  a stock fire or casualty insurance company;
	(4)  a mutual fire or casualty insurance company;
	(5)  a Mexican casualty insurance company;
	(6)  a Lloyd's plan;
	(7)  a reciprocal or interinsurance exchange;
	(8)  a fraternal benefit society;
	(9)  a stipulated premium company;
	(10)  a nonprofit legal services corporation;
	(11)  a statewide mutual assessment company;
	(12)  a local mutual aid association;
	(13)  a local mutual burial association;
	(14)  an association exempt under Section 887.102;
	(15)  a nonprofit hospital, medical, or dental service
	corporation, including a corporation subject to Chapter 842;
	(16)  a county mutual insurance company;
	(17)  a farm mutual insurance company;
	(18)  a risk retention group;
	(19)  a purchasing group;
	(20)  an eligible surplus lines insurer; and
	(21)  except as provided by Section 542.053(b), a
	guaranty association operating under Chapter 462 or 463 [Article
	21.28-C or 21.28-D].
	SECTION 2D.008.  Sections 542.053(a) and (b), Insurance
	Code, are amended to correct cross-references to read as follows:
	(a)  This subchapter does not apply to:
	(1)  workers' compensation insurance;
	(2)  mortgage guaranty insurance;
	(3)  title insurance;
	(4)  fidelity, surety, or guaranty bonds;
	(5)  marine insurance as defined by Section 1807.001
	[Article 5.53]; or
	(6)  a guaranty association created and operating under
	Chapter 2602.
	(b)  A guaranty association operating under Chapter 462 or
	463 [Article 21.28-C or 21.28-D] is not subject to the damage
	provisions of Section 542.060.
	SECTION 2D.009.  Section 542.102(b), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(b)  This section does not apply to a workers' compensation
	insurance policy subject to Section 2051.151 [Article 5.65A].
	SECTION 2D.010.  Section 542.152, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 542.152.  EXCEPTION. This subchapter does not apply
	to:
	(1)  a casualty insurance policy that requires the
	insured's consent to settle a claim against the insured;
	(2)  fidelity, surety, or guaranty bonds; or
	(3)  marine insurance as defined by Section 1807.001
	[Article 5.53].
	SECTION 2D.011.  Section 544.301(1), Insurance Code, is
	amended to correct cross-references to read as follows:
	(1)  "Insurer" means an insurance company, reciprocal
	or interinsurance exchange, mutual insurance company, capital
	stock company, county mutual insurance company, farm mutual
	insurance company, Lloyd's plan, or other legal entity authorized
	to write residential property insurance in this state. The term
	includes an affiliate, as described by Section 823.003(a), if that
	affiliate is authorized to write and is writing residential
	property insurance in this state. The term does not include:
	(A)  an eligible surplus lines insurer regulated
	under Chapter 981;
	(B)  the Texas Windstorm Insurance Association
	under Chapter 2210 [Article 21.49]; or
	(C)  the FAIR Plan Association under Chapter 2211
	[Article 21.49A].
	SECTION 2D.012.  Section 551.001, Insurance Code, is amended
	to correct cross-references by amending Subsection (a) and adding
	Subsection (a-1) to read as follows:
	(a)  The commissioner may, as necessary, adopt and enforce
	reasonable rules, including notice requirements, relating to the
	cancellation and nonrenewal of any insurance policy regulated by
	the department under:
	(1)  Chapter 5;
	(2)  Chapter 1804, 1805, 2171, or 2301; or
	(3)  Subtitle C, D, E, or F, Title 10[, other than:
	[(1)a policy subject to Subchapter B or C; or
	[(2)  a marine insurance policy other than inland
	marine].
	(a-1)  Notwithstanding Subsection (a), Subsection (a) does
	not apply to:
	(1)  an insurance policy subject to Subchapter B or C of
	this chapter; or
	(2)  a marine insurance policy other than inland
	marine.
	SECTION 2D.013.  Sections 551.107(b) and (e), Insurance
	Code, are amended to correct cross-references to read as follows:
	(b)  A claim under this section does not include a claim:
	(1)  resulting from a loss caused by natural causes;
	(2)  that is filed but is not paid or payable under the
	policy; or
	(3)  that an insurer is prohibited from using under
	Section 544.353 [3, Article 5.35-4].
	(e)  An insurer may notify an insured who has filed two
	claims in a period of less than three years that the insurer may
	refuse to renew the policy if the insured files a third claim during
	the three-year period. If the insurer does not notify the insured
	in accordance with this subsection, the insurer may not refuse to
	renew the policy because of claims. The notice form must:
	(1)  list the policyholder's claims; and
	(2)  contain the sentence: "The filing by you of
	another claim, except for a claim resulting from a loss caused by
	natural causes, a claim filed but not paid or payable under the
	policy under which it was filed, or an appliance-related claim that
	we are prohibited from using under Section 544.353 [3, Article
	5.35-4], Texas Insurance Code, could cause us to refuse to renew
	your policy."
	SECTION 2D.014.  Section 553.004(a), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(a)  If the commissioner considers it necessary, the
	commissioner may initiate an examination of an insurer under
	Sections 401.051, 401.052, and 401.054-401.062 [Article 1.15].
	SECTION 2D.015.  Section 558.001, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 558.001.  DEFINITION. In this chapter, "insurer" means
	an insurance company or other entity authorized to engage in the
	business of insurance in this state. The term includes:
	(1)  a stock life, health, or accident insurance
	company;
	(2)  a mutual life, health, or accident insurance
	company;
	(3)  a stock fire or casualty insurance company;
	(4)  a mutual fire or casualty insurance company;
	(5)  a Mexican casualty insurance company;
	(6)  a farm mutual insurance company;
	(7)  a county mutual insurance company;
	(8)  a Lloyd's plan;
	(9)  a reciprocal or insurance exchange;
	(10)  a fraternal benefit society;
	(11)  a stipulated premium company;
	(12)  a nonprofit legal services corporation;
	(13)  a statewide mutual assessment company;
	(14)  a local mutual aid association;
	(15)  a local mutual burial association;
	(16)  an association exempt under Section 887.102;
	(17)  a nonprofit hospital, medical, or dental service
	corporation, including a corporation subject to Chapter 842;
	(18)  a risk retention group;
	(19)  a purchasing group;
	(20)  an eligible surplus lines insurer; and
	(21)  a guaranty association operating under Chapter
	462 or 463 [Article 21.28-C or 21.28-D].
	SECTION 2D.016.  Section 558.002(c), Insurance Code, is
	amended to correct cross-references to read as follows:
	(c)  A guaranty association shall promptly refund any
	unearned premium as described by Subchapter E, Chapter 462 [Section
	5(8), Article 21.28-C], or Sections 463.003(9) [5(10)] and 463.259
	[8(n), Article 21.28-D].
	SECTION 2D.017.  Section 706.001(a), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(a)  The definitions adopted under Sections 2251.002 and
	2301.002 and the terms described by Sections 2251.003 and 2301.003
	[Article 5.13-2] apply to this chapter.
	SECTION 2D.018.  Section 706.004, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 706.004.  RATES AND FORMS. Notwithstanding any other
	law, rates and forms for insurance coverage issued under this
	chapter are governed by:
	(1)  Subchapters A-E, Chapter 2251;
	(2)  Subchapter A, Chapter 2301; and
	(3)  Article 5.13-2.
	PART E.  CROSS-REFERENCE UPDATES:  TITLE 6, INSURANCE CODE
	SECTION 2E.001.  Section 802.056, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 802.056.  STATUS OF REPORTS AND OTHER INFORMATION.  A
	report or any other information resulting from the collection,
	review, analysis, and distribution of information developed from
	the filing of annual statement convention blanks and provided to
	the department by the National Association of Insurance
	Commissioners is considered part of the process of examination of
	insurance companies under this code, including Chapters 86 and 401
	[Articles 1.15-1.19].
	SECTION 2E.002.  Section 803.009, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 803.009.  CONFLICTING PROVISIONS.  This chapter
	prevails over a conflicting provision of any other law of this
	state, including:
	(1)  Chapters 221, 222, and 223;
	(2)  Sections 401.151, 401.152, 401.155, and 401.156;
	and
	(3)  Section 171.0525, Tax Code [Articles 1.16, 4.10,
	4.11, and 9.59].
	SECTION 2E.003.  Section 804.104, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 804.104.  RISK RETENTION GROUP NOT CHARTERED IN THIS
	STATE.  A risk retention group that is not chartered but that is
	registered in this state under Section 2201.152 [4(b)(3), Article
	21.54], must designate the commissioner as its agent for service of
	process and receipt of legal documents.
	SECTION 2E.004.  Section 804.201(a), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(a)  Process served by serving the commissioner under this
	chapter must be directed to the defendant and include:
	(1)  for an unauthorized person or insurer, the name
	and address of the person or insurer to be served;
	(2)  for a risk retention group, the name and address of
	the group to be served;
	(3)  for a surplus lines insurer, the name and address
	of the insurer to be served;
	(4)  for an unincorporated association, trust, or other
	organization formed under Chapter 1505 [Article 3.71], the name and
	address of the association, trust, or organization; or
	(5)  for an authorized company, the name and address of
	the company as it appears in the department records.
	SECTION 2E.005.  Section 822.056(e), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(e)  If all of the authorized shares of stock without par
	value are not subscribed and paid for when the charter is granted or
	the amendment is filed, respectively, the insurance company shall
	file with the department a certificate authenticated by a majority
	of the directors stating the number of shares without par value
	issued and the consideration received for those shares. An
	insurance company may issue and dispose of those remaining
	authorized shares for money or an instrument authorized for minimum
	capital under:
	(1)  a provision of Subchapter B, Chapter 424, other
	than Section 424.052, 424.072, or 424.073; and
	(2)  Section 822.204 [and Article 2.10].
	SECTION 2E.006.  Sections 822.061(a) and (b), Insurance
	Code, are amended to correct a cross-reference to read as follows:
	(a)  On receipt of a charter fee in the amount determined
	under Chapter 202 [Article 4.07], the commissioner shall examine
	the articles of incorporation filed with the department under
	Section 822.060 and any certificate filed under Section
	822.057(a)(4).
	(b)  If the commissioner approves the articles of
	incorporation and, if applicable, the certificate filed under
	Section 822.057(a)(4), the commissioner shall certify and file the
	approved documents with the department records and, on receipt of a
	fee in the amount determined under Chapter 202 [Article 4.07], the
	commissioner shall issue a certified copy of the charter to the
	incorporators.
	SECTION 2E.007.  Section 822.155, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 822.155.  APPLICATION FOR AMENDMENT OF CHARTER.  A
	domestic insurance company may amend its charter by paying to the
	commissioner a fee in the amount determined under Chapter 202
	[Article 4.07] and by filing with the department:
	(1)  an application for a charter amendment on the form
	and containing the information prescribed by the commissioner; and
	(2)  the company's proposed amendment.
	SECTION 2E.008.  Sections 822.158(a) and (e), Insurance
	Code, are amended to correct cross-references to read as follows:
	(a)  Not later than the 60th day after the date the
	application under Section 822.155 is filed, the commissioner shall
	determine whether:
	(1)  the proposed capital structure of the insurance
	company meets the requirements of this code;
	(2)  the officers, directors, and managing head of the
	insurance company have sufficient insurance experience, ability,
	standing, and good record to make success of the company probable;
	(3)  the applicants are acting in good faith;
	(4)  if the proposed amendment relates to a diminution
	of the insurance company's charter powers with respect to the kinds
	of insurance business in which the company may be engaged, all
	liabilities incidental to the exercise of the powers to be
	eliminated have been terminated or wholly reinsured; and
	(5)  the property involved in an increase of capital or
	surplus, or both, is:
	(A)  properly valued; and
	(B)  in the form authorized by the following
	provisions [Section 822.204 and Article 2.10], to the extent those
	provisions apply:
	(i)  Subchapter B, Chapter 424, other than
	Sections 424.052, 424.072, and 424.073; and
	(ii)  Section 822.204.
	(e)  On approval of a certificate required under Section
	822.156 and receipt of a fee in the amount determined under Chapter
	202 [Article 4.07], the commissioner shall issue to the directors a
	certified copy of an amendment authorizing the issuance of shares
	of stock without par value that is filed under this section. The
	amendment is effective on issuance of the certified copy of the
	amendment.
	SECTION 2E.009.  Section 822.211, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 822.211.  ACTION OF COMMISSIONER WHEN CAPITAL OR
	SURPLUS REQUIREMENTS NOT SATISFIED.  If an insurance company does
	not comply with the capital and surplus requirements of this
	chapter, the commissioner may enter an order prohibiting the
	company from writing new business and may:
	(1)  place the company under state supervision or
	conservatorship;
	(2)  declare the company to be in a hazardous condition
	as provided by Subchapter A, Chapter 404 [Article 1.32];
	(3)  declare the company to be impaired as provided by
	Subchapter B, Chapter 404 [Section 5, Article 1.10]; or
	(4)  apply to the company any other applicable sanction
	provided by this code.
	SECTION 2E.010.  Section 823.001(c), Insurance Code, is
	amended to read as follows:
	(c)  The purpose of this chapter [article] is to promote the
	public interest by:
	(1)  facilitating the achievement of the objectives
	described by Subsection (a);
	(2)  requiring disclosure of pertinent information
	relating to and approval of changes in control of an insurer;
	(3)  requiring disclosure and approval of material
	transactions and relationships between the insurer and the
	insurer's affiliates, including certain dividends to shareholders
	paid by the insurer; and
	(4)  providing standards governing material
	transactions between the insurer and the insurer's affiliates.
	SECTION 2E.011.  Section 823.353(a), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(a)  Each registered insurer that complies with an order
	under Section 823.351(a) shall pay the expense of the examination
	in accordance with Sections 401.151, 401.152, 401.155, and 401.156
	[Article 1.16].
	SECTION 2E.012.  Section 823.451, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 823.451.  RECEIVERSHIP.  If it appears to the
	commissioner that a person's violation of this chapter so impairs
	the financial condition of a domestic insurer as to threaten the
	insurer's insolvency or make the further transaction of the
	insurer's business hazardous to the insurer's policyholders or
	creditors or the public, the commissioner may proceed under
	Chapters 441 and 443 [Articles 21.28 and 21.28-A] to take
	possession of the insurer's property and conduct the business of
	the insurer.
	SECTION 2E.013.  Section 824.151(b), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(b)  Except as provided by Section 824.152, the provisions of
	Subchapter D, Chapter 425, [Article 3.39] that limit investments in
	the corporate stock of another corporation do not apply to a
	purchase made under this section.
	SECTION 2E.014.  Sections 824.152(d) and (g), Insurance
	Code, are amended to correct a cross-reference to read as follows:
	(d)  A purchase, offer to purchase, tender offer, request to
	purchase, or invitation to purchase shares in excess of the limits
	imposed under Subchapter D, Chapter 425, [Article 3.39] may not be
	made until it is filed with and approved by the commissioner in
	accordance with Chapter 823.
	(g)  If the merger or consolidation does not take effect
	within the period finally determined and extended by the
	commissioner, the purchasing corporation must sell or otherwise
	dispose of the purchased shares that exceed the investment
	limitations imposed under Subchapter D, Chapter 425, [Article 3.39]
	within six months of the final effective date.
	SECTION 2E.015.  Section 828.051, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 828.051.  EXCEPTION TO LIMITATION ON PURCHASING SHARES
	OF OTHER COMPANY.  Subchapters C and D, Chapter 425, [Articles 3.33
	and 3.39] do not apply to a purchase or contract described by
	Section 828.001 if all requirements of this subchapter are met.
	SECTION 2E.016.  Section 828.054, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 828.054.  APPROVAL REQUIRED.  A purchase, offer to
	purchase, tender offer, request to purchase, or invitation to
	purchase shares in excess of the limits imposed under Subchapter C
	or D, Chapter 425, [Article 3.33 or 3.39] may not be made until it is
	filed with and approved by the commissioner in accordance with
	Chapter 823.
	SECTION 2E.017.  Section 828.056(b), Insurance Code, is
	amended to correct cross-references to read as follows:
	(b)  If the reinsurance agreement does not take effect within
	the period finally determined and extended by the commissioner, the
	purchasing company shall sell or otherwise dispose of the purchased
	shares that exceed the investment limitations imposed under
	Subchapter C or D, Chapter 425, [Article 3.33 or 3.39] within six
	months of the final effective date.
	SECTION 2E.018.  Section 841.002, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 841.002.  APPLICABILITY OF CHAPTER AND OTHER
	LAW.  Except as otherwise expressly provided by this code, each
	insurance company incorporated or engaging in business in this
	state as a life insurance company, an accident insurance company, a
	life and accident insurance company, a health and accident
	insurance company, or a life, health, and accident insurance
	company is subject to:
	(1)  this chapter;
	(2)  Chapter 3;
	(3)  Chapters 425 and 492; [and]
	(4) [(3)]  Title 7;
	(5)  Sections 1202.051, 1204.151, 1204.153, and
	1204.154;
	(6)  Subchapter A, Chapter 1202, Subchapters A and F,
	Chapter 1204, Subchapter A, Chapter 1273, Subchapters A, B, and D,
	Chapter 1355, and Subchapter A, Chapter 1366;
	(7)  Subchapter A, Chapter 1507;
	(8)  Chapters 1203, 1210, 1251-1254, 1301, 1351, 1354,
	1359, 1364, 1368, 1505, 1506, 1651, 1652, and 1701; and
	(9)  Chapter 177, Local Government Code.
	SECTION 2E.019.  Section 841.054(c), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(c)  At the time of incorporation, the required capital and
	surplus shall consist only of:
	(1)  United States currency;
	(2)  bonds of the United States, this state, or a county
	or municipality of this state; or
	(3)  government insured mortgage loans that are
	authorized by this chapter or Chapter 425 [3], with not more than 50
	percent of the required capital invested in first mortgage real
	property loans.
	SECTION 2E.020.  Section 841.058(a), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(a)  To obtain a charter for a domestic insurance company,
	the incorporators must pay to the department the charter fee in an
	amount determined under Chapter 202 [Article 4.07] and file with
	the department:
	(1)  an application for charter on the form and
	containing the information prescribed by the commissioner;
	(2)  the company's articles of incorporation; and
	(3)  an affidavit made by two or more of the
	incorporators that states that:
	(A)  the minimum capital and surplus requirements
	of Section 841.054 are satisfied;
	(B)  the capital and surplus are the bona fide
	property of the company; and
	(C)  the information in the articles of
	incorporation is true and correct.
	SECTION 2E.021.  Section 841.061(c), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(c)  If the commissioner does not reject the application
	under Subsection (b), the commissioner shall approve the
	application. On approval of an application, the department shall
	record the information required by Section 841.058 in records
	maintained for that purpose. On receipt of a fee in the amount
	determined under Chapter 202 [Article 4.07], the commissioner shall
	provide to the incorporators a certified copy of the application,
	articles of incorporation, and submitted affidavit.
	SECTION 2E.022.  Section 841.207, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 841.207.  ACTIONS OF COMMISSIONER WHEN CAPITAL AND
	SURPLUS REQUIREMENTS NOT SATISFIED.  If an insurance company does
	not comply with the capital and surplus requirements of this
	chapter, the commissioner may order the insurance company to cease
	writing new business and may:
	(1)  place the insurance company under state
	supervision or conservatorship;
	(2)  declare the insurance company to be in a hazardous
	condition as provided by Subchapter A, Chapter 404 [Article 1.32];
	(3)  declare the insurance company to be impaired as
	provided by Section 841.206; or
	(4)  apply to the insurance company any other
	applicable sanction provided by this code.
	SECTION 2E.023.  Section 841.255(a), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(a)  Not later than March 1 of each year, a domestic
	insurance company shall:
	(1)  prepare a statement showing the condition of the
	company on December 31 of the preceding year; and
	(2)  deliver the statement to the department
	accompanied by a filing fee in the amount determined under Chapter
	202 [Article 4.07].
	SECTION 2E.024.  Section 841.257, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 841.257.  KINDS OF BUSINESS LIMITED.  An insurance
	company authorized to engage in the business of insurance under
	this chapter or in accordance with Section 982.051 may not accept a
	risk or write an insurance policy in this state or any other state
	or country other than:
	(1)  a life, accident, or health insurance policy;
	(2)  reinsurance under Sections 492.051(b) and (c) or
	Chapter 493 [Article 5.75-1] by a life insurance company authorized
	to engage in the business of insurance in this state; or
	(3)  reinsurance under Chapter 494 [Article 5.75-3] by
	a domestic insurance company.
	SECTION 2E.025.  Section 842.201(c), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(c)  The department shall charge a fee in an amount
	determined under Chapter 202 [Article 4.07] for filing the
	statement.
	SECTION 2E.026.  Section 842.209, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 842.209.  EXAMINATIONS.  The following laws [Articles
	1.15 and 1.16] apply to a group hospital service corporation:
	(1)  Subchapter A, Chapter 86; and
	(2)  Sections 401.051, 401.052, 401.054-401.062,
	401.151, 401.152, 401.155, and 401.156.
	SECTION 2E.027.  Section 842.210, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 842.210.  LIQUIDATION, REHABILITATION, OR CONSERVATION
	OF GROUP HOSPITAL SERVICE CORPORATION.  The dissolution,
	liquidation, rehabilitation, or conservation of a group hospital
	service corporation is subject to Chapters 441 and 443 [Articles
	21.28 and 21.28-A].
	SECTION 2E.028.  Section 842.253, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 842.253.  POLICY, CERTIFICATE, AND APPLICATION
	FORMS.  A policy, certificate, or application form used by a group
	hospital service corporation is subject to Chapter 1701 [Article
	3.42].
	SECTION 2E.029.  Sections 843.002(20), (28), and (30),
	Insurance Code, are amended to correct cross-references to read as
	follows:
	(20)  "Net worth" means the amount by which total
	liabilities, excluding liability for subordinated debt issued in
	compliance with Chapter 427 [Article 1.39], is exceeded by total
	admitted assets.
	(28)  "Uncovered expenses" means the estimated amount
	of administrative expenses and the estimated cost of health care
	services that are not guaranteed, insured, or assumed by a person
	other than the health maintenance organization. The term does not
	include the cost of health care services if the physician or
	provider agrees in writing that an enrollee is not liable,
	assessable, or in any way subject to making payment for the services
	except as described in the evidence of coverage issued to the
	enrollee under Chapter 1271 [Article 20A.09]. The term includes
	any amount due on loans in the next calendar year unless the amount
	is specifically subordinated to uncovered medical and health care
	expenses or the amount is guaranteed by a sponsoring organization.
	(30)  "Delegated entity" means an entity, other than a
	health maintenance organization authorized to engage in business
	under this chapter, that by itself, or through subcontracts with
	one or more entities, undertakes to arrange for or provide medical
	care or health care to an enrollee in exchange for a predetermined
	payment on a prospective basis and that accepts responsibility for
	performing on behalf of the health maintenance organization a
	function regulated by this chapter, Section 1367.053, Subchapter A,
	Chapter 1452, Subchapter B, Chapter 1507, Chapter 222, 251, or 258,
	as applicable to a health maintenance organization, or Chapter 1271
	or 1272 [or Chapter 20A]. The term does not include:
	(A)  an individual physician; or
	(B)  a group of employed physicians, practicing
	medicine under one federal tax identification number, whose total
	claims paid to providers not employed by the group constitute less
	than 20 percent of the group's total collected revenue computed on a
	calendar year basis.
	SECTION 2E.030.  Section 843.006(a), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(a)  Except as provided by Subsection (b), each application,
	filing, and report required under this chapter, Section 1367.053,
	Subchapter A, Chapter 1452, Subchapter B, Chapter 1507, Chapter
	222, 251, or 258, as applicable to a health maintenance
	organization, or Chapter 1271 or 1272 [or Chapter 20A] is a public
	document.
	SECTION 2E.031.  Section 843.007(a), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(a)  Any information relating to the diagnosis, treatment,
	or health of an enrollee or applicant obtained by a health
	maintenance organization from the enrollee or applicant or from a
	physician or provider shall be held in confidence and may not be
	disclosed to any person except:
	(1)  to the extent necessary to accomplish the purposes
	of this chapter or:
	(A)  Section 1367.053;
	(B)  Subchapter A, Chapter 1452;
	(C)  Subchapter B, Chapter 1507;
	(D)  Chapter 222, 251, or 258, as applicable to a
	health maintenance organization; or
	(E)  Chapter 1271 or 1272 [Chapter 20A];
	(2)  with the express consent of the enrollee or
	applicant;
	(3)  in compliance with a statute or court order for the
	production or discovery of evidence; or
	(4)  in the event of a claim or litigation between the
	enrollee or applicant and the health maintenance organization in
	which the information is pertinent.
	SECTION 2E.032.  Section 843.008, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 843.008.  COSTS OF ADMINISTERING HEALTH MAINTENANCE
	ORGANIZATION LAWS.  Money collected under this chapter and
	Chapters 222, 251, and 258, as applicable to a health maintenance
	organization, [Article 20A.33] must be sufficient to administer
	this chapter and:
	(1)  Section 1367.053;
	(2)  Subchapter A, Chapter 1452;
	(3)  Subchapter B, Chapter 1507;
	(4)  Chapters 222, 251, and 258, as applicable to a
	health maintenance organization; and
	(5)  Chapters 1271 and 1272 [Chapter 20A].
	SECTION 2E.033.  Sections 843.051(a), (b), and (e),
	Insurance Code, are amended to correct cross-references to read as
	follows:
	(a)  Except to the extent that the commissioner determines
	that the nature of health maintenance organizations, health care
	plans, or evidences of coverage renders a provision of the
	following laws clearly inappropriate, Subchapter A, Chapter 542,
	Subchapters D and E, Chapter 544, and Chapters 541, 543, and 547
	[Articles 21.21, 21.21A, 21.21-2, 21.21-5, and 21.21-6, as added by
	Chapter 522, Acts of the 74th Legislature, Regular Session, 1995,
	and the Unauthorized Insurers False Advertising Process Act
	(Article 21.21-1, Vernon's Texas Insurance Code)] apply to:
	(1)  health maintenance organizations that offer
	basic, limited, and single health care coverages;
	(2)  basic, limited, and single health care plans; and
	(3)  evidences of coverage under basic, limited, and
	single health care plans.
	(b)  A health maintenance organization is subject to:
	(1)  Chapter 402 [Section 3B, Article 3.51-6];
	(2)  Chapter 827 and is an authorized insurer for
	purposes of that chapter; and
	(3)  Subchapter G, Chapter 1251, and Section 1551.064
	[Article 21.49-8].
	(e)  Except for Chapter 251, as applicable to a third-party
	administrator, and Chapters 259, 4151, and 4201 [Articles 21.07-6
	and 21.58A], insurance laws and group hospital service corporation
	laws do not apply to a physician or provider. Notwithstanding this
	subsection, a physician or provider who conducts a utilization
	review during the ordinary course of treatment of patients under a
	joint or delegated review agreement with a health maintenance
	organization on services provided by the physician or provider is
	not required to obtain certification under Subchapter C, Chapter
	4201 [Section 3, Article 21.58A].
	SECTION 2E.034.  Section 843.071(b), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(b)  A person may not use "health maintenance organization"
	or "HMO" in the course of operation unless the person:
	(1)  complies with this chapter and:
	(A)  Section 1367.053;
	(B)  Subchapter A, Chapter 1452;
	(C)  Subchapter B, Chapter 1507;
	(D)  Chapters 222, 251, and 258, as applicable to
	a health maintenance organization; and
	(E)  Chapters 1271 and 1272 [Chapter 20A]; and
	(2)  holds a certificate of authority under this
	chapter.
	SECTION 2E.035.  Section 843.073(b), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(b)  Except as provided by Section 843.101 or 843.318(a), a
	physician or provider that employs or enters into a contractual
	arrangement with a provider or group of providers to provide basic
	or limited health care services or a single health care service is
	subject to this chapter and the following provisions [Chapter 20A]
	and is required to obtain a certificate of authority under this
	chapter:
	(1)  Section 1367.053;
	(2)  Subchapter A, Chapter 1452;
	(3)  Subchapter B, Chapter 1507;
	(4)  Chapters 222, 251, and 258, as applicable to a
	health maintenance organization; and
	(5)  Chapters 1271 and 1272.
	SECTION 2E.036.  Sections 843.078(j), (m), and (n),
	Insurance Code, are amended to correct cross-references to read as
	follows:
	(j)  An application for a certificate of authority must
	include a description of the procedures and programs to be
	implemented by the applicant to meet the quality of health care
	requirements of this chapter and:
	(1)  Section 1367.053;
	(2)  Subchapter A, Chapter 1452;
	(3)  Subchapter B, Chapter 1507; and
	(4)  Chapters 1271 and 1272 [Chapter 20A].
	(m)  An application for a certificate of authority must
	include documentation demonstrating that the applicant will comply
	with Section 1271.005(c) [Article 20A.09Z].
	(n)  An application for a certificate of authority must
	include any other information that the commissioner requires to
	make the determinations required by this chapter and:
	(1)  Section 1367.053;
	(2)  Subchapter A, Chapter 1452;
	(3)  Subchapter B, Chapter 1507;
	(4)  Chapters 222, 251, and 258, as applicable to a
	health maintenance organization; and
	(5)  Chapters 1271 and 1272 [Chapter 20A].
	SECTION 2E.037.  Section 843.084, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 843.084.  DURATION OF CERTIFICATE OF AUTHORITY.  A
	certificate of authority continues in effect:
	(1)  while the certificate holder meets the
	requirements of this chapter and:
	(A)  Section 1367.053;
	(B)  Subchapter A, Chapter 1452;
	(C)  Subchapter B, Chapter 1507;
	(D)  Chapters 222, 251, and 258, as applicable to
	a health maintenance organization; and
	(E)  Chapters 1271 and 1272 [Chapter 20A]; or
	(2)  until the commissioner suspends or revokes the
	certificate or the commissioner terminates the certificate at the
	request of the certificate holder.
	SECTION 2E.038.  Section 843.107, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 843.107.  INDEMNITY BENEFITS; POINT-OF-SERVICE
	PROVISIONS.  A health maintenance organization may offer:
	(1)  indemnity benefits covering out-of-area emergency
	care;
	(2)  indemnity benefits, in addition to those relating
	to out-of-area and emergency care, provided through an insurer or
	group hospital service corporation;
	(3)  a point-of-service plan under Subchapter A,
	Chapter 1273 [Article 3.64]; or
	(4)  a point-of-service rider under Section 843.108.
	SECTION 2E.039.  Section 843.151, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 843.151.  RULES.  The commissioner may adopt reasonable
	rules as necessary and proper to:
	(1)  implement this chapter and Section 1367.053,
	Subchapter A, Chapter 1452, Subchapter B, Chapter 1507, Chapters
	222, 251, and 258, as applicable to a health maintenance
	organization, and Chapters 1271 and 1272 [Chapter 20A], including
	rules to:
	(A)  prescribe authorized investments for a
	health maintenance organization for all investments not otherwise
	addressed in this chapter;
	(B)  ensure that enrollees have adequate access to
	health care services; and
	(C)  establish minimum physician-to-patient
	ratios, mileage requirements for primary and specialty care,
	maximum travel time, and maximum waiting time for obtaining an
	appointment; and
	(2)  meet the requirements of federal law and
	regulations.
	SECTION 2E.040.  Section 843.152, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 843.152.  SUBPOENA AUTHORITY.  In implementing this
	chapter and the following provisions [Chapter 20A], the
	commissioner may exercise subpoena authority in accordance with
	Subchapter C, Chapter 36:
	(1)  Section 1367.053;
	(2)  Subchapter A, Chapter 1452;
	(3)  Subchapter B, Chapter 1507;
	(4)  Chapters 222, 251, and 258, as applicable to a
	health maintenance organization; and
	(5)  Chapters 1271 and 1272.
	SECTION 2E.041.  Section 843.153, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 843.153.  AUTHORITY TO CONTRACT.  In performing duties
	under this chapter and the following provisions [Chapter 20A], the
	commissioner may contract with a state agency or, after notice and
	opportunity for hearing, with a qualified person to make
	recommendations concerning determinations to be made by the
	commissioner:
	(1)  Section 1367.053;
	(2)  Subchapter A, Chapter 1452;
	(3)  Subchapter B, Chapter 1507;
	(4)  Chapters 222, 251, and 258, as applicable to a
	health maintenance organization; and
	(5)  Chapters 1271 and 1272.
	SECTION 2E.042.  Sections 843.155(b) and (c), Insurance
	Code, are amended to correct cross-references to read as follows:
	(b)  The report shall:
	(1)  be verified by at least two principal officers;
	(2)  be in a form prescribed by the commissioner; and
	(3)  include:
	(A)  a financial statement of the health
	maintenance organization, including its balance sheet and receipts
	and disbursements for the preceding calendar year, certified by an
	independent public accountant;
	(B)  the number of individuals enrolled during the
	preceding calendar year, the number of enrollees as of the end of
	that year, and the number of enrollments terminated during that
	year;
	(C)  updated financial projections for the next
	calendar year of the type described in Section 843.078(e), until
	the health maintenance organization has had a net income for 12
	consecutive months; and
	(D)  other information relating to the
	performance of the health maintenance organization as necessary to
	enable the commissioner to perform the commissioner's duties under:
	(i)  this chapter;
	(ii)  Section 1367.053;
	(iii)  Subchapter A, Chapter 1452;
	(iv)  Subchapter B, Chapter 1507;
	(v)  Chapters 222, 251, and 258, as
	applicable to a health maintenance organization; and
	(vi)  Chapters 1271 and 1272 [and Chapter
	20A].
	(c)  Sections 36.108 and 201.055 and Chapter 802 [and Article
	1.11] apply to the annual report of a health maintenance
	organization.
	SECTION 2E.043.  Sections 843.156(f), (h), and (i),
	Insurance Code, are amended to correct cross-references to read as
	follows:
	(f)  The commissioner may examine and use the records of a
	health maintenance organization, including records of a quality of
	care assurance program and records of a medical peer review
	committee, as necessary to implement the purposes of this chapter,
	Section 1367.053, Subchapter A, Chapter 1452, Subchapter B, Chapter
	1507, Chapters 222, 251, and 258, as applicable to a health
	maintenance organization, and Chapters 1271 and 1272 [and Chapter
	20A], including commencement of an enforcement action under Section
	843.461 or 843.462. Information obtained under this subsection is
	confidential and privileged and is not subject to the public
	information law, Chapter 552, Government Code, or to subpoena
	except as necessary for the commissioner to enforce this chapter,
	Section 1367.053, Subchapter A, Chapter 1452, Subchapter B, Chapter
	1507, Chapter 222, 251, or 258, as applicable to a health
	maintenance organization, or Chapter 1271 or 1272 [or Chapter 20A].
	In this subsection, "medical peer review committee" has the meaning
	assigned by Section 151.002, Occupations Code.
	(h)  Chapter 86, Section 401.101, and Subchapters B and D,
	Chapter 401, [Articles 1.04A, 1.15, 1.16, and 1.19] apply to a
	health maintenance organization, except to the extent that the
	commissioner determines that the nature of the examination of a
	health maintenance organization renders the applicability of those
	provisions clearly inappropriate.
	(i)  Section 38.001, Section 81.003, and Chapter 82[, and
	Article 1.12] apply to a health maintenance organization.
	SECTION 2E.044.  Section 843.157(a), Insurance Code, is
	amended to correct cross-references to read as follows:
	(a)  The rehabilitation, liquidation, supervision, or
	conservation of a health maintenance organization shall be treated
	as the rehabilitation, liquidation, supervision, or conservation
	of an insurer and be conducted under the supervision of the
	commissioner under Chapter 441 or 443 [Article 21.28 or 21.28-A],
	as appropriate.
	SECTION 2E.045.  Sections 843.204(b) and (c), Insurance
	Code, are amended to correct cross-references to read as follows:
	(b)  In this chapter, Section 1367.053, Subchapter A,
	Chapter 1452, Subchapter B, Chapter 1507, Chapters 222, 251, and
	258, as applicable to a health maintenance organization, and
	Chapters 1271 and 1272 [and Chapter 20A], a statement or item of
	information is:
	(1)  considered to be untrue if the statement or item
	does not conform to fact in any respect that is or may be
	significant to an enrollee of, or person considering enrollment in,
	a health care plan; and
	(2)  considered to be misleading, whether or not the
	statement or item is literally untrue, if, in the total context in
	which the statement is made or the item is communicated, the
	statement or item may be reasonably understood by a reasonable
	person who does not possess special knowledge regarding health care
	coverage as indicating:
	(A)  the inclusion of a benefit or advantage that
	does not exist and that is of possible significance to an enrollee
	of, or person considering enrollment in, a health care plan; or
	(B)  the absence of an exclusion, limitation, or
	disadvantage that does exist and that is of possible significance
	to an enrollee of, or person considering enrollment in, a health
	care plan.
	(c)  In this chapter, Section 1367.053, Subchapter A,
	Chapter 1452, Subchapter B, Chapter 1507, Chapters 222, 251, and
	258, as applicable to a health maintenance organization, and
	Chapters 1271 and 1272 [and Chapter 20A], an evidence of coverage is
	considered to be deceptive if the evidence of coverage, taken as a
	whole and with consideration given to typography and format as well
	as language, would cause a reasonable person who does not possess
	special knowledge regarding health care plans and evidences of
	coverage for health care plans to expect charges or benefits,
	services, or other advantages that the evidence of coverage does
	not provide or that the health care plan issuing the evidence of
	coverage does not regularly make available for enrollees covered
	under the evidence of coverage.
	SECTION 2E.046.  Sections 843.261(a), (c), and (d),
	Insurance Code, are amended to correct cross-references to read as
	follows:
	(a)  A health maintenance organization shall implement and
	maintain an internal appeal system that:
	(1)  provides reasonable procedures for the resolution
	of an oral or written appeal concerning dissatisfaction or
	disagreement with an adverse determination; and
	(2)  includes procedures for notification, review, and
	appeal of an adverse determination in accordance with Chapter 4201
	[Article 21.58A].
	(c)  When an enrollee, a person acting on behalf of an
	enrollee, or an enrollee's provider of record expresses orally or
	in writing any dissatisfaction or disagreement with an adverse
	determination, the health maintenance organization or utilization
	review agent shall:
	(1)  consider the expression of dissatisfaction or
	disagreement as an appeal of the adverse determination; and
	(2)  review and resolve the appeal in accordance with
	Chapter 4201 [Article 21.58A].
	(d)  A health maintenance organization may integrate its
	appeal procedures related to adverse determinations with the
	complaint and appeal procedures established by the health
	maintenance organization under Section 843.251 and otherwise
	governed by this subchapter only if the procedures related to
	adverse determinations comply with this section and Chapter 4201
	[Article 21.58A].
	SECTION 2E.047.  Section 843.282(a), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(a)  Any person, including a person who has attempted to
	resolve a complaint through a health maintenance organization's
	complaint system process and is dissatisfied with the resolution,
	may submit a complaint to the department alleging a violation of:
	(1)  this chapter;
	(2)  Section 1367.053;
	(3)  Subchapter A, Chapter 1452;
	(4)  Subchapter B, Chapter 1507;
	(5)  Chapters 222, 251, and 258, as applicable to a
	health maintenance organization; or
	(6)  Chapter 1271 or 1272 [or Chapter 20A].
	SECTION 2E.048.  Section 843.301, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 843.301.  PRACTICE OF MEDICINE NOT AFFECTED.  This
	chapter, Section 1367.053, Subchapter A, Chapter 1452, Subchapter
	B, Chapter 1507, Chapters 222, 251, and 258, as applicable to a
	health maintenance organization, and Chapters 1271 and 1272 [and
	Chapter 20A] do not:
	(1)  authorize any person, other than a licensed
	physician or practitioner of the healing arts, acting within the
	scope of the person's license, to engage directly or indirectly in
	the practice of medicine or a healing art; or
	(2)  authorize any person to regulate, interfere with,
	or intervene in any manner in the practice of medicine or a healing
	art.
	SECTION 2E.049.  Section 843.337(e), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(e)  Except as provided by Chapter 1213 [Article 21.52Z], a
	physician or provider may, as appropriate:
	(1)  mail a claim by United States mail, first class, or
	by overnight delivery service;
	(2)  submit the claim electronically;
	(3)  fax the claim; or
	(4)  hand deliver the claim.
	SECTION 2E.050.  Section 843.352, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 843.352.  CONFLICT WITH OTHER LAW.  To the extent of
	any conflict between this subchapter and Subchapter C, Chapter 1204
	[Article 21.52C], this subchapter controls.
	SECTION 2E.051.  Sections 843.407(a), (b), and (c),
	Insurance Code, are amended to correct cross-references to read as
	follows:
	(a)  In addition to all other remedies available by law, if
	the commissioner believes that a health maintenance organization or
	another person is insolvent or does not maintain the net worth
	required under Sections 843.403, 843.4031, and 843.404, the
	commissioner may bring an action in a Travis County district court
	to be named receiver in accordance with Section 843.157 and Chapter
	443 [Article 21.28].
	(b)  The court may:
	(1)  find that a receiver should take charge of the
	assets of the health maintenance organization; and
	(2)  name the commissioner as the receiver of the
	health maintenance organization in accordance with Section 843.157
	and Chapter 443 [Article 21.28].
	(c)  The operations and business of a health maintenance
	organization represent the business of insurance for purposes of
	Section 843.157 and Chapters 441 and 443 [Articles 21.28 and
	21.28-A].
	SECTION 2E.052.  Section 843.461(b), Insurance Code, is
	amended to correct cross-references to read as follows:
	(b)  The commissioner may take an enforcement action listed
	in Subsection (a) against a health maintenance organization if the
	commissioner finds that the health maintenance organization:
	(1)  is operating in a manner that is:
	(A)  significantly contrary to its basic
	organizational documents or health care plan; or
	(B)  contrary to the manner described in and
	reasonably inferred from other information submitted under Section
	843.078, 843.079, or 843.080;
	(2)  issues an evidence of coverage or uses a schedule
	of charges for health care services that does not comply with the
	requirements of Sections 843.346, 1271.001-1271.005, 1271.007,
	1271.151, 1271.152, and 1271.156, and Subchapters B, C, E, F, and G,
	Chapter 1271 [Article 20A.09];
	(3)  does not meet the requirements of Section
	843.082(1);
	(4)  provides a health care plan that does not provide
	or arrange for basic health care services, provides a limited
	health care service plan that does not provide or arrange for the
	plan's limited health care services, or provides a single health
	care service plan that does not provide or arrange for a single
	health care service;
	(5)  cannot fulfill its obligation to provide:
	(A)  health care services as required under its
	health care plan;
	(B)  limited health care services as required
	under its limited health care service plan; or
	(C)  a single health care service as required
	under its single health care service plan;
	(6)  is no longer financially responsible and may
	reasonably be expected to be unable to meet its obligations to
	enrollees or prospective enrollees;
	(7)  has not implemented the complaint system required
	by Section 843.251 in a manner to resolve reasonably valid
	complaints;
	(8)  has advertised or merchandised its services in an
	untrue, misrepresentative, misleading, deceptive, or unfair manner
	or a person on behalf of the health maintenance organization has
	advertised or merchandised the health maintenance organization's
	services in an untrue, misrepresentative, misleading, deceptive,
	or untrue manner;
	(9)  would be hazardous to its enrollees if it
	continued in operation;
	(10)  has not complied substantially with:
	(A)  this chapter [or Chapter 20A] or a rule
	adopted under this chapter; or
	(B)  Section 1367.053, Subchapter A, Chapter
	1452, Subchapter B, Chapter 1507, Chapter 222, 251, or 258, as
	applicable to a health maintenance organization, or Chapter 1271 or
	1272 or a rule adopted under one of those provisions [Chapter 20A];
	or
	(11)  has not taken corrective action the commissioner
	considers necessary to correct a failure to comply with this
	chapter, any applicable provision of this code, or any applicable
	rule or order of the commissioner not later than the 30th day after
	the date of notice of the failure or within any longer period
	specified in the notice and determined by the commissioner to be
	reasonable.
	SECTION 2E.053.  Section 843.463, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 843.463.  INJUNCTIONS.  If the commissioner believes
	that a health maintenance organization or another person is
	violating or has violated this chapter [or Chapter 20A] or a rule
	adopted under this chapter or Section 1367.053, Subchapter A,
	Chapter 1452, Subchapter B, Chapter 1507, Chapter 222, 251, or 258,
	as applicable to a health maintenance organization, or Chapter 1271
	or 1272 or a rule adopted under one of those provisions [Chapter
	20A], the commissioner may bring an action in a Travis County
	district court to enjoin the violation and obtain other relief the
	court considers appropriate.
	SECTION 2E.054.  Section 843.464(a), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(a)  A person, including an agent or officer of a health
	maintenance organization, commits an offense if the person:
	(1)  wilfully violates this chapter or [Chapter 20A or]
	a rule adopted under this chapter or Section 1367.053, Subchapter
	A, Chapter 1452, Subchapter B, Chapter 1507, Chapter 222, 251, or
	258, as applicable to a health maintenance organization, or Chapter
	1271 or 1272 or a rule adopted under one of those provisions
	[Chapter 20A]; or
	(2)  knowingly makes a false statement with respect to
	a report or statement required under this chapter or Section
	1367.053, Subchapter A, Chapter 1452, Subchapter B, Chapter 1507,
	Chapter 222, 251, or 258, as applicable to a health maintenance
	organization, or Chapter 1271 or 1272 [Chapter 20A].
	SECTION 2E.055.  Section 845.051, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 845.051.  STATEWIDE RURAL HEALTH CARE SYSTEM.  The
	commissioner shall designate a single organization as the statewide
	rural health care system. The system is authorized to sponsor,
	arrange for the provision of, or provide health care services to
	enrollees in programs in rural areas. The programs are not subject
	to:
	(1)  a law requiring the coverage or the offer of
	coverage for services by a particular health care provider under:
	(A)  Chapter 62, Health and Safety Code;
	(B)  Chapter 32, Human Resources Code;
	(C)  a state-, county-, or local
	government-sponsored indigent care initiative; or
	(D)  a federal Medicare Plus Choice program; or
	(2)  Subchapters A-I, Chapter 1251, Subchapter A,
	Chapter 1364, Subchapter A, Chapter 1366, or Section 1551.064
	[Article 3.51-6] under a state-, county-, or local
	government-sponsored uninsured or indigent care initiative.
	SECTION 2E.056.  Section 846.003(b), Insurance Code, is
	amended to correct cross-references to read as follows:
	(b)  A multiple employer welfare arrangement is subject to
	the following laws:
	(1)  Subchapters C and D, Chapter 36;
	(2)  Section 38.001;
	(3)  Section 81.002;
	(4)  Chapter 82;
	(5)  Chapter 83;
	(6)  Chapter 86;
	(7)  Section 201.003;
	(8)  Sections 401.051, 401.052, 401.054-401.062,
	401.151, 401.152, 401.155, and 401.156;
	(9)  Chapter 441;
	(10)  Chapter 443;
	(11)  Chapter 461;
	(12)  Section 521.005;
	(13)  Chapter 541;
	(14)  Chapter 701;
	(15)  Chapter 801;
	(16) [(7)]  Chapter 803;
	(17) [(8)]  Chapter 804;
	(18) [(9)]  Subchapter A, Chapter 805; and
	(19) [(10)]  Sections 841.259, 841.701-841.702, and
	841.704-841.705[;
	[(11)Section 841.704;
	[(12)Section 841.259;
	[(13)Article 1.10D;
	[(14)Article 1.12;
	[(15)Article 1.13;
	[(16)Article 1.15;
	[(17)Article 1.16;
	[(18)Article 1.19;
	[(19)Article 1.35;
	[(20)Article 1.31;
	[(21)Article 3.56;
	[(22)Article 21.21;
	[(23)Article 21.28;
	[(24)Article 21.28A; and
	[(25)Article 21.28E].
	SECTION 2E.057.  Section 846.007(d), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(d)  A multiple employer welfare arrangement may establish
	premium discounts, rebates, or a reduction in otherwise applicable
	copayments or deductibles in return for adherence to programs of
	health promotion and disease prevention. A discount, rebate, or
	reduction established under this subsection does not violate
	Section 541.056(a) [4(8), Article 21.21].
	SECTION 2E.058.  Section 846.158(c), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(c)  Each multiple employer welfare arrangement shall pay
	the expenses of the examination as provided by Sections 401.151,
	401.152, 401.155, and 401.156 [Article 1.16].
	SECTION 2E.059.  Section 846.202(a), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(a)  In this section, "creditable coverage" has the meaning
	assigned by Section 1205.004 [Section 3, Article 21.52G, as added
	by Chapter 955, Acts of the 75th Legislature, Regular Session,
	1997].
	SECTION 2E.060.  Sections 861.052(b) and (d), Insurance
	Code, are amended to correct a cross-reference to read as follows:
	(b)  The incorporators shall file with the department:
	(1)  articles of incorporation for the general casualty
	company;
	(2)  a charter fee in the amount determined under
	Chapter 202 [Article 4.07]; and
	(3)  an affidavit, made by two or more of the
	incorporators, that all of the general casualty company's stock is
	subscribed in good faith and fully paid for.
	(d)  On receipt of a fee in the amount determined under
	Chapter 202 [Article 4.07], the department shall provide the
	incorporators with a certified copy of the articles of
	incorporation.
	SECTION 2E.061.  Section 861.154, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 861.154.  DIVIDENDS.  Except as authorized by Sections
	403.001 and 403.051 [Article 21.31], the directors of a general
	casualty company may not issue dividends.
	SECTION 2E.062.  Section 861.251(b), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(b)  After incorporation and issuance of a certificate of
	authority, a general casualty company shall invest the minimum
	capital and surplus as provided by Section 822.204. The company
	shall invest all other funds of the company in excess of the minimum
	capital and surplus as provided by:
	(1)  a provision of Subchapter B, Chapter 424, other
	than Section 424.052, 424.072, or 424.073; [Article 2.10] and
	(2)  Section 862.002.
	SECTION 2E.063.  Section 861.252(a), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(a)  On granting of the charter to a general casualty
	company, the company shall deposit with the comptroller $50,000 in:
	(1)  cash; or
	(2)  securities of the kind described by a provision of
	Subchapter B, Chapter 424, other than Section 424.052, 424.072, or
	424.073 [Article 2.10].
	SECTION 2E.064.  Section 861.254(h), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(h)  Except as provided by Chapter 202 [Article 4.07], the
	department shall charge a fee of $20 for filing the annual statement
	required by this section. The comptroller shall collect the fee.
	SECTION 2E.065.  Section 861.257, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 861.257.  EXAMINATION OF COMPANY.  A general casualty
	company is subject to:
	(1)  Subchapter A, Chapter 86; and
	(2)  Sections 401.051, 401.052, 401.054-401.062,
	401.151, 401.152, 401.155, and 401.156 [Articles 1.15 and 1.16].
	SECTION 2E.066.  Section 861.258(d), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(d)  Subsection (b) does not apply to:
	(1)  real property occupied by buildings used in whole
	or in part by a general casualty company in the transaction of
	business;
	(2)  an interest in minerals or royalty reserved on the
	sale of real property acquired under Sections 862.002(c)(1)-(3);
	and
	(3)  investment real property acquired under Section
	424.064 [Article 2.10(e)(11)].
	SECTION 2E.067.  Section 862.101(f), Insurance Code, is
	amended to correct cross-references to read as follows:
	(f)  Reinsurance that is required or permitted by this
	section must comply with:
	(1)  Subchapter A, Chapter 491;
	(2)  Sections 492.051(b) and (c); and
	(3)  Chapter 493 [Articles 5.75-1 and 21.72].
	SECTION 2E.068.  Section 862.151, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 862.151.  REDUCTION OF CAPITAL STOCK AND PAR VALUE OF
	SHARES.  (a)  If the minimum surplus of a fire, marine, or inland
	marine insurance company is impaired in excess of the amount
	permitted under Subchapter B, Chapter 404 [Section 5, Article
	1.10], the commissioner may allow the company to amend its charter
	as provided by Sections 822.157 and 822.158 to reduce the amount of
	the company's capital stock and the par value of its shares in
	proportion to the extent of the permitted amount of impairment.
	(b)  A company acting under Subsection (a):
	(1)  may not reduce the par value of its shares below
	the sum computed under Section 822.055;
	(2)  may not deduct from the assets and property on hand
	more than $125,000;
	(3)  shall retain the remainder of the assets and
	property on hand as surplus assets;
	(4)  may not distribute any of the assets or property to
	the shareholders; and
	(5)  may not reduce the capital stock or surplus of the
	company to an amount less than the minimum capital and the minimum
	surplus required by Sections 822.202, 822.210, and 822.211, subject
	to Subchapter B, Chapter 404 [Section 5, Article 1.10].
	SECTION 2E.069.  Sections 862.152(a) and (b), Insurance
	Code, are amended to correct a cross-reference to read as follows:
	(a)  This section applies to a fire, marine, or inland marine
	insurance company that receives notice from the commissioner under
	Subchapter B, Chapter 404 [Section 5, Article 1.10], to make good
	within 60 days:
	(1)  any impairment of the company's required capital;
	or
	(2)  the company's surplus.
	(b)  The company shall promptly call on its shareholders for
	an amount necessary to make the company's capital and surplus equal
	to the amount required by Sections 822.054 and 822.210, subject to
	Subchapter B, Chapter 404 [Section 5, Article 1.10].
	SECTION 2E.070.  Section 862.153(a), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(a)  If a shareholder of the insurance company who is given
	notice under Section 862.152 does not pay the amount called for by
	the company under that section, the company may:
	(1)  require the return of the original certificate of
	stock held by the shareholder; and
	(2)  issue a new certificate for a number of shares that
	the shareholder may be entitled to in the proportion that the value
	of the funds of the company, computed without inclusion of any money
	or other property paid by shareholders in response to the notice
	under Section 862.152, bears to the total amount of the original
	capital and the minimum surplus of the company required by Section
	822.054 or 822.210, subject to Subchapter B, Chapter 404 [Section
	5, Article 1.10].
	SECTION 2E.071.  Section 862.154(b), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(b)  The insurance company shall sell any new stock created
	under Subsection (a) for an amount sufficient to make up any
	impairment of the company's required minimum capital and to make up
	the surplus of the company as required by Section 822.054 or
	822.210, subject to Subchapter B, Chapter 404 [Section 5, Article
	1.10], but may not impair the capital of the company.
	SECTION 2E.072.  Section 881.006(b), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(b)  Sections 201.001 and 201.002 apply [Article 1.31A
	applies] to the fee.
	SECTION 2E.073.  Section 882.002, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 882.002.  EXAMINATION OF COMPANY.  The following
	provisions [Articles 1.15 and 1.16] apply to a mutual life
	insurance company organized under this chapter:
	(1)  Subchapter A, Chapter 86; and
	(2)  Sections 401.051, 401.052, 401.054-401.062,
	401.151, 401.152, 401.155, and 401.156.
	SECTION 2E.074.  Section 882.056(a), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(a)  To obtain a charter for a mutual life insurance company
	under this chapter, the incorporators must pay the charter fee in
	the amount determined under Chapter 202 [Article 4.07] and file
	with the department:
	(1)  an application for charter on the form and
	including the information prescribed by the commissioner;
	(2)  the company's articles of incorporation; and
	(3)  an affidavit made by two or more of the
	incorporators that states that:
	(A)  the unencumbered surplus requirements of
	Section 882.055 are satisfied;
	(B)  the unencumbered surplus is the bona fide
	property of the company; and
	(C)  the information in the application and
	articles of incorporation is true and correct.
	SECTION 2E.075.  Section 883.202(a), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(a)  A domestic mutual insurance company that writes
	fidelity and surety bond coverage shall maintain on deposit with
	the comptroller cash or securities of the kind described by a
	provision of Subchapter B, Chapter 424, other than Section 424.052,
	424.072, or 424.073, [Article 2.10] in an amount equal to the amount
	of cash or securities required of a domestic stock insurance
	company.
	SECTION 2E.076.  Section 884.002(c), Insurance Code, is
	amended to correct cross-references to read as follows:
	(c)  The following provisions of this code apply to a
	stipulated premium company:
	(1)  Article [1.15;
	[(2)Article 1.15A;
	[(3)Article 1.16;
	[(4)Article 1.19;
	[(5)Article 1.32;
	[(6)Article 3.10;
	[(7)Article 3.39;
	[(8)Article 3.40;
	[(9)Article 21.07-7;
	[(10)Article 21.21;
	[(11)Article 21.28;
	[(12)Article 21.32;
	[(13)Article 21.39;
	[(14)Article] 21.47;
	(2) [(15)]  Section 38.001;
	(3)  Chapter 86;
	(4)  Subchapter A, Chapter 401;
	(5)  Sections 401.051, 401.052, 401.054-401.062,
	401.151, 401.152, 401.155, and 401.156;
	(6)  Sections 403.001, 403.052, and 403.102;
	(7)  Subchapter A, Chapter 404;
	(8)  Section 421.001;
	(9)  Subchapter D, Chapter 425;
	(10)  Chapter 443;
	(11)  Chapter 492, other than Sections 492.051(b) and
	(c);
	(12)  Chapter 541;
	(13) [(16)]  Sections 801.001-801.002;
	(14) [(17)]  Sections 801.051-801.055;
	(15) [(18)]  Section 801.057;
	(16) [(19)]  Sections 801.101-801.102;
	(17) [(20)]  Subchapter A, Chapter 821;
	(18) [(21)]  Chapter 824;
	(19) [(22)]  Chapter 828;
	(20) [(23)]  Section 841.251;
	(21) [(24)]  Section 841.259;
	(22) [(25)]  Section 841.261; [and]
	(23) [(26)]  Section 841.703; and
	(24)  Chapter 4152.
	SECTION 2E.077.  Section 884.056(a), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(a)  To obtain a charter for a stipulated premium company
	under this chapter, the incorporators must pay a charter fee in an
	amount determined under Chapter 202 [Article 4.07] and file with
	the department:
	(1)  an application for charter on the form and
	containing the information prescribed by the department;
	(2)  the company's articles of incorporation; and
	(3)  an affidavit made by two or more of the
	incorporators that states that:
	(A)  the minimum capital and surplus requirements
	of Section 884.054 are satisfied;
	(B)  the capital and surplus is the bona fide
	property of the company; and
	(C)  the information in the application and
	articles of incorporation is true and correct.
	SECTION 2E.078.  Section 884.059(c), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(c)  If the commissioner does not reject the application
	under Subsection (b), the commissioner shall approve the
	application and on receipt of a fee in the amount determined under
	Chapter 202 [Article 4.07] shall provide to the incorporators a
	certified copy of the application, articles of incorporation, and
	submitted affidavit.
	SECTION 2E.079.  Section 884.201, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 884.201.  FORM OF CAPITAL AND SURPLUS.  After a charter
	is granted under this chapter, the stipulated premium company:
	(1)  shall maintain the company's minimum capital at
	all times in a form described by Section 884.054(d); and
	(2)  may invest the company's surplus as provided by
	Sections 425.203-425.228 [Article 3.39].
	SECTION 2E.080.  Section 884.253(c), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(c)  A stipulated premium company that complies with
	Subsection (b) may pay cash dividends in accordance with Sections
	403.001 and 403.052 [Article 21.32].
	SECTION 2E.081.  Sections 884.256(a) and (e), Insurance
	Code, are amended to correct cross-references to read as follows:
	(a)  Except as provided by Section 884.406, not later than
	March 31 of each year a stipulated premium company shall:
	(1)  prepare a statement showing the condition of the
	company on December 31 of the preceding year; and
	(2)  deliver the statement to the department
	accompanied by a filing fee in the amount determined under Chapter
	202 [Article 4.07].
	(e)  Fees collected under this section shall be deposited to
	the credit of the Texas Department of Insurance operating account.
	Sections 201.001 and 201.002 apply [Article 1.31A applies] to fees
	collected under this section.
	SECTION 2E.082.  Section 884.307(a), Insurance Code, is
	amended to correct cross-references to read as follows:
	(a)  A stipulated premium company that possesses capital and
	unencumbered surplus in a combined amount of at least $100,000 more
	than all of its liabilities, including contingent liabilities, may
	issue annuity contracts as authorized by Chapters [Chapter] 3 and
	1701 and Title 7.
	SECTION 2E.083.  Section 884.310, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 884.310.  AGENT.  Each agent of a stipulated premium
	company must be licensed under Title 13 [Subchapter A, Chapter 21].
	SECTION 2E.084.  Sections 884.311(a) and (c), Insurance
	Code, are amended to correct cross-references to read as follows:
	(a)  A stipulated premium insurance company issuing life,
	health, or accident coverages or maintaining policies in force that
	were issued in accordance with Subchapter I may elect that the
	company's investments and transactions be governed by Subchapter C,
	Chapter 425 [Article 3.33 of this code].
	(c)  After the second anniversary of the effective date of an
	initial election authorized by this section, the stipulated premium
	insurance company may elect that the company's investments and
	transactions be governed by Sections 425.203-425.228 [Article 3.39
	of this code].
	SECTION 2E.085.  Section 884.357, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 884.357.  FORM APPROVAL.  The approval of a form of an
	insurance policy issued by a stipulated premium company is governed
	by Chapter 1701 [Article 3.42].
	SECTION 2E.086.  Section 884.402, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 884.402.  ADDITIONAL COVERAGE.  A stipulated premium
	company that, at the time it begins to issue coverages under this
	subchapter, possesses the amounts of capital and unencumbered
	surplus equal to or greater than the corresponding amounts required
	for organization of a life and health company under Sections
	841.052, 841.054, 841.204, 841.205, 841.301, and 841.302 may,
	subject to Section 884.403:
	(1)  issue any kind of life insurance coverage
	authorized by Chapter 3, 841, or 1701 or Title 7;
	(2)  issue any kind of health or accident insurance
	coverage authorized by:
	(A)  Title 7;
	(B)  Chapter 3, 704, 841, 846, 982, 1201, 1202,
	1203, 1210, 1251, 1252, 1253, 1254, 1301, 1351, 1354, 1359, 1364,
	1368, 1501, 1504, 1505, 1506, 1552, 1575, 1576, 1579, 1581, 1625,
	1651, 1652, or 1701;
	(C)  Chapter 492, other than Sections 492.051(b)
	and (c);
	(D)  Subchapter B, Chapter 38, Subchapter D,
	Chapter 425, Subchapter A or F, Chapter 1204, Subchapter A, Chapter
	1273, Subchapter A, B, or D, Chapter 1355, Subchapter A, Chapter
	1366, Subchapter A, Chapter 1507;
	(E)  Section 1204.151, 1204.153, 1204.154, or
	1451.051; or
	(F)  Chapter 177, Local Government Code; or
	(3)  issue life insurance coverage through policies
	without cash surrender values or nonforfeiture values and that
	exceed $10,000 on one life.
	SECTION 2E.087.  Section 884.405, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 884.405.  AGENT; LICENSE.  (a)  An agent may not
	solicit or write any coverage authorized by this subchapter unless
	the agent:
	(1)  holds a license issued under Chapter 4054 [Chapter
	213, Acts of the 54th Legislature, Regular Session, 1955 (Article
	21.07-1, Vernon's Texas Insurance Code)]; and
	(2)  is appointed by the stipulated premium company for
	which the agent is soliciting and writing coverage under this
	subchapter.
	(b)  The commissioner may issue under Chapter 4054 [Chapter
	213, Acts of the 54th Legislature, Regular Session, 1955 (Article
	21.07-1, Vernon's Texas Insurance Code),] a license for an agent to
	solicit and write any coverage authorized by this subchapter for a
	stipulated premium company. Chapter 4054 applies [Chapter 213,
	Acts of the 54th Legislature, Regular Session, 1955 (Article
	21.07-1, Vernon's Texas Insurance Code), applies] to the stipulated
	premium company as if the company were a legal reserve life
	insurance company.
	SECTION 2E.088.  Section 884.455, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 884.455.  REQUIRED SECURITIES.  The commissioner shall
	require that a stipulated premium company have securities of the
	class and character required by Sections 425.203-425.228 [Article
	3.39] in the amount of the reserve liability computed for the
	company under Section 884.454 less any deficiency reserve under
	Section 884.453 after all the debts and claims against the company
	and the minimum capital required by this chapter have been applied.
	SECTION 2E.089.  Section 884.601(a), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(a)  The shareholders of a stipulated premium company that
	possesses capital in an amount equal to at least $700,000,
	unencumbered surplus in an amount equal to at least $700,000, and
	sufficient reserves on hand for the company's policies as required
	under provisions of Chapter 425, other than Sections
	425.002-425.005, [Subchapter C, Chapter 3,] may convert the company
	to a legal reserve company that operates under Chapter 841 by
	complying with each requirement applicable to a company operating
	under that chapter.
	SECTION 2E.090.  Section 884.701, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 884.701.  HAZARDOUS FINANCIAL CONDITION, SUPERVISION,
	CONSERVATORSHIP, AND LIQUIDATION.  Subchapter A, Chapter 404, and
	Chapters 441 and 443 [Articles 1.32, 21.28, and 21.28-A] apply to a
	stipulated premium company engaged in the business of insurance in
	this state.
	SECTION 2E.091.  Section 885.301(a), Insurance Code, is
	amended to correct cross-references to read as follows:
	(a)  A fraternal benefit society may provide for the payment
	of:
	(1)  death benefits in any form;
	(2)  endowment benefits;
	(3)  annuity benefits;
	(4)  benefits for temporary or permanent disability
	resulting from disease or accident;
	(5)  benefits for hospital, medical, or nursing
	expenses resulting from sickness, bodily infirmity, or accident;
	(6)  benefits for the erection of a monument or
	tombstone to the memory of a deceased member;
	(7)  funeral benefits; and
	(8)  any other benefit that may be provided by a life,
	accident, or health insurance company and that is:
	(A)  offered in compliance with a law described by
	Section 841.002 [the provisions of Chapter 3 and Title 7]
	applicable to a life, accident, or health insurance company; and
	(B)  consistent with this chapter.
	SECTION 2E.092.  Section 885.306(a), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(a)  A fraternal benefit society may not deliver or issue for
	delivery in this state a benefit certificate unless the form of the
	certificate has been filed under Chapter 1701 [Article 3.42].
	SECTION 2E.093.  Section 885.351, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 885.351.  AGENTS.  (a)  A fraternal benefit society may
	appoint an agent licensed by the department under Subchapter B,
	Chapter 4054, [Article 21.07-1] to sell benefits listed under
	Section 885.301(a) to society members.
	(b)  Except as provided by Section 885.352, a person may not
	solicit or procure benefit contracts for a fraternal benefit
	society unless the person is licensed as a general life, accident,
	and health agent under Subchapter B, Chapter 4054 [Article
	21.07-1].
	(c)  The licensing and regulation of agents for fraternal
	benefit societies is subject to Title 13 [Subchapter A, Chapter
	21,] and other laws regulating those agents.
	SECTION 2E.094.  Section 885.353, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 885.353.  EMPLOYMENT OF CERTAIN PERSONS TO SOLICIT
	BUSINESS PROHIBITED.  A fraternal benefit society may not employ or
	otherwise retain a person to solicit business if the person has had
	a license revoked under Chapter 4005 [Article 21.07 or 21.14, or
	under Chapter 213, Acts of the 54th Legislature, Regular Session,
	1955 (Article 21.07-1, Vernon's Texas Insurance Code)].
	SECTION 2E.095.  Section 885.404(c), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(c)  For any category of benefit certificates issued to
	insure a female risk, a modified net premium or present value
	referred to in Subchapter B, Chapter 425, [Article 3.28] may be
	computed according to an age not more than six years younger than
	the actual age of the insured.
	SECTION 2E.096.  Section 885.408(b), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(b)  Sections 425.203-425.228 apply [Article 3.39 applies]
	to reserve investments for a domestic fraternal benefit society.
	SECTION 2E.097.  Section 885.410, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 885.410.  EXAMINATION OF DOMESTIC FRATERNAL BENEFIT
	SOCIETIES.  A domestic fraternal benefit society is subject to:
	(1)  Subchapter A, Chapter 86;
	(2)  Subchapter A, Chapter 401; and
	(3)  Sections 401.051, 401.052, 401.054-401.062,
	401.151, 401.152, 401.155, and 401.156 [Articles 1.15, 1.15A, and
	1.16].
	SECTION 2E.098.  Section 885.411(e), Insurance Code, is
	amended to correct cross-references to read as follows:
	(e)  A foreign fraternal benefit society is subject to the
	provisions of Subchapter A, Chapter 86, and Sections 401.051,
	401.052, 401.054-401.062, 401.151, 401.152, 401.155, and 401.156
	[Articles 1.15 and 1.16] that apply to an insurer that is not
	organized under the laws of this state but is authorized to engage
	in business in this state.
	SECTION 2E.099.  Section 885.412(b), Insurance Code, is
	amended to correct cross-references to read as follows:
	(b)  This section does not apply to a proceeding involving a
	fraternal benefit society instituted by the commissioner or the
	state, including an administrative hearing, a proceeding under
	Chapter 441 or 443 [Article 21.28 or 21.28-A], or a court
	proceeding.
	SECTION 2E.100.  Section 885.413, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 885.413.  FEES.  The department shall deposit fees
	collected under this chapter to the credit of the Texas Department
	of Insurance operating account. Sections 201.001 and 201.002 apply
	[Article 1.31A applies] to fees collected under this chapter.
	SECTION 2E.101.  Section 885.414(a), Insurance Code, is
	amended to correct cross-references to read as follows:
	(a)  This chapter does not prevent or limit any action by or
	remedy available to the department or the state under Chapter 441 or
	443 [Article 21.28 or 21.28-A] or other applicable law.
	SECTION 2E.102.  Section 886.107(b), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(b)  Sections 201.001 and 201.002 apply [Article 1.31A
	applies] to the fee.
	SECTION 2E.103.  Section 887.062, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 887.062.  EXAMINATION.  The following provisions
	[Articles 1.15 and 1.16] apply to an association:
	(1)  Subchapter A, Chapter 86; and
	(2)  Sections 401.051, 401.052, 401.054-401.062,
	401.151, 401.152, 401.155, and 401.156.
	SECTION 2E.104.  Section 887.551, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 887.551.  HAZARDOUS FINANCIAL CONDITION, SUPERVISION,
	CONSERVATORSHIP, AND LIQUIDATION.  The following provisions
	[Articles 1.32, 21.28, and 21.28-A] apply to an association engaged
	in the business of insurance in this state:
	(1)  Subchapter A, Chapter 404;
	(2)  Chapter 441; and
	(3)  Chapter 443.
	SECTION 2E.105.  Section 888.052(b), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(b)  Annual assessments collected under this section shall
	be deposited to the credit of the Texas Department of Insurance
	operating account. Sections 201.001 and 201.002 apply [Article
	1.31A applies] to the assessments.
	SECTION 2E.106.  Section 911.001(c), Insurance Code, is
	amended to correct cross-references to read as follows:
	(c)  Except to the extent of any conflict with this chapter,
	the following provisions apply to a farm mutual insurance company:
	(1)  Subchapter A, Chapter 32;
	(2)  Subchapter D, Chapter 36;
	(3)  Sections 31.002(2), 32.021(c), 32.023, 32.041,
	33.002, 38.001, 81.001-81.004, 201.005, 201.055, 401.051, 401.052,
	401.054-401.062, 401.103-401.106, 401.151, 401.152, 401.155,
	401.156, 421.001, 801.051-801.055, 801.057, 801.101, 801.102,
	822.204, 841.004, 841.251, 841.252, [and] 862.101, 1806.001,
	1806.101, 1806.103(b), and 1806.104-1806.107;
	(4)  Chapter 86;
	(5)  Subchapter A, Chapter 401;
	(6)  Subchapter B, Chapter 404;
	(7)  Chapter 422;
	(8)  Subchapter B, Chapter 424, other than Section
	424.052, 424.072, or 424.073;
	(9)  Chapter 441;
	(10)  Chapter 443;
	(11)  Chapter 462;
	(12)  Chapter 481;
	(13)  Chapter 541;
	(14) [(5)]  Chapter 802;
	(15) [(6)]  Subchapter A, Chapter 805;
	(16) [(7)]  Chapter 824; and
	(17)  Article [(8)  Sections 2, 5, 6, and 17, Article
	1.10, and Articles] 1.09-1[, 1.12, 1.13, 1.15, 1.15A, 1.16, 1.17,
	1.18, 1.19, 2.10, 5.20, 21.28, 21.28--A, 21.28--C, 21.39, and
	21.39--A].
	SECTION 2E.107.  Section 911.251, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 911.251.  LICENSING AND APPOINTMENT OF CERTAIN
	AGENTS.  (a)  An individual or firm may not solicit, write, sign,
	execute, or deliver insurance policies, bind insurance risks,
	collect premiums, or otherwise act on behalf of a farm mutual
	insurance company in the capacity of an insurance agent in the
	solicitation or sale of crop insurance unless the individual or
	firm holds a license issued under Title 13 [Subchapter A, Chapter
	21].
	(b)  A farm mutual insurance company may not appoint and act
	through an agent under Subchapter F, Chapter 4051 [Article
	21.14-2].
	SECTION 2E.108.  Sections 911.308(c) and (d), Insurance
	Code, are amended to correct cross-references to read as follows:
	(c)  A company described by Subsection (b) shall invest the
	minimum unencumbered surplus as provided by Section 822.204. The
	company may invest funds in excess of the minimum unencumbered
	surplus as provided by the provisions of Subchapter B, Chapter 424,
	other than Sections 424.052, 424.072, and 424.073 [Article 2.10].
	(d)  A company described by Subsection (b) shall, without
	delay, restore the minimum unencumbered surplus if the surplus is
	impaired. The department shall proceed as provided by Subchapter
	B, Chapter 404 [Section 5, Article 1.10].
	SECTION 2E.109.  Sections 912.002(b) and (c), Insurance
	Code, are amended to correct cross-references to read as follows:
	(b)  A county mutual insurance company is subject to:
	(1)  Sections 38.001, 401.051, 401.052,
	401.054-401.062, 401.151, 401.152, 401.155, 401.156, 501.159,
	501.202, 501.203, [and] 822.204, 1806.001, 1806.101, 1806.103(b),
	1806.104-1806.107, 2002.002, and 2002.005;
	(2)  Subchapter A, Chapter 86;
	(3)  Subchapter A, Chapter 401;
	(4)  the provisions of Subchapter B, Chapter 424, other
	than Sections 424.052, 424.072, and 424.073;
	(5)  Chapters 221, 251, 252, 254, [and] 541, and 2210;
	and
	(6) [(3)]  Articles [1.15, 1.15A, 1.16, 2.10, 5.20,
	5.37, 5.38,] 5.39 and [,] 5.40[, and 21.49].
	(c)  Rate regulation for a residential fire and allied lines
	insurance policy written by a county mutual insurance company is
	subject to Chapter 2253 [Subchapters Q and U, Chapter 5]. On and
	after December 1, 2004, rate regulation for a personal automobile
	insurance policy and a residential fire and allied lines insurance
	policy written by a county mutual insurance company is subject to
	Article 5.13-2 and Chapter 2251. A county mutual insurance company
	is subject to Chapter 2253 [Subchapter U, Chapter 5]. The
	commissioner may adopt rules as necessary to implement this
	subsection.
	SECTION 2E.110.  Section 912.152, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 912.152.  POLICY FORMS.  (a)  A county mutual insurance
	company is subject to:
	(1)  Sections 1952.051-1952.055;
	(2)  Subchapter B, Chapter 2002;
	(3)  Chapter 2301; and
	(4)  Articles 5.06 and[,] 5.35[, and 5.145].
	(b)  County mutual insurance companies shall file policy
	forms under Subchapter B, Chapter 2301, [Article 5.145] or continue
	to use the standard policy forms and endorsements promulgated under
	former Articles 5.06 and 5.35 on notification to the commissioner
	in writing in the manner prescribed by those articles that those
	forms will continue to be used.
	SECTION 2E.111.  Section 912.251, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 912.251.  LICENSING AND APPOINTMENT OF AGENTS.  An
	agent for a county mutual insurance company must be licensed and
	appointed as provided by Title 13 [Subchapter A, Chapter 21].
	SECTION 2E.112.  Section 912.308(b), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(b)  A county mutual insurance company is subject to
	Subchapter B, Chapter 404, and Sections 822.203, 822.205, 822.210,
	and 822.212 [and Section 5, Article 1.10].
	SECTION 2E.113.  Section 912.701, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 912.701.  HAZARDOUS FINANCIAL CONDITION, SUPERVISION,
	CONSERVATORSHIP, AND LIQUIDATION.  Subchapter A, Chapter 404, and
	Chapters 441 and 443 [Articles 1.32, 21.28, and 21.28-A] apply to a
	county mutual insurance company engaged in the business of
	insurance in this state.
	SECTION 2E.114.  Section 941.003(c), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(c)  Chapter 2007 [Subchapter M, Chapter 5,] applies to rates
	for motor vehicle insurance written by a Lloyd's plan.
	SECTION 2E.115.  Section 941.102(d), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(d)  Sections 201.001 and 201.002 apply [Article 1.31A
	applies] to a fee collected under Subsection (c).
	SECTION 2E.116.  Section 941.204(b), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(b)  Funds of a Lloyd's plan other than the minimum guaranty
	fund and surplus described by Subsection (a) must, if invested, be
	invested as provided by:
	(1)  the provisions of Subchapter B, Chapter 424, other
	than Sections 424.052, 424.072, and 424.073 [Article 2.10]; or
	(2)  any other law governing the investment of the
	funds of a capital stock insurance company engaged in the same kind
	of business.
	SECTION 2E.117.  Section 941.206, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 941.206.  HAZARDOUS FINANCIAL CONDITION, SUPERVISION,
	CONSERVATORSHIP, AND LIQUIDATION; IMPAIRMENT OF SURPLUS.  (a)
	Subchapter A, Chapter 404, and Chapters 441 and 443 [Articles 1.32,
	21.28, and 21.28-A] apply to a Lloyd's plan engaged in the business
	of insurance in this state.
	(b)  Subchapter B, Chapter 404, [Section 5, Article 1.10,]
	applies to a Lloyd's plan.
	SECTION 2E.118.  Section 941.251(a), Insurance Code, is
	amended to correct cross-references to read as follows:
	(a)  The provisions of Sections 86.001, 86.002, 401.051,
	401.052, 401.054-401.062, 401.151, 401.152, 401.155, and 401.156
	[The provisions of Articles 1.15 and 1.16] that relate to the
	examination of insurers apply to a Lloyd's plan.
	SECTION 2E.119.  Section 942.003(c), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(c)  Chapter 2007 [Subchapter M, Chapter 5,] applies to rates
	for motor vehicle insurance written by an exchange.
	SECTION 2E.120.  Section 942.155(c), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(c)  An exchange shall maintain the required assets as to:
	(1)  minimum surplus requirements, as provided by
	Section 822.204; and
	(2)  other funds, as provided by the provisions of
	Subchapter B, Chapter 424, other than Sections 424.052, 424.072,
	and 424.073 [Article 2.10].
	SECTION 2E.121.  Section 942.156, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 942.156.  ISSUANCE OF FIDELITY AND SURETY BOND
	INSURANCE; DEPOSIT REQUIRED.  (a)  If a domestic exchange writes
	fidelity or surety bond insurance in this state, the exchange shall
	keep on deposit with the comptroller money, bonds, or other
	securities in an amount of not less than $50,000. The department
	shall approve for the deposit securities described by the
	provisions of Subchapter B, Chapter 424, other than Sections
	424.052, 424.072, and 424.073, [Article 2.10,] and the exchange
	shall maintain the approved securities intact at all times.
	(b)  A foreign exchange that writes fidelity or surety bond
	insurance in this state shall file with the department evidence
	satisfactory to the department that the exchange has, for the
	protection of its subscribers, at least $100,000 in money, bonds,
	or other securities as described by the provisions of Subchapter B,
	Chapter 424, other than Sections 424.052, 424.072, and 424.073,
	[Article 2.10] on deposit with the comptroller or other appropriate
	official of its state of domicile or in escrow under that official's
	supervision and control in a reliable bank or trust company. If
	those bonds or other securities are not acceptable to and approved
	by the department, the department may deny the attorney in fact for
	the exchange a certificate of authority.
	SECTION 2E.122.  Sections 942.203(a) and (b), Insurance
	Code, are amended to correct cross-references to read as follows:
	(a)  To the extent applicable, the schedule of fees
	established under Chapter 202 [Article 4.07] applies to an exchange
	and the exchange's attorney in fact.
	(b)  An exchange is subject to:
	(1)  Chapters 221 and 222; and
	(2)  Chapters 251-255 [Articles 4.04, 4.10, 4.11, 5.12,
	5.24, 5.49, and 5.68].
	SECTION 2E.123.  Section 961.002(b), Insurance Code, is
	amended to correct cross-references to read as follows:
	(b)  The following provisions of this code apply to a
	nonprofit legal services corporation in the same manner that they
	apply to an insurer or a person engaged in the business of
	insurance, to the extent the provisions do not conflict with this
	chapter:
	(1)  Articles [1.01,] 1.09-1 and[, 1.11, 1.12, 1.13,
	1.15, 1.15A, 1.16, 1.17, 1.18, 1.19, 1.20, 1.21, 1.22, 21.21,
	21.21-2, 21.28, 21.28-A,] 21.47[, and 21.49-8];
	(2)  [Sections 2, 6, and 17, Article 1.10;
	[(3)]  Sections 31.002, 31.004, 31.007, 31.021,
	31.022, 31.023, [31.025,] 31.026, 31.027, [32.001, 32.002,
	32.003,] 32.021, 32.022(a), 32.023, [32.041,] 33.002, 33.006,
	36.108, 38.001, 81.004, 201.005, 201.055, 401.051, 401.052,
	401.054-401.062, 401.103-401.106, 401.151, 401.152, 401.155,
	401.156, 801.001, 801.002, 801.051-801.055, 801.057, 801.101,
	801.102, [802.003,] 841.251, and 841.252;
	(3) [(4)]  Subchapter B, Chapter 31;
	(4)  Subchapters A and C, Chapter 32;
	(5)  Subchapter D, Chapter 36;
	(6)  Subchapter A, Chapter 401;
	(7)  Subchapter A, Chapter 542;
	(8)  Subchapter A, Chapter 805; and
	(9)  Chapters 86, 402, 441, 443, 481, 541, 802, and [(7)
	Chapter] 824.
	SECTION 2E.124.  Section 961.005, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 961.005.  AGENTS.  The licensing and regulation of an
	agent authorized to solicit prepaid legal services contracts for a
	nonprofit legal services corporation is subject to Title 13
	[Subchapter A, Chapter 21].
	SECTION 2E.125.  Section 981.005, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 981.005.  VALIDITY OF CONTRACTS.  (a)  Unless a material
	and intentional violation of this chapter or Chapter 225 [Section
	12, Article 1.14-2,] exists, an insurance contract obtained from an
	eligible surplus lines insurer is:
	(1)  valid and enforceable as to all parties; and
	(2)  recognized in the same manner as a comparable
	contract issued by an authorized insurer.
	(b)  A material and intentional violation of this chapter or
	Chapter 225 [Section 12, Article 1.14-2,] does not preclude the
	insured from enforcing the insured's rights under the contract.
	SECTION 2E.126.  Section 981.006, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 981.006.  SANCTIONS.  Chapter 82 applies to a surplus
	lines agent or an eligible surplus lines insurer that violates:
	(1)  this chapter;
	(2)  Chapter 225 [Section 12, Article 1.14-2]; or
	(3)  a rule or order adopted under Subchapter B or
	Section 981.005.
	SECTION 2E.127.  Section 981.008, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 981.008.  SURPLUS LINES INSURANCE PREMIUM TAX.  The
	premiums charged for surplus lines insurance are subject to the
	premium tax imposed under Chapter 225 [Section 12, Article 1.14-2].
	SECTION 2E.128.  Section 981.101(b), Insurance Code, is
	amended to correct cross-references to read as follows:
	(b)  A surplus lines document must state, in 11-point type,
	the following:
	This insurance contract is with an insurer not licensed to transact
	insurance in this state and is issued and delivered as surplus line
	coverage under the Texas insurance statutes. The Texas Department
	of Insurance does not audit the finances or review the solvency of
	the surplus lines insurer providing this coverage, and the insurer
	is not a member of the property and casualty insurance guaranty
	association created under Chapter 462 [Article 21.28-C], Insurance
	Code. Chapter 225 [Section 12, Article 1.14-2], Insurance Code,
	requires payment of a __________ (insert appropriate tax rate)
	percent tax on gross premium.
	SECTION 2E.129.  Section 981.104(b), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(b)  A change made under Subsection (a) may not result in
	coverage or an insurance contract that would violate this chapter
	or Chapter 225 [Section 12, Article 1.14-2], if originally issued
	on that basis.
	SECTION 2E.130.  Section 981.160, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 981.160.  NO ENFORCEMENT AUTHORITY.  This subchapter
	does not give the stamping office authority to enforce this chapter
	or Chapter 225 [Section 12, Article 1.14-2].
	SECTION 2E.131.  Section 981.201, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 981.201.  DEFINITION.  In this subchapter, "managing
	general agent" means an agent licensed under Chapter 4053 [the
	Managing General Agents' Licensing Act (Article 21.07-3, Vernon's
	Texas Insurance Code)].
	SECTION 2E.132.  Section 981.203(a), Insurance Code, is
	amended to correct cross-references to read as follows:
	(a)  The department may issue a surplus lines license to an
	applicant who the department determines complies with Subsection
	(b) and is:
	(1)  an individual who:
	(A)  has passed an examination under Chapter 4002
	[Article 21.01-1] and department rules; and
	(B)  holds a current license as:
	(i)  a general property and casualty agent
	authorized under Subchapter B, Chapter 4051 [Article 21.14]; or
	(ii)  a managing general agent; or
	(2)  a corporation, limited liability company, or
	partnership that:
	(A)  has at least one officer or director or at
	least one active partner who has passed the required surplus lines
	license examination;
	(B)  holds a current license as:
	(i)  a general property and casualty agent
	authorized under Subchapter B, Chapter 4051 [Article 21.14]; or
	(ii)  a managing general agent; and
	(C)  conducts insurance activities under this
	chapter only through an individual licensed under this section.
	SECTION 2E.133.  Section 981.220(b), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(b)  A surplus lines license granted to a managing general
	agent who is not also licensed under Subchapters A-E, Chapter 4051,
	[Article 21.14] is limited to the acceptance of business
	originating through a licensed general property and casualty agent.
	The license does not authorize the agent to engage in business
	directly with the insurance applicant.
	SECTION 2E.134.  Section 981.221, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 981.221.  SUSPENSION OR REVOCATION OF LICENSE.  If a
	license holder does not maintain the qualifications necessary to
	obtain the license, the department may revoke or suspend the
	license or deny the renewal of that license in accordance with
	Chapter 4003 and Subchapters B and C, Chapter 4005 [Article
	21.01-2].
	SECTION 2E.135.  Section 981.222, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 981.222.  APPLICABILITY OF OTHER LAW.  In addition to
	the requirements of this chapter, the administration and regulation
	of a surplus lines agent's license is governed by Title 13
	[Subchapter A, Chapter 21], except that the provisions of Sections
	4001.002(b)(2)-(6), 4001.003, and 4001.004 and Subchapters C-G,
	Chapter 4001, do [Article 21.07 does] not apply to a license issued
	under this subchapter.
	SECTION 2E.136.  Section 982.107, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 982.107.  APPLICABILITY OF OTHER LAW.  Chapter 402
	[Article 21.49-8] applies to a foreign or alien insurance company.
	SECTION 2E.137.  Section 982.254, Insurance Code, is amended
	to correct a cross-reference to read as follows:
	Sec. 982.254.  FAILURE TO ELIMINATE IMPAIRMENT OF TRUSTEED
	SURPLUS.  If an alien insurance company has not satisfied the
	commissioner at the end of the designated period under Section
	982.253(a) that the impairment has been eliminated, the
	commissioner may proceed against the company as provided by Chapter
	441 [Article 21.28-A] as an insurance company whose further
	transaction of the business of insurance in the United States will
	be hazardous to its policyholders in the United States.
	SECTION 2E.138.  Section 982.255(a), Insurance Code, is
	amended to correct cross-references to read as follows:
	(a)  The books, records, accounting, and verification
	relating to an authorized alien insurance company's trusteed assets
	are subject to examination by the department or the department's
	appointed representative at the United States branch office of the
	company, in the same manner and to the same extent that applies
	under Subchapter A, Chapter 86, and Sections 401.051, 401.052,
	401.054-401.062, 401.151, 401.152, 401.155, and 401.156 [Articles
	1.15 and 1.16] to domestic and foreign insurance companies
	authorized to engage in the same kind of insurance.
	SECTION 2E.139.  Section 984.002, Insurance Code, is amended
	to correct cross-references to read as follows:
	Sec. 984.002.  AUTHORIZED AGENT REQUIRED.  A Mexican
	casualty insurance company may engage in the business of insurance
	in this state only through an agent licensed by the department under
	Subchapters A-E and G, Chapter 4051, or Chapter 4055 [Article 21.09
	or 21.14].
	PART F.  CROSS-REFERENCE UPDATES:  TITLE 7, INSURANCE CODE
	SECTION 2F.001. Section 1101.055(b), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(b)  A life insurance policy may provide for a settlement
	that will be less than the amount required under Subsection (a) if
	the death of the insured is:
	(1)  by the insured's own hand regardless of whether the
	insured is sane or insane;
	(2)  caused by following a hazardous occupation that is
	stated in the policy; or
	(3)  the result of aviation activities under conditions
	specified in the policy and approved by the department under
	Chapter 1701 [Article 3.42].
	SECTION 2F.002. Section 1101.101(b), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(b)  Notwithstanding Chapter 1701 [Article 3.42], a policy
	issued or delivered in another state, territory, district, or
	county by a life insurance company organized under the laws of this
	state may contain any provision required by the laws of that state,
	territory, district, or county.
	SECTION 2F.003. Section 1102.004(b), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(b)  This section does not require the resubmission for
	approval of any previously approved insurance policy form unless:
	(1)  withdrawal of approval is authorized under this
	section or Chapter 1701 [Article 3.42]; or
	(2)  after notice and hearing, the commissioner
	determines that approval was obtained by improper means, including
	by misrepresentation, fraud, or a misleading statement or document.
	SECTION 2F.004. Section 1105.007(b), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(b)  Subsection (a) does not require a cash surrender value
	greater than the reserve for the policy computed as provided by
	Subchapter B, Chapter 425 [Article 3.28].
	SECTION 2F.005. Section 1105.056, Insurance Code, is
	amended to correct a cross-reference to read as follows:
	Sec. 1105.056.  NONFORFEITURE INTEREST RATE.  The annual
	nonforfeiture interest rate for a policy issued in a particular
	calendar year is equal to 125 percent of the calendar year statutory
	valuation interest rate for that policy as defined by Subchapter B,
	Chapter 425 [Article 3.28], rounded to the nearest one-fourth of
	one percent.
	SECTION 2F.006. Section 1111.006, Insurance Code, is
	amended to correct cross-references to read as follows:
	Sec. 1111.006.  APPLICABILITY OF OTHER INSURANCE LAWS.  The
	following laws apply to a person engaged in the business of life or
	viatical settlements:
	(1)  [Articles 1.10, 1.10D, 1.19, and 21.21;
	[(2)]  Chapters 82, 83, [and] 84, 481, 541, and 701;
	(2) [(3)] Sections 31.002, [32.001, 32.002, 32.003,]
	32.021, 32.023, 32.041, 38.001, 81.004, 86.001, 86.051, 86.052,
	201.004, 401.051, 401.054, 401.151(a), 521.003, 521.004,
	543.001(c), 801.056, and 862.052;
	(3)  Subchapter A, Chapter 32; [and]
	(4)  Subchapter C, Chapter 36;
	(5)  Subchapter B, Chapter 404; and
	(6)  Subchapter B, Chapter 491.
	SECTION 2F.007. Section 1131.007, Insurance Code, is
	amended to correct a cross-reference to read as follows:
	Sec. 1131.007.  POLICY FORM.  A policy of group life
	insurance is subject to Chapter 1701 [Article 3.42].
	SECTION 2F.008. Section 1151.101, Insurance Code, is
	amended to correct a cross-reference to read as follows:
	Sec. 1151.101.  AUTHORIZED PROVISIONS.  In addition to the
	provisions required by Subchapter B and Section 1151.152, an
	industrial life insurance policy may:
	(1)  exclude liability or promise a benefit that is
	less than the full amount payable as a death benefit if the insured:
	(A)  dies by the insured's own hand, regardless of
	whether the insured is sane or insane; or
	(B)  dies as a result of engaging in a stated
	hazardous occupation;
	(2)  promise a benefit that is less than the full amount
	payable if the insured dies as a result of an aviation activity
	under a condition specified in the policy approved by the
	department as provided by Chapter 1701 [Article 3.42];
	(3)  limit the maximum amount payable on the death of a
	child younger than 15 years of age; and
	(4)  include any other provision not otherwise
	prohibited by this chapter.
	SECTION 2F.009. Section 1152.151, Insurance Code, is
	amended to correct cross-references to read as follows:
	Sec. 1152.151.  AGENT'S LICENSE REQUIRED.  (a) A person may
	not sell or offer for sale in this state a variable contract, or act
	to negotiate, make, or consummate a variable contract for another,
	unless the department has licensed the person under Chapter 4054
	[Article 21.07-1] as a general life, accident, and health agent.
	(b)  The licensing and regulation of a person acting as a
	variable contract agent is subject to the same provisions
	applicable to the licensing and regulation of other agents under
	Title 13 [Subchapter A, Chapter 21].
	PART G.  CROSS-REFERENCE UPDATES:  TITLE 8, INSURANCE CODE
	SECTION 2G.001.  Section 1251.202, Insurance Code, is
	amended to correct cross-references to read as follows:
	Sec. 1251.202.  NOTICE REGARDING CERTAIN EMPLOYER HEALTH
	BENEFIT PLANS.  (a)  In this section, "standard health benefit plan"
	means a plan offered under [Article 3.80, Article 20A.09N, or]
	Chapter 1507.
	(b)  If an employer offers to employees a standard health
	benefit plan, the employer shall:
	(1)  provide a copy of the disclosure statement
	provided to the employer by the plan issuer under [Section 6,
	Article 3.80, Article 20A.09N(g),] Section 1507.006[,] or
	[Section] 1507.056 to:
	(A)  each employee:
	(i)  before the employee initially enrolls
	in the plan, unless the employee received notice under Paragraph
	(B) on or after the 90th day before the date the employee initially
	enrolls; and
	(ii)  not later than the 30th day before the
	date the employee renews enrollment in the plan; and
	(B)  each prospective employee before the
	prospective employee is hired by the employer; and
	(2)  obtain a copy of the notice signed by the employee
	or prospective employee at the time the notice is provided.
	SECTION 2G.002.  Section 1272.052(c), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(c)  The parties to the delegation agreement shall determine
	which party bears the expense of complying with a requirement of
	this subchapter, including the cost of an examination required by
	the department under Subchapter B, Chapter 401 [Article 1.15], if
	applicable.
	SECTION 2G.003.  Section 1272.058, Insurance Code, is
	amended to correct a cross-reference to read as follows:
	Sec. 1272.058.  INFORMATION RELATING TO DELEGATED THIRD
	PARTY.  A delegation agreement required by Section 1272.052 must
	require the delegated entity to provide the license number of a
	delegated third party performing a function that requires:
	(1)  a license as a third-party administrator under
	Chapter 4151 or utilization review agent under Chapter 4201
	[Article 21.58A]; or
	(2)  another license under this code or another
	insurance law of this state.
	SECTION 2G.004.  Section 1272.060, Insurance Code, is
	amended to correct a cross-reference to read as follows:
	Sec. 1272.060.  UTILIZATION REVIEW.  A delegation agreement
	required by Section 1272.052 must provide that:
	(1)  enrollees shall receive notification at the time
	of enrollment of which entity is responsible for performing
	utilization review;
	(2)  the delegated entity or third party performing
	utilization review shall perform that review in accordance with
	Chapter 4201 [Article 21.58A]; and
	(3)  the delegated entity or third party shall forward
	utilization review decisions made by the entity or third party to
	the health maintenance organization on a monthly basis.
	SECTION 2G.005.  Section 1272.301(d), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(d)  A denial of out-of-network services under this section
	is subject to appeal under Chapter 4201 [Article 21.58A].
	SECTION 2G.006.  Section 1274.004(b), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(b)  Before adopting rules under this section, the
	commissioner shall consult and receive advice from the technical
	advisory committee on claims processing established under Chapter
	1212 [Article 21.52Y].
	SECTION 2G.007.  Sections 1305.004(a)(11), (12), (17),
	(27), and (28), Insurance Code, are amended to correct
	cross-references to read as follows:
	(11)  "Independent review organization" means an
	entity that is certified by the commissioner to conduct independent
	review under Chapter 4202 [Article 21.58C] and rules adopted by the
	commissioner.
	(12)  "Life-threatening" has the meaning assigned by
	Section 4201.002 [2, Article 21.58A].
	(17)  "Nurse" has the meaning assigned by Section
	4201.002 [Section 2, Article 21.58A].
	(27)  "Utilization review" has the meaning assigned by
	Section 4201.002 [2, Article 21.58A].
	(28)  "Utilization review agent" has the meaning
	assigned by Section 4201.002 [Article 21.58A].
	SECTION 2G.008.  Section 1305.056(c), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(c)  A network is subject to Chapters 441 and 443 [Articles
	21.28 and 21.28-A] and is considered an insurer or insurance
	company, as applicable, for purposes of those laws.
	SECTION 2G.009.  Section 1305.154(c), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(c)  A network's contract with a carrier must include:
	(1)  a description of the functions that the carrier
	delegates to the network, consistent with the requirements of
	Subsection (b), and the reporting requirements for each function;
	(2)  a statement that the network and any management
	contractor or third party to which the network delegates a function
	will perform all delegated functions in full compliance with all
	requirements of this chapter, the Texas Workers' Compensation Act,
	and rules of the commissioner or the commissioner of workers'
	compensation;
	(3)  a provision that the contract:
	(A)  may not be terminated without cause by either
	party without 90 days' prior written notice; and
	(B)  must be terminated immediately if cause
	exists;
	(4)  a hold-harmless provision stating that the
	network, a management contractor, a third party to which the
	network delegates a function, and the network's contracted
	providers are prohibited from billing or attempting to collect any
	amounts from employees for health care services under any
	circumstances, including the insolvency of the carrier or the
	network, except as provided by Section 1305.451(b)(6);
	(5)  a statement that the carrier retains ultimate
	responsibility for ensuring that all delegated functions and all
	management contractor functions are performed in accordance with
	applicable statutes and rules and that the contract may not be
	construed to limit in any way the carrier's responsibility,
	including financial responsibility, to comply with all statutory
	and regulatory requirements;
	(6)  a statement that the network's role is to provide
	the services described under Subsection (b) as well as any other
	services or functions delegated by the carrier, including functions
	delegated to a management contractor, subject to the carrier's
	oversight and monitoring of the network's performance;
	(7)  a requirement that the network provide the
	carrier, at least monthly and in a form usable for audit purposes,
	the data necessary for the carrier to comply with reporting
	requirements of the department and the division of workers'
	compensation with respect to any services provided under the
	contract, as determined by commissioner rules;
	(8)  a requirement that the carrier, the network, any
	management contractor, and any third party to which the network
	delegates a function comply with the data reporting requirements of
	the Texas Workers' Compensation Act and rules of the commissioner
	of workers' compensation;
	(9)  a contingency plan under which the carrier would,
	in the event of termination of the contract or a failure to perform,
	reassume one or more functions of the network under the contract,
	including functions related to:
	(A)  payments to providers and notification to
	employees;
	(B)  quality of care;
	(C)  utilization review;
	(D)  retrospective review; and
	(E)  continuity of care, including a plan for
	identifying and transitioning employees to new providers;
	(10)  a provision that requires that any agreement by
	which the network delegates any function to a management contractor
	or any third party be in writing, and that such an agreement require
	the delegated third party or management contractor to be subject to
	all the requirements of this subchapter;
	(11)  a provision that requires the network to provide
	to the department the license number of a management contractor or
	any delegated third party who performs a function that requires a
	license as a utilization review agent under Chapter 4201 [Article
	21.58A] or any other license under this code or another insurance
	law of this state;
	(12)  an acknowledgment that:
	(A)  any management contractor or third party to
	whom the network delegates a function must perform in compliance
	with this chapter and other applicable statutes and rules, and that
	the management contractor or third party is subject to the
	carrier's and the network's oversight and monitoring of its
	performance; and
	(B)  if the management contractor or the third
	party fails to meet monitoring standards established to ensure that
	functions delegated to the management contractor or the third party
	under the delegation contract are in full compliance with all
	statutory and regulatory requirements, the carrier or the network
	may cancel the delegation of one or more delegated functions;
	(13)  a requirement that the network and any management
	contractor or third party to which the network delegates a function
	provide all necessary information to allow the carrier to provide
	information to employees as required by Section 1305.451; and
	(14)  a provision that requires the network, in
	contracting with a third party directly or through another third
	party, to require the third party to permit the commissioner to
	examine at any time any information the commissioner believes is
	relevant to the third party's financial condition or the ability of
	the network to meet the network's responsibilities in connection
	with any function the third party performs or has been delegated.
	SECTION 2G.010.  Section 1305.351(a), Insurance Code, is
	amended to correct cross-references to read as follows:
	(a)  The requirements of Chapter 4201 [Article 21.58A] apply
	to utilization review conducted in relation to claims in a workers'
	compensation health care network. In the event of a conflict
	between Chapter 4201 [Article 21.58A] and this chapter, this
	chapter controls.
	SECTION 2G.011.  Section 1305.355(a), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(a)  The utilization review agent shall:
	(1)  permit the employee or person acting on behalf of
	the employee and the employee's requesting provider whose
	reconsideration of an adverse determination is denied to seek
	review of that determination within the period prescribed by
	Subsection (b) by an independent review organization assigned in
	accordance with Chapter 4202 [Article 21.58C] and commissioner
	rules; and
	(2)  provide to the appropriate independent review
	organization, not later than the third business day after the date
	the utilization review agent receives notification of the
	assignment of the request to an independent review organization:
	(A)  any medical records of the employee that are
	relevant to the review;
	(B)  any documents used by the utilization review
	agent in making the determination;
	(C)  the response letter described by Section
	1305.354(a)(4);
	(D)  any documentation and written information
	submitted in support of the request for reconsideration; and
	(E)  a list of the providers who provided care to
	the employee and who may have medical records relevant to the
	review.
	SECTION 2G.012.  Section 1369.056, Insurance Code, is
	amended to correct cross-references to read as follows:
	Sec. 1369.056.  ADVERSE DETERMINATION.  (a)  The refusal of a
	group health benefit plan issuer to provide benefits to an enrollee
	for a prescription drug is an adverse determination for purposes of
	Section 4201.002 [2, Article 21.58A,] if:
	(1)  the drug is not included in a drug formulary used
	by the group health benefit plan; and
	(2)  the enrollee's physician has determined that the
	drug is medically necessary.
	(b)  The enrollee may appeal the adverse determination under
	Subchapters H and I, Chapter 4201 [Sections 6 and 6A, Article
	21.58A].
	SECTION 2G.013.  Sections 1501.002(8) and (14), Insurance
	Code, are amended to correct cross-references to read as follows:
	(8)  "Large employer" means a person who employed an
	average of at least 51 eligible employees on business days during
	the preceding calendar year and who employs at least two employees
	on the first day of the plan year. The term includes a governmental
	entity subject to Article 3.51-1, [3.51-2,] 3.51-4, or 3.51-5, to
	Subchapter C, Chapter 1364, [or] to Chapter 1578, or to Chapter 177,
	Local Government Code, that otherwise meets the requirements of
	this subdivision. For purposes of this definition, a partnership
	is the employer of a partner.
	(14)  "Small employer" means a person who employed an
	average of at least two employees but not more than 50 eligible
	employees on business days during the preceding calendar year and
	who employs at least two employees on the first day of the plan
	year. The term includes a governmental entity subject to Article
	3.51-1, [3.51-2,] 3.51-4, or 3.51-5, to Subchapter C, Chapter 1364,
	[or] to Chapter 1578, or to Chapter 177, Local Government Code, that
	otherwise meets the requirements of this subdivision. For purposes
	of this definition, a partnership is the employer of a partner.
	SECTION 2G.014.  Section 1501.009(b), Insurance Code, is
	amended to correct cross-references to read as follows:
	(b)  An independent school district that is participating in
	the uniform group coverage program established under Chapter 1579
	[Article 3.50-7] may not participate in the small employer market
	under this section for health insurance coverage and may not renew a
	health insurance contract obtained in accordance with this section
	after the date on which the program of coverages provided under
	Chapter 1579 [Article 3.50-7] is implemented. This subsection does
	not affect a contract for the provision of optional coverages not
	included in a health benefit plan under this chapter.
	SECTION 2G.015.  Section 1501.257(c), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(c)  Utilization review performed for any cost containment,
	case management, or managed care arrangement must comply with
	Chapter 4201 [Article 21.58A].
	SECTION 2G.016.  Section 1504.001(4), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(4)  "Health benefit plan issuer" means:
	(A)  an insurance company, group hospital service
	corporation, or health maintenance organization that delivers or
	issues for delivery an individual, group, blanket, or franchise
	insurance policy or agreement, a group hospital service contract,
	or an evidence of coverage that provides benefits for medical or
	surgical expenses incurred as a result of an accident or sickness;
	(B)  a governmental entity subject to Subchapter
	D, Chapter 1355, Subchapter C, Chapter 1364, Chapter 1578, [or]
	Article 3.51-1, [3.51-2,] 3.51-4, or 3.51-5, or Chapter 177, Local
	Government Code;
	(C)  the issuer of a multiple employer welfare
	arrangement as defined by Section 846.001; or
	(D)  the issuer of a group health plan as defined
	by Section 607, Employee Retirement Income Security Act of 1974 (29
	U.S.C. Section 1167).
	SECTION 2G.017.  Section 1506.109(a), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(a)  The pool shall provide for and use cost containment
	measures and requirements to make the coverage offered by the pool
	more cost-effective. To the extent the board determines it is
	cost-effective, the cost containment measures must include
	individual case management and disease management. The cost
	containment measures may include preadmission screening, the
	requirement of a second surgical opinion, and concurrent
	utilization review subject to Chapter 4201 [Article 21.58A].
	SECTION 2G.018.  Section 1551.003(12), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(12)  "Serious mental illness" has the meaning assigned
	by Section 1355.001 [1, Article 3.51-14].
	SECTION 2G.019.  Sections 1551.064(a) and (b), Insurance
	Code, are amended to correct cross-references to read as follows:
	(a)  This section applies only to a group policy or contract
	described by Section 1251.301 [3B(a), Article 3.51-6]. A policy or
	contract executed under this chapter must provide that:
	(1)  premium payments must be:
	(A)  paid directly to the Employees Retirement
	System of Texas; and
	(B)  postmarked or received not later than the
	10th day of the month for which the premium is due;
	(2)  the premium for group continuation coverage under
	Subchapter G, Chapter 1251 [Section 3B, Article 3.51-6], may not
	exceed the level established for other surviving dependents of
	deceased employees and annuitants;
	(3)  at the time the group policy or contract is
	delivered, issued for delivery, renewed, amended, or extended, the
	Employees Retirement System of Texas shall give notice of the
	continuation option to each state agency covered by the group
	benefits program; and
	(4)  each state agency shall give written notice of the
	continuation option to each employee and dependent of an employee
	who is covered by the group benefits program.
	(b)  A group policy or contract executed under this chapter
	must provide that, not later than the 15th day after the date of any
	severance of the family relationship that might activate the
	continuation option under Subchapter G, Chapter 1251 [Section 3B,
	Article 3.51-6], the group member shall give written notice of the
	severance to the employing state agency.
	SECTION 2G.020.  Section 1601.109(a), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(a)  In this section, "serious mental illness" has the
	meaning assigned by Section 1355.001 [1, Article 3.51-14].
	PART H.  CROSS-REFERENCE UPDATES:  TITLE 10, INSURANCE CODE
	SECTION 2H.001.  Section 1805.001, Insurance Code, is
	amended to correct cross-references to read as follows:
	Sec. 1805.001.  APPLICABILITY OF CHAPTER.  This chapter
	applies to the kinds of insurance and insurers subject to:
	(1)  Section 403.002;
	(2)  Section 941.003 with respect to the application of
	a law described by Section 941.003(b)(1) [941.003(b)(3)] or (c);
	(3)  Section 942.003 with respect to the application of
	a law described by Section 942.003(b)(1) [942.003(b)(3)] or (c);
	(4)  Subchapter A, B, or C, [or D,] Chapter 5;
	(5)  Subchapter H, Chapter 544;
	(6)  Subchapter A, Chapter 2301;
	(7)  Chapter 252, 253, 254, 255, 426, 1806, 1807, 2001,
	2002, 2003, 2004, 2005, 2006, 2008, 2051, 2052, 2053, 2055, 2171,
	2251, or 2252;
	(8)  Subtitle B or C, Title 10; or
	(9)  [Chapter 406A, Labor Code; or
	[(10)]  Chapter 2154, Occupations Code.
	SECTION 2H.002.  Section 1951.004(a), Insurance Code, is
	amended to correct cross-references to read as follows:
	(a)  An insurer, or an officer or representative of an
	insurer, commits an offense if the insurer, officer, or
	representative violates:
	(1)  Section 1951.001, 1951.002, 1952.051, 1952.052,
	1952.053, 1952.054, or 1952.055;
	(2)  Subchapter B, Chapter 1806;
	(3)  Subchapter C, Chapter 1953;
	(4)  Chapter 254; or
	(5) [(4)]  Article 5.01, [5.02,] 5.03, [5.05,] 5.06,
	5.10, or 5.11.
	SECTION 2H.003.  Section 2051.002, Insurance Code, is
	amended to correct cross-references to read as follows:
	Sec. 2051.002.  CONSTRUCTION OF CERTAIN LAWS. The following
	shall be construed and applied independently of any other law that
	relates to insurance rates and forms or prescribes the duties of the
	commissioner or the department:
	(1)  this chapter;
	(2)  [Subchapter D, Chapter 5;
	[(3)] Chapter 251, as that chapter relates to workers'
	compensation insurance; and
	(3) [(4)]  Chapters 255, 426, 2052, [and] 2053, and
	2055[; and
	[(5)Chapter 406A, Labor Code].
	SECTION 2H.004.  Section 2051.157, Insurance Code, is
	amended to correct a cross-reference to read as follows:
	Sec. 2051.157.  PENALTY FOR CERTAIN VIOLATIONS. An officer
	or other representative of an insurance company is subject to a fine
	of not less than $100 or more than $500 if the officer or other
	representative violates any provision of the following relating to
	the company's business:
	(1)  Subchapter A or B;
	(2)  Section 2051.156 or 2051.201;
	(3)  Chapter 426 or 2052;
	(4)  Subchapter A, C, or D, Chapter 2053; or
	(5)  Section 2053.051, 2053.052, 2053.053, or
	2053.055[; or
	[(6)Article 5.66].
	SECTION 2H.005.  Section 2052.004(a), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(a)  Subject to Subsections (b) and (c), this subtitle [and
	Article 5.66] may not be construed to prohibit an insurance
	company, including the Texas Mutual Insurance Company, from issuing
	participating policies.
	SECTION 2H.006.  Section 2201.155(a), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(a)  A risk retention group not chartered in this state is
	liable for the payment of premium and maintenance taxes and taxes on
	premiums of direct business for risks located in this state and
	shall report to the commissioner the net premiums written for risks
	located in this state. The group is subject to taxation, and any
	fine or penalty related to that taxation, on the same basis as a
	foreign admitted insurer in accordance with Chapters 4, 201, 202,
	203, 221, 222, 224, 227, 228, and 251-257.
	SECTION 2H.007.  Section 2204.101(d), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(d)  The exchange and the members are considered insurers for
	purposes of:
	(1)  Sections 201.052, 201.053, and 201.054;
	(2)  Chapters 4, 202, 203, 221, 222, 224, 227, 228, 251,
	257, and 1109; and
	(3)  Section 171.0525, Tax Code.
	PART I.  CROSS-REFERENCE UPDATES:  TITLE 11, INSURANCE CODE
	SECTION 2I.001.  Section 2551.001(c), Insurance Code, is
	amended to correct cross-references to read as follows:
	(c)  To the extent applicable, the following provisions of
	this code apply to a title insurance company:
	(1)  Articles [1.01, 1.04A,] 1.09-1 and[, 1.12, 1.13,
	1.15-1.19, 21.31,] 21.47[, and 21.49-8];
	(2)  Subsection (b), Article 1.04D;
	(3)  [Article 1.14-3, other than Section 8;
	[(4)Subchapter F, Chapter 5;
	[(5)]  Chapters 33, 82, 83, 84, 86, 102, 261, 281, 401,
	402, 493, 494, 541, 547, 555, 701, 801, 802, 824, [and] 828, 1805,
	and 2204;
	(4) [(6)]  Chapter 31, other than Section 31.005;
	(5) [(7)]  Chapter 32, other than Section 32.022(b);
	(6) [(8)]  Chapter 36, other than Sections 36.003,
	36.004, and 36.101-36.106;
	(7) [(9)]  Subchapter A, Chapter 38;
	(8) [(10)]  Subchapters A-G, Chapter 101;
	(9) [(11)]  Chapter 982, other than Sections 982.003,
	982.051, 982.101, 982.105, 982.106(b), 982.109, and 982.113; and
	(10) [(12)]  Sections 37.052, 39.001, 39.002, 81.002,
	81.004, 201.004, 201.005, 201.051, 201.055, 403.001, 403.051,
	403.101, 521.002-521.004, 805.021, 822.001, 822.051, 822.052(1),
	(2), and (3), 822.053, 822.057, except Subsection (a)(4), 822.058,
	822.059, 822.060, 822.155, 822.157, 822.158, except Subsection
	(a)(5), 841.004, 841.251, 841.252(a)-(c), and 4001.103.
	SECTION 2I.002.  Sections 2551.151(a) and (g), Insurance
	Code, are amended to correct cross-references to read as follows:
	(a)  A title insurance company shall hold all investments in
	cash or in the following:
	(1)  an abstract plant or plants, provided that:
	(A)  the corporation is organized under this title
	and has the right to engage in the business of title insurance;
	(B)  except as provided by Subsection (b), the
	investment is not more than 50 percent of the corporation's capital
	stock; and
	(C)  the valuation of the plant or plants is
	approved by the department;
	(2)  securities described by Subchapter D, Chapter 425,
	other than Sections 425.202 and 425.229-425.232, [Article 3.39] or
	investments authorized for title insurance companies under the laws
	of any other state in which the company is authorized to engage in
	business;
	(3)  real property or any real property interest that
	is:
	(A)  required for the company's convenient
	accommodation in the transaction of business with reasonable regard
	to future needs;
	(B)  acquired in connection with a claim under a
	title insurance policy;
	(C)  acquired in satisfaction or on account of
	loans, mortgages, liens, judgments, or decrees previously owed to
	the company in the course of business;
	(D)  acquired in partial payment of the
	consideration of the sale of real property owned by the company if
	the transaction results in a net reduction in the company's
	investment in real property; or
	(E)  reasonably necessary to maintain or enhance
	the sale value of real property previously acquired or held by the
	company under this subdivision;
	(4)  a first mortgage note secured by any of the
	following, provided that the amount of the note does not exceed 80
	percent of the appraised value of the security for the note:
	(A)  an abstract plant and connected personal
	property in or outside this state;
	(B)  stock of a title insurance agent in or
	outside this state;
	(C)  a construction contract to build an abstract
	plant and connected personal property; or
	(D)  any two or more of the items listed in this
	subdivision;
	(5)  the shares of any federal home loan bank in an
	amount necessary to qualify for membership and any additional
	amounts approved by the commissioner;
	(6)  foreign securities that are substantially of the
	same kinds, classes, and investment grade as securities otherwise
	qualified for investment under this section, provided that, unless
	the investment is also qualified under Subdivision (2), the
	aggregate amount of foreign investments made under this subdivision
	does not exceed:
	(A)  five percent of the insurer's admitted assets
	at the end of the preceding year;
	(B)  two percent of the insurer's admitted assets
	at the end of the preceding year invested in the securities of all
	entities domiciled in any one foreign country; and
	(C)  one-half of one percent of the insurer's
	admitted assets at the end of the preceding year invested in the
	securities of any one individual entity domiciled in a foreign
	country;
	(7)  securities lending, repurchase, reverse
	repurchase, and dollar roll transactions, as described by Section
	425.121 [4(q), Article 3.33]; or
	(8)  money market funds, as described by Section
	425.123 [4(s), Article 3.33].
	(g)  A title insurance company may invest in a certified
	capital company in the manner provided by Chapter 228 [Subchapter
	B, Chapter 4].
	SECTION 2I.003.  Section 2601.001, Insurance Code, is
	amended to correct a cross-reference to read as follows:
	Sec. 2601.001.  SUPERVISION, LIQUIDATION, REHABILITATION,
	REORGANIZATION, OR CONSERVATION OF TITLE INSURANCE COMPANIES AND
	AGENTS. Each title insurance agent and title insurance company is
	subject to Chapters 441 and 443 [Articles 21.28 and 21.28-A].
	SECTION 2I.004.  Section 2602.002(a), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(a)  This chapter is for:
	(1)  the purposes and findings stated in Sections
	441.001, 441.003, 441.005, and 441.006 [Section 1, Article
	21.28-A]; and
	(2)  the protection of holders of covered claims.
	SECTION 2I.005.  Section 2602.005(b), Insurance Code, is
	amended to correct cross-references to read as follows:
	(b)  If this chapter conflicts with another law relating to
	the subject matter of this chapter or its application, other than
	Chapter 441 or 443 [Article 21.28 or 21.28-A], this chapter
	controls. If this chapter conflicts with Chapter 441 or 443
	[Article 21.28 or 21.28-A], that chapter [article] controls.
	SECTION 2I.006.  Section 2602.114(e), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(e)  A board member may not disclose information received in
	the meeting unless authorized by the commissioner or required as
	witness in court. A board member and the meeting are subject to the
	confidentiality standard imposed on an examiner under Sections
	401.105 and 401.106 [Article 1.18], except that a bond is not
	required of a board member.
	SECTION 2I.007.  Section 2602.254, Insurance Code, is
	amended to correct a cross-reference to read as follows:
	Sec. 2602.254.  CERTAIN CONSERVATOR AND RECEIVER EXPENSES
	COVERED. Reasonable and necessary administrative expenses
	incurred by a conservator appointed by the commissioner or a
	receiver appointed by a court for an unauthorized insurer operating
	in this state are covered claims if the commissioner has notified
	the association or the association has otherwise become aware that:
	(1)  the unauthorized insurer has insufficient liquid
	assets to pay those expenses; and
	(2)  insufficient money is available from:
	(A)  abandoned money under Section 443.304 [8,
	Article 21.28]; and
	(B)  department appropriations for use in paying
	those expenses.
	SECTION 2I.008.  Section 2602.301(a), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(a)  The association shall:
	(1)  investigate a claim brought against the
	association, the commissioner, or a special deputy receiver
	appointed under Chapter 443 [Article 21.28] if the claim involves
	or may involve the association's rights and obligations under this
	chapter; and
	(2)  adjust, compromise, settle, and pay a covered
	claim to the extent of the association's obligation, and deny all
	other claims.
	PART J.  CROSS-REFERENCE UPDATES:  TITLE 13, INSURANCE CODE
	SECTION 2J.001.  Section 4001.002(a), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(a)  Except as otherwise provided by this code, this title
	applies to each person licensed under:
	(1)  Subchapter H, Chapter 885;
	(2)  Subchapter F, Chapter 911;
	(3)  Section 912.251;
	(4)  Section 961.005;
	(5)  Subchapter E, Chapter 981;
	(6) [(5)]  Subchapter D, Chapter 1152;
	(7) [(6)]  Subchapter C or D of this chapter;
	(8) [(7)]  Subtitle B, C, or D of this title;
	[(8)Article 23.23A;] or
	(9)  Subsection (c), Article 5.13-1.
	SECTION 2J.002.  Section 4001.009(a), Insurance Code, is
	amended to correct cross-references to read as follows:
	(a)  As referenced in Section 4001.003(9), a reference to an
	agent in the following laws includes a subagent without regard to
	whether a subagent is specifically mentioned:
	(1)  Chapters 281, 402, 421-423, 441, 444, 461-463,
	523, 541-556, 558, 559, 702, 703, 705, 821, 823-825, 827, 828, 844,
	963, 1108, 1205-1209, 1211-1214 [1211-1213], 1352, 1353, 1357,
	1358, 1360-1363, 1369, 1453-1455, 1503, 1550, 1801, 1803,
	2151-2154, 2201-2203, 2205-2213, 3501, 3502, 4007, [and] 4102, and
	4201-4203;
	(2)  Chapter 403, excluding Section 403.002;
	(3)  Subchapter A, Chapter 491;
	(4)  Subchapter C, Chapter 521;
	[(3)Subchapter F, Chapter 542;
	[(4)Subchapters G and I, Chapter 544;]
	(5)  Subchapter A, Chapter 557;
	(6)  Subchapter B, Chapter 805;
	(7)  Subchapters D, E, and F, Chapter 982;
	(8) [(7)]  Subchapter D, Chapter 1103;
	(9) [(8)]  Subchapters B, C, D, and E, Chapter 1204,
	excluding Sections 1204.153 and 1204.154;
	(10) [(9)]  Subchapter B, Chapter 1366;
	(11) [(10)]  Subchapters B, C, and D, Chapter 1367,
	excluding Section 1367.053(c);
	(12) [(11)]  Subchapters A, C, D, E, F, H, and I,
	Chapter 1451;
	(13) [(12)]  Subchapter B, Chapter 1452;
	(14) [(13)]  Sections 551.004, 841.303, 982.001,
	982.002, 982.004, 982.052, 982.102, 982.103, 982.104, 982.106,
	982.107, 982.108, 982.110, 982.111, [and] 982.112, and 1802.001;
	and
	(15) [(14)Subchapters D, E, and F, Chapter 982;
	[(15)Section 1101.003(a); and
	[(16)]  Chapter 107, Occupations Code.
	SECTION 2J.003.  Section 4051.002, Insurance Code, is
	amended to correct a cross-reference to read as follows:
	Sec. 4051.002.  REQUIREMENTS APPLICABLE TO CERTAIN AGENT
	CONTRACTS. An agent's contract entered into on or after August 27,
	1973, by an insurer engaged in the business of property and casualty
	insurance in this state is subject to Chapter 444 [Article
	21.11-2].
	SECTION 2J.004.  Section 4051.101(a), Insurance Code, is
	amended to correct cross-references to read as follows:
	(a)  Except as provided by Section 4051.052, a person is
	required to hold a limited property and casualty license if the
	person acts as an agent who writes:
	(1)  job protection insurance as defined by Section
	962.002 [Article 25.01];
	(2)  exclusively, insurance on growing crops under
	Subchapter F;
	(3)  any form of insurance authorized under Chapter 911
	for a farm mutual insurance company;
	(4)  exclusively, any form of insurance authorized to
	be solicited and written in this state that relates to:
	(A)  the ownership, operation, maintenance, or
	use of a motor vehicle designed for use on the public highways,
	including a trailer or semitrailer, and the motor vehicle's
	accessories or equipment; or
	(B)  the ownership, occupancy, maintenance, or
	use of a manufactured home classified as personal property under
	Section 2.001, Property Code;
	(5)  a prepaid legal services contract under Article
	5.13-1 or Chapter 961;
	(6)  exclusively, an industrial fire insurance policy:
	(A)  covering dwellings, household goods, and
	wearing apparel;
	(B)  written on a weekly, monthly, or quarterly
	basis on a continuous premium payment plan; and
	(C)  written for an insurer exclusively engaged in
	the business as described by Section 912.310;
	(7)  credit insurance, except as otherwise provided by
	Chapter 4055; or
	(8)  any other kind of insurance, if holding a limited
	property and casualty license to write that kind of insurance is
	determined necessary by the commissioner for the protection of the
	insurance consumers of this state.
	SECTION 2J.005.  Section 4152.104(b), Insurance Code, is
	amended to correct a cross-reference to read as follows:
	(b)  Expenses relating to an examination conducted under
	this subchapter may be charged to the person examined in accordance
	with Sections 401.151, 401.152, 401.155, and 401.156 [Article
	1.16].
	SECTION 2J.006.  Section 4152.152, Insurance Code, is
	amended to correct cross-references to read as follows:
	Sec. 4152.152.  PLACEMENT OF REINSURANCE WITH UNAUTHORIZED
	REINSURER. Unless the ceding insurer releases the broker in
	writing from the broker's obligations under this section, a broker
	who places reinsurance on behalf of an authorized ceding insurer
	with a reinsurer that is not authorized, accredited, or trusteed in
	this state under Chapter 492 [Article 3.10] or 493 [5.75-1] shall:
	(1)  exercise due diligence in inquiring into the
	financial condition of the reinsurer;
	(2)  disclose to the ceding insurer the broker's
	findings in connection with the inquiry under Subdivision (1); and
	(3)  make available to the ceding insurer a copy of the
	current financial statement of the reinsurer.
	SECTION 2J.007.  Section 4152.214(a), Insurance Code, is
	amended to correct cross-references to read as follows:
	(a)  Unless the ceding insurer releases the manager in
	writing from the manager's obligations under this section, a
	manager who places reinsurance on behalf of an authorized ceding
	insurer with a reinsurer that is not authorized, accredited, or
	trusteed in this state under Chapter 492 [Article 3.10] or 493
	[5.75-1] shall:
	(1)  exercise due diligence in inquiring into the
	financial condition of the reinsurer;
	(2)  disclose to the ceding insurer the manager's
	findings in connection with the inquiry under Subdivision (1); and
	(3)  make available to the ceding insurer a copy of the
	current financial statement of the reinsurer.
	PART K.  EFFECTIVE DATE
	SECTION 2K.001.  This article takes effect April 1, 2009.
	ARTICLE 3.  INSURANCE CODE UPDATE
	PART A. GENERAL PROVISIONS
	SECTION 3A.001.  This article is enacted as part of the
	state's continuing statutory revision program under Chapter 323,
	Government Code. This article is a revision for purposes of Section
	43, Article III, Texas Constitution, and has the purposes of:
	(1)  conforming codifications enacted by the 79th
	Legislature to other Acts of that legislature that amended the laws
	codified or added new law to subject matter codified;
	(2)  making necessary corrections to enacted
	codifications; and
	(3)  renumbering titles, chapters, and sections of
	codes that duplicate title, chapter, or section numbers.
	SECTION 3A.002.  (a) The repeal of a statute by this article
	does not affect an amendment, revision, or reenactment of the
	statute by the 80th Legislature, Regular Session, 2007. The
	amendment, revision, or reenactment is preserved and given effect
	as part of the code provision that revised the statute so amended,
	revised, or reenacted.
	(b)  If any provision of this article conflicts with a
	statute enacted by the 80th Legislature, Regular Session, 2007, the
	statute controls.
	(c)  If any provision of this article conflicts with a
	provision of H.B. No. 3167, Acts of the 80th Legislature, Regular
	Session, 2007, this article controls.
	SECTION 3A.003.  (a) A transition or saving provision of a
	law codified by this article applies to the codified law to the same
	extent as it applied to the original law.
	(b)  The repeal of a transition or saving provision by this
	article does not affect the application of the provision to the
	codified law.
	(c)  In this section, "transition provision" includes any
	temporary provision providing for a special situation in the
	transition period between the existing law and the establishment or
	implementation of the new law.
	PART B.  CHANGES UPDATING INSURANCE CODE
	SECTION 3B.001.  (a) Section 401.010(a), Insurance Code, is
	amended to conform to Section 2, Chapter 408, Acts of the 79th
	Legislature, Regular Session, 2005, to read as follows:
	(a)  An accountant must audit the financial reports provided
	by an insurer or health maintenance organization for purposes of an
	audit under this subchapter.  The accountant who audits the reports
	must conduct the audit in accordance with generally accepted
	auditing standards or with standards adopted by the Public Company
	Accounting Oversight Board, as applicable, and must consider the
	standards specified [other procedures described] in the Financial
	Condition Examiner's Handbook adopted by the National Association
	of Insurance Commissioners or other analogous nationally
	recognized standards adopted by commissioner rule.
	(b)  Section 2, Chapter 408, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Subsection (b), Section
	14, Article 1.15A, Insurance Code, is repealed.
	SECTION 3B.002.  (a) Section 401.011(d), Insurance Code, is
	amended to conform to Section 1, Chapter 408, Acts of the 79th
	Legislature, Regular Session, 2005, to read as follows:
	(d)  The commissioner may not accept an audited financial
	report prepared wholly or partly by an individual or firm who the
	commissioner finds:
	(1)  has been convicted of fraud, bribery, a violation
	of the Racketeer Influenced and Corrupt Organizations Act (18
	U.S.C. Section 1961 et seq.), or a state or federal criminal offense
	involving dishonest conduct;
	(2)  has violated the insurance laws of this state with
	respect to a report filed under this subchapter; [or]
	(3)  has demonstrated a pattern or practice of failing
	to detect or disclose material information in reports filed under
	this subchapter; or
	(4)  has directly  or indirectly entered into an
	agreement of indemnity or release of liability regarding an audit
	of an insurer.
	(b)  Section 1, Chapter 408, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Subsection (c), Section
	12, Article 1.15A, Insurance Code, is repealed.
	SECTION 3B.003.  Subchapters A, B, C, D, E, F, G, H, I, J, K,
	L, M, N, O, and P, Chapter 442, Insurance Code, and Section 6.069,
	Chapter 265, Acts of the 79th Legislature, Regular Session, 2005,
	which amended former Section 3A, Article 21.28, Insurance Code, are
	repealed to conform to the repeal of Article 21.28, Insurance Code,
	by Section 9, Chapter 995, Acts of the 79th Legislature, Regular
	Session, 2005.
	SECTION 3B.004.  (a)  The following changes are made to Title
	1, Insurance Code, and Subtitle C, Title 4, Insurance Code, for
	organizational purposes:
	(1)  Chapter 21A, Insurance Code, is redesignated as
	Chapter 443, Subtitle C, Title 4, Insurance Code, and:
	(A)  Subchapter A in the redesignated chapter is
	redesignated as Subchapter A, Chapter 443, Insurance Code, and the
	sections in the redesignated subchapter, Sections 21A.001,
	21A.002, 21A.003, 21A.004, 21A.005, 21A.006, 21A.007, 21A.008,
	21A.009, 21A.010, 21A.011, 21A.012, 21A.013, 21A.0135, 21A.014,
	21A.015, 21A.016, and 21A.017, are redesignated as Sections
	443.001, 443.002, 443.003, 443.004, 443.005, 443.006, 443.007,
	443.008, 443.009, 443.010, 443.011, 443.012, 443.013, 443.0135,
	443.014, 443.015, 443.016, and 443.017, respectively;
	(B)  Subchapter B in the redesignated chapter is
	redesignated as Subchapter B, Chapter 443, Insurance Code, and the
	sections in the redesignated subchapter, Sections 21A.051 through
	21A.059, are redesignated as Sections 443.051 through 443.059;
	(C)  Subchapter C in the redesignated chapter is
	redesignated as Subchapter C, Chapter 443, Insurance Code, and the
	sections in the redesignated subchapter, Sections 21A.101 through
	21A.105, are redesignated as Sections 443.101 through 443.105;
	(D)  Subchapter D in the redesignated chapter is
	redesignated as Subchapter D, Chapter 443, Insurance Code, and the
	sections in the redesignated subchapter, Sections 21A.151 through
	21A.156, are redesignated as Sections 443.151 through 443.156;
	(E)  Subchapter E in the redesignated chapter is
	redesignated as Subchapter E, Chapter 443, Insurance Code, and the
	sections in the redesignated subchapter, Sections 21A.201 through
	21A.213, are redesignated as Sections 443.201 through 443.213;
	(F)  Subchapter F in the redesignated chapter is
	redesignated as Subchapter F, Chapter 443, Insurance Code, and the
	sections in the redesignated subchapter, Sections 21A.251 through
	21A.261, are redesignated as Sections 443.251 through 443.261;
	(G)  Subchapter G in the redesignated chapter is
	redesignated as Subchapter G, Chapter 443, Insurance Code, and the
	sections in the redesignated subchapter, Sections 21A.301 through
	21A.304, are redesignated as Sections 443.301 through 443.304;
	(H)  Subchapter H in the redesignated chapter is
	redesignated as Subchapter H, Chapter 443, Insurance Code, and the
	sections in the redesignated subchapter, Sections 21A.351 through
	21A.355, are redesignated as Sections 443.351 through 443.355; and
	(I)  Subchapter I in the redesignated chapter is
	redesignated as Subchapter I, Chapter 443, Insurance Code, and the
	sections in the redesignated subchapter, Sections 21A.401 and
	21A.402, are redesignated as Sections 443.401 and 443.402,
	respectively; and
	(2)  Subchapter Q, Chapter 442, Insurance Code, is
	redesignated as Chapter 444, Insurance Code, the heading of
	Subchapter Q is amended to read as follows:  "CHAPTER 444
	[SUBCHAPTER Q].  AGENCY CONTRACTS WITH CERTAIN INSURERS", and
	Sections 442.801, 442.802, 442.803, and 442.804 in the redesignated
	subchapter are redesignated as Sections 444.001, 444.002, 444.003,
	and 444.004, respectively.
	(b)  Sections 21A.004(a)(4), (11), (14), (17), and (26),
	Insurance Code, redesignated as Sections 443.004(a)(4), (11),
	(14), (17), and (26), Insurance Code, respectively, by Subsection
	(a)(1)(A) of this section, are amended to conform to the additional
	changes made by Subsection (a)(1) of this section and to the
	recodification and repeal of Articles 21.28-C and 21.28-D,
	Insurance Code, by Chapter 727, Acts of the 79th Legislature,
	Regular Session, 2005, to read as follows:
	(4)  "Delinquency proceeding" means any proceeding
	instituted against an insurer for the purpose of liquidating,
	rehabilitating, or conserving the insurer, and any proceeding under
	Section 443.051 [21A.051].
	(11)  "Guaranty association" means any mechanism
	mandated by [Article 21.28-C or 21.28-D,] Chapter 462, 463, or
	2602[,] or other laws of this state or a similar mechanism in
	another state that is created for the payment of claims or
	continuation of policy obligations of financially impaired or
	insolvent insurers.
	(14)  "Insurer" means any person that has done,
	purports to do, is doing, or is authorized to do the business of
	insurance in this state, and is or has been subject to the authority
	of or to liquidation, rehabilitation, reorganization, supervision,
	or conservation by any insurance commissioner. For purposes of
	this chapter, any other persons included under Section 443.003
	[21A.003] are insurers.
	(17)  "Party in interest" means the commissioner, a 10
	percent or greater equity security holder in the insolvent insurer,
	any affected guaranty association, any nondomiciliary commissioner
	for a jurisdiction in which the insurer has outstanding claims
	liabilities, and any of the following parties that have filed a
	request for inclusion on the service list under Section 443.007
	[21A.007]:
	(A)  an insurer that ceded to or assumed business
	from the insolvent insurer; and
	(B)  an equity shareholder, policyholder,
	third-party claimant, creditor, and any other person, including any
	indenture trustee, with a financial or regulatory interest in the
	receivership proceeding.
	(26)  "Secured claim" means any claim secured by an
	asset that is not a general asset. The term includes the right to
	set off as provided in Section 443.209 [21A.209]. The term does not
	include a claim arising from a constructive or resulting trust, a
	special deposit claim, or a claim based on mere possession.
	(c)  Sections 21A.005(e), (h), and (i), Insurance Code,
	redesignated as Sections 443.005(e), (h), and (i), Insurance Code,
	respectively, by Subsection (a)(1)(A) of this section, are amended
	to conform to the additional changes made by Subsection (a)(1) of
	this section to read as follows:
	(e)  If, on motion of any party, the receivership court finds
	that any action, as a matter of substantial justice, should be tried
	in a forum outside this state, the receivership court may enter an
	appropriate order to stay further proceedings on the action in this
	state. Except as to claims against the estate, nothing in this
	chapter deprives a party of any contractual right to pursue
	arbitration. A party in arbitration may bring a claim or
	counterclaim against the estate, but the claim or counterclaim is
	subject to Section 443.209 [21A.209].
	(h)  At any time after an order is entered pursuant to
	Section 443.051, 443.101, or 443.151 [21A.051, 21A.101, or
	21A.151], the commissioner or receiver may transfer the case to the
	county of the principal office of the person proceeded against. In
	the event of transfer, the court in which the proceeding was
	commenced, upon application of the commissioner or receiver, shall
	direct its clerk to transmit the court's file to the clerk of the
	court to which the case is to be transferred. The proceeding, after
	transfer, shall be conducted in the same manner as if it had been
	commenced in the court to which the matter is transferred.
	(i)  A person may not intervene in any delinquency proceeding
	in this state for the purpose of seeking or obtaining payment of any
	judgment, lien, or other claim of any kind. The claims procedure
	set forth in this chapter constitutes the exclusive means for
	obtaining payment of claims from the receivership estate. This
	provision is not intended to affect the rights conferred on the
	guaranty associations by Section 443.008(l) [21A.008(l)].
	(d)  Section 21A.008(e), Insurance Code, redesignated as
	Section 443.008(e), Insurance Code, by Subsection (a)(1)(A) of this
	section, is amended to conform to the additional changes made by
	Subsection (a)(1) of this section to read as follows:
	(e)  Notwithstanding Subsection (c), the commencement of a
	delinquency proceeding under this chapter does not operate as a
	stay of:
	(1)  regulatory actions not described by Subsection
	(c)(7) that are taken by the commissioners of nondomiciliary
	states, including the suspension of licenses;
	(2)  criminal proceedings;
	(3)  any act to perfect or to maintain or continue the
	perfection of an interest in property to the extent that the act is
	accomplished within any relation back period under applicable law;
	(4)  set off as permitted by Section 443.209 [21A.209];
	(5)  pursuit and enforcement of nonmonetary
	governmental claims, judgments, and proceedings;
	(6)  presentment of a negotiable instrument and the
	giving of notice and protesting dishonor of the instrument;
	(7)  enforcement of rights against single beneficiary
	trusts established pursuant to and in compliance with laws relating
	to credit for reinsurance;
	(8)  termination, liquidation, and netting of
	obligations under qualified financial contracts as provided for in
	Section 443.261 [21A.261];
	(9)  discharge by a guaranty association of statutory
	responsibilities under any law governing guaranty associations; or
	(10)  any of the following actions:
	(A)  an audit by a governmental unit to determine
	tax liability;
	(B)  the issuance to the insurer by a governmental
	unit of a notice of tax deficiency;
	(C)  a demand for tax returns; or
	(D)  the making of an assessment for any tax and
	issuance of a notice and demand for payment of the assessment.
	(e)  Section 21A.009(c), Insurance Code, redesignated as
	Section 443.009(c), Insurance Code, by Subsection (a)(1)(A) of this
	section, is amended to conform to the additional changes made by
	Subsection (a)(1) of this section to read as follows:
	(c)  If applicable law, an order, or an agreement fixes a
	period for commencing or continuing a civil action in a court other
	than the receivership court on a claim against the insurer, and the
	period has not expired before the date of the initial filing of the
	petition in a delinquency proceeding, then the period does not
	expire until the later of:
	(1)  the end of the period, including any suspension of
	the period occurring on or after the filing of the initial petition
	in the delinquency proceeding; or
	(2)  30 days after termination or expiration of the
	stay under Section 443.008 [21A.008] with respect to the claim.
	(f)  Section 21A.0135, Insurance Code, redesignated as
	Section 443.0135, Insurance Code, by Subsection (a)(1)(A) of this
	section, is amended to conform to the additional changes made by
	Subsection (a)(1) of this section to read as follows:
	Sec. 443.0135 [21A.0135].  CONTRACTS FOR SPECIAL DEPUTIES.
	(a)  The receiver shall use a competitive bidding process in the
	selection of any special deputies appointed under Section 443.102
	or 443.154 [21A.102 or 21A.154]. The process must include
	procedures to promote the participation of historically
	underutilized businesses that have been certified by the Texas
	Building and Procurement Commission under Section 2161.061,
	Government Code.
	(b)  A proposal submitted in connection with a bid
	solicitation under Subsection (a) must describe the efforts that
	have been made to include historically underutilized businesses as
	subcontractors and the plan for using the historically
	underutilized businesses in the administration of the receivership
	estate. A special deputy appointed under Section 443.102 or
	443.154 [21A.102 or 21A.154] shall make a good faith effort to
	implement the plan and shall report to the receiver the special
	deputy's efforts to identify and subcontract with historically
	underutilized businesses.
	(g)  Sections 21A.015(a), (c), and (i), Insurance Code,
	redesignated as Sections 443.015(a), (c), and (i), Insurance Code,
	respectively, by Subsection (a)(1)(A) of this section, are amended
	to conform to the additional changes made by Subsection (a)(1) of
	this section to read as follows:
	(a)  The receiver may pay any expenses under contracts,
	leases, employment agreements, or other arrangements entered into
	by the insurer prior to receivership, as the receiver deems
	necessary for the purposes of this chapter. The receiver is not
	required to pay any expenses that the receiver determines are not
	necessary, and may reject any contract pursuant to Section 443.013
	[21A.013].
	(c)  The receiver shall submit to the receivership court an
	application pursuant to Section 443.007 [21A.007] to approve:
	(1)  the terms of compensation of each special deputy
	or contractor with respect to which the total amount of the
	compensation is reasonably expected by the receiver for the
	duration of the delinquency proceeding to exceed $250,000, or
	another amount established by the receivership court; and
	(2)  any other anticipated expense in excess of
	$25,000, or another amount established by the receivership court.
	(i)  All expenses of receivership shall be paid from the
	assets of the insurer, except as provided by this subsection. In
	the event that the property of the insurer does not contain
	sufficient cash or liquid assets to defray the expenses incurred,
	the commissioner may advance funds from the account established
	under Section 443.304(c) [21A.304(c)]. Any amounts advanced shall
	be repaid to the account out of the first available money of the
	insurer.
	(h)  Sections 21A.051(a), (b), and (i), Insurance Code,
	redesignated as Sections 443.051(a), (b), and (i), Insurance Code,
	respectively, by Subsection (a)(1)(B) of this section, are amended
	to conform to the additional changes made by Subsection (a)(1) of
	this section to read as follows:
	(a)  The commissioner may file in a district court of Travis
	County a petition with respect to an insurer domiciled in this
	state, an unauthorized insurer, or, pursuant to Section 443.401
	[21A.401], a foreign insurer:
	(1)  alleging that grounds exist that would justify a
	court order for a formal delinquency proceeding against the insurer
	under this chapter;
	(2)  alleging that the interests of policyholders,
	creditors, or the public will be endangered by delay; and
	(3)  setting forth the contents of a seizure order
	deemed to be necessary by the commissioner.
	(b)  Upon a filing under Subsection (a), the receivership
	court may issue, ex parte and without notice or hearing, the
	requested seizure order directing the commissioner to take
	possession and control of all or a part of the property, books,
	accounts, documents, and other records of an insurer, and of the
	premises occupied by it for transaction of its business, and until
	further order of the receivership court, enjoining the insurer and
	its officers, managers, agents, and employees from disposition of
	its property and from the transaction of its business except with
	the written consent of the commissioner. Any person having
	possession or control of and refusing to deliver any of the books,
	records, or assets of a person against whom a seizure order has been
	issued commits an offense. An offense under this subsection is
	punishable in the manner described by Section 443.010(e)
	[21A.010(e)].
	(i)  In all proceedings and judicial reviews under this
	section, all records of the insurer, department files, court
	records and papers, and other documents, so far as they pertain to
	or are a part of the record of the proceedings, are confidential,
	and all papers filed with the clerk of the court shall be held by the
	clerk in a confidential file as permitted by law, except to the
	extent necessary to obtain compliance with any order entered in
	connection with the proceedings, unless and until:
	(1)  the court, after hearing argument in chambers,
	orders otherwise;
	(2)  the insurer requests that the matter be made
	public; or
	(3)  the commissioner applies for an order under
	Section 443.057 [21A.057].
	(i)  Section 21A.052(b), Insurance Code, redesignated as
	Section 443.052(b), Insurance Code, by Subsection (a)(1)(B) of this
	section, is amended to conform to the additional changes made by
	Subsection (a)(1) of this section to read as follows:
	(b)  The petition must state the grounds upon which the
	proceeding is based and the relief requested and may include a
	prayer for restraining orders and injunctive relief as described in
	Section 443.008 [21A.008]. On the filing of the petition or order,
	a copy shall be forwarded by first class mail or electronic
	communication as permitted by the receivership court to the
	insurance regulatory officials and guaranty associations in states
	in which the insurer did business.
	(j)  Section 21A.056(a), Insurance Code, redesignated as
	Section 443.056(a), Insurance Code, by Subsection (a)(1)(B) of this
	section, is amended to conform to the additional changes made by
	Subsection (a)(1) of this section to read as follows:
	(a)  The commissioner, rehabilitator, or liquidator may
	share documents, materials, or other information in the possession,
	custody, or control of the department without regard to the
	confidentiality of those documents, materials, or information,
	pertaining to an insurer that is the subject of a proceeding under
	this chapter with other state, federal, and international
	regulatory agencies, with the National Association of Insurance
	Commissioners and its affiliates and subsidiaries, with state,
	federal, and international law enforcement authorities, with an
	auditor appointed by the receivership court in accordance with
	Section 443.355 [21A.355], and, pursuant to Section 443.105
	[21A.105], with representatives of guaranty associations that may
	have statutory obligations as a result of the insolvency of the
	insurer, provided that the recipient agrees to maintain the
	confidentiality, if any, of the documents, material, or other
	information. Nothing in this section limits the power of the
	commissioner to disclose information under other applicable law.
	(k)  Section 21A.057, Insurance Code, redesignated as
	Section 443.057, Insurance Code, by Subsection (a)(1)(B) of this
	section, is amended to conform to the additional changes made by
	Subsection (a)(1) of this section and to the recodification and
	repeal of Articles 1.15, 1.15A, 1.16, 1.32, and 21.28-A, Insurance
	Code, by Chapter 727, Acts of the 79th Legislature, Regular
	Session, 2005, to read as follows:
	Sec. 443.057 [21A.057].  GROUNDS FOR CONSERVATION,
	REHABILITATION, OR LIQUIDATION. The commissioner may file with a
	court in this state a petition with respect to an insurer domiciled
	in this state or an unauthorized insurer for an order of
	rehabilitation or liquidation on any one or more of the following
	grounds:
	(1)  the insurer is impaired;
	(2)  the insurer is insolvent;
	(3)  the insurer is about to become insolvent, with
	"about to become insolvent" being defined as reasonably anticipated
	that the insurer will not have liquid assets to meet its next 90
	days' current obligations;
	(4)  the insurer has neglected or refused to comply
	with an order of the commissioner to make good within the time
	prescribed by law any deficiency, whenever its capital and minimum
	required surplus, if a stock company, or its surplus, if a company
	other than stock, has become impaired;
	(5)  the insurer, its parent company, its subsidiaries,
	or its affiliates have converted, wasted, or concealed property of
	the insurer or have otherwise improperly disposed of, dissipated,
	used, released, transferred, sold, assigned, hypothecated, or
	removed the property of the insurer;
	(6)  the insurer is in a condition such that it could
	not meet the requirements for organization and authorization as
	required by law, except as to the amount of the original surplus
	required of a stock company under Title 6, and except as to the
	amount of the surplus required of a company other than a stock
	company in excess of the minimum surplus required to be maintained;
	(7)  the insurer, its parent company, its subsidiaries,
	or its affiliates have concealed, removed, altered, destroyed, or
	failed to establish and maintain books, records, documents,
	accounts, vouchers, and other pertinent material adequate for the
	determination of the financial condition of the insurer by
	examination under Chapter 401 [Article 1.15, 1.15A, or 1.16] or has
	failed to properly administer claims or maintain claims records
	that are adequate for the determination of its outstanding claims
	liability;
	(8)  at any time after the issuance of an order under
	Section 404.003 or Chapter 441 [Article 1.32 or 21.28-A], or at the
	time of instituting any proceeding under this chapter, it appears
	to the commissioner that, upon good cause shown, it would not be in
	the best interest of the policyholders, creditors, or the public to
	proceed with the conduct of the business of the insurer;
	(9)  the insurer is in a condition such that the further
	transaction of business would be hazardous financially, according
	to Subchapter A, Chapter 404, [Article 1.32] or otherwise, to its
	policyholders, creditors, or the public;
	(10)  there is reasonable cause to believe that there
	has been embezzlement from the insurer, wrongful sequestration or
	diversion of the insurer's property, forgery or fraud affecting the
	insurer, or other illegal conduct in, by, or with respect to the
	insurer that, if established, would endanger assets in an amount
	threatening the solvency of the insurer;
	(11)  control of the insurer is in a person who is:
	(A)  dishonest or untrustworthy; or
	(B)  so lacking in insurance company managerial
	experience or capability as to be hazardous to policyholders,
	creditors, or the public;
	(12)  any person who in fact has executive authority in
	the insurer, whether an officer, manager, general agent, director,
	trustee, employee, shareholder, or other person, has refused to be
	examined under oath by the commissioner concerning the insurer's
	affairs, whether in this state or elsewhere or if examined under
	oath, refuses to divulge pertinent information reasonably known to
	the person; and after reasonable notice of the fact, the insurer has
	failed promptly and effectively to terminate the employment and
	status of the person and all the person's influence on management;
	(13)  after demand by the commissioner under Chapter
	401 [Article 1.15, 1.15A, or 1.16] or under this chapter, the
	insurer has failed promptly to make available for examination any
	of its own property, books, accounts, documents, or other records,
	or those of any subsidiary or related company within the control of
	the insurer or of any person having executive authority in the
	insurer, so far as they pertain to the insurer;
	(14)  without first obtaining the written consent of
	the commissioner, the insurer has transferred, or attempted to
	transfer, in a manner contrary to Chapter 823 or any law relating to
	bulk reinsurance, substantially its entire property or business, or
	has entered into any transaction the effect of which is to merge,
	consolidate, or reinsure substantially its entire property or
	business in or with the property or business of any other person;
	(15)  the insurer or its property has been or is the
	subject of an application for the appointment of a receiver,
	trustee, custodian, conservator, sequestrator, or similar
	fiduciary of the insurer or its property otherwise than as
	authorized under the insurance laws of this state;
	(16)  within the previous five years, the insurer has
	wilfully and continuously violated its charter, articles of
	incorporation or bylaws, any insurance law of this state, or any
	valid order of the commissioner;
	(17)  the insurer has failed to pay within 60 days after
	the due date any obligation to any state or political subdivision of
	a state or any judgment entered in any state, if the court in which
	the judgment was entered had jurisdiction over the subject matter,
	except that nonpayment is not a ground until 60 days after any good
	faith effort by the insurer to contest the obligation has been
	terminated, whether it is before the commissioner or in the courts;
	(18)  the insurer has systematically engaged in the
	practice of reaching settlements with and obtaining releases from
	claimants, and then unreasonably delayed payment, failed to pay the
	agreed-upon settlements, or systematically attempted to compromise
	with claimants or other creditors on the ground that it is
	financially unable to pay its claims or obligations in full;
	(19)  the insurer has failed to file its annual report
	or other financial report required by statute within the time
	allowed by law;
	(20)  the board of directors or the holders of a
	majority of the shares entitled to vote, or a majority of those
	individuals entitled to the control of those entities specified by
	Section 443.003 [21A.003], request or consent to rehabilitation or
	liquidation under this chapter;
	(21)  the insurer does not comply with its domiciliary
	state's requirements for issuance to it of a certificate of
	authority, or its certificate of authority has been revoked by its
	state of domicile; or
	(22)  when authorized by department rules.
	(l)  Section 21A.058, Insurance Code, redesignated as
	Section 443.058, Insurance Code, by Subsection (a)(1)(B) of this
	section, is amended to conform to the additional changes made by
	Subsection (a)(1) of this section to read as follows:
	Sec. 443.058 [21A.058].  ENTRY OF ORDER.  If the
	commissioner establishes any of the grounds provided in Section
	443.057 [21A.057], the receivership court shall grant the petition
	and issue the order of rehabilitation or liquidation requested in
	the petition.
	(m)  Section 21A.101(b), Insurance Code, redesignated as
	Section 443.101(b), Insurance Code, by Subsection (a)(1)(C) of this
	section, is amended to conform to the additional changes made by
	Subsection (a)(1) of this section to read as follows:
	(b)  Any order issued under this section must require
	accountings to the receivership court by the rehabilitator.
	Accountings must be at the intervals specified by the receivership
	court in its order, but not less frequently than semi-annually.
	Each accounting must include a report concerning the
	rehabilitator's opinion as to the likelihood that a plan under
	Section 443.103 [21A.103] will be prepared by the rehabilitator and
	the timetable for doing so.
	(n)  Section 21A.102(a), Insurance Code, redesignated as
	Section 443.102(a), Insurance Code, by Subsection (a)(1)(C) of this
	section, is amended to conform to the additional changes made by
	Subsection (a)(1) of this section to read as follows:
	(a)  The rehabilitator may appoint one or more special
	deputies. A special deputy serves at the pleasure of the
	rehabilitator and has all the powers and responsibilities of the
	rehabilitator granted under this section, unless specifically
	limited by the rehabilitator. The rehabilitator may employ or
	contract with legal counsel, actuaries, accountants, appraisers,
	consultants, clerks, assistants, and other personnel as may be
	deemed necessary. Any special deputy or any other person with whom
	the rehabilitator contracts under this subsection may act on behalf
	of the commissioner only in the commissioner's capacity as
	rehabilitator. Any person with whom the rehabilitator contracts
	under this subsection is not considered an agent of the state, and
	any contract entered into under this subsection does not constitute
	a contract with the state. The provisions of any law governing the
	procurement of goods and services by the state does not apply to any
	contract entered into by the commissioner as rehabilitator. The
	compensation of any special deputies, employees, and contractors
	and all expenses of taking possession of the insurer and of
	conducting the rehabilitation shall be fixed by the rehabilitator,
	with the approval of the receivership court in accordance with
	Section 443.015 [21A.015], and shall be paid out of the property of
	the insurer. The persons appointed under this subsection serve at
	the pleasure of the rehabilitator. If the rehabilitator deems it
	necessary to the proper performance of the rehabilitator's duties
	under this chapter, the rehabilitator may appoint an advisory
	committee of policyholders, claimants, or other creditors,
	including guaranty associations. The advisory committee serves at
	the pleasure of the rehabilitator and without compensation or
	reimbursement for expenses. The rehabilitator or the receivership
	court in rehabilitation proceedings conducted under this chapter
	may not appoint another committee of any nature.
	(o)  Section 21A.104, Insurance Code, redesignated as
	Section 443.104, Insurance Code, by Subsection (a)(1)(C) of this
	section, is amended to conform to the additional changes made by
	Subsection (a)(1) of this section to read as follows:
	Sec. 443.104 [21A.104].  TERMINATION OF REHABILITATION.  (a)
	When the rehabilitator believes further attempts to rehabilitate an
	insurer would substantially increase the risk of loss to creditors,
	policyholders, or the public or would be futile, the rehabilitator
	may move for an order of liquidation. In accordance with Section
	443.105 [21A.105], the rehabilitator or the rehabilitator's
	designated representative shall coordinate with the guaranty
	associations that may become liable as a result of the liquidation
	and any national association of guaranty associations to plan for
	transition to liquidation.
	(b)  Because the protection of the interests of insureds,
	claimants, and the public requires the timely performance of all
	insurance policy obligations, if the payment of policy obligations
	is suspended in substantial part for a period of six months at any
	time after the appointment of the rehabilitator and the
	rehabilitator has not filed an application for approval of a plan
	under Section 443.103 [21A.103], the rehabilitator shall petition
	the receivership court for an order of liquidation.
	(c)  The rehabilitator or the directors of the insurer may at
	any time petition the receivership court for, or the receivership
	court on its own motion may enter, an order terminating
	rehabilitation of an insurer. Subject to the provisions of Section
	443.351 [21A.351], if the receivership court finds that
	rehabilitation has been accomplished and that grounds for
	rehabilitation under Section 443.057 [21A.057] no longer exist, it
	shall order that the insurer be restored to title and possession of
	its property and the control of the business.
	(p)  Sections 21A.151(b) and (e), Insurance Code,
	redesignated as Sections 443.151(b) and (e), Insurance Code,
	respectively, by Subsection (a)(1)(D) of this section, are amended
	to conform to the additional changes made by Subsection (a)(1) of
	this section to read as follows:
	(b)  Upon issuance of the order of liquidation, the rights
	and liabilities of the insurer and of its creditors, policyholders,
	shareholders, members, and all other persons interested in its
	estate become fixed as of the date of entry of the order of
	liquidation, except as provided by Sections 443.152 and 443.255
	[21A.152 and 21A.255], unless otherwise fixed by the court.
	(e)  In the event an order of liquidation is set aside on
	appeal, the company may not be released from delinquency
	proceedings except in accordance with Section 443.351 [21A.351].
	(q)  Sections 21A.152(b), (c), and (d), Insurance Code,
	redesignated as Sections 443.152(b), (c), and (d), Insurance Code,
	respectively, by Subsection (a)(1)(D) of this section, are amended
	to conform to the additional changes made by Subsection (a)(1) of
	this section to read as follows:
	(b)  Notwithstanding any policy or contract language or any
	other statute, all policies, insurance contracts other than
	reinsurance by which the insurer has ceded insurance obligations to
	another person, and surety bonds or surety undertakings, other than
	life or health insurance or annuities, in effect at the time of
	issuance of an order of liquidation, unless further extended by the
	receiver with the approval of the receivership court, continue in
	force only until the earlier of:
	(1)  the 30th day after the date of entry of the
	liquidation order;
	(2)  the date of expiration of the policy coverage;
	(3)  the date the insured has replaced the insurance
	coverage with equivalent insurance with another insurer or
	otherwise terminated the policy;
	(4)  the date the liquidator has effected a transfer of
	the policy obligation pursuant to Section 443.154(h) [21A.154(h)];
	or
	(5)  the date proposed by the liquidator and approved
	by the receivership court to cancel coverage.
	(c)  An order of liquidation under Section 443.151 [21A.151]
	must terminate coverages at the time specified by Subsections (a)
	and (b) for purposes of any other statute.
	(d)  Policies of life or health insurance or annuities
	covered by a guaranty association and any portion of policies of
	life or health insurance or annuities covered by a guaranty
	association continue in force for the period and under the terms
	provided for by any applicable guaranty association law. Policies
	of life or health insurance or annuities not covered by a guaranty
	association and any portion of policies of life or health insurance
	or annuities not covered by a guaranty association terminate under
	Subsection (b), except to the extent the liquidator proposes and
	the receivership court approves the use of property of the estate,
	consistent with Section 443.301 [21A.301], for the purpose of
	continuing the contracts or coverage by transferring them to an
	assuming reinsurer.
	(r)  Sections 21A.154(a), (b), (h), (k), (l), (y), and (z),
	Insurance Code, redesignated as Sections 443.154(a), (b), (h), (k),
	(l), (y), and (z), Insurance Code, respectively, by Subsection
	(a)(1)(D) of this section, are amended to conform to the additional
	changes made by Subsection (a)(1) of this section to read as
	follows:
	(a)  The liquidator may appoint a special deputy or deputies
	to act for the liquidator under this chapter and employ or contract
	with legal counsel, actuaries, accountants, appraisers,
	consultants, clerks, assistants, and other personnel the
	liquidator may deem necessary to assist in the liquidation. A
	special deputy has all powers of the liquidator granted by this
	section, unless specifically limited by the liquidator, and serves
	at the pleasure of the liquidator. A special deputy or any other
	person with whom the liquidator contracts under this subsection may
	act on behalf of the commissioner only in the commissioner's
	capacity as liquidator. Any person with whom the liquidator
	contracts is not considered to be an agent of the state and any
	contract under this subsection is not a contract with the state.
	The provisions of any law governing the procurement of goods and
	services by the state do not apply to any contract entered into by
	the commissioner as liquidator. This subsection does not waive any
	immunity granted by Section 443.014 [21A.014] or create any cause
	of action against the state.
	(b)  The liquidator may determine the reasonable
	compensation for any special deputies, employees, or contractors
	retained by the liquidator as provided in Subsection (a) and pay
	compensation in accordance with Section 443.015 [21A.015].
	(h)  The liquidator may use property of the estate of an
	insurer under a liquidation order to transfer to a solvent assuming
	insurer policy obligations or the insurer's obligations under
	surety bonds and surety undertakings as well as collateral held by
	the insurer with respect to the reimbursement obligations of the
	principals under those surety bonds and surety undertakings, if the
	transfer can be arranged without prejudice to applicable priorities
	under Section 443.301 [21A.301]. If all insureds, principals,
	third-party claimants, and obligees under the policies, surety
	bonds, and surety undertakings consent or if the receivership court
	so orders, the estate has no further liability under the
	transferred policies, surety bonds, or surety undertakings after
	the transfer is made.
	(k)  The liquidator may enter into contracts as necessary to
	carry out the order to liquidate and, subject to the provisions of
	Section 443.013 [21A.013], may assume or reject any executory
	contract or unexpired lease to which the insurer is a party.
	(l)  The liquidator may continue to prosecute and institute
	in the name of the insurer or in the liquidator's own name any and
	all suits and other legal proceedings, in this state or elsewhere,
	and abandon the prosecution of claims the liquidator deems
	unprofitable to pursue further. If the insurer is dissolved under
	Section 443.153 [21A.153], the liquidator has the power to apply to
	any court in this state or elsewhere for leave to substitute the
	liquidator for the insurer as a party.
	(y)  The liquidator may hypothecate, encumber, lease, sell,
	transfer, abandon, or otherwise dispose of or deal with any
	property of the insurer, settle or resolve any claim brought by the
	liquidator on behalf of the insurer, or commute or settle any claim
	of reinsurance under any contract of reinsurance, as follows:
	(1)  if the property or claim has a market or settlement
	value that does not exceed the lesser of $1 million or 10 percent of
	the general assets of the estate as shown on the receivership's
	financial statements, the liquidator may take action at the
	liquidator's discretion, provided that the receivership court may,
	upon petition of the liquidator, increase the threshold upon a
	showing that compliance with this requirement is burdensome to the
	liquidator in administering the estate and is unnecessary to
	protect the material interests of creditors;
	(2)  in all instances other than those described in
	Subdivision (1), the liquidator may take the action only after
	obtaining approval of the receivership court as provided by Section
	443.007 [21A.007];
	(3)  the liquidator may, at the liquidator's
	discretion, request the receivership court to approve a proposed
	action as provided by Section 443.007 [21A.007] if the value of the
	property or claim appears to be less than the threshold provided by
	Subdivision (1) but cannot be ascertained with certainty, or for
	any other reason as determined by the liquidator; and
	(4)  after obtaining approval of the receivership court
	as provided in Section 443.007 [21A.007], the liquidator may,
	subject to Subsection (z), transfer rights to payment under ceding
	reinsurance agreements covering policies to a third-party
	transferee.
	(z)  The transferee of a right to payment under Subsection
	(y)(4) has the rights to collect and enforce collection of the
	reinsurance for the amount payable to the ceding insurer or to its
	receiver, without diminution because of the insolvency or because
	the receiver has failed to pay all or a portion of the claim, based
	on the amounts paid or allowed pursuant to Section 443.211
	[21A.211]. The transfer of the rights does not give rise to any
	defense regarding the reinsurer's obligations under the
	reinsurance agreement regardless of whether an agreement or other
	applicable law prohibits the transfer of rights under the
	reinsurance agreement. Except as provided in this subsection, any
	transfer of rights pursuant to Subsection (y)(4) does not impair
	any rights or defenses of the reinsurer that existed prior to the
	transfer or that would have existed in the absence of the transfer.
	Except as otherwise provided in this subsection, any transfer of
	rights pursuant to Subsection (y)(4) does not relieve the
	transferee or the liquidator from obligations owed to the reinsurer
	pursuant to the reinsurance or other agreement.
	(s)  Section 21A.155(b), Insurance Code, redesignated as
	Section 443.155(b), Insurance Code, by Subsection (a)(1)(D) of this
	section, is amended to conform to the additional changes made by
	Subsection (a)(1) of this section to read as follows:
	(b)  The notice of the entry of an order of liquidation must
	contain or provide directions for obtaining the following
	information:
	(1)  a statement that the insurer has been placed in
	liquidation;
	(2)  a statement that certain acts are stayed under
	Section 443.008 [21A.008] and describe any additional injunctive
	relief ordered by the receivership court;
	(3)  a statement whether, and to what extent, the
	insurer's policies continue in effect;
	(4)  to the extent applicable, a statement that
	coverage by state guaranty associations may be available for all or
	part of policy benefits in accordance with applicable state
	guaranty laws;
	(5)  a statement of the deadline for filing claims, if
	established, and the requirements for filing a proof of claim
	pursuant to Section 443.251 [21A.251] on or before that date;
	(6)  a statement of the date, time, and location of any
	initial status hearing scheduled at the time the notice is sent;
	(7)  a description of the process for obtaining notice
	of matters before the receivership court; and
	(8)  any other information the liquidator or the
	receivership court deems appropriate.
	(t)  Section 21A.156(a), Insurance Code, redesignated as
	Section 443.156(a), Insurance Code, by Subsection (a)(1)(D) of this
	section, is amended to conform to the additional changes made by
	Subsection (a)(1) of this section to read as follows:
	(a)  Every person who represented the insurer as an agent and
	receives notice in the form prescribed in Section 443.155 [21A.155]
	that the insurer is the subject of a liquidation order, not later
	than the 30th day after the date of the notice, shall provide to the
	liquidator, in addition to the information the agent may be
	required to provide pursuant to Section 443.010 [21A.010], the
	information in the agent's records related to any policy issued by
	the insurer through the agent and any policy issued by the insurer
	through an agent under contract to the agent, including the name and
	address of any subagent. For purposes of this subsection, a policy
	is issued through an agent if the agent has a property interest in
	the expiration of the policy or if the agent has had in the agent's
	possession a copy of the declarations of the policy at any time
	during the life of the policy, except where the ownership of the
	expiration of the policy has been transferred to another.
	(u)  Sections 21A.207(a), (d), and (f), Insurance Code,
	redesignated as Sections 443.207(a), (d), and (f), Insurance Code,
	respectively, by Subsection (a)(1)(E) of this section, are amended
	to conform to the additional changes made by Subsection (a)(1) of
	this section to read as follows:
	(a)  Except as otherwise provided in this section, to the
	extent that the receiver obtains an order under Section 443.201
	[21A.201] or avoids a transfer under Section 443.202, 443.203,
	443.204, 443.205, or 443.206 [Sections 21A.202, 21A.203, 21A.204,
	21A.205, or 21A.206], the receiver may recover the property
	transferred, or the value of the property, from:
	(1)  the initial transferee of the transfer or the
	entity for whose benefit the transfer was made; or
	(2)  any immediate or mediate transferee of the initial
	transferee.
	(d)  In addition to the remedies specifically provided under
	Sections 443.201-443.206 [21A.201-21A.206] and Subsection (a), if
	the receiver is successful in establishing a claim to the property
	or any part of the property, the receiver is entitled to recover
	judgment for:
	(1)  rental for the use of the tangible property from
	the later of the entry of the receivership order or the date of the
	transfer;
	(2)  in the case of funds or intangible property, the
	greater of:
	(A)  the actual interest or income earned by the
	property; or
	(B)  interest at the statutory rate for judgments
	from the later of the date of the entry of the receivership order or
	the date of the transfer; and
	(3)  except as to recoveries from guaranty
	associations, all costs, including investigative costs and other
	expenses necessary to the recovery of the property or funds, and
	reasonable attorney's fees.
	(f)  In any action under Sections 443.201-443.206
	[21A.201-21A.206], the receiver has the burden of proving the
	avoidability of a transfer, and the person against whom recovery or
	avoidance is sought has the burden of proving the nature and extent
	of any affirmative defense.
	(v)  Section 21A.208(b), Insurance Code, redesignated as
	Section 443.208(b), Insurance Code, by Subsection (a)(1)(E) of this
	section, is amended to conform to the additional changes made by
	Subsection (a)(1) of this section to read as follows:
	(b)  A claim allowable under Subsection (a) by reason of the
	avoidance, whether voluntary or involuntary, or a preference, lien,
	conveyance, transfer, assignment, or encumbrance, may be filed as
	an excused late filing under Section 443.251(b) [21A.251(b)] if
	filed not later than the 30th day after the date of the avoidance,
	or within the further time allowed by the receivership court under
	Subsection (a).
	(w)  Section 21A.210(j), Insurance Code, redesignated as
	Section 443.210(j), Insurance Code, by Subsection (a)(1)(E) of this
	section, is amended to conform to the additional changes made by
	Subsection (a)(1) of this section to read as follows:
	(j)  Any claim filed by an assessee who fails to pay an
	assessment, after the conclusion of any legal action by the
	assessee objecting to the assessment, is deemed a late filed claim
	under Section 443.251 [21A.251].
	(x)  Sections 21A.211(b) and (f), Insurance Code,
	redesignated as Sections 443.211(b) and (f), Insurance Code,
	respectively, by Subsection (a)(1)(E) of this section, are amended
	to conform to the additional changes made by Subsection (a)(1) of
	this section and to the recodification and repeal of Articles
	21.28-C and 21.28-D, Insurance Code, by Chapter 727, Acts of the
	79th Legislature, Regular Session, 2005, to read as follows:
	(b)  Except as provided by Subsection (a), any reinsurance
	shall be payable to the receiver under a policy reinsured by the
	assuming insurer on the basis of claims:
	(1)  allowed under Section 443.253 [21A.253]; and
	(2)  paid under:
	(A)  Chapter 462, 463, or [Article 21.28-C or
	21.28-D;
	[(B)Chapter] 2602; or
	(B) [(C)]  the guaranty associations of other
	states.
	(f)  Nothing in this chapter shall be construed as
	authorizing the receiver, or other entity, to compel payment from a
	non-life reinsurer on the basis of estimated incurred but not
	reported losses or outstanding reserves, except outstanding
	reserves with respect to claims made pursuant to Section 443.255
	[21A.255] and approved workers compensation claims filed under
	Section 443.252(d) [21A.252(d)].
	(y)  Sections 21A.212(a), (b), and (c), Insurance Code,
	redesignated as Sections 443.212(a), (b), and (c), Insurance Code,
	respectively, by Subsection (a)(1)(E) of this section, are amended
	to conform to the additional changes made by Subsection (a)(1) of
	this section to read as follows:
	(a)  An insured shall pay, either directly to the receiver or
	to any agent that has paid or is obligated to pay the receiver on
	behalf of the insured, any unpaid earned premium or retrospectively
	rated premium due the insurer based on the termination of coverage
	under Section 443.152 [21A.152]. Premium on surety business is
	deemed earned at inception if a policy term cannot be determined.
	All other premium is deemed earned and is prorated equally over the
	determined policy term, regardless of any provision in the bond,
	guaranty, contract or other agreement.
	(b)  Any person, other than the insured, shall turn over to
	the receiver any unpaid premium due and owing as shown on the
	records of the insurer, including any amount representing
	commissions, for the full policy term due the insurer at the time of
	the entry of the receivership order, whether earned or unearned,
	based on the termination of coverage under Section 443.152
	[21A.152]. The unpaid premium due the receiver from any person
	other than the insured excludes any premium not collected from the
	insured and not earned based on the termination of coverage under
	Section 443.152 [21A.152].
	(c)  Any person, other than the insured, responsible for the
	remittance of a premium, shall turn over to the receiver any
	unearned commission of the person based on the termination of
	coverage under Section 443.152 [21A.152]. Credits, setoffs, or
	both may not be allowed to an agent, broker, premium finance
	company, or any other person for any amounts advanced to the insurer
	by the person on behalf of, but in the absence of a payment by, the
	insured, or for any other amount paid by the person to any other
	person after the entry of the order of receivership.
	(z)  Sections 21A.213(h) and (i), Insurance Code,
	redesignated as Sections 443.213(h) and (i), Insurance Code,
	respectively, by Subsection (a)(1)(E) of this section, are amended
	to conform to the additional changes made by Subsection (a)(1) of
	this section to read as follows:
	(h)  To the extent a guaranty association is required by
	applicable law to pay any claims for which the insurer would have
	been entitled to reimbursement from the policyholder, the following
	provisions apply:
	(1)  The receiver shall promptly invoice the
	policyholder for the reimbursement due under the agreement, and the
	policyholder is obligated to pay the amount invoiced to the
	receiver for the benefit of the guaranty associations that paid the
	claims. Neither the insolvency of the insurer nor the insurer's
	inability to perform any obligations under the deductible agreement
	is a defense to the policyholder's reimbursement obligation under
	the deductible agreement. At the time the policyholder
	reimbursements are collected, the receiver shall promptly forward
	those amounts to the guaranty association, based on the claims paid
	by the guaranty association that were subject to the deductible.
	(2)  If the collateral is insufficient to reimburse the
	guaranty association for claims paid within the deductible, the
	receiver shall use any existing collateral to make a partial
	reimbursement to the guaranty association, subject to any
	allocation under Subsection (d), (e), or (f). If more than one
	guaranty association has a claim against the same collateral, the
	receiver shall prorate payments to each guaranty association based
	on the amount of the claims each guaranty association has paid.
	(3)  The receiver is entitled to deduct from
	reimbursements owed to a guaranty association or collateral to be
	returned to a policyholder reasonable actual expenses incurred in
	fulfilling the receiver's responsibilities under this section.
	Expenses incurred to collect reimbursements for the benefit of a
	guaranty association are subject to the approval of the guaranty
	association. Any remaining expenses that are not deducted from the
	reimbursements are payable subject to Section 443.015 [21A.015].
	(4)  The receiver shall provide any affected guaranty
	associations with a complete accounting of the receiver's
	deductible billing and collection activities on a quarterly basis,
	or at other intervals as may be agreed to between the receiver and
	the guaranty associations. Accountings under this subdivision must
	include copies of the policyholder billings, the reimbursements
	collected, the available amounts and use of collateral for each
	account, and any prorating of payments.
	(5)  If the receiver fails to make a good faith effort
	to collect reimbursements due from a policyholder under a
	deductible agreement within 120 days of receipt of claims payment
	reports from a guaranty association, the guaranty association may,
	after notice to the receiver, collect the reimbursements that are
	due, and, in so doing, the guaranty association shall have the same
	rights and remedies as the receiver. A guaranty association shall
	report any amounts collected under this subdivision and expenses
	incurred in collecting those amounts to the receiver.
	(6)  The receiver shall periodically adjust the
	collateral held as the claims subject to the deductible agreement
	are paid, provided that adequate collateral is maintained. The
	receiver is not required to adjust the collateral more than once a
	year. The receiver shall inform the guaranty associations of all
	collateral reviews, including the basis for the adjustment.
	(7)  Reimbursements received or collected by a guaranty
	association under this section may not be considered a distribution
	of the insurer's assets. A guaranty association shall provide the
	receiver with an accounting of any amounts it has received or
	collected under this section and any expenses incurred in
	connection with that receipt or collection. The amounts received,
	net of any expenses incurred in connection with collection of the
	amounts, must be set off against the guaranty association's claim
	filed under Section 443.251 [21A.251] for the payments that were
	reimbursed.
	(8)  To the extent that a guaranty association pays a
	claim within the deductible amount that is not reimbursed by either
	the receiver or by policyholder payments, the guaranty association
	has a claim for those amounts in the delinquency proceeding in
	accordance with Section 443.251 [21A.251].
	(9)  Nothing in this section limits any rights of a
	guaranty association under applicable law to obtain reimbursement
	for claims payments made by the guaranty association under policies
	of the insurer or for the association's related expenses.
	(i)  If a claim that is subject to a deductible agreement and
	secured by collateral is not covered by any guaranty association,
	the following provisions apply:
	(1)  The receiver is entitled to retain as an asset of
	the estate any collateral or deductible reimbursements obtained by
	the receiver.
	(2)  If a policyholder fails to assume an obligation
	under a deductible agreement to pay a claim, the receiver shall use
	the collateral to adjust and pay the claim to the extent that the
	available collateral, after any allocation under Subsection (d),
	(e), or (f), is sufficient to pay all outstanding and anticipated
	claims within the deductible. If the collateral is exhausted and
	all reasonable means of collection against the insured have been
	exhausted, the remaining claims shall be subject to the provisions
	of Sections 443.251 and 443.301 [21A.251 and 21A.301].
	(3)  The receiver is entitled to deduct from collateral
	reasonable actual expenses incurred in fulfilling the receiver's
	responsibilities under this section. Any remaining expenses that
	are not deducted from the reimbursements are payable subject to
	Section 443.015 [21A.015].
	(aa)  Sections 21A.251(a) and (b), Insurance Code,
	redesignated as Sections 443.251(a) and (b), Insurance Code,
	respectively, by Subsection (a)(1)(F) of this section, are amended
	to conform to the additional changes made by Subsection (a)(1) of
	this section to read as follows:
	(a)  Except as provided by this subsection, proof of all
	claims must be filed with the liquidator in the form required by
	Section 443.252 [21A.252] on or before the last day for filing
	specified in the notice required under Section 443.155 [21A.155],
	which date may not be later than 18 months after entry of the order
	of liquidation, unless the receivership court, for good cause
	shown, extends the time, except that proofs of claims for cash
	surrender values or other investment values in life insurance and
	annuities and for any other policies insuring the lives of persons
	need not be filed unless the liquidator expressly so requires. The
	receivership court, only upon application of the liquidator, may
	allow alternative procedures and requirements for the filing of
	proofs of claim or for allowing or proving claims. Upon
	application, if the receivership court dispenses with the
	requirements of filing a proof of claim by a person or a class or
	group of persons, a proof of claim for the person, class, or group
	is deemed to have been filed for all purposes, except that the
	receivership court's waiver of proof of claim requirements does not
	impact guaranty association proof of claim filing requirements or
	coverage determinations to the extent the guaranty fund statute or
	filing requirements are inconsistent with the receivership court's
	waiver of proof.
	(b)  The liquidator shall permit a claimant that makes a late
	filing to share ratably in distributions, whether past or future,
	as if the claim were not filed late, to the extent that the payment
	will not prejudice the orderly administration of the liquidation,
	under the following circumstances:
	(1)  the eligibility to file a proof of claim was not
	known to the claimant, and the claimant filed a proof of claim not
	later than the 90th day after the date of first learning of the
	eligibility;
	(2)  a transfer to a creditor was avoided under Section
	443.202, 443.203, 443.204, or 443.206 [21A.202, 21A.203, 21A.204,
	or 21A.206], or was voluntarily surrendered under Section 443.208
	[21A.208], and the filing satisfies the conditions of Section
	443.208 [21A.208]; or
	(3)  the valuation under Section 443.260 [21A.260], of
	security held by a secured creditor shows a deficiency, and the
	claim for the deficiency is filed not later than the 30th day after
	the valuation.
	(bb)  Sections 21A.253(b), (d), (i), and (k), Insurance
	Code, redesignated as Sections 443.253(b), (d), (i), and (k),
	Insurance Code, respectively, by Subsection (a)(1)(F) of this
	section, are amended to conform to the additional changes made by
	Subsection (a)(1) of this section to read as follows:
	(b)  Pursuant to the review, the liquidator shall provide
	written notice of the claim determination by any means authorized
	by Section 443.007 [21A.007] to the claimant or the claimant's
	attorney and may provide notice to any reinsurer that is or may be
	liable in respect of the claim. The notice must set forth the
	amount of the claim allowed by the liquidator, if any, and the
	priority class of the claim as established in Section 443.301
	[21A.301].
	(d)  A claim that has not become mature as of the coverage
	termination date established under Section 443.201 [21A.201]
	because payment on the claim is not yet due may be allowed as if it
	were mature. A claim that is allowed under this subsection may be
	discounted to present value based upon a reasonable estimated date
	of the payment, if the liquidator determines that the present value
	of the payment is materially less than the amount of the payment.
	(i)  A claim that does not contain all the applicable
	information required by Section 443.252 [21A.252] need not be
	further reviewed or adjudicated, and may be denied or disallowed by
	the liquidator subject to the notice and objection procedures in
	this section.
	(k)  The liquidator is not required to process claims for any
	class until it appears reasonably likely that property will be
	available for a distribution to that class. If there are
	insufficient assets to justify processing all claims for any class
	listed in Section 443.301 [21A.301], the liquidator shall report
	the facts to the receivership court and make such recommendations
	as may be appropriate for handling the remainder of the claims.
	(cc)  Section 21A.254, Insurance Code, redesignated as
	Section 443.254, Insurance Code, by Subsection (a)(1)(F) of this
	section, is amended to conform to the additional changes made by
	Subsection (a)(1) of this section to read as follows:
	Sec. 443.254 [21A.254].  CLAIMS UNDER OCCURRENCE POLICIES,
	SURETY BONDS, AND SURETY UNDERTAKINGS.  (a)  Subject to the
	provisions of Section 443.253 [21A.253], any insured has the right
	to file a claim for the protection afforded under the insured's
	policy, regardless of whether a claim is known at the time of
	filing, if the policy is an occurrence policy.
	(b)  Subject to the provisions of Section 443.253 [21A.253],
	an obligee under a surety bond or surety undertaking has the right
	to file a claim for the protection afforded under the surety bond or
	surety undertaking issued by the insurer under which the obligee is
	the beneficiary, regardless of whether a claim is known at the time
	of filing.
	(c)  After a claim is filed under Subsection (a) or (b), at
	the time that a specific claim is made by or against the insured or
	by the obligee, the insured or the obligee shall supplement the
	claim, and the receiver shall treat the claim as a contingent or
	unliquidated claim under Section 443.255 [21A.255].
	(dd)  Sections 21A.255(a) and (c), Insurance Code,
	redesignated as Sections 443.255(a) and (c), Insurance Code,
	respectively, by Subsection (a)(1)(F) of this section, are amended
	to conform to the additional changes made by Subsection (a)(1) of
	this section to read as follows:
	(a)  A claim of an insured or third party may be allowed under
	Section 443.253 [21A.253], regardless of the fact that the claim
	was contingent or unliquidated, if any contingency is removed in
	accordance with Subsection (b) and the value of the claim is
	determined. For purposes of this section, a claim is contingent if:
	(1)  the accident, casualty, disaster, loss, event, or
	occurrence insured, reinsured, or bonded or reinsured against
	occurred on or before the date fixed under Section 443.151
	[21A.151]; and
	(2)  the act or event triggering the insurer's
	obligation to pay has not occurred as of the date fixed under
	Section 443.151 [21A.151].
	(c)  The liquidator may petition the receivership court to
	set a date before which all claims under this section are final. In
	addition to the notice requirements of Section 443.007 [21A.007],
	the liquidator shall give notice of the filing of the petition to
	all claimants with claims that remain contingent or unliquidated
	under this section.
	(ee)  Section 21A.256(c), Insurance Code, redesignated as
	Section 443.256(c), Insurance Code, by Subsection (a)(1)(F) of this
	section, is amended to conform to the additional changes made by
	Subsection (a)(1) of this section to read as follows:
	(c)  The liquidator may make recommendations to the
	receivership court for the allowance of an insured's claim after
	consideration of the probable outcome of any pending action against
	the insured on which the claim is based, the probable damages
	recoverable in the action, and the probable costs and expenses of
	defense. After allowance by the receivership court, the liquidator
	shall withhold any distribution payable on the claim, pending the
	outcome of litigation and negotiation between the insured and the
	third party. The liquidator may reconsider the claim as provided in
	Section 443.253(j) [21A.253(j)]. As claims against the insured are
	settled or barred, the insured or third party, as appropriate,
	shall be paid from the amount withheld the same percentage
	distribution as was paid on other claims of like priority, based on
	the lesser of the amount actually due from the insured by action or
	paid by agreement plus the reasonable costs and expense of defense,
	or the amount allowed on the claims by the receivership court.
	After all claims are settled or barred, any sum remaining from the
	amount withheld shall revert to the undistributed property of the
	insurer.
	(ff)  Section 21A.257(a), Insurance Code, redesignated as
	Section 443.257(a), Insurance Code, by Subsection (a)(1)(F) of this
	section, is amended to conform to the additional changes made by
	Subsection (a)(1) of this section to read as follows:
	(a)  When objections to the liquidator's proposed treatment
	of a claim are filed and the liquidator does not alter the
	determination of the claim as a result of the objections, the
	liquidator shall ask the receivership court for a hearing pursuant
	to Section 443.007 [21A.007].
	(gg)  Section 21A.258, Insurance Code, redesignated as
	Section 443.258, Insurance Code, by Subsection (a)(1)(F) of this
	section, is amended to conform to the additional changes made by
	Subsection (a)(1) of this section to read as follows:
	Sec. 443.258 [21A.258].  LIQUIDATOR'S RECOMMENDATIONS TO
	RECEIVERSHIP COURT.  The liquidator shall present to the
	receivership court, for approval, reports of claims settled or
	determined by the liquidator under Section 443.253 [21A.253]. The
	reports must be presented from time to time as determined by the
	liquidator and must include information identifying the claim and
	the amount and priority class of the claim.
	(hh)  Sections 21A.260(e) and (g), Insurance Code,
	redesignated as Sections 443.260(e) and (g), Insurance Code,
	respectively, by Subsection (a)(1)(F) of this section, are amended
	to conform to the additional changes made by Subsection (a)(1) of
	this section to read as follows:
	(e)  If collateral is insufficient to satisfy in full all
	potential claims against it under Subsections (c) and (g), the
	claims against the collateral must be paid on a pro rata basis, and
	an obligee or completion contractor under Subsection (c) has a
	claim, subject to allowance under Section 443.253 [21A.253], for
	any deficiency.
	(g)  To the extent that a guaranty association has made a
	payment relating to a claim against a surety bond, the guaranty
	association shall first be reimbursed for that payment and related
	expenses out of the available collateral or proceeds related to the
	surety bond. To the extent that the collateral is sufficient, the
	guaranty association shall be reimbursed 100 percent of its
	payment. If the collateral is insufficient to satisfy in full all
	potential claims against the collateral under Subsection (c) and
	this subsection, a guaranty association that has paid claims on the
	surety bond is entitled to a pro rata share of the available
	collateral in accordance with Subsection (e), and the guaranty
	association has claims against the general assets of the estate in
	accordance with Section 443.253 [21A.253] for any deficiency. Any
	payment made to a guaranty association under this subsection from
	collateral may not be deemed early access or otherwise deemed a
	distribution out of the general assets or property of the estate,
	and the guaranty association receiving payment shall subtract any
	payment from the collateral from the association's final claims
	against the estate.
	(ii)  Sections 21A.261(a) and (e), Insurance Code,
	redesignated as Sections 443.261(a) and (e), Insurance Code,
	respectively, by Subsection (a)(1)(F) of this section, are amended
	to conform to the additional changes made by Subsection (a)(1) of
	this section to read as follows:
	(a)  Notwithstanding any other provision of this chapter,
	including any other provision of this chapter permitting the
	modification of contracts, or other law of this state, a person may
	not be stayed or prohibited from exercising:
	(1)  a contractual right to terminate, liquidate, or
	close out any netting agreement or qualified financial contract
	with an insurer because of:
	(A)  the insolvency, financial condition, or
	default of the insurer at any time, provided that the right is
	enforceable under applicable law other than this chapter; or
	(B)  the commencement of a formal delinquency
	proceeding under this chapter;
	(2)  any right under a pledge, security, collateral, or
	guarantee agreement, or any other similar security arrangement or
	credit support document, relating to a netting agreement or
	qualified financial contract; or
	(3)  subject to any provision of Section 443.209(b)
	[21A.209(b)], any right to set off or net out any termination value,
	payment amount, or other transfer obligation arising under or in
	connection with a netting agreement or qualified financial contract
	where the counterparty or its guarantor is organized under the laws
	of the United States or a state or foreign jurisdiction approved by
	the Securities Valuation Office of the National Association of
	Insurance Commissioners as eligible for netting.
	(e)  Notwithstanding any other provision of this chapter, a
	receiver may not avoid a transfer of money or other property arising
	under or in connection with a netting agreement or qualified
	financial contract, or any pledge, security, or collateral or
	guarantee agreement or any other similar security arrangement or
	credit support document relating to a netting agreement or
	qualified financial contract, that is made before the commencement
	of a formal delinquency proceeding under this chapter. However, a
	transfer may be avoided under Section 443.205(a) [21A.205(a)] if
	the transfer was made with actual intent to hinder, delay, or
	defraud the insurer, a receiver appointed for the insurer, or
	existing or future creditors.
	(jj)  Section 21A.301, Insurance Code, redesignated as
	Section 443.301, Insurance Code, by Subsection (a)(1)(G) of this
	section, is amended to conform to the additional changes made by
	Subsection (a)(1) of this section and to the recodification and
	repeal of Section 2(3), Article 21.28-C, and Section 12, Article
	21.28-D, Insurance Code, by Chapter 727, Acts of the 79th
	Legislature, Regular Session, 2005, to read as follows:
	Sec. 443.301 [21A.301].  PRIORITY OF DISTRIBUTION. The
	priority of payment of distributions on unsecured claims must be in
	accordance with the order in which each class of claims is set forth
	in this section. Every claim in each class shall be paid in full, or
	adequate funds retained for their payment, before the members of
	the next class receive payment, and all claims within a class must
	be paid substantially the same percentage of the amount of the
	claim. Except as provided by Subsections (a)(2), (a)(3), (i), and
	(k), subclasses may not be established within a class. No claim by
	a shareholder, policyholder, or other creditor shall be permitted
	to circumvent the priority classes through the use of equitable
	remedies. The order of distribution of claims shall be:
	(a)  Class 1. (1) The costs and expenses of administration
	expressly approved or ratified by the liquidator, including the
	following:
	(A)  the actual and necessary costs of preserving
	or recovering the property of the insurer;
	(B)  reasonable compensation for all services
	rendered on behalf of the administrative supervisor or receiver;
	(C)  any necessary filing fees;
	(D)  the fees and mileage payable to witnesses;
	(E)  unsecured loans obtained by the receiver; and
	(F)  expenses, if any, approved by the
	rehabilitator of the insurer and incurred in the course of the
	rehabilitation that are unpaid at the time of the entry of the order
	of liquidation.
	(2)  The reasonable expenses of a guaranty association,
	including overhead, salaries and other general administrative
	expenses allocable to the receivership to include administrative
	and claims handling expenses and expenses in connection with
	arrangements for ongoing coverage, other than expenses incurred in
	the performance of duties under Section 462.002(3), 463.108,
	463.111, 463.113, 463.353, or 2602.113[, Section 2(3) of Article
	21.28-C, and Section 12 of Article 21.28-D] or similar duties under
	the statute governing a similar organization in another state. In
	the case of the Texas Property and Casualty Insurance Guaranty
	Association and other property and casualty guaranty associations,
	the expenses shall include loss adjustment expenses, including
	adjusting and other expenses and defense and cost containment
	expenses. In the event that there are insufficient assets to pay
	all of the costs and expenses of administration under Subsection
	(a)(1) and the expenses of a guaranty association, the costs and
	expenses under Subsection (a)(1) shall have priority over the
	expenses of a guaranty association. In this event, the expenses of
	a guaranty association shall be paid on a pro rata basis after the
	payment of costs and expenses under Subsection (a)(1) in full.
	(3)  For purposes of Subsection (a)(1)(E), any
	unsecured loan obtained by the receiver, unless by its terms it
	otherwise provides, has priority over all other costs of
	administration. Absent agreement to the contrary, all claims in
	this subclass share pro rata.
	(4)  Except as expressly approved by the receiver, any
	expenses arising from a duty to indemnify the directors, officers,
	or employees of the insurer are excluded from this class and, if
	allowed, are Class 5 claims.
	(b)  Class 2.  All claims under policies of insurance,
	including third-party claims, claims under nonassessable policies
	for unearned premium, claims of obligees and, subject to the
	discretion of the receiver, completion contractors under surety
	bonds and surety undertakings other than bail bonds, mortgage or
	financial guaranties, or other forms of insurance offering
	protection against investment risk, claims by principals under
	surety bonds and surety undertakings for wrongful dissipation of
	collateral by the insurer or its agents, and claims incurred during
	the extension of coverage provided for in Section 443.152
	[21A.152]. All other claims incurred in fulfilling the statutory
	obligations of a guaranty association not included in Class 1,
	including indemnity payments on covered claims and, in the case of
	the Life, Accident, Health, and Hospital Service Insurance Guaranty
	Association or another life and health guaranty association, all
	claims as a creditor of the impaired or insolvent insurer for all
	payments of and liabilities incurred on behalf of covered claims or
	covered obligations of the insurer and for the funds needed to
	reinsure those obligations with a solvent insurer. Notwithstanding
	any provision of this chapter, the following claims are excluded
	from Class 2 priority:
	(1)  obligations of the insolvent insurer arising out
	of reinsurance contracts;
	(2)  obligations, excluding unearned premium claims on
	policies other than reinsurance agreements, incurred after:
	(A)  the expiration date of the insurance policy;
	(B)  the policy has been replaced by the insured
	or canceled at the insured's request; or
	(C)  the policy has been canceled as provided by
	this chapter;
	(3)  obligations to insurers, insurance pools, or
	underwriting associations and their claims for contribution,
	indemnity, or subrogation, equitable or otherwise;
	(4)  any claim that is in excess of any applicable
	limits provided in the insurance policy issued by the insurer;
	(5)  any amount accrued as punitive or exemplary
	damages unless expressly covered under the terms of the policy;
	(6)  tort claims of any kind against the insurer and
	claims against the insurer for bad faith or wrongful settlement
	practices; and
	(7)  claims of the guaranty associations for
	assessments not paid by the insurer, which must be paid as claims in
	Class 5.
	(c)  Class 3.  Claims of the federal government not included
	in Class 3.
	(d)  Class 4.  Debts due employees for services or benefits
	to the extent that the debts do not exceed $5,000 or two months
	salary, whichever is the lesser, and represent payment for services
	performed within one year before the entry of the initial order of
	receivership. This priority is in lieu of any other similar
	priority that may be authorized by law as to wages or compensation
	of employees.
	(e)  Class 5.  Claims of other unsecured creditors not
	included in Classes 1 through 4, including claims under reinsurance
	contracts, claims of guaranty associations for assessments not paid
	by the insurer, and other claims excluded from Class 2.
	(f)  Class 6.  Claims of any state or local governments,
	except those specifically classified elsewhere in this section.
	Claims of attorneys for fees and expenses owed them by an insurer
	for services rendered in opposing a formal delinquency proceeding.
	In order to prove the claim, the claimant must show that the insurer
	that is the subject of the delinquency proceeding incurred the fees
	and expenses based on its best knowledge, information, and belief,
	formed after reasonable inquiry, indicating opposition was in the
	best interests of the insurer, was well grounded in fact, and was
	warranted by existing law or a good faith argument for the
	extension, modification, or reversal of existing law, and that
	opposition was not pursued for any improper purpose, such as to
	harass or to cause unnecessary delay or needless increase in the
	cost of the litigation.
	(g)  Class 7.  Claims of any state or local government for a
	penalty or forfeiture, but only to the extent of the pecuniary loss
	sustained from the act, transaction, or proceeding out of which the
	penalty or forfeiture arose, with reasonable and actual costs
	occasioned thereby. The balance of the claims must be treated as
	Class 9 claims under Subsection (i).
	(h)  Class 8.  Except as provided in Sections 443.251(b)
	[21A.251(b)] and (d), late filed claims that would otherwise be
	classified in Classes 2 through 7.
	(i)  Class 9.  Surplus notes, capital notes or contribution
	notes or similar obligations, premium refunds on assessable
	policies, and any other claims specifically assigned to this class.
	Claims in this class are subject to any subordination agreements
	related to other claims in this class that existed before the entry
	of the liquidation order.
	(j)  Class 10.  Interest on allowed claims of Classes 1
	through 9, according to the terms of a plan proposed by the
	liquidator and approved by the receivership court.
	(k)  Class 11.  Claims of shareholders or other owners
	arising out of their capacity as shareholders or other owners, or
	any other capacity, except as they may be qualified in Class 2, 5,
	or 10. Claims in this class are subject to any subordination
	agreements related to other claims in this class that existed
	before the entry of the liquidation order.
	(kk)  Section 21A.302(f), Insurance Code, redesignated as
	Section 443.302(f), Insurance Code, by Subsection (a)(1)(G) of this
	section, is amended to conform to the additional changes made by
	Subsection (a)(1) of this section to read as follows:
	(f)  Any claim payments made under Subsection (d) and any
	related expenses must be treated as early access payments under
	Section 443.303 [21A.303] to the guaranty association responsible
	for the claims.
	(ll)  Sections 21A.303(a), (b), (c), (e), (f), and (g),
	Insurance Code, redesignated as Sections 443.303(a), (b), (c), (e),
	(f), and (g), Insurance Code, respectively, by Subsection (a)(1)(G)
	of this section, are amended to conform to the additional changes
	made by Subsection (a)(1) of this section to read as follows:
	(a)  For purposes of this section, "distributable assets"
	means all general assets of the liquidation estate less:
	(1)  amounts reserved, to the extent necessary and
	appropriate, for the entire Section 443.301(a) [21A.301(a)]
	expenses of the liquidation through and after its closure; and
	(2)  to the extent necessary and appropriate, reserves
	for distributions on claims other than those of the guaranty
	associations falling within the priority classes of claims
	established in Section 443.301(c) [21A.301(c)].
	(b)  Early access payments to guaranty associations must be
	made as soon as possible after the entry of a liquidation order and
	as frequently as possible after the entry of the order, but at least
	annually if distributable assets are available to be distributed to
	the guaranty associations, and must be in amounts consistent with
	this section. Amounts advanced to an affected guaranty association
	pursuant to this section shall be accounted for as advances against
	distributions to be made under Section 443.302 [21A.302]. Where
	sufficient distributable assets are available, amounts advanced
	are not limited to the claims and expenses paid to date by the
	guaranty associations; however, the liquidator may not distribute
	distributable assets to the guaranty associations in excess of the
	anticipated entire claims of the guaranty associations falling
	within the priority classes of claims established in Sections
	443.301(b) [21A.301(b)] and (c).
	(c)  Within 120 days after the entry of an order of
	liquidation by the receivership court, and at least annually after
	the entry of the order, the liquidator shall apply to the
	receivership court for approval to make early access payments out
	of the general assets of the insurer to any guaranty associations
	having obligations arising in connection with the liquidation or
	shall report that there are no distributable assets at that time
	based on financial reporting as required in Section 443.016
	[21A.016]. The liquidator may apply to the receivership court for
	approval to make early access payments more frequently than
	annually based on additional information or the recovery of
	material assets.
	(e)  Notice of each application for early access payments, or
	of any report required pursuant to this section, must be given in
	accordance with Section 443.007 [21A.007] to the guaranty
	associations that may have obligations arising from the
	liquidation. Notwithstanding the provisions of Section 443.007
	[21A.007], the liquidator shall provide these guaranty
	associations with at least 30 days' actual notice of the filing of
	the application and with a complete copy of the application prior to
	any action by the receivership court. Any guaranty association
	that may have obligations arising in connection with the
	liquidation has:
	(1)  the right to request additional information from
	the liquidator, who may not unreasonably deny such request; and
	(2)  the right to object as provided by Section 443.007
	[21A.007] to any part of each application or to any report filed by
	the liquidator pursuant to this section.
	(f)  In each application regarding early access payments,
	the liquidator shall, based on the best information available to
	the liquidator at the time, provide, at a minimum, the following:
	(1)  to the extent necessary and appropriate, the
	amount reserved for the entire expenses of the liquidation through
	and after its closure and for distributions on claims falling
	within the priority classes of claims established in Sections
	443.301(b) [21A.301(b)] and (c);
	(2)  the computation of distributable assets and the
	amount and method of equitable allocation of early access payments
	to each of the guaranty associations; and
	(3)  the most recent financial information filed with
	the National Association of Insurance Commissioners by the
	liquidator.
	(g)  Each guaranty association that receives any payments
	pursuant to this section agrees, upon depositing the payment in any
	account to its benefit, to return to the liquidator any amount of
	these payments that may be required to pay claims of secured
	creditors and claims falling within the priority classes of claims
	established in Section 443.301(a) [21A.301(a)], (b), or (c). No
	bond may be required of any guaranty association.
	(mm)  Sections 21A.304(a), (b), and (d), Insurance Code,
	redesignated as Sections 443.304(a), (b), and (d), Insurance Code,
	respectively, by Subsection (a)(1)(G) of this section, are amended
	to conform to the additional changes made by Subsection (a)(1) of
	this section to read as follows:
	(a)  If any funds of the receivership estate remain unclaimed
	after the final distribution under Section 443.302 [21A.302], the
	funds must be placed in a segregated unclaimed funds account held by
	the commissioner. If the owner of any of the unclaimed funds
	presents proof of ownership satisfactory to the commissioner before
	the second anniversary of the date of the termination of the
	delinquency proceeding, the commissioner shall remit the funds to
	the owner. The interest earned on funds held in the unclaimed funds
	account may be used to pay any administrative costs related to the
	handling or return of unclaimed funds.
	(b)  If any amounts held in the unclaimed funds account
	remain unclaimed on or after the second anniversary of the date of
	the termination of the delinquency proceeding, the commissioner may
	file a motion for an order directing the disposition of the funds in
	the court in which the delinquency proceeding was pending. Any
	costs incurred in connection with the motion may be paid from the
	unclaimed funds account. The motion shall identify the name of the
	insurer, the names and last known addresses of the persons entitled
	to the unclaimed funds, if known, and the amount of the funds.
	Notice of the motion shall be given as directed by the court. Upon a
	finding by the court that the funds have not been claimed before the
	second anniversary of the date of the termination of the
	delinquency proceeding, the court shall order that any claims for
	unclaimed funds and any interest earned on the unclaimed funds that
	has not been expended under Subsection (a) are abandoned and that
	the funds must be disbursed under one of the following methods:
	(1)  the amounts may be deposited in the general
	receivership expense account under Subsection (c);
	(2)  the amounts may be transferred to the comptroller,
	and deposited into the general revenue fund; or
	(3)  the amounts may be used to reopen the receivership
	in accordance with Section 443.353 [21A.353] and be distributed to
	the known claimants with approved claims.
	(d)  Any advance to a receivership under Subsection (c)(2)
	may be treated as a claim under Section 443.301 [21A.301] as agreed
	at the time the advance is made or, in the absence of an agreement,
	in the priority determined to be appropriate by the court.
	(nn)  Section 21A.352, Insurance Code, redesignated as
	Section 443.352, Insurance Code, by Subsection (a)(1)(H) of this
	section, is amended to conform to the additional changes made by
	Subsection (a)(1) of this section to read as follows:
	Sec. 443.352 [21A.352].  TERMINATION OF LIQUIDATION
	PROCEEDINGS.  When all property justifying the expense of
	collection and distribution has been collected and distributed
	under this chapter, the liquidator shall apply to the receivership
	court for an order discharging the liquidator and terminating the
	proceeding. The receivership court may grant the application and
	make any other orders, including orders to transfer any remaining
	funds that are uneconomic to distribute, or pursuant to Section
	443.302(c) [21A.302(c)], assign any assets that remain
	unliquidated, including claims and causes of action, as may be
	deemed appropriate.
	(oo)  Section 21A.354(b), Insurance Code, redesignated as
	Section 443.354(b), Insurance Code, by Subsection (a)(1)(H) of this
	section, is amended to conform to the additional changes made by
	Subsection (a)(1) of this section to read as follows:
	(b)  If the receiver determines that any records should be
	maintained after the closing of the delinquency proceeding, the
	receiver may reserve property from the receivership estate for the
	maintenance of the records, and any amounts so retained are
	administrative expenses of the estate under Section 443.301(a)
	[21A.301(a)]. Any records retained pursuant to this subsection
	must be transferred to the custody of the commissioner, and the
	commissioner may retain or dispose of the records as appropriate,
	at the commissioner's discretion. Any records of a delinquent
	insurer that are transferred to the commissioner may not be
	considered records of the department for any purposes, and Chapter
	552, Government Code, does not apply to those records.
	(pp)  Sections 21A.401(a) and (d), Insurance Code,
	redesignated as Sections 443.401(a) and (d), Insurance Code,
	respectively, by Subsection (a)(1)(I) of this section, are amended
	to conform to the changes made by Subsection (a)(1) of this section
	and to the recodification and repeal of Section 17, Article
	21.28-C, and Section 18, Article 21.28-D, Insurance Code, by
	Chapter 727, Acts of the 79th Legislature, Regular Session, 2005,
	to read as follows:
	(a)  The commissioner may initiate an action against a
	foreign insurer pursuant to Section 443.051 [21A.051] on any of the
	grounds stated in that section or on the basis that:
	(1)  any of the foreign insurer's property has been
	sequestered, garnished, or seized by official action in its
	domiciliary state or in any other state;
	(2)  the foreign insurer's certificate of authority to
	do business in this state has been revoked or was never issued and
	there are residents of this state with unpaid claims or in-force
	policies; or
	(3)  initiation of the action is necessary to enforce a
	stay under Section 462.309, 463.404, or [17, Article 21.28-C,
	Section 18, Article 21.28-D, or Section] 2602.259.
	(d)  Notwithstanding Section 443.201(c) [21A.201(c)], the
	conservator shall hold and conserve the assets located in this
	state until the commissioner in the insurer's domiciliary state is
	appointed its receiver or until an order terminating conservation
	is entered under Subsection (g). Once a domiciliary receiver is
	appointed, the conservator shall turn over to the domiciliary
	receiver all property subject to an order under this section.
	(qq)  Sections 21A.402(a) and (c), Insurance Code,
	redesignated as Sections 443.402(a) and (c), Insurance Code,
	respectively, by Subsection (a)(1)(I) of this section, are amended
	to conform to the additional changes made by Subsection (a)(1) of
	this section to read as follows:
	(a)  A domiciliary receiver appointed in another state is
	vested by operation of law with title to, and may summarily take
	possession of, all property and records of the insurer in this
	state. Notwithstanding any other provision of law regarding
	special deposits, special deposits held in this state shall be,
	upon the entry of an order of liquidation with a finding of
	insolvency, distributed to the guaranty associations in this state
	as early access payments subject to Section 443.303 [21A.303], in
	relation to the lines of business for which the special deposits
	were made. The holder of any special deposit shall account to the
	domiciliary receiver for all distributions from the special deposit
	at the time of the distribution. The statutory provisions of
	another state and all orders entered by courts of competent
	jurisdiction in relation to the appointment of a domiciliary
	receiver of an insurer and any related proceedings in another state
	must be given full faith and credit in this state. For purposes of
	this section, "another state" means any state other than this
	state. This state shall treat any other state than this state as a
	reciprocal state.
	(c)  Except as provided in Subsection (a), the domiciliary
	receiver shall handle special deposits and special deposit claims
	in accordance with federal law and the statutes pursuant to which
	the special deposits are required. All amounts in excess of the
	estimated amount necessary to administer the special deposit and
	pay the unpaid special deposit claims are deemed general assets of
	the estate. If there is a deficiency in any special deposit so that
	the claims secured by the special deposit are not fully discharged
	from the deposit, the claimants may share in the general assets of
	the insurer to the extent of the deficiency at the same priority as
	other claimants in their class of priority under Section 443.301
	[21A.301], but the sharing must be deferred until the other
	claimants of their class have been paid percentages of their claims
	equal to the percentage paid from the special deposit. The intent
	of this provision is to equalize to this extent the advantage gained
	by the security provided by the special deposits.
	(rr)  Section 442.801, Insurance Code, redesignated as
	Section 444.001, Insurance Code, by Subsection (a)(2) of this
	section, is amended to conform to the repeal of Article 21.28,
	Insurance Code, and the enactment of Chapter 21A, Insurance Code,
	by Chapter 995, Acts of the 79th Legislature, Regular Session,
	2005, and to the changes made by Subsection (a)(1) of this section
	to read as follows:
	Sec. 444.001 [442.801].  REQUIRED CONTRACT PROVISION.  An
	agency contract entered into on or after August 27, 1973, by an
	insurer writing fire and casualty insurance in this state must
	contain, or shall be construed to contain, the following provision:
	Notwithstanding any other provision of this contract, the
	obligation of the agent to remit written premiums to the insurer
	shall be changed on the commencement of a delinquency proceeding as
	defined by Chapter 443 [442], Insurance Code, as amended. After the
	commencement of the delinquency proceeding, the obligation of the
	agent to remit premiums is limited to premiums earned before the
	cancellation date of insurance policies stated in the order of a
	court of competent jurisdiction under Chapter 443 [442], Insurance
	Code, canceling the policies. The agent does not owe and may not be
	required to remit to the insurer or to the receiver any premiums
	that are unearned as of the cancellation date stated in the order.
	(ss)  Section 442.803, Insurance Code, redesignated as
	Section 444.003, Insurance Code, by Subsection (a)(2) of this
	section, is amended to conform to the additional changes made by
	Subsection (a)(2) of this section to read as follows:
	Sec. 444.003 [442.803].  EFFECT OF CHAPTER [SUBCHAPTER] ON
	ACTION BY RECEIVER AGAINST AGENT.  This chapter [subchapter] does
	not prejudice a cause of action by the receiver against an agent to
	recover:
	(1)  unearned premiums that were not returned to
	policyholders; or
	(2)  earned premiums that were not promptly remitted to
	the receiver.
	(tt)  Section 442.804, Insurance Code, redesignated as
	Section 444.004, Insurance Code, by Subsection (a)(2) of this
	section, is amended to conform to the additional changes made by
	Subsection (a)(2) of this section to read as follows:
	Sec. 444.004 [442.804].  AGENT NOT RECEIVER'S AGENT.  This
	chapter [subchapter] does not render the agent an agent of the
	receiver for earned or unearned premiums.
	SECTION 3B.005.  (a)  Section 462.007(b), Insurance Code,
	is amended to conform to Section 2, Chapter 995, Acts of the 79th
	Legislature, Regular Session, 2005, 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, 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.
	(b)  Section 2, Chapter 995, Acts of the 79th Legislature,
	Regular Session, 2005, which  amended former Subsection (a),
	Section 3, Article 21.28-C, Insurance Code, is repealed.
	SECTION 3B.006.  (a)  Section 462.207, Insurance Code, is
	amended to conform to Section 3, Chapter 995, Acts of the 79th
	Legislature, Regular Session, 2005, to read as follows:
	Sec. 462.207.  CLAIMS NOT COVERED: AMOUNTS DUE CERTAIN
	ENTITIES.  (a)  Any amount directly or indirectly due any
	reinsurer, insurer, self-insurer, insurance pool, or underwriting
	association, as a subrogation recovery, reinsurance recovery,
	contribution, or indemnification, or otherwise, is not a covered
	claim.
	(b)  An impaired insurer's insured is not liable, and the
	reinsurer, insurer, self-insurer, insurance pool, or underwriting
	association is not entitled to sue or continue a suit against the
	insured, for a subrogation recovery, reinsurance recovery,
	contribution, [or] indemnification, or any other claim asserted
	directly or indirectly by a reinsurer, insurer, insurance pool, or
	underwriting association to the extent of the applicable liability
	limits of the insurance policy written and issued to the insured by
	the insolvent insurer.
	(b)  Section 3, Chapter 995, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Subdivision (8),
	Section 5, Article 21.28-C, Insurance Code, is repealed.
	SECTION 3B.007.  (a)  Section 462.211, Insurance Code, is
	amended to conform to Section 4, Chapter 995, Acts of the 79th
	Legislature, Regular Session, 2005, and Section 6.070, Chapter 265,
	Acts of the 79th Legislature, Regular Session, 2005, to read as
	follows:
	Sec. 462.211.  CLAIMS NOT COVERED:  LATE FILED CLAIMS.  (a)
	Notwithstanding any other provision of this chapter or any other
	law to the contrary, and subject to [except as provided by]
	Subsection (b), a claim that is filed with the association on a date
	that is later than 18 months after the date of the order of
	liquidation or that is unknown  and unreported as of the date is not
	a covered claim.
	(b)  This section does not apply to a claim for workers'
	compensation benefits governed by Title 5, Labor Code, and the
	applicable rules of the commissioner of workers' compensation
	[Texas Workers' Compensation Commission].
	(b)  Subchapter C, Chapter 462, Insurance Code, is amended to
	conform to Section 4, Chapter 995, Acts of the 79th Legislature,
	Regular Session, 2005, by adding Section 462.1121 to read as
	follows:
	Sec. 462.1121.  ACTION TO OBTAIN INFORMATION CONCERNING
	INSURER IN RECEIVERSHIP AUTHORIZED.  (a)  The association may bring
	an action against any third-party administrator, agent, attorney,
	or other representative of an insurer for which a receiver has been
	appointed to obtain custody and control of all information,
	including files, records, and electronic data, related to the
	insurer that is appropriate or necessary for the association, or a
	similar association in other states, to carry out its duties under
	this chapter or a similar law of another state. The association has
	the absolute right to obtain information under this section through
	emergency equitable relief, regardless of where the information is
	physically located.
	(b)  In bringing an action under this section, the
	association is not subject to any defense, possessory lien or other
	type of lien, or other legal or equitable ground for refusal to
	surrender the information that may be asserted against the receiver
	of the insurer.
	(c)  The association is entitled to an award of reasonable
	attorney's fees and costs incurred by the association in any action
	to obtain information under this section.
	(d)  The rights granted to the association under this section
	do not affect the receiver's title to information, and information
	obtained under this section remains the property of the receiver
	while in the custody of the association.
	(c)  The following are repealed:
	(1)  Section 4, Chapter 995, Acts of the 79th
	Legislature, Regular Session, 2005, which amended former Section 8,
	Article 21.28-C, Insurance Code, by amending Subsection (d) and
	adding Subsection (i); and
	(2)  Section 6.070, Chapter 265, Acts of the 79th
	Legislature, Regular Session, 2005, which amended former
	Subsection (d), Section 8, Article 21.28-C, Insurance Code.
	SECTION 3B.008.  (a)  Section 462.017(b), Insurance Code,
	is amended to conform to Section 5, Chapter 995, Acts of the 79th
	Legislature, Regular Session, 2005, 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.
	(b)  Section 5, Chapter 995, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Subsection (g), Section
	10, Article 21.28-C, Insurance Code, is repealed.
	SECTION 3B.009.  (a)  Sections 462.308(a) and (c),
	Insurance Code, are amended to conform to Section 6, Chapter 995,
	Acts of the 79th Legislature, Regular Session, 2005, 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 [under this chapter from the person on
	whose behalf the payment was made if the person is:
	[(1)]  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 [or]
	(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[:
	[(A)]  whose net worth on December 31 of the year
	preceding the date the insurer becomes an impaired insurer exceeds
	$50 million[; and
	[(B)  whose obligations under a liability policy
	or contract of insurance written, issued, and placed in force after
	January 1, 1992, are satisfied wholly or partly by payment made
	under this chapter].
	(c)  For purposes of Subsection (a)(2), an insured's net
	worth is deemed to include [includes] the aggregate net worth of the
	insured and of the insured's parent, subsidiary, and affiliated
	companies[,] computed on a consolidated basis.
	(b)  Section 6, Chapter 995, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Subsection (b), Section
	11, Article 21.28-C, Insurance Code, is repealed.
	SECTION 3B.010.  (a)  Section 462.212, Insurance Code, is
	amended to conform to Section 7, Chapter 995, Acts of the 79th
	Legislature, Regular Session, 2005, to read as follows:
	Sec. 462.212.  NET WORTH EXCLUSION.  (a)  Except for a
	workers' compensation claim governed by Title 5, Labor Code, a
	covered claim does not include, and the association is not liable
	for, any claim arising from an insurance policy of any [The
	association is not liable to pay a first-party claim of an] insured
	whose net worth on December 31 of the year preceding the date the
	insurer becomes an impaired insurer exceeds $50 million.
	(b)  For purposes of this section, an insured's net worth
	includes the aggregate net worth of the insured and of the insured's
	parent, subsidiary, and affiliated companies[,] computed on a
	consolidated basis.
	(c)  This section does not apply:
	(1)  to third-party claims against an insured that has:
	(A)  applied for or consented to the appointment
	of a receiver, trustee, or liquidator for all or a substantial part
	of the insurer's assets;
	(B)  filed a voluntary petition in bankruptcy; or
	(C)  filed a petition or an answer seeking a
	reorganization or arrangement with creditors or to take advantage
	of any insolvency law; or
	(2)  if an order, judgment, or decree is entered by a
	court of competent jurisdiction, on the application of a creditor,
	adjudicating the insured bankrupt or insolvent or approving a
	petition seeking reorganization of the insured or of all or a
	substantial part of its assets.
	(d)  In an instance described by Subsection (c), the
	association is entitled to assert a claim in the bankruptcy or
	receivership proceeding to recover the amount of any covered claim
	and costs of defense paid on behalf of the insured.
	(e)  The association may establish procedures for requesting
	financial information from an insured or claimant on a confidential
	basis for the purpose of applying sections concerning the net worth
	of first-party and third-party claimants, subject to any
	information requested under this subsection being shared with any
	other association similar to the association and with the
	liquidator for the impaired insurer on the same confidential basis.
	If the insured or claimant refuses to provide the requested
	financial information, the association requests an auditor's
	certification of that information, and the auditor's certification
	is available but not provided, the association may deem the net
	worth of the insured or claimant to be in excess of $50 million at
	the relevant time.
	(f)  In any lawsuit contesting the applicability of Section
	462.308 or this section when the insured or claimant has declined to
	provide financial information under the procedure provided in the
	plan of operation under Section 462.103, the insured or claimant
	bears the burden of proof concerning its net worth at the relevant
	time. If the insured or claimant fails to prove that its net worth
	at the relevant time was less than the applicable amount, the court
	shall award the association its full costs, expenses, and
	reasonable attorney's fees in contesting the claim  [This section
	does not exclude the payment of a covered claim for workers'
	compensation benefits otherwise payable under this chapter].
	(b)  Section 7, Chapter 995, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Section 11A, Article
	21.28-C, Insurance Code, is repealed.
	SECTION 3B.011.  (a)  Sections 462.309(c) and (e),
	Insurance Code, are amended to conform to Section 8, Chapter 995,
	Acts of the 79th Legislature, Regular Session, 2005, to read as
	follows:
	(c)  A deadline imposed under the Texas Rules of Civil
	Procedure or the Texas Rules of Appellate Procedure is tolled
	during the stay.  Statutes of limitation or repose are not tolled
	during the stay, and any action filed during the stay is stayed upon
	the filing of the action.
	(e)  The commissioner may bring an ancillary conservation
	[delinquency] proceeding under Section 443.401 [Sections 442.751,
	442.752, and 442.754] for the [limited] purpose of determining the
	application, enforcement, and extension of the stay to an impaired
	insurer that is not domiciled in this state.
	(b)  Section 8, Chapter 995, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Subsection (a), Section
	17, Article 21.28-C, Insurance Code, is repealed.
	SECTION 3B.012.  (a)  The heading to Chapter 463, Insurance
	Code, is amended to conform to Section 9, Chapter 753, Acts of the
	79th Legislature, Regular Session, 2005, to read as follows:
	CHAPTER 463. TEXAS LIFE, ACCIDENT, HEALTH, AND HOSPITAL SERVICE
	INSURANCE GUARANTY ASSOCIATION
	(b)  Section 463.001, Insurance Code, is amended to conform
	to Section 9, Chapter 753, Acts of the 79th Legislature, Regular
	Session, 2005, to read as follows:
	Sec.463.001.SHORT TITLE.  This chapter may be cited as
	the Texas Life, Accident, Health, and Hospital Service Insurance
	Guaranty Association Act.
	SECTION 3B.013.  (a)  Section 463.003, Insurance Code, is
	amended to conform to Sections 2 and 3, Chapter 753, Acts of the
	79th Legislature, Regular Session, 2005, and to more closely
	conform to the source law from which the section was derived, to
	read as follows:
	Sec.463.003.GENERAL DEFINITIONS.  In this chapter:
	(1)  "Association" means the Texas Life, Accident,
	Health, and Hospital Service Insurance Guaranty Association.
	(1-a)  "Benefit plan" means a specific employee, union,
	or association of natural persons benefit plan.
	(2)  "Board" means the board of directors of the
	association.
	(3)  "Contractual obligation" means an obligation
	under a policy or contract or certificate under a group policy or
	contract, or part of a policy or contract or certificate, for which
	coverage is provided under Subchapter E.
	(4)  "Covered policy" means a policy or contract, or
	portion of a policy or contract, with respect to which this chapter
	provides coverage as determined under Subchapter E.
	(5)  "Impaired insurer" means a member insurer that is
	designated an "impaired insurer" by the commissioner and is:
	(A)  [is] placed by a court in this state or
	another state under an order of supervision, liquidation,
	rehabilitation, or conservation [under Chapter 441 or 442 and is
	designated by the commissioner as an impaired insurer]; [or]
	(B)  placed under an order of liquidation or
	rehabilitation under Chapter 443; or
	(C)  placed under an order of supervision or
	conservation by the commissioner under Chapter 441 [is determined
	in good faith by the commissioner to be unable or potentially unable
	to fulfill the insurer's contractual obligations].
	(6)  "Insolvent insurer" means a member insurer that[:
	[(A)] has been placed under an order of
	liquidation with a finding of insolvency by a court in this state or
	another state [a minimum free surplus, if a mutual insurance
	company, or required capital, if a stock insurance company, that is
	impaired to an extent prohibited by law; and
	[(B)  the commissioner designates as an insolvent
	insurer].
	(7)  "Member insurer" means an insurer that is required
	to participate in the association under Section 463.052.
	(7-a)  "Owner" means the owner of a policy or contract
	and "policy owner" and "contract owner" mean the person who is
	identified as the legal owner under the terms of the policy or
	contract or who is otherwise vested with legal title to the policy
	or contract through a valid assignment completed in accordance with
	the terms of the policy or contract and is properly recorded as the
	owner on the books of the insurer. The terms "owner," "contract
	owner," and "policy owner" do not include persons with a mere
	beneficial interest in a policy or contract.
	(8)  "Person" means an individual, corporation,
	limited liability company, partnership, association, governmental
	body or entity, or voluntary organization.
	(8-a)  "Plan sponsor" means:
	(A)  the employer in the case of a benefit plan
	established or maintained by a single employer;
	(B)  the employee organization in the case of a
	benefit plan established or maintained by an employee organization;
	or
	(C)  in a case of a benefit plan established or
	maintained by two or more employers or jointly by one or more
	employers and one or more employee organizations, the association,
	committee, joint board of trustees, or other similar group of
	representatives of the parties who establish or maintain the
	benefit plan.
	(9)  "Premium" means an amount received on a covered
	policy, less any premium, consideration, or deposit returned on the
	policy, and any dividend or experience credit on the policy.  The
	term does not include:
	(A)  an amount received for a policy or contract
	or part of a policy or contract for which coverage is not provided
	under Section 463.202, except that assessable premiums may not be
	reduced because of:
	(i)  an interest limitation provided by
	Section 463.203(b)(3); or
	(ii)  a limitation provided by Section
	463.204 with respect to a single individual, participant,
	annuitant, or contract owner [holder];
	(B)  premiums in excess of $5 million on an
	unallocated annuity contract not issued under a governmental
	benefit  [retirement] plan established under Section 401, 403(b),
	or 457, Internal Revenue Code of 1986; [or]
	(C)  premiums received from the state treasury or
	the United States treasury for insurance for which this state or the
	United States contracts to:
	(i)  provide welfare benefits to designated
	welfare recipients; or
	(ii)  implement Title 2, Human Resources
	Code, or the Social Security Act (42 U.S.C. Section 301 et seq.); or
	(D)  premiums in excess of $5 million with respect
	to multiple nongroup policies of life insurance owned by one owner,
	regardless of whether the policy owner is an individual, firm,
	corporation, or other person and regardless of whether the persons
	insured are officers, managers, employees, or other persons,
	regardless of the number of policies or contracts held by the owner.
	(10)  "Resident" means a person who resides in this
	state on the earlier of the date a member insurer becomes an
	impaired insurer or the date of entry of a court order that
	determines a member insurer to be an impaired insurer or the date of
	entry of a court order that determines a member insurer to be an
	insolvent insurer and to whom the [at the time a] member insurer
	[that] owes a contractual obligation [to the person is determined
	to be impaired or insolvent]. For the purposes of this subdivision:
	(A)  a person is considered to be a resident of
	only one state; [and]
	(B)  a person other than an individual is
	considered to be a resident of the state in which the person's
	principal place of business is located; and
	(C)  a United States citizen who is either a
	resident of a foreign country or a resident of a United States
	possession, territory, or protectorate that does not have an
	association similar to the association created by this chapter is
	considered a resident of the state of domicile of the insurer that
	issued the policy or contract.
	(10-a)  "Structured settlement annuity" means an
	annuity purchased to fund periodic payments for a plaintiff or
	other claimant in payment for or with respect to personal injury
	suffered by the plaintiff or other claimant.
	(11)  "Supplemental contract" means a written [an]
	agreement for the distribution of policy or contract proceeds.
	(12)  "Unallocated annuity contract" means an annuity
	contract or group annuity certificate that is not issued to and
	owned by an individual, except to the extent of any annuity benefits
	guaranteed to an individual by an insurer under the contract or
	certificate.
	(b)  Subchapter A, Chapter 463, Insurance Code, is amended to
	conform to Section 3, Chapter 753, Acts of the 79th Legislature,
	Regular Session, 2005, by adding Section 463.0031 to read as
	follows:
	Sec. 463.0031.  DEFINITION OF PRINCIPAL PLACE OF BUSINESS OF
	PLAN SPONSOR OR OTHER PERSON.  (a)  Except as otherwise provided by
	this section, in this chapter, the "principal place of business" of
	a plan sponsor or a person other than an individual means the single
	state in which the individuals who establish policy for the
	direction, control, and coordination of the operations of the plan
	sponsor or person as a whole primarily exercise that function, as
	determined by the association in its reasonable judgment by
	considering the following factors:
	(1)  the state in which the primary executive and
	administrative headquarters of the plan sponsor or person is
	located;
	(2)  the state in which the principal office of the
	chief executive officer of the plan sponsor or person is located;
	(3)  the state in which the board of directors, or
	similar governing person or persons, of the plan sponsor or person
	conduct the majority of their meetings;
	(4)  the state in which the executive or management
	committee of the board of directors, or similar governing person or
	persons, of the plan sponsor or person conduct the majority of their
	meetings;
	(5)  the state from which the management of the overall
	operations of the plan sponsor or person is directed; and
	(6)  in the case of a benefit plan sponsored by
	affiliated companies comprising a consolidated corporation, the
	state in which the holding company or controlling affiliate has its
	principal place of business as determined using the factors
	described by Subdivisions (1)-(5).
	(b)  In the case of a plan sponsor, if more than 50 percent of
	the participants in the benefit plan are employed in a single state,
	that state is the principal place of business of the plan sponsor.
	(c)  The principal place of business of a plan sponsor of a
	benefit plan described in Section 463.003(8-a)(C) is the principal
	place of business of the association, committee, joint board of
	trustees, or other similar group of representatives of the parties
	who establish or maintain the benefit plan that, in lieu of a
	specific or clear designation of a principal place of business,
	shall be deemed to be the principal place of business of the
	employer or employee organization that has the largest investment
	in that benefit plan.
	(c)  Section 463.052(b), Insurance Code, is amended to
	conform to Section 2, Chapter 753, Acts of the 79th Legislature,
	Regular Session, 2005, to read as follows:
	(b)  The following do not participate as member insurers:
	(1)  a health maintenance organization;
	(2)  a fraternal benefit society;
	(3)  a mandatory state pooling plan;
	(4)  a reciprocal or interinsurance exchange; [and]
	(5)  an organization which has a certificate of
	authority or license limited to the issuance of charitable gift
	annuities, as defined by this code or rules adopted by the
	commissioner; and
	(6)  an entity similar to an entity described by
	Subdivision (1), (2), (3), [or] (4), or (5).
	(d)  Section 463.204, Insurance Code, is amended to conform
	to Section 2, Chapter 753, Acts of the 79th Legislature, Regular
	Session, 2005, to read as follows:
	Sec. 463.204.  OBLIGATIONS EXCLUDED.  A contractual
	obligation does not include:
	(1)  death benefits in an amount in excess of $300,000
	or a net cash surrender or net cash withdrawal value in an amount in
	excess of $100,000 [in the aggregate] under one or more policies on
	a single life;
	(2)  an amount in excess of:
	(A)  $100,000 in the present value [aggregate]
	under one or more annuity contracts issued with respect to a single
	life under [to the same holder of] individual annuity policies or
	[to the same annuitant or participant under] group annuity
	policies; or
	(B)  $5 million in unallocated annuity contract
	benefits with respect to a single contract owner [holder]
	regardless of the number of those contracts;
	(3)  an amount in excess of the following amounts,
	including any net cash surrender or cash withdrawal values,
	[$200,000 in the aggregate] under one or more accident, health,
	[or] accident and health, or long-term care insurance policies on a
	single life:
	(A)  $500,000 for basic hospital,
	medical-surgical, or major medical insurance, as those terms are
	defined by this code or rules adopted by the commissioner;
	(B)  $300,000 for disability and long-term care
	insurance, as those terms are defined by this code or rules adopted
	by the commissioner; or
	(C)  $200,000 for coverages that are not defined
	as basic hospital, medical-surgical, major medical, disability, or
	long-term care insurance;
	(4)  an amount in excess of $100,000 in present value
	annuity benefits, in the aggregate, including any net cash
	surrender and net cash withdrawal values, with respect to each
	individual participating in a governmental retirement benefit plan
	established under Section 401, 403(b), or 457, Internal Revenue
	Code of 1986 (26 U.S.C. Sections 401, 403(b), and 457), covered by
	an unallocated annuity contract or the beneficiary or beneficiaries
	of the individual if the individual is deceased;
	(5)  an amount in excess of $100,000 in present value
	annuity benefits, in the aggregate, including any net cash
	surrender and net cash withdrawal values, with respect to each
	payee of a structured settlement annuity or the beneficiary or
	beneficiaries of the payee if the payee is deceased;
	(6)  aggregate benefits in an amount in excess of
	$300,000 with respect to a single life, except with respect to:
	(A)  benefits paid under basic hospital,
	medical-surgical, or major medical insurance policies, described
	by Subdivision (3)(A), in which case the aggregate benefits are
	$500,000; and
	(B)  benefits paid to one owner of multiple
	nongroup policies of life insurance, whether the policy owner is an
	individual, firm, corporation, or other person, and whether the
	persons insured are officers, managers, employees, or other
	persons, in which case the maximum benefits are $5 million
	regardless of the number of policies and contracts held by the
	owner;
	(7)  an amount in excess of $5 million in benefits, with
	respect to either one plan sponsor whose plans own directly or in
	trust one or more unallocated annuity contracts not included in
	Subdivision (4) irrespective of the number of contracts with
	respect to the contract owner or plan sponsor or one contract owner
	provided coverage under Section 463.201(a)(3)(B), except that, if
	one or more unallocated annuity contracts are covered contracts
	under this chapter and are owned by a trust or other entity for the
	benefit of two or more plan sponsors, coverage shall be afforded by
	the association if the largest interest in the trust or entity
	owning the contract or contracts is held by a plan sponsor whose
	principal place of business is in this state, and in no event shall
	the association be obligated to cover more than $5 million in
	benefits with respect to all these unallocated contracts;
	(8)  any contractual obligations of the insolvent or
	impaired insurer under a covered policy or contract that do not
	materially affect the economic value of economic benefits of the
	covered policy or contract; or
	(9) [(4)]  punitive, exemplary, extracontractual, or
	bad faith damages, regardless of whether the damages are:
	(A)  agreed to or assumed by an insurer or
	insured; or
	(B)  imposed by a court.
	(e)  The following are repealed:
	(1)  Section 2, Chapter 753, Acts of the 79th
	Legislature, Regular Session, 2005, which amended former Section 5,
	Article 21.28-D, Insurance Code, by amending Subdivisions (2), (3),
	(4), (5), (6), (7), (9), (10), (11), and (12) and adding
	Subdivisions (2-a), (8-a), (9-a), and (11-a); and
	(2)  Section 3, Chapter 753, Acts of the 79th
	Legislature, Regular Session, 2005, which added Section 5A to
	former Article 21.28-D, Insurance Code.
	SECTION 3B.014.  (a)  Section 463.051(a), Insurance Code,
	is amended to conform to Section 4, Chapter 753, Acts of the 79th
	Legislature, Regular Session, 2005, to read as follows:
	(a)  The Texas Life, Accident, Health, and Hospital Service
	Insurance Guaranty Association is a nonprofit legal entity existing
	to pay benefits and continue coverage as provided by this chapter.
	(b)  Section 4, Chapter 753, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Subsection (a), Section
	6, Article 21.28-D, Insurance Code, is repealed.
	SECTION 3B.015.  (a)  Section 463.101(a), Insurance Code,
	is amended to conform to Section 5, Chapter 753, Acts of the 79th
	Legislature, Regular Session, 2005, to read as follows:
	(a)  The association may:
	(1)  enter into contracts as necessary or proper to
	carry out this chapter and the purposes of this chapter;
	(2)  sue or be sued, including taking:
	(A)  necessary or proper legal action to:
	(i)  recover an unpaid assessment under
	Subchapter D; or
	(ii)  settle a claim or potential claim
	against the association; or
	(B)  necessary legal action to avoid payment of an
	improper claim;
	(3)  borrow money to effect the purposes of this
	chapter;
	(4)  exercise, for the purposes of this chapter and to
	the extent approved by the commissioner, the powers of a domestic
	life, accident, or health insurance company or a group hospital
	service corporation, except that the association may not issue an
	insurance policy or annuity contract other than to perform the
	association's obligations under this chapter; [and]
	(5)  to further the association's purposes, exercise
	the association's powers, and perform the association's duties,
	join an organization of one or more state associations that have
	similar purposes;
	(6)  request information from a person seeking coverage
	from the association in determining its obligations under this
	chapter with respect to the person, and the person shall promptly
	comply with the request; and
	(7)  take any other necessary or appropriate action to
	discharge the association's duties and obligations under this
	chapter or to exercise the association's powers under this chapter.
	(b)  Subchapter E, Chapter 463, Insurance Code, is amended to
	conform to Section 5, Chapter 753, Acts of the 79th Legislature,
	Regular Session, 2005, by adding Section 463.206 to read as
	follows:
	Sec. 463.206.  ASSOCIATION DISCRETION IN MANNER OF PROVIDING
	BENEFITS.  (a)  The board shall have discretion and may exercise
	reasonable business judgment to determine the means by which the
	association is to provide the benefits of this chapter in an
	economical and efficient manner.
	(b)  If the association arranges or offers to provide the
	benefits of this chapter to a covered person under a plan or
	arrangement that fulfills the association's obligations under this
	chapter, the person is not entitled to benefits from the
	association in addition to or other than those provided under the
	plan or arrangement.
	(c)  Section 463.259, Insurance Code, is amended to conform
	to Section 5, Chapter 753, Acts of the 79th Legislature, Regular
	Session, 2005, to read as follows:
	Sec. 463.259.  PREMIUM DUE DURING RECEIVERSHIP. After a
	court enters an order of receivership with respect to an impaired or
	insolvent insurer, a premium due for coverage issued by the insurer
	is owned by and is payable at the direction of the association. The
	association is liable for an unearned premium owed to a policy or
	contract owner that arises after the court enters the order.
	(d)  Section 463.261, Insurance Code, is amended to conform
	to Section 5, Chapter 753, Acts of the 79th Legislature, Regular
	Session, 2005, by adding Subsections (d) and (e) to read as follows:
	(d)  The rights of the association under Subsection (c)
	include, in the case of a structured settlement annuity, any rights
	of the owner, beneficiary, or payee of the annuity, to the extent of
	benefits received under this chapter, against any person originally
	or by succession responsible for the losses arising from the
	personal injury relating to the annuity or payment for the annuity,
	other than a person responsible solely by reason of serving as an
	assignee in respect of a qualified assignment under Section 130,
	Internal Revenue Code of 1986 (26 U.S.C. Section 130).
	(e)  If a provision of this section is invalid or ineffective
	with respect to any person or claim for any reason, the amount
	payable by the association with respect to the related covered
	obligations is reduced by the amount realized by any other person
	with respect to the person or claim that is attributable to the
	policies, or portion of the policies, covered by the association.
	If the association has provided benefits with respect to a covered
	obligation and a person recovers amounts as to which the
	association has rights described in this section, the person shall
	pay to the association the portion of the recovery attributable to
	the policies, or portion of the policies, covered by the
	association.
	(e)  Subchapter F, Chapter 463, Insurance Code, is amended to
	conform to Section 5, Chapter 753, Acts of the 79th Legislature,
	Regular Session, 2005, by adding Section 463.263 to read as
	follows:
	Sec. 463.263.  DEPOSIT TO BE PAID TO ASSOCIATION.  (a)  A
	deposit in this state, held under law or required by the
	commissioner for the benefit of creditors, including policy owners,
	that is not turned over to the domiciliary receiver on the entry of
	a final order of liquidation or order approving a rehabilitation
	plan of an insurer domiciled in this state or a reciprocal state in
	accordance with Section 443.402 shall be promptly paid to the
	association.
	(b)  The association is entitled to retain a portion of any
	amount paid to the association under this section equal to the
	percentage determined by dividing the aggregate amount of policy
	owners' claims related to that insolvency for which the association
	has provided statutory benefits by the aggregate amount of all
	policy owners' claims in this state related to that insolvency and
	shall remit to the domiciliary receiver the amount paid to the
	association and retained under this section.
	(c)  The amount paid to the association under this section,
	less the amount retained by the association under this section, is
	treated as a distribution of estate assets under Section 443.303 or
	the similar law of the state of domicile of the impaired or
	insolvent insurer.
	(f)  Section 5, Chapter 753, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Section 8, Article
	21.28-D, Insurance Code, by amending Subsections (e), (n), and (v)
	and adding Subsections (u-1), (u-2), (u-3), (x), and (y), is
	repealed.
	SECTION 3B.016.  (a)  Section 463.151, Insurance Code, is
	amended to conform to Section 6, Chapter 753, Acts of the 79th
	Legislature, Regular Session, 2005, by amending Subsection (a) and
	adding Subsection (a-1) to read as follows:
	(a)  The association shall assess member insurers,
	separately for each account under Section 463.105, in the amounts
	and at the times the board determines necessary to provide money for
	the association to exercise the association's powers, perform the
	association's duties, and carry out the purposes of this chapter.
	The association may not authorize and call [make] an assessment to
	meet the requirements of the association with respect to an
	impaired or insolvent insurer until the assessment is necessary to
	carry out the purposes of this chapter. The board shall classify
	assessments under Section 463.152 and determine the amount of
	assessments with reasonable accuracy, recognizing that exact
	determinations may not always be possible.
	(a-1)  The association shall notify each member insurer of
	its anticipated pro rata share of an authorized assessment not yet
	called not later than the 180th day after the date the assessment is
	authorized.
	(b)  Section 463.152, Insurance Code, is amended to conform
	to Section 6, Chapter 753, Acts of the 79th Legislature, Regular
	Session, 2005, by amending Subsections (b) and (c) and adding
	Subsection (d) to read as follows:
	(b)  Class A assessments are authorized and called [made] to
	pay:
	(1)  the association's administrative costs;
	(2)  administrative expenses that:
	(A)  are properly incurred under this chapter; and
	(B)  relate to an unauthorized insurer or to an
	entity that is not a member insurer; and
	(3)  other general expenses not related to a particular
	impaired or insolvent insurer.
	(c)  Class B assessments are authorized and called [made] to
	the extent necessary for the association to carry out the
	association's powers and duties under Sections 463.101, 463.103,
	463.109, and 463.111(c) and Subchapter F with regard to an impaired
	or insolvent insurer.
	(d)  For purposes of this section, an assessment is
	authorized at the time a resolution by the board is passed under
	which an assessment will be called immediately or in the future from
	member insurers for a specified amount and an assessment is called
	at the time a notice has been issued by the association to member
	insurers requiring that an authorized assessment be paid within a
	period stated in the notice. An authorized assessment becomes a
	called assessment at the time notice is mailed by the association to
	member insurers.
	(c)  Sections 463.153(b) and (c), Insurance Code, are
	amended to conform to Section 6, Chapter 753, Acts of the 79th
	Legislature, Regular Session, 2005, to read as follows:
	(b)  Class B assessments against a member insurer for each
	account under Section 463.105 shall be authorized and called [made]
	in the proportion that the premiums received on [all] business in
	this state by the insurer on policies or contracts covered by each
	account for the three most recent calendar years for which
	information is available preceding the year in which the insurer
	became impaired or insolvent bear to [the] premiums received on
	[all] business in this state for those calendar years by all
	assessed member insurers.  The amount of a Class B assessment shall
	be allocated [divided] among the separate accounts in accordance
	with an allocation formula that may be based on:
	(1)  the premiums or reserves of the impaired or
	insolvent insurer; or
	(2)  any other standard deemed by the board in the
	board's sole discretion as being fair and reasonable under the
	circumstances [the proportion that the premiums on the policies
	covered by each account were received by the impaired or insolvent
	insurer from all covered policies during the year preceding the
	date of the impairment, as shown in the annual statements for the
	year preceding the date of the assessment].
	(c)  The total amount of assessments on a member insurer for
	each account under Section 463.105 may not exceed two [one] percent
	of the insurer's premiums on the policies covered by the account
	during the three [in a single] calendar years preceding the year in
	which the insurer became an impaired or insolvent insurer.  If two
	or more assessments are authorized in a calendar year with respect
	to insurers that become impaired or insolvent in different calendar
	years, the average annual premiums for purposes of the aggregate
	assessment percentage limitation described by this subsection
	shall be equal to the higher of the three-year average annual
	premiums for the applicable subaccount or account as computed in
	accordance with this section [year]. If the maximum assessment and
	the other assets of the association do not provide in a year an
	amount sufficient to carry out the association's responsibilities,
	the association shall make necessary additional assessments as soon
	as this chapter permits.
	(d)  Section 6, Chapter 753, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Section 9, Article
	21.28-D, Insurance Code, by amending Subsections (b), (d), (f),
	(g), and (h) and adding Subsection (b-1), is repealed.
	SECTION 3B.017.  (a)  Section 463.161(a), Insurance Code, is
	amended to conform to Section 7, Chapter 753, Acts of the 79th
	Legislature, Regular Session, 2005, to read as follows:
	(a)  A member insurer is entitled to show as an admitted
	asset a certificate of contribution in the form the commissioner
	approves under Section 463.156. Unless the commissioner requires a
	longer period, the certificate may be shown at:
	(1)  for the calendar year of issuance, an amount equal
	to the certificate's original face value approved by the
	commissioner; and
	(2)  beginning with the year following the calendar
	year of issuance, an amount equal to the certificate's original
	face value, reduced by 20 [10] percent a year for each year after
	the year of issuance, for a period of five [10] years.
	(b)  Section 7, Chapter 753, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Subsection (a), Section
	(13), Article 21.28-D, Insurance Code, is repealed.
	SECTION 3B.018.  (a)  Section 463.201, Insurance Code, is
	amended to conform to Section 1, Chapter 753, Acts of the 79th
	Legislature, Regular Session, 2005, and to conform more closely to
	the source law from which the section was derived to read as
	follows:
	Sec. 463.201.  INSUREDS COVERED. (a) Subject to Subsections
	(b) and (c), this [This] chapter provides coverage for a policy or
	contract described by Section 463.202 to a person who is:
	(1)  a person, other than a certificate holder under a
	group policy or contract who is not a resident, who is a
	beneficiary, assignee, or payee of a person described by
	Subdivision (2);
	(2)  a person who is [subject to Subsection (b),] an
	owner of or certificate holder under a policy or contract specified
	by Section 463.202, other than [or a contract holder under] an
	unallocated annuity contract or structured settlement annuity, and
	who is:
	(A)  a resident; or
	(B)  not a resident, but only under all of the
	following conditions:
	(i)  the insurers that issued the policies
	or contracts are domiciled in this state;
	(ii)  the state in which the person resides
	has an association similar to the association; and
	(iii)  the person is not eligible for
	coverage by an association in any other state because the insurer
	was not licensed in the state at the time specified in that state's
	guaranty association law;
	(3)  a person who is the owner of an unallocated annuity
	contract issued to or in connection with:
	(A)  a benefit plan whose plan sponsor has the
	sponsor's principal place of business in this state; or
	(B)  a government lottery, if the owner is a
	resident; or
	(4)  a person who is the payee under a structured
	settlement annuity, or beneficiary of the payee if the payee is
	deceased, if:
	(A)  the payee is a resident, regardless of where
	the contract owner resides;
	(B)  the payee is not a resident, the contract
	owner of the structured settlement annuity is a resident, and the
	payee is not eligible for coverage by the association in the state
	in which the payee resides; or
	(C)  the payee and the contract owner are not
	residents, the insurer that issued the structured settlement
	annuity is domiciled in this state, the state in which the contract
	owner resides has an association similar to the association, and
	neither the payee or, if applicable, the payee's beneficiary, nor
	the contract owner is eligible for coverage by the association in
	the state in which the payee or contract owner resides [(2) a
	beneficiary, assignee, or payee, other than a certificate holder
	under a group policy or contract who is not a resident, of a person
	described by Subdivision (1)].
	(b)  This chapter does not provide coverage to:
	(1)  a person who is a payee or the beneficiary of a
	payee with respect to a contract the owner of which is a resident of
	this state, if the payee or the payee's beneficiary is afforded any
	coverage by the association of another state; or
	(2)  a person otherwise described by Subsection (a)(3),
	if any coverage is provided by the association of another state to
	that person.
	(c)  This chapter is intended to provide coverage to persons
	who are residents of this state, and in those limited circumstances
	as described in this chapter, to nonresidents. In order to avoid
	duplicate coverage, if a person who would otherwise receive
	coverage under this chapter is provided coverage under the laws of
	any other state, the person may not be provided coverage under this
	chapter. In determining the application of the provisions of this
	subsection in situations in which a person could be covered by the
	association of more than one state, whether as an owner, payee,
	beneficiary, or assignee, this chapter shall be construed in
	conjunction with other state laws to result in coverage by only one
	association.  [Coverage under Subsection (a)(1) applies to a person
	who is not a resident, only if:
	[(1)  the insurer that issued the policy or contract is
	domiciled in this state;
	[(2)  the insurer never held a certificate of authority
	in the state in which the person resides;
	[(3)  the state in which the person resides has an
	association similar to the association; and
	[(4)  the person is not eligible for coverage by the
	association in the state in which the person resides.]
	(b)  Sections 463.202(a) and (c), Insurance Code, are
	amended to conform to Section 1, Chapter 753, Acts of the 79th
	Legislature, Regular Session, 2005, to read as follows:
	(a)  Except as limited by this chapter, the coverage provided
	by this chapter to a person specified by Section 463.201, subject to
	Sections 463.201(b) and (c), applies with respect to the following
	policies and contracts issued by a member insurer:
	(1)  a direct, nongroup life, health, accident,
	annuity, or supplemental policy or contract;
	(2)  a certificate under a direct group policy or
	contract;
	(3)  a group hospital service contract; and
	(4)  an unallocated annuity contract.
	(c)  For the purposes of this section, an annuity contract or
	a certificate under a group annuity contract includes:
	(1)  a guaranteed investment contract;
	(2)  a deposit administration contract;
	(3)  an allocated or unallocated funding agreement;
	(4)  a structured settlement annuity [agreement];
	(5)  an annuity issued to or in connection with a
	government lottery [a lottery contract]; and
	(6)  an immediate or deferred annuity contract.
	(c)  Section 463.203, Insurance Code, is amended to conform
	to Section 1, Chapter 753, Acts of the 79th Legislature, Regular
	Session, 2005, by amending Subsection (b) and adding Subsection (c)
	to read as follows:
	(b)  This chapter does not provide coverage for:
	(1)  any part of a policy or contract not guaranteed by
	the insurer or under which the risk is borne by the policy or
	contract owner [holder];
	(2)  a policy or contract of reinsurance, unless an
	assumption certificate has been issued;
	(3)  any part of a policy or contract to the extent that
	the rate of interest on which that part is based:
	(A)  as averaged over the period of four years
	before the date the member insurer becomes impaired or insolvent
	under this chapter, whichever is earlier [association became
	obligated with respect to the policy or contract], exceeds a rate of
	interest determined by subtracting two percentage points from
	Moody's Corporate Bond Yield Average averaged for the same
	four-year period or for a lesser period if the policy or contract
	was issued less than four years before the date the member insurer
	becomes impaired or insolvent under this chapter, whichever is
	earlier [association became obligated]; and
	(B)  on and after the date the member insurer
	becomes impaired or insolvent under this chapter, whichever is
	earlier [association became obligated with respect to the policy or
	contract], exceeds the rate of interest determined by subtracting
	three percentage points from Moody's Corporate Bond Yield Average
	as most recently available;
	(4)  a portion of a policy or contract issued to a plan
	or program of an employer, association, [or] similar entity, or
	other person to provide life, health, or annuity benefits to the
	entity's employees, [or] members, or others, to the extent that the
	plan or program is self-funded or uninsured, including benefits
	payable by an employer, association, or similar entity under:
	(A)  a multiple employer welfare arrangement as
	defined by Section 3, Employee Retirement Income Security Act of
	1974 (29 U.S.C. Section 1002);
	(B)  a minimum premium group insurance plan;
	(C)  a stop-loss group insurance plan; or
	(D)  an administrative services-only contract;
	(5)  any part of a policy or contract to the extent that
	the part provides dividends, [or] experience rating credits, or
	voting rights, or provides that fees or allowances be paid to any
	person, including the policy or contract owner [holder], in
	connection with the service to or administration of the policy or
	contract;
	(6)  a policy or contract issued in this state by a
	member insurer at a time the insurer was not authorized to issue the
	policy or contract in this state;
	(7)  an unallocated annuity contract issued to or in
	connection with a [an employee] benefit plan protected under the
	federal Pension Benefit Guaranty Corporation, regardless of
	whether the Pension Benefit Guaranty Corporation has not yet become
	liable to make any payments with respect to the benefit plan;
	(8)  any part of an unallocated annuity contract that
	is not issued to or in connection with a specific employee, a
	benefit plan for a union or association of individuals, or a
	governmental lottery; [or]
	(9)  any part of a financial guarantee, funding
	agreement, or guaranteed investment contract that:
	(A)  does not contain a mortality guarantee; and
	(B)  is not issued to or in connection with a
	specific employee, a benefit plan, or a governmental lottery;
	(10)  a part of a policy or contract to the extent that
	the assessments required by Subchapter D with respect to the policy
	or contract are preempted by federal or state law;
	(11)  a contractual agreement that established the
	member insurer's obligations to provide a book value accounting
	guaranty for defined contribution benefit plan participants by
	reference to a portfolio of assets that is owned by the benefit plan
	or the plan's trustee in a case in which neither the benefit plan
	sponsor nor its trustee is an affiliate of the member insurer; or
	(12)  a part of a policy or contract to the extent the
	policy or contract provides for interest or other changes in value
	that are to be determined by the use of an index or external
	reference stated in the policy or contract, but that have not been
	credited to the policy or contract, or as to which the policy or
	contract owner's rights are subject to forfeiture, as of the date
	the member insurer becomes an impaired or insolvent insurer under
	this chapter, whichever date is earlier, subject to Subsection (c).
	(c)  For purposes of determining the values that have been
	credited and are not subject to forfeiture as described by
	Subsection (b)(12), if a policy's or contract's interest or changes
	in value are credited less frequently than annually, the interest
	or change in value determined by using the procedures defined in the
	policy or contract is credited as if the contractual date of
	crediting interest or changing values is the earlier of the date of
	impairment or the date of insolvency, and is not subject to
	forfeiture.
	(d)  Section 463.260(a), Insurance Code, is amended to
	conform to Section 1, Chapter 753, Acts of the 79th Legislature,
	Regular Session, 2005, to read as follows:
	(a)  The association is not liable for benefits that exceed
	the contractual obligations for which the insurer is liable or
	would have been liable if not impaired or insolvent.  The
	association has no obligation to provide benefits outside the
	express written terms of the policy or contract, including:
	(1)  claims based on marketing materials;
	(2)  claims based on side letters, riders, or other
	documents that were issued without meeting applicable policy form
	filing or approval requirements;
	(3)  claims based on misrepresentation of or regarding
	policy benefits;
	(4)  extracontractual claims; or
	(5)  claims for penalties or consequential or
	incidental damages.
	(e)  Subchapter F, Chapter 463, Insurance Code, is amended to
	conform to Section 1, Chapter 753, Acts of the 79th Legislature,
	Regular Session, 2005, by adding Section 463.262 to read as
	follows:
	Sec. 463.262.  EFFECT OF SUBROGATION AND ASSIGNMENT OF
	RIGHTS AND AVAILABLE ASSETS ON ASSOCIATION OBLIGATION.  (a)  The
	limitations set forth in this chapter are limitations on the
	benefits for which the association is obligated before taking into
	account either the association's subrogation and assignment rights
	or the extent to which those benefits could be provided out of the
	assets of the impaired or insolvent insurer attributable to covered
	policies.
	(b)  The costs of the association's obligations under this
	chapter may be met by the use of assets attributable to covered
	policies or reimbursed to the association pursuant to the
	association's subrogation and assignment rights.
	(f)  Section 1, Chapter 753, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Section 3, Article
	21.28-D, Insurance Code, is repealed.
	SECTION 3B.019.  (a)  Section 463.302(d), Insurance Code,
	is amended to conform to Section 8, Chapter 753, Acts of the 79th
	Legislature, Regular Session, 2005, to read as follows:
	(d)  The maximum amount recoverable under Subsections (b)
	and (c) is the amount needed in excess of all other available assets
	of the impaired or insolvent insurer to pay the insurer's
	contractual obligations.
	(b)  Section 463.304, Insurance Code, is amended to conform
	to Section 8, Chapter 753, Acts of the 79th Legislature, Regular
	Session, 2005, to read as follows:
	Sec.463.304.DISTRIBUTION OF OWNERSHIP RIGHTS OF IMPAIRED OR INSOLVENT INSURER
	OR INSOLVENT INSURER
	ownership rights of an impaired or insolvent insurer before the
	termination of a receivership, the court:
	(1)  shall consider the welfare of the policyholders of
	the continuing or successor insurer; and
	(2)  may consider the contributions of the respective
	parties, including the association, the shareholders and
	policyholders of the impaired or insolvent insurer, and any other
	party with a bona fide interest.
	(c)  Section 8, Chapter 753, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Subsections (d) and
	(i), Section 14, Article 21.28-D, Insurance Code, is repealed.
	SECTION 3B.020.  (a) Article 21.79H, Insurance Code, is
	transferred to Chapter 542, Insurance Code, redesignated as
	Subchapter G of that chapter, and amended to read as follows:
	SUBCHAPTER G. INSURER'S RECOVERY FROM UNINSURED THIRD PARTY
	Sec. 542.301.  APPLICABILITY OF SUBCHAPTER [Art. 21.79H.
	RECOVERY OF CERTAIN COSTS FROM THIRD PARTY].  [(a)] This subchapter
	[article] applies to any insurer that delivers, issues for
	delivery, or renews a private passenger automobile insurance policy
	in this state, including a county mutual, a reciprocal or
	interinsurance exchange, or a Lloyd's plan.
	Sec. 542.302.  RECOVERY IN SUIT OR OTHER ACTION. [(b)]  An
	insurer that brings suit or takes other action described by Section
	542.202 [of this code] against a responsible third party relating
	to a loss that is covered under a private passenger automobile
	insurance policy issued by the insurer and for which the
	responsible third party is uninsured is entitled to recover, in
	addition to payments made by the insurer or insured, the costs of
	bringing the suit or taking the action, including reasonable
	attorney's fees and court costs.
	(b)  For organizational purposes, the heading to Subchapter
	E, Chapter 542, Insurance Code, is amended to read as follows:
	SUBCHAPTER E. RECOVERY OF DEDUCTIBLE [COLLECTION] FROM THIRD
	PARTIES UNDER CERTAIN AUTOMOBILE INSURANCE POLICIES
	SECTION 3B.021.  (a)  Section 544.303, Insurance Code, is
	amended to conform to Section 1, Chapter 149, Acts of the 79th
	Legislature, Regular Session, 2005, to read as follows:
	Sec. 544.303.  PROHIBITION OF CERTAIN UNDERWRITING
	DECISIONS BASED ON PREVIOUS MOLD CLAIM OR DAMAGE. An insurer may
	not make an underwriting decision regarding a residential property
	insurance policy based on previous mold damage or a claim for mold
	damage if:
	(1)  the applicant for insurance coverage has property
	eligible for coverage under a residential property policy;
	(2)  the property has had mold damage;
	(3)  mold remediation has been performed on the
	property; and
	(4)  the property was:
	(A)  remediated, as evidenced by a certificate of
	mold remediation issued to the property owner under Section
	1958.154, Occupations Code, that establishes with reasonable
	certainty that the underlying cause of the mold at the property has
	been remediated; or
	(B)  inspected by an independent assessor or
	adjustor who determined, based on the inspection, that the property
	does not contain evidence of mold damage.
	(b)  Section 1, Chapter 149, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Section 3, Article
	21.21-11, Insurance Code, is repealed.
	SECTION 3B.022.  (a)  Section 544.352, Insurance Code, is
	amended to conform to Section 1, Chapter 528, Acts of the 79th
	Legislature, Regular Session, 2005, and further amended to read as
	follows:
	Sec. 544.352.  DEFINITIONS. In this subchapter:
	(1)  "Appliance" means a household device operated by
	gas or electric current, including hoses directly attached to the
	device. The term includes air conditioning units, heating units,
	refrigerators, dishwashers, icemakers, clothes washers, water
	heaters, and disposals.
	(2)  "Insurer" means an insurance company, reciprocal
	or interinsurance exchange, mutual insurance company, capital
	stock company, county mutual insurance company, farm mutual
	insurance company, association, Lloyd's plan, or other entity
	writing residential property insurance in this state. The term
	includes an affiliate, as described by Section 823.003(a), if that
	affiliate is authorized to write and is writing residential
	property insurance in this state. The term does not include:
	(A)  the Texas Windstorm Insurance Association
	created and operated under Chapter 2210 [Article 21.49]; or
	(B)  the FAIR Plan created and operated under
	Chapter 2211 [Article 21.49A].
	(3) [(2)]  "Residential property insurance" means
	insurance against loss to residential real property at a fixed
	location or tangible personal property provided in a homeowners
	policy, which includes a tenant policy, a condominium owners
	policy, or a residential fire and allied lines policy.
	(4) [(3)]  "Underwriting guideline" means a rule,
	standard, guideline, or practice, whether written, oral, or
	electronic, that is used by an insurer or an agent of an insurer to:
	(A)  decide whether to accept or reject an
	application for a residential property insurance policy; or
	(B)  determine how to classify the risks that are
	accepted for the purpose of determining a rate.
	(b)  Section 1, Chapter 528, Acts of the 79th Legislature,
	Regular Session, 2005, which added Subdivision (4) to former
	Section 2, Article 5.35-4, Insurance Code, is repealed.
	SECTION 3B.023.  (a)  Chapter 544, Insurance Code, is
	amended to codify Article 21.53X, Insurance Code, as added by
	Section 8, Chapter 97, Acts of the 79th Legislature, Regular
	Session, 2005, by adding Subchapter J and is further amended to read
	as follows:
	SUBCHAPTER J. PROHIBITED PRACTICES RELATING TO EXPOSURE TO
	ASBESTOS OR SILICA
	Sec. 544.451.  DEFINITION.  In this subchapter, "health
	benefit plan" means a plan that provides benefits for medical,
	surgical, or other treatment expenses incurred as a result of a
	health condition, a mental health condition, an accident, sickness,
	or substance abuse, including an individual, group, blanket, or
	franchise insurance policy or insurance agreement, a group hospital
	service contract, or an individual or group evidence of coverage or
	similar coverage document. The term includes:
	(1)  a small employer health benefit plan or a health
	benefit plan written to provide coverage with a cooperative under
	Chapter 1501;
	(2)  a standard health benefit plan offered under
	Subchapter A or Subchapter B, Chapter 1507; and
	(3)  a health benefit plan offered under Chapter 1551,
	1575, 1579, or 1601.
	Sec. 544.452.  APPLICABILITY OF SUBCHAPTER. This subchapter
	applies to any entity that offers a health benefit plan or an
	annuity or life insurance policy or contract in this state,
	including:
	(1)  a stock or mutual life, health, or accident
	insurance company;
	(2)  a group hospital service corporation operating
	under Chapter 842;
	(3)  a fraternal benefit society operating under
	Chapter 885;
	(4)  a stipulated premium insurance company operating
	under Chapter 884;
	(5)  a Lloyd's plan operating under Chapter 941;
	(6)  an exchange operating under Chapter 942;
	(7)  a health maintenance organization operating under
	Chapter 843;
	(8)  a multiple employer welfare arrangement that holds
	a certificate of authority under Chapter 846;
	(9)  an approved nonprofit health corporation that
	holds a certificate of authority under Chapter 844;
	(10)  a statewide mutual assessment company operating
	under Chapter 881;
	(11)  a local mutual aid association operating under
	Chapter 886; and
	(12)  a local mutual burial association operating under
	Chapter 888.
	Sec. 544.453.  PROHIBITION. An entity that offers a health
	benefit plan or an annuity or life insurance policy or contract may
	not use the fact that a person has been exposed to asbestos fibers
	or silica or has filed a claim governed by Chapter 90, Civil
	Practice and Remedies Code, to reject, deny, limit, cancel, refuse
	to renew, increase the premiums for, or otherwise adversely affect
	the person's eligibility for or coverage under the policy or
	contract.
	(b)  Article 21.53X, Insurance Code, as added by Section 8,
	Chapter 97, Acts of the 79th Legislature, Regular Session, 2005, is
	repealed.
	SECTION 3B.024.  Section 551.004, Insurance Code, is amended
	to correct references to read as follows:
	Sec. 551.004.  TRANSFER NOT CONSIDERED A REFUSAL TO RENEW.
	For purposes of this chapter and Subchapters C and D, Chapter 1952
	[Articles 5.06-1 and 5.06-3 of this code], the transfer of a
	policyholder between admitted companies within the same insurance
	group is not considered a refusal to renew.
	SECTION 3B.0245.  (a)  Subchapter A, Chapter 551, Insurance
	Code, is amended to conform to the enactment of Article 21.49-2V,
	Insurance Code, by Section 8.02, Chapter 206, Acts of the 78th
	Legislature, Regular Session, 2003, by adding Section 551.005 to
	read as follows:
	Sec. 551.005.  MEMBERSHIP DUES. (a) In this section,
	"insurer" includes a county mutual insurance company, a Lloyd's
	plan, and a reciprocal or interinsurance exchange.
	(b)  Except as otherwise provided by law, an insurer may
	require that membership dues in its sponsoring organization be paid
	as a condition for issuance or renewal of a policy.
	(b)  Article 21.49-2V, Insurance Code, as added by Section
	8.02, Chapter 206, Acts of the 78th Legislature, Regular Session,
	2003, is repealed.
	SECTION 3B.025.  Section 843.318(a), Insurance Code, is
	amended to conform more closely to the source law from which the
	section was derived to read as follows:
	(a)  This chapter and this code do not prohibit a physician
	or provider who is participating in a health maintenance
	organization delivery network, whether by contracting with a health
	maintenance organization under Section 843.101 or by
	subcontracting with a physician or provider in the health
	maintenance organization delivery network, from entering into a
	contractual arrangement [authorized by this section] within a
	health maintenance organization delivery network described by
	Subsections (b)-(e).
	SECTION 3B.026.   Section 941.003(b), Insurance Code, as
	amended by Chapters 631 and 1295, Acts of the 79th Legislature,
	Regular Session, 2005, is reenacted and is amended to correct
	references to read as follows:
	(b)  A Lloyd's plan is subject to:
	(1)  Subchapter [Section 5, Article 1.10;
	[(2)Article 1.15A;
	[(3)Subchapters] A, [Q, T, and U,] Chapter 5, Chapter
	254, Subchapters A and B, Chapter 1806, and Subtitle C, Title 10;
	(2) [(4)] Articles [5.20,] 5.35, [5.38,] 5.39, and
	5.40;
	(3) [(5) Article 21.49-8;
	[(6)Sections 822.203, 822.205, 822.210, and 822.212;
	[(7)] Article 5.13-2, as provided by that article,
	Chapter 2251, as provided by that chapter, and Chapter 2301, as
	provided by that chapter;
	(4) [(8)] Chapters 251, 252, 402, [and] 541, and 2253;
	(5)  Subchapter A, Chapter 401;
	(6)  Subchapter B, Chapter 404;
	(7)  Subchapter C, Chapter 1806; and
	(8)  Sections [(9) Section] 38.001, 501.159, 822.203,
	822.205, 822.210, 822.212, 2002.005, 2002.051, and 2002.052.
	SECTION 3B.027.  Section 942.003(b), Insurance Code, as
	amended by Chapters 631 and 1295, Acts of the 79th Legislature,
	Regular Session, 2005, is reenacted and is amended to correct
	references to read as follows:
	(b)  An exchange is subject to:
	(1)  Subchapter [Section 5, Article 1.10;
	[(2)Articles 1.15, 1.15A, and 1.16;
	[(3)Subchapters] A, [Q, T, and U,] Chapter 5, Chapter
	254, Subchapters A and B, Chapter 1806, and Subtitle C, Title 10;
	(2) [(4)] Articles [5.20,] 5.35, [5.37, 5.38,] 5.39,
	and 5.40;
	(3) [(5) Article 21.49-8;
	[(6)  Sections 822.203, 822.205, 822.210, 822.212,
	861.254(a)-(f), 861.255, 862.001(b), and 862.003;
	[(7)] Article 5.13-2, as provided by that article,
	Chapter 2251, as provided by that chapter, and Chapter 2301, as
	provided by that chapter;
	(4)  Chapters 402, [(8) Chapter] 541, and 2253;
	(5)  Subchapter A, Chapter 401, and Sections 401.051,
	401.052, 401.054, 401.055, 401.056, 401.057, 401.058, 401.059,
	401.060, 401.061, 401.062, 401.151, 401.152, 401.155, and 401.156;
	(6)  Subchapter B, Chapter 404;
	(7)  Subchapter C, Chapter 1806; and
	(8)  Sections [(9) Section] 38.001, 501.159, 822.203,
	822.205, 822.210, 822.212, 861.254(a)-(f), 861.255, 862.001(b),
	862.003, 2002.002, 2002.005, 2002.051, and 2002.052.
	SECTION 3B.02701.  Sections 1272.001(a)(1), (3), and (4),
	Insurance Code, are amended to conform more closely to the source
	law from which they were derived to read as follows:
	(1)  "Delegated entity" means an entity, other than a
	health maintenance organization authorized to engage in business
	under Chapter 843, that by itself, or through subcontracts with one
	or more entities, undertakes to arrange for or provide medical care
	or health care to an enrollee in exchange for a predetermined
	payment on a prospective basis and that accepts responsibility for
	performing on behalf of the health maintenance organization a
	function regulated by this chapter, Chapter 222, 251, or 258, as
	applicable to a health maintenance organization, Chapter 843 or [,]
	1271, Section 1367.053 [or 1367], Subchapter A, Chapter 1452, or
	Subchapter B, Chapter 1507. The term does not include:
	(A)  an individual physician; or
	(B)  a group of employed physicians, practicing
	medicine under one federal tax identification number, whose total
	claims paid to providers not employed by the group constitute less
	than 20 percent of the group's total collected revenue computed on a
	calendar year basis.
	(3)  "Delegated third party" means a third party other
	than a delegated entity that contracts with a delegated entity,
	either directly or through another third party, to:
	(A)  accept responsibility for performing a
	function regulated by this chapter, Chapter 222, 251, or 258, as
	applicable to a health maintenance organization, Chapter 843 or [,]
	1271, Section 1367.053 [or 1367], Subchapter A, Chapter 1452, or
	Subchapter B, Chapter 1507; or
	(B)  receive, handle, or administer funds, if the
	receipt, handling, or administration is directly or indirectly
	related to a function regulated by this chapter, Chapter 222, 251,
	or 258, as applicable to a health maintenance organization, Chapter
	843 or [,] 1271, Section 1367.053 [or 1367], Subchapter A, Chapter
	1452, or Subchapter B, Chapter 1507.
	(4)  "Delegation agreement" means an agreement by which
	a health maintenance organization assigns the responsibility for a
	function regulated by this chapter, Chapter 222, 251, or 258, as
	applicable to a health maintenance organization, Chapter 843 or [,]
	1271, Section 1367.053 [or 1367], Subchapter A, Chapter 1452, or
	Subchapter B, Chapter 1507.
	SECTION 3B.0271.  (a)  Section 1301.004, Insurance Code, to
	conform more closely to the source law from which it was derived, is
	transferred to Section 1301.061, Insurance Code, redesignated as
	Subsection (c) of that section, and amended to read as follows:
	(c)  [Sec. 1301.004. COMPLIANCE WITH CHAPTER
	REQUIRED.]  Each preferred provider benefit plan offered in this
	state must comply with this chapter.
	(b)  Subchapter A, Chapter 1301, Insurance Code, is amended
	to conform more closely to the source law from which Chapter 1301
	was derived by adding Section 1301.0041 to read as follows:
	Sec. 1301.0041.  APPLICABILITY. This chapter applies to any
	preferred provider benefit plan in which an insurer provides,
	through the insurer's health insurance policy, for the payment of a
	level of coverage that is different from the basic level of coverage
	provided by the health insurance policy if the insured uses a
	preferred provider.
	SECTION 3B.028.  Section 1365.004, Insurance Code, is
	amended to conform more closely to the source law from which the
	section was derived to read as follows:
	Sec. 1365.004.  RIGHT TO REJECT COVERAGE OR SELECT
	ALTERNATIVE BENEFITS [COVERAGE]. An offer of coverage required
	under Section 1365.003 is subject to the right of the group contract
	holder to reject the coverage or to select an alternative level of
	benefits [coverage] that is offered by or negotiated with the group
	health benefit plan issuer.
	SECTION 3B.0281.  Section 1367.053(c), Insurance Code, is
	amended to conform more closely to the source law from which the
	section was derived to read as follows:
	(c)  In addition to the immunizations required under
	Subsection (a), a health maintenance organization that issues a
	health benefit plan shall provide under the plan coverage for
	immunization against rotovirus and any other immunization required
	for a child by law.
	SECTION 3B.029.  (a)  Section 1507.003(b), Insurance Code,
	is amended to conform to Section 2, Chapter 577, Acts of the 79th
	Legislature, Regular Session, 2005, to read as follows:
	(b)  For purposes of this subchapter, "state-mandated health
	benefits" does not include benefits that are mandated by federal
	law or standard provisions or rights required under this code or
	other laws of this state to be provided in an individual, blanket,
	or group policy for accident and health insurance that are
	unrelated to a specific health illness, injury, or condition of an
	insured, including provisions related to:
	(1)  continuation of coverage under:
	(A)  Subchapters F and G, Chapter 1251;
	(B)  Section 1201.059; and
	(C)  Subchapter B, Chapter 1253;
	(2)  termination of coverage under Sections 1202.051
	and 1501.108;
	(3)  preexisting conditions under Subchapter D,
	Chapter 1201, and Sections 1501.102-1501.105;
	(4)  coverage of children, including newborn or adopted
	children, under:
	(A)  Subchapter D, Chapter 1251;
	(B)  Sections 1201.053, 1201.061,
	1201.063-1201.065, and Subchapter A, Chapter 1367;
	(C)  Chapter 1504;
	(D)  Chapter 1503;
	(E)  Section 1501.157;
	(F)  Section 1501.158; and
	(G)  Sections 1501.607-1501.609;
	(5)  services of practitioners under:
	(A)  Subchapters A, B, and C, Chapter 1451; or
	(B)  Section 1301.052;
	(6)  supplies and services associated with the
	treatment of diabetes under Subchapter B, Chapter 1358;
	(7)  coverage for serious mental illness under
	Subchapter A, Chapter 1355[, if the standard health benefit plan is
	issued to a large employer as defined by Section 1501.002];
	(8)  coverage for childhood immunizations and hearing
	screening as required by Subchapters B and C, Chapter 1367, other
	than Section 1367.053(c) and Chapter 1353;
	(9)  coverage for reconstructive surgery for certain
	craniofacial abnormalities of children as required by Subchapter D,
	Chapter 1367;
	(10)  coverage for the dietary treatment of
	phenylketonuria as required by Chapter 1359;
	(11)  coverage for referral to a non-network physician
	or provider when medically necessary covered services are not
	available through network physicians or providers, as required by
	Section 1271.055; and
	(12)  coverage for cancer screenings under:
	(A)  Chapter 1356;
	(B)  Chapter 1362; [and]
	(C)  Chapter 1363; and
	(D)  Chapter 1370.
	(b)  Section 2, Chapter 577, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Subsection (b), Section
	3, Article 3.80, Insurance Code, is repealed.
	SECTION 3B.030.  (a)  Section 1507.053(b), Insurance Code,
	is amended to conform to Section 3, Chapter 577, Acts of the 79th
	Legislature, Regular Session, 2005, to read as follows:
	(b)  For purposes of this subchapter, "state-mandated health
	benefits" does not include coverage that is mandated by federal law
	or standard provisions or rights required under this code or other
	laws of this state to be provided in an evidence of coverage that
	are unrelated to a specific health illness, injury, or condition of
	an enrollee, including provisions related to:
	(1)  continuation of coverage under Subchapter G,
	Chapter 1251;
	(2)  termination of coverage under Sections 1202.051
	and 1501.108;
	(3)  preexisting conditions under Subchapter D,
	Chapter 1201, and Sections 1501.102-1501.105;
	(4)  coverage of children, including newborn or adopted
	children, under:
	(A)  Chapter 1504;
	(B)  Chapter 1503;
	(C)  Section 1501.157;
	(D)  Section 1501.158; and
	(E)  Sections 1501.607-1501.609;
	(5)  services of providers under Section 843.304;
	(6)  coverage for serious mental health illness under
	Subchapter A, Chapter 1355[, if the standard health benefit plan is
	issued to a large employer as defined by Section 1501.002]; and
	(7)  coverage for cancer screenings under:
	(A)  Chapter 1356;
	(B)  Chapter 1362; [and]
	(C)  Chapter 1363; and
	(D)  Chapter 1370.
	(b)  Section 3, Chapter 577, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Subsection (d), Article
	20A.09N, Insurance Code, is repealed.
	SECTION 3B.031.  Section 1801.002, Insurance Code, is
	repealed to conform to Section 5.01(4), Chapter 1227, Acts of the
	79th Legislature, Regular Session, 2005.
	SECTION 3B.032.  (a) Section 1806.101, Insurance Code, is
	amended to conform to Section 2, Chapter 631, Acts of the 79th
	Legislature, Regular Session, 2005, to read as follows:
	Sec. 1806.101.  DEFINITIONS.  In this subchapter:
	(1)  "Insurance" includes a suretyship.
	(2)  "Insurer" means an insurance company or other
	legal entity described by Sections 1806.102(a) and (b).
	(3)  "Policy" includes a bond.
	(b)  Sections 1806.104(a) and (b), Insurance Code, are
	amended to conform to Section 2, Chapter 631, Acts of the 79th
	Legislature, Regular Session, 2005, to read as follows:
	(a)  Except as otherwise provided by this subchapter, an
	insurer, an insurer's employee, or a broker or agent may not
	knowingly:
	(1)  issue an insurance policy that is not in
	accordance with an applicable filing [that is filed and in effect
	under Chapter 2251 or 2301 or Article 5.13-2]; or
	(2)  charge, demand, or receive a premium on an
	insurance policy that is not in accordance with an applicable
	filing [that is filed and in effect under Chapter 2251 or 2301 or
	Article 5.13-2].
	(b)  Except as provided in an applicable filing [that is
	filed and in effect under Chapter 2251 or 2301 or Article 5.13-2],
	an insurer, an insurer's employee, or a broker or agent may not
	directly or indirectly pay, allow, or give, or offer to pay, allow,
	or give, as an inducement to insurance, or after insurance has been
	written, a rebate, discount, abatement, credit or reduction of the
	premium stated in an insurance policy, or a special favor or
	advantage in the dividends or other benefits to accrue on the
	policy, or any valuable consideration or inducement, not specified
	in the policy.
	(c)  Section 2, Chapter 631, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Subsections (a) and
	(d), Article 5.20, Insurance Code, is repealed.
	SECTION 3B.033.  Section 1806.102, Insurance Code, is
	amended to conform to Section 1, Chapter 631, Acts of the 79th
	Legislature, Regular Session, 2005, to read as follows:
	Sec. 1806.102.  APPLICABILITY OF SUBCHAPTER.  (a)  This
	[Except as provided by Subsections (b) and (c), this] subchapter
	applies to an insurer, including a corporation, reciprocal or
	interinsurance exchange, mutual insurance company, association,
	Lloyd's plan, or other organization, writing casualty insurance or
	writing fidelity, surety, or guaranty bonds, on risks or operations
	in this state.
	(b)  This subchapter applies [does not apply] to:
	(1)  a farm mutual insurance company with respect to
	each line of insurance that a farm mutual insurance company is
	authorized to write under Section 911.151 [or association regulated
	under Chapter 911]; and [or]
	(2)  a county mutual insurance company with respect to
	each line of insurance that a county mutual insurance company is
	authorized to write under Section 912.151 [regulated under Chapter
	912].
	(c)  Except as otherwise provided by this subchapter, this
	[This] subchapter does not apply to the writing of:
	(1)  automobile insurance;
	(2)  life, health, or accident insurance;
	(3)  professional liability insurance;
	(4)  reinsurance;
	(5)  aircraft insurance;
	(6)  fraternal benefit insurance;
	(7)  fire insurance;
	(8)  workers' compensation insurance;
	(9)  marine insurance, including noncommercial inland
	marine insurance and ocean marine insurance;
	(10)  title insurance;
	(11)  explosion insurance, except insurance against
	loss from personal injury or property damage resulting accidentally
	from:
	(A)  a steam boiler;
	(B)  a heater or pressure vessel;
	(C)  an electrical device;
	(D)  an engine; or
	(E)  all machinery and appliances used in
	connection with or in the operation of a boiler, heater, vessel,
	electrical device, or engine described by Paragraphs (A)-(D); or
	(12)  insurance coverage for any of the following
	conditions or risks:
	(A)  weather or climatic conditions, including
	lightning, tornado, windstorm, hail, cyclone, rain, or frost and
	freeze;
	(B)  earthquake or volcanic eruption;
	(C)  smoke or smudge;
	(D)  excess or deficiency of moisture;
	(E)  flood;
	(F)  the rising water of an ocean or an ocean's
	tributary;
	(G)  bombardment, invasion, insurrection, riot,
	civil war or commotion, military or usurped power, or any order of a
	civil authority made to prevent the spread of a conflagration,
	epidemic or catastrophe;
	(H)  vandalism or malicious mischief;
	(I)  strike or lockout;
	(J)  water or other fluid or substance resulting
	from:
	(i)  the breakage or leakage of a sprinkler,
	pump, or other apparatus erected for extinguishing fire, or a water
	pipe or other conduit or container; or
	(ii)  casual water entering a building
	through a leak or opening in the building or by seepage through
	building walls; or
	(K)  accidental damage to a sprinkler, pump, fire
	apparatus, pipe, or other conduit or container described by
	Paragraph (J)(i).
	SECTION 3B.034.  (a) Section 1901.054(b), Insurance Code,
	is amended to conform to Section 1, Chapter 1135, Acts of the 79th
	Legislature, Regular Session, 2005, to read as follows:
	(b)  A rate is not excessive unless[:
	[(1)]  the rate is unreasonably high for the insurance
	coverage provided[; and
	[(2)  a reasonable degree of competition does not exist
	in the area with respect to the classification to which the rate
	applies].
	(b)  Section 1901.057, Insurance Code, is amended to conform
	to Section 1, Chapter 1135, Acts of the 79th Legislature, Regular
	Session, 2005, to read as follows:
	Sec.1901.057.CONSIDERATIONS IN APPROVING RATES.  In
	approving rates under this chapter, the department [commissioner]
	shall consider the impact of risk management courses taken by
	physicians and health care providers in this state.
	(c)  Section 1, Chapter 1135, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Section 3, Article
	5.15-1, Insurance Code, is repealed.
	SECTION 3B.035.  (a) Subchapter B, Chapter 1901, Insurance
	Code, is amended by adding Section 1901.0541 to conform to Section
	2, Chapter 1135, Acts of the 79th Legislature, Regular Session,
	2005, to read as follows:
	Sec. 1901.0541.  USE IN UNDERWRITING OF CERTAIN INFORMATION
	RELATED TO LAWSUITS; REFUND.  (a) Notwithstanding any other
	provision of this code, an insurer may not consider for the purpose
	of setting premiums or reducing a claims-free discount for a
	particular insured physician's professional liability insurance a
	lawsuit filed against the physician if:
	(1)  before trial, the lawsuit was dismissed by the
	claimant or nonsuited; and
	(2)  no payment was made to the claimant under a
	settlement agreement.
	(b)  An insurer that, in setting premiums or reducing a
	claims-free discount for a physician's professional liability
	insurance, considers a lawsuit filed against the physician shall
	refund to the physician any increase in premiums paid by the
	physician that is attributable to that lawsuit or reinstate the
	claims-free discount if the lawsuit is dismissed by the claimant or
	nonsuited without payment to the claimant under a settlement
	agreement. The insurer shall issue the refund or reinstate the
	discount on or before the 30th day after the date the insurer
	receives written evidence that the lawsuit was dismissed or
	nonsuited without payment to the claimant under a settlement
	agreement.
	(c)  This section does not prohibit an insurer from
	considering and using aggregate historical loss and expense
	experience applicable generally to a classification of physicians'
	professional liability insurance to set rates for that
	classification to the extent authorized by Chapter 2251 and Article
	5.13-2.  Notwithstanding Section 2251.052(c), an insurer may not
	assign a physician to a particular classification based on a factor
	described by Subsection (a).
	(b)  Subchapter F, Chapter 1901, Insurance Code, is amended
	by adding Section 1901.254 to conform to Section 2, Chapter 1135,
	Acts of the 79th Legislature, Regular Session, 2005, to read as
	follows:
	Sec. 1901.254.  PROHIBITION OF USE OF CERTAIN INFORMATION
	FOR PHYSICIAN OR HEALTH CARE PROVIDER.  (a)  For the purpose of
	writing professional liability insurance for physicians and health
	care providers, an insurer may not consider whether, or the extent
	to which, a physician or health care provider provides services in
	this state to individuals who are recipients of Medicaid or covered
	by the state child health plan program established by Chapter 62,
	Health and Safety Code, including any consideration resulting in:
	(1)  denial of coverage;
	(2)  refusal to renew coverage;
	(3)  cancellation of coverage;
	(4)  limitation of the amount, extent, or kind of
	coverage available; or
	(5)  a determination of the rate or premium to be paid.
	(b)  The commissioner may adopt rules as necessary to
	implement this section.
	(c)  Section 2, Chapter 1135, Acts of the 79th Legislature,
	Regular Session, 2005, which added Sections 12 and 13 to former
	Article 5.15-1, Insurance Code, is repealed.
	SECTION 3B.036.  (a)  Subchapter F, Chapter 1901, Insurance
	Code, is amended by adding Section 1901.255 to conform to Section 1,
	Chapter 184, Acts of the 79th Legislature, Regular Session, 2005,
	to read as follows:
	Sec. 1901.255.  COVERAGE FOR VOLUNTEER HEALTH CARE
	PROVIDERS.  (a)  In this section:
	(1)  "Charitable organization" has the meaning
	assigned by Section 84.003, Civil Practice and Remedies Code.
	(2)  "Volunteer health care provider" has the meaning
	assigned by Section 84.003, Civil Practice and Remedies Code.
	(b)  An insurer may make available professional liability
	insurance covering a volunteer health care provider for an act or
	omission resulting in death, damage, or injury to a patient while
	the person is acting in the course and scope of the person's duties
	as a volunteer health care provider as described by Chapter 84,
	Civil Practice and Remedies Code.
	(c)  This section does not affect the liability of a
	volunteer health care provider who is serving as a direct service
	volunteer of a charitable organization. Section 84.004(c), Civil
	Practice and Remedies Code, applies to the volunteer health care
	provider without regard to whether the volunteer health care
	provider obtains liability insurance under this section.
	(d)  An insurer may make professional liability insurance
	available under this section to a volunteer health care provider
	without regard to whether the volunteer health care provider is a
	"health care provider" as defined by Section 1901.001.
	(b)  Section 1, Chapter 184, Acts of the 79th Legislature,
	Regular Session, 2005, which added Section 12 to former Article
	5.15-1, Insurance Code, is repealed.
	SECTION 3B.037.  (a) Section 1952.101(c), Insurance Code,
	is amended to conform to Section 3, Chapter 1159, Acts of the 79th
	Legislature, Regular Session, 2005, to read as follows:
	(c)  The coverage required by this subchapter does not apply
	if any insured named in the insurance policy rejects the coverage in
	writing. Unless the named insured requests in writing the coverage
	required by this subchapter, the insurer is not required to provide
	that coverage in or supplemental to a reinstated insurance policy
	or renewal insurance policy if the named insured rejected the
	coverage in connection with that insurance policy or an insurance
	policy previously issued to the insured by the same insurer or by an
	affiliated insurer.
	(b)  Section 3, Chapter 1159, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Section (1), Article
	5.06-1, Insurance Code, is repealed.
	SECTION 3B.038.  (a) Section 1952.152(b), Insurance Code,
	is amended to conform to Section 4, Chapter 1159, Acts of the 79th
	Legislature, Regular Session, 2005, to read as follows:
	(b)  The coverage required by this subchapter does not apply
	if any insured named in the insurance policy rejects the coverage in
	writing.  Unless the named insured requests in writing the coverage
	required by this subchapter, the insurer is not required to provide
	that coverage in or supplemental to a reinstated insurance policy
	or renewal insurance policy if the named insured rejected the
	coverage in connection with that insurance policy or an insurance
	policy previously issued to the insured by the same insurer or by an
	affiliated insurer.
	(b)  Section 4, Chapter 1159, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Subsection (a), Article
	5.06-3, Insurance Code, is repealed.
	SECTION 3B.039.  (a) Section 1952.155, Insurance Code, is
	amended by amending Subsection (b) and adding Subsection (c) to
	conform to Section 2, Chapter 1074, Acts of the 79th Legislature,
	Regular Session, 2005, to read as follows:
	(b)  Except as provided by Subsection (c), an [An] insurer
	paying benefits under coverage required by this subchapter does not
	have a right of subrogation or claim against any other person or
	insurer to recover any benefits by reason of the alleged fault of
	the other person in causing or contributing to the accident.
	(c)  An insurer paying benefits pursuant to this subchapter,
	including a county mutual insurance company, shall have a right of
	subrogation and a claim against a person causing or contributing to
	the accident if, on the date of loss, financial responsibility as
	required by Chapter 601, Transportation Code, has not been
	established for a motor vehicle involved in the accident and
	operated by that person.
	(b)  Section 2, Chapter 1074, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Article 5.06-3,
	Insurance Code, by amending Subsection (c) and adding Subsection
	(i), is repealed.
	SECTION 3B.040.  (a) Section 2006.052, Insurance Code, is
	amended to conform to Sections 4 and 6, Chapter 291, Acts of the
	79th Legislature, Regular Session, 2005, by amending Subsection (b)
	and adding Subsection (c) to read as follows:
	(b)  This section applies to an insurer that uses a tier
	classification or discount program that has a premium consequence
	based in whole or in part on claims experience, regardless of
	whether any of the policies that continuously covered the
	policyholder was a different kind of residential property insurance
	policy from the policy eligible for the premium discount.
	(c)  A residential property insurance claim under this
	section does not include a claim:
	(1)  resulting from a loss caused by natural causes;
	(2)  that is filed but is not paid or payable under the
	policy; or
	(3)  that an insurer is prohibited from using under
	Section 544.353.
	(b)  Subchapter B, Chapter 2006, Insurance Code, is amended
	to conform to Section 4, Chapter 291, Acts of the 79th Legislature,
	Regular Session, 2005, by adding Section 2006.0521 to read as
	follows:
	Sec. 2006.0521.  COMPLIANCE WITH OTHER LAW REQUIRED.  Any
	change in the amount of a premium discount provided under this
	subchapter must comply with the requirements of Section 551.107.
	(c)  Sections 4 and 6, Chapter 291, Acts of the 79th
	Legislature, Regular Session, 2005, which amended former Article
	5.43, Insurance Code, by amending Subsection (d) and adding
	Subsections (a-1) and (f), are repealed.
	SECTION 3B.041.  (a) Section 2051.151(a), Insurance Code,
	is amended to conform to Section 6.062, Chapter 265, Acts of the
	79th Legislature, Regular Session, 2005, to read as follows:
	(a)  Except as otherwise provided by Subsection (b), an
	insurance company that writes workers' compensation insurance in
	this state shall notify a policyholder of a claim that is filed
	against the policyholder's policy and, after the initial notice,
	the company shall notify the policyholder of:
	(1)  any proposal to settle the claim; or
	(2)  on receipt of a written request from the
	policyholder, any administrative or judicial proceeding relating
	to the resolution of the claim[, including a benefit review
	conference conducted by the Texas Workers' Compensation
	Commission].
	(b)  Section 6.062, Chapter 265, Acts of the 79th
	Legislature, Regular Session, 2005, which amended former Section
	(a), Article 5.65A, Insurance Code, is repealed.
	SECTION 3B.042.  (a) Section 2053.001, Insurance Code, is
	amended to conform to Section 5.01, Chapter 265, Acts of the 79th
	Legislature, Regular Session, 2005, by amending Subdivision (2) and
	adding Subdivision (2-a) to read as follows:
	(2)  "Insurance company" means a person authorized to
	engage in the business of workers' compensation insurance in this
	state.  The term includes:
	(A)  the Texas Mutual Insurance Company;
	(B)  a Lloyd's plan under Chapter 941; and
	(C)  a reciprocal and interinsurance exchange
	under Chapter 942.
	(2-a)  "Premium" means the amount charged for a
	workers' compensation insurance policy, including any
	endorsements, after the application of individual risk variations
	based on loss or expense considerations.
	(b)  Section 5.01, Chapter 265, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Section 1, Article
	5.55, Insurance Code, by amending Subdivision (2) and adding
	Subdivision (2-a), is repealed.
	SECTION 3B.043.  (a) Sections 2053.002(a) and (b),
	Insurance Code, are amended to conform to Section 5.02, Chapter
	265, Acts of the 79th Legislature, Regular Session, 2005, to read as
	follows:
	(a)  In setting rates, an insurance company shall consider:
	(1)  past and prospective loss cost experience;
	(2)  operation expenses;
	(3)  investment income;
	(4)  a reasonable margin for profit and contingencies;
	[and]
	(5)  the effect on premiums of individual risk
	variations based on loss or expense considerations; and
	(6)  any other relevant factor.
	(b)  A rate or premium established under this subchapter may
	not be excessive, inadequate, or unfairly discriminatory.
	(b)  Section 5.02, Chapter 265, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Subsections (b) and
	(d), Section 2, Article 5.55, Insurance Code, is repealed.
	SECTION 3B.044.  Section 2053.007(c), Insurance Code, is
	repealed to conform to Section 5.04, Chapter 265, Acts of the 79th
	Legislature, Regular Session, 2005.
	SECTION 3B.045.  (a) Section 2053.010, Insurance Code, is
	amended to conform to Section 5.05, Chapter 265, Acts of the 79th
	Legislature, Regular Session, 2005, to read as follows:
	Sec. 2053.010.  PENALTIES [ADMINISTRATIVE PENALTY].  If a
	workers' compensation insurance policy is issued and the
	commissioner subsequently disapproves the rate or filing on which
	the premium is based, the commissioner, after notice and the
	opportunity for a hearing, may:
	(1)  impose sanctions under Chapter 82;
	(2)  issue a cease and desist order under Chapter 83;
	(3)  impose administrative penalties under Chapter 84;
	or
	(4)  take any combination of these actions.  [(a)  The
	commissioner may assess an administrative penalty against an
	insurance company if the commissioner determines, based on a
	pattern of charges for premiums, that the company is consistently
	overcharging or undercharging the company's policyholders for
	workers' compensation insurance.
	[(b)An administrative penalty under this section must be:
	[(1)  assessed in accordance with Section 415.021,
	Labor Code; and
	[(2)  set by the commissioner in an amount reasonable
	and necessary to deter overcharging or undercharging of
	policyholders.]
	(b)  Section 5.05, Chapter 265, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Section 7, Article
	5.55, Insurance Code, is repealed.
	SECTION 3B.046.  (a) Subchapter A, Chapter 2053, Insurance
	Code, is amended to conform to Section 5.055, Chapter 265, Acts of
	the 79th Legislature, Regular Session, 2005, by adding Section
	2053.011 to read as follows:
	Sec. 2053.011.  EXCLUSIVE JURISDICTION.  The department has
	exclusive jurisdiction over all rates and premiums subject to this
	subchapter.
	(b)  Section 5.055, Chapter 265, Acts of the 79th
	Legislature, Regular Session, 2005, which added Section 8 to former
	Article 5.55, Insurance Code, is repealed.
	SECTION 3B.047.  (a) Subchapter A, Chapter 2053, Insurance
	Code, is amended to conform to Section 5.03, Chapter 265, Acts of
	the 79th Legislature, Regular Session, 2005, by adding Sections
	2053.012 and 2053.013 to read as follows:
	Sec. 2053.012.  REPORT ON LEGISLATIVE REFORMS REQUIRED.  (a)
	Not later than December 1 of each even-numbered year, the
	commissioner shall report to the governor, lieutenant governor, and
	speaker of the house of representatives regarding the impact that
	legislation enacted during the regular session of the 79th
	Legislature reforming the workers' compensation system of this
	state has had on the affordability and availability of workers'
	compensation insurance for the employers of this state. The report
	must include an analysis of:
	(1)  the projected workers' compensation premium
	savings realized by employers as a result of the reforms;
	(2)  the impact of the reforms on:
	(A)  the percentage of employers who provide
	workers' compensation insurance coverage for their employees; and
	(B)  to the extent possible, economic development
	and job creation;
	(3)  the effects of the reforms on market competition
	and carrier financial solvency, including an analysis of how
	carrier loss ratios, combined ratios, and use of individual risk
	variations have changed since implementation of the reforms; and
	(4)  the extent of participation in workers'
	compensation health care networks by small and medium-sized
	employers.
	(b)  If the commissioner determines that workers'
	compensation rate filings or premium levels analyzed by the
	department do not appropriately reflect the savings associated with
	the reforms described by Subsection (a), the commissioner shall
	include in the report required under Subsection (a) any
	recommendations, including any recommended legislative changes,
	necessary to identify the tools needed by the department to more
	effectively regulate workers' compensation rates.
	(c)  At the request of the department, each insurance company
	shall submit to the department all data and other information
	considered necessary by the commissioner to generate the report
	required under Subsection (a). Failure by an insurance company to
	submit the data and information in a timely fashion, as determined
	by commissioner rule, constitutes grounds for sanctions under
	Chapter 82.
	Sec. 2053.013.  REVIEW OF RATES; CONSIDERATION OF OTHER LAW.
	In reviewing rates under this subchapter, the commissioner shall
	consider any state or federal legislation that has been enacted and
	that may impact rates and premiums for workers' compensation
	insurance coverage in this state.
	(b)  Section 5.03, Chapter 265, Acts of the 79th Legislature,
	Regular Session, 2005, which added Subsections (e) through (h) to
	former Section 3, Article 5.55, Insurance Code, is repealed.
	SECTION 3B.048.  (a) Chapter 2053, Insurance Code, is
	amended to conform to Section 5.06, Chapter 265, Acts of the 79th
	Legislature, Regular Session, 2005, by adding Subchapter A-1 to
	read as follows:
	SUBCHAPTER A-1.  UNDERWRITING GUIDELINES
	Sec. 2053.031.  DEFINITIONS.  In this subchapter:
	(1)  "Insurance company" has the meaning assigned by
	Section 2053.001.
	(2)  "Underwriting guideline" means a rule, standard,
	guideline, or practice, whether written, oral, or electronic, that
	is used by an insurance company or its agent to decide whether to
	accept or reject an application for coverage under a workers'
	compensation insurance policy or to determine how to classify those
	risks that are accepted for the purpose of determining a rate.
	Sec. 2053.032.  UNDERWRITING GUIDELINES.  Each underwriting
	guideline used by an insurance company in writing workers'
	compensation insurance must be sound, actuarially justified, or
	otherwise substantially commensurate with the contemplated risk.
	An underwriting guideline may not be unfairly discriminatory.
	Sec. 2053.033.  ENFORCEMENT.  This subchapter may be
	enforced in the manner provided by Section 38.003(g).
	Sec. 2053.034.  FILING REQUIREMENTS. Each insurance company
	shall file with the department a copy of the insurance company's
	underwriting guidelines. The insurance company shall update its
	filing each time the underwriting guidelines are changed. If a
	group of insurance companies files one set of underwriting
	guidelines for the group, the group shall identify which
	underwriting guidelines apply to each insurance company in the
	group.
	Sec. 2053.035.  APPLICABILITY OF SECTION 38.003. Section
	38.003 applies to this subchapter to the extent consistent with
	this subchapter.
	(b)  Section 5.06, Chapter 265, Acts of the 79th Legislature,
	Regular Session, 2005, which added Article 5.55A to former
	Subchapter D, Chapter 5, Insurance Code, is repealed.
	SECTION 3B.049.  (a) Subchapter B, Chapter 2053, Insurance
	Code, is amended to conform to Section 5.08, Chapter 265, Acts of
	the 79th Legislature, Regular Session, 2005, by adding Section
	2053.056 to read as follows:
	Sec. 2053.056.  RATE HEARINGS. (a) The commissioner shall
	conduct a public hearing each biennium, beginning not later than
	December 1, 2008, to review rates to be charged for workers'
	compensation insurance written in this state.  A public hearing
	under this section is not a contested case as defined by Section
	2001.003, Government Code.
	(b)  Not later than the 30th day before the date of the public
	hearing required under Subsection (a), each insurance company
	subject to this subtitle and Article 5.66 shall file the insurance
	company's rates, supporting information, and supplementary rating
	information with the commissioner.
	(c)  The commissioner shall review the information submitted
	under Subsection (b) to determine the positive or negative impact
	of the enactment of workers' compensation reform legislation
	enacted by the 79th Legislature, Regular Session, 2005, on workers'
	compensation rates and premiums. The commissioner may consider
	other factors, including relativities under Section 2053.051, in
	determining whether a change in rates has impacted the premium
	charged to policyholders.
	(d)  The commissioner shall implement rules as necessary to
	mandate rate reductions or to modify the use of individual risk
	variations if the commissioner determines that the rates or
	premiums charged by insurance companies do not meet the rating
	standards as defined in this code.
	(e)  The commissioner shall adopt rules as necessary to
	mandate rate or premium reductions by insurance companies for the
	use of cost-containment strategies that result in savings to the
	workers' compensation system, including use of a workers'
	compensation health care network health care delivery system, as
	described by Chapter 1305.
	(b)  Section 5.08, Chapter 265, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Article 5.60A,
	Insurance Code, is repealed.
	SECTION 3B.050.  (a) Section 2053.151(b), Insurance Code,
	is amended to conform to Section 5.07, Chapter 265, Acts of the 79th
	Legislature, Regular Session, 2005, to read as follows:
	(b)  For purposes of Subsection (a), the commissioner shall
	establish standards and procedures for categorizing insurance and
	medical benefits required to be reported on each workers'
	compensation claim.  In establishing the standards, the
	commissioner shall consult with the commissioner of workers'
	compensation [Texas Workers' Compensation Commission] to ensure
	that the data collection methodology will yield data necessary for
	research and medical cost containment efforts.
	(b)  Section 5.07, Chapter 265, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Subsection (b), Article
	5.58, Insurance Code, is repealed.
	SECTION 3B.051.  (a) Section 2054.008(d), Insurance Code,
	is amended to conform to Section 6.065, Chapter 265, Acts of the
	79th Legislature, Regular Session, 2005, to read as follows:
	(d)  Except as provided by Subsection (e), a company
	investigation file:
	(1)  is confidential and not subject to required
	disclosure under Chapter 552, Government Code; and
	(2)  may be disclosed only:
	(A)  in a criminal proceeding;
	(B)  in a hearing conducted by the division of
	workers' compensation of the department [commission];
	(C)  on a judicial determination of good cause; or
	(D)  to a governmental agency, political
	subdivision, or regulatory body if the disclosure is necessary or
	proper for the enforcement of a law of this state, another state, or
	the United States.
	(b)  Section 6.065, Chapter 265, Acts of the 79th
	Legislature, Regular Session, 2005, which amended former
	Subsection (a), Section 10, Article 5.76-3, Insurance Code, is
	repealed.
	SECTION 3B.052.  (a) Section 2054.204(a), Insurance Code,
	is amended to conform to Section 6.066, Chapter 265, Acts of the
	79th Legislature, Regular Session, 2005, to read as follows:
	(a)  The company shall file annual statements with the
	department [and commission] in the same manner as is required of
	other workers' compensation insurance companies.
	(b)  Section 6.066, Chapter 265, Acts of the 79th
	Legislature, Regular Session, 2005, which amended former
	Subsection (e), Section 12, Article 5.76-3, Insurance Code, is
	repealed.
	SECTION 3B.053.  (a) Section 2054.206, Insurance Code, is
	amended to conform to Section 6.067, Chapter 265, Acts of the 79th
	Legislature, Regular Session, 2005, to read as follows:
	Sec. 2054.206.  ADDITIONAL REPORTS. The company shall file
	with the department [and the commission] all reports required of
	other workers' compensation insurance companies.
	(b)  Section 6.067, Chapter 265, Acts of the 79th
	Legislature, Regular Session, 2005, which amended former
	Subsection (b), Section 16, Article 5.76-3, Insurance Code, is
	repealed.
	SECTION 3B.0531.  Section 2054.253(b), Insurance Code, is
	amended to conform more closely to the source law from which the
	section was derived to read as follows:
	(b)  The systems may provide for a higher or lower premium
	payment by an insured based on[:
	[(1)]  the company's evaluation of the underwriting
	characteristics of the individual risk[;] and
	[(2)]  the appropriate premium to be charged for the
	policy coverages.
	SECTION 3B.054.  (a) Section 2054.451(b), Insurance Code,
	is amended to conform to Section 6.064, Chapter 265, Acts of the
	79th Legislature, Regular Session, 2005, to read as follows:
	(b)  The company shall cooperate with the division of
	workers' compensation of the department [commission] to compile and
	maintain information necessary to detect practices or patterns of
	conduct that violate this code relating to workers' compensation
	insurance or that violate Subtitle A, Title 5, Labor Code.
	(b)  Section 2054.452, Insurance Code, is amended to conform
	to Section 6.064, Chapter 265, Acts of the 79th Legislature,
	Regular Session, 2005, to read as follows:
	Sec. 2054.452.  INVESTIGATIONS; COORDINATION [WITH
	COMMISSION].  (a)  The company may investigate cases of suspected
	fraud and violations of this code relating to workers' compensation
	insurance.
	(b)  The company may:
	(1)  coordinate the company's investigations with those
	conducted by the division of workers' compensation of the
	department [commission] to avoid duplication of efforts; and
	(2)  refer to the division of workers' compensation of
	the department [commission] a case that is not otherwise resolved
	by the company so that the division [commission] may:
	(A)  perform any further investigation necessary
	under the circumstances;
	(B)  conduct administrative violation
	proceedings; and
	(C)  assess and collect penalties and
	restitution.
	(c)  Section 2054.454, Insurance Code, is amended to conform
	to Section 6.064, Chapter 265, Acts of the 79th Legislature,
	Regular Session, 2005, to read as follows:
	Sec. 2054.454.  DEPOSIT AND USE OF PENALTIES COLLECTED BY
	DIVISION [COMMISSION].  A penalty collected under Section
	2054.452(b):
	(1)  must be deposited in the Texas Department of
	Insurance operating account [general revenue fund to the credit of
	the commission]; and
	(2)  may be appropriated only to the division of
	workers' compensation of the department [commission] to offset the
	costs of the program under Section 2054.451.
	(d)  Section 6.064, Chapter 265, Acts of the 79th
	Legislature, Regular Session, 2005, which amended former
	Subsections (a), (b), and (e), Section 9, Article 5.76-3, Insurance
	Code, is repealed.
	SECTION 3B.055.  (a) Section 2054.501, Insurance Code, is
	amended to conform to Section 6.063, Chapter 265, Acts of the 79th
	Legislature, Regular Session, 2005, to read as follows:
	Sec. 2054.501.  DEFINITION.  In this subchapter, "division"
	means the [commission's] division of workers' compensation of the
	department [health and safety].
	(b)  Section 2054.502, Insurance Code, is amended to conform
	to Section 6.063, Chapter 265, Acts of the 79th Legislature,
	Regular Session, 2005, to read as follows:
	Sec. 2054.502.  REQUIREMENTS FOR PREVENTION OF INJURIES.
	The company may make and enforce requirements for the prevention of
	injuries to an employee of a policyholder or applicant for
	insurance under this chapter. On reasonable notice, a policyholder
	or applicant shall grant representatives of the company[, the
	commission,] or the department free access to the premises of the
	policyholder or applicant during regular working hours for purposes
	of this section.
	(c)  Section 2054.506, Insurance Code, is amended to conform
	to Section 6.063, Chapter 265, Acts of the 79th Legislature,
	Regular Session, 2005, to read as follows:
	Sec. 2054.506.  SAFETY CONSULTANT REPORT.  A safety
	consultant acting under this subchapter shall file a written report
	with the division [commission] and the policyholder specifying any
	hazardous condition or practice identified in the safety
	consultation.
	(d)  Section 2054.509, Insurance Code, is amended to conform
	to Section 6.063, Chapter 265, Acts of the 79th Legislature,
	Regular Session, 2005, to read as follows:
	Sec. 2054.509.  FOLLOW-UP INSPECTION.  (a) Not earlier than
	the 90th day after or later than the sixth month after the date an
	accident prevention plan is developed under Section 2054.507, the
	division shall conduct a follow-up inspection of the policyholder's
	premises in accordance with rules adopted by the commissioner of
	workers' compensation [commission].
	(b)  The division [commission] may require the participation
	of the safety consultant who performed the initial consultation and
	developed the accident prevention plan.
	(c)  If the commissioner of workers' compensation [division]
	determines that a policyholder has complied with the terms of the
	accident prevention plan or has implemented other accepted
	corrective measures, the commissioner of workers' compensation
	[division] shall certify that determination.
	(d)  If the commissioner of workers' compensation [division]
	determines that a policyholder has failed or refuses to implement
	the accident prevention plan or other suitable hazard abatement
	measures, the policyholder may elect to cancel coverage not later
	than the 30th day after the date of the determination.
	(e)  Sections 2054.510(a), (c), and (d), Insurance Code, are
	amended to conform to Section 6.063, Chapter 265, Acts of the 79th
	Legislature, Regular Session, 2005, to read as follows:
	(a)  If a policyholder described by Section 2054.509(d) does
	not elect to cancel coverage as provided by that section:
	(1)  the company may cancel the coverage; or
	(2)  the commissioner of workers' compensation
	[commission] may impose an administrative penalty on the
	policyholder.
	(c)  In imposing an administrative penalty, the commissioner
	of workers' compensation [commission] may consider any matter that
	justice may require and shall consider:
	(1)  the seriousness of the violation, including the
	nature, circumstances, consequences, extent, and gravity of the
	prohibited act;
	(2)  the history and extent of previous administrative
	violations;
	(3)  the demonstrated good faith of the violator,
	including actions taken to rectify the consequences of the
	prohibited act;
	(4)  any economic benefit resulting from the prohibited
	act; and
	(5)  the penalty necessary to deter future violations.
	(d)  A penalty collected under this section [must be]:
	(1)  must be deposited in the general revenue fund [to
	the credit of the commission]; and [or]
	(2)  may be appropriated [reappropriated] to the
	division [commission] to offset the costs of implementing and
	administering this subchapter.
	(f)  Section 2054.512, Insurance Code, is amended to conform
	to Section 6.063, Chapter 265, Acts of the 79th Legislature,
	Regular Session, 2005, to read as follows:
	Sec. 2054.512.  FEES FOR SERVICES.  The division
	[commission] shall:
	(1)  charge a policyholder for the reasonable cost of
	services provided to the policyholder under Sections 2054.505,
	2054.506, 2054.507, 2054.509, and 2054.510(a); and
	(2)  set the fees for the services at a
	cost-reimbursement level, including a reasonable allocation of the
	division's [commission's] administrative costs.
	(g)  Section 2054.513, Insurance Code, is amended to conform
	to Section 6.063, Chapter 265, Acts of the 79th Legislature,
	Regular Session, 2005, to read as follows:
	Sec. 2054.513.  ENFORCEMENT OF SUBCHAPTER.  The [compliance
	and practices] division [of the commission] shall enforce
	compliance with this subchapter through the administrative
	violation proceedings under Chapter 415, Labor Code.
	(h)  Section 6.063, Chapter 265, Acts of the 79th
	Legislature, Regular Session, 2005, which amended former
	Subsections (a), (e), (g), (h), (i), (k), and (l), Section 8,
	Article 5.76-3, Insurance Code, is repealed.
	SECTION 3B.056.  Section 2054.001(2), Insurance Code, is
	repealed to conform to Section 7.01, Chapter 265, Acts of the 79th
	Legislature, Regular Session, 2005.
	SECTION 3B.057.  Section 6.068, Chapter 265, Acts of the
	79th Legislature, Regular Session, 2005, which amended former
	Subsections (a) and (c), Section 10, Article 5.76-5, Insurance
	Code, is repealed.
	SECTION 3B.058.  Section 2151.154, Insurance Code, is
	amended to conform more closely to the source law from which the
	section was derived to read as follows:
	Sec. 2151.154.  ASSIGNMENT DISTRIBUTION PLAN.  (a)  The
	plan of operation must include a voluntary, competitive limited
	assignment distribution plan that allows an authorized insurer to
	contract directly with a servicing carrier [insurer] to accept
	assignments to the servicing carrier [insurer] by the association.
	(b)  A servicing carrier [insurer] must be authorized to
	write automobile insurance in this state and must:
	(1)  have written automobile liability insurance in
	this state for at least five years; or
	(2)  be currently engaged as a servicing carrier
	[insurer] for assigned risk automobile business in at least one
	other state.
	(c)  After notice and hearing, the commissioner may prohibit
	an insurer from acting as a servicing carrier [insurer].
	(d)  An authorized insurer and a servicing carrier [insurer]
	shall determine through negotiation the terms of a contract
	described by this section, including the buy-out fee.
	(e)  The governing committee may:
	(1)  adopt reasonable rules for the conduct of business
	under a contract described by this section; and
	(2)  establish reasonable standards of eligibility for
	servicing carriers [insurers].
	SECTION 3B.059.  (a) Section 2154.005(a), Insurance Code,
	is amended to conform to Section 1, Chapter 217, Acts of the 79th
	Legislature, Regular Session, 2005, to read as follows:
	(a)  The fund is an account in a depository selected by the
	board of regents of The Texas A&M University System in the manner
	provided by Section 51.003, Education Code, for funds subject to
	the control of institutions of higher education under Section
	51.002, Education Code [the general revenue fund].
	(b)  Section 1, Chapter 217, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Subsections (a) and
	(c), Section 5, Article 21.61, Insurance Code, is repealed.
	SECTION 3B.0591.  (a) The following changes are made to
	Subtitle A, Title 5, Labor Code, and Subtitle E, Title 10, Insurance
	Code, for organizational purposes:
	(1)  Chapter 406A, Labor Code, is redesignated as
	Chapter 2055, Subtitle E, Title 10, Insurance Code; and
	(2)  Sections 406A.001, 406A.002, 406A.003, 406A.004,
	406A.005, 406A.006, 406A.007, and 406A.008 in the redesignated
	chapter are redesignated as Sections 2055.001, 2055.002, 2055.003,
	2055.004, 2055.005, 2055.006, 2055.007, and 2055.008, Insurance
	Code, respectively.
	(b)  Section 406A.001, Labor Code, redesignated as Section
	2055.001, Insurance Code, by Subsection (a)(2) of this section, is
	amended to conform to that redesignation to read as follows:
	Sec. 2055.001 [406A.001].  DEFINITION [DEFINITIONS].  In
	this chapter, "business[:
	[(1)"Business] entity" means a business enterprise
	owned by a single person or a corporation, organization, business
	trust, trust, partnership, joint venture, association, or other
	business entity.
	[(2)  "Commissioner" means the commissioner of
	insurance.
	[(3)  "Department" means the Texas Department of
	Insurance.]
	(c)  Section 406A.008, Labor Code, redesignated as Section
	2055.008, Insurance Code, by Subsection (a)(2) of this section, is
	amended to conform to that redesignation to read as follows:
	Sec. 2055.008 [406A.008].  APPLICABILITY OF OTHER LAW. (a)
	A group established under this chapter is entitled to any deviation
	applicable under Section 2052.004, 2053.051, or 2053.052(a) or
	(b)[, Insurance Code].
	(b)  A member of a group is not subject to the discounts and
	surcharges established under Subchapter F, Chapter 2053[,
	Insurance Code].
	(d)  Section 36.002, Insurance Code, is amended to conform to
	the redesignation of Chapter 406A, Labor Code, as Chapter 2055,
	Insurance Code, by Subsection (a)(1) of this section to read as
	follows:
	Sec. 36.002.  ADDITIONAL RULEMAKING AUTHORITY. The
	commissioner may adopt reasonable rules that are:
	(1)  necessary to effect the purposes of a provision
	of:
	(A)  Subchapter B, Chapter 5;
	(B)  Subchapter C, Chapter 1806;
	(C)  Subchapter A, Chapter 2301;
	(D)  Chapter 251, as that chapter relates to
	casualty insurance and fidelity, guaranty, and surety bond
	insurance;
	(E)  Chapter 253;
	(F)  Chapter 2251 or 2252; or
	(G)  Subtitle B, Title 10; or
	(2)  appropriate to accomplish the purposes of a
	provision of:
	(A)  Section 37.051(a), 403.002, 492.051(b) or
	(c), 501.159, 941.003(b)(3) or (c), or 942.003(b)(3) or (c);
	(B)  Subchapter H, Chapter 544;
	(C)  Chapter 251, as that chapter relates to:
	(i)  automobile insurance;
	(ii)  casualty insurance and fidelity,
	guaranty, and surety bond insurance;
	(iii)  fire insurance and allied lines;
	(iv)  workers' compensation insurance; or
	(v)  aircraft insurance;
	(D)  Chapter 5, 252, 253, 254, 255, 256, 426, 493,
	494, 1804, 1805, 1806, or 2171;
	(E)  Subtitle B, C, D, E, F, H, or I, Title 10;
	(F)  Section 417.008, Government Code; or
	(G)  [Chapter 406A, Labor Code; or
	[(H)] Chapter 2154, Occupations Code.
	(e)  Section 1805.001, Insurance Code, is amended to conform
	to the redesignation of Chapter 406A, Labor Code, as Chapter 2055,
	Insurance Code, by Subsection (a)(1) of this section to read as
	follows:
	Sec. 1805.001.  APPLICABILITY OF CHAPTER. This chapter
	applies to the kinds of insurance and insurers subject to:
	(1)  Section 403.002;
	(2)  Section 941.003 with respect to the application of
	a law described by Section 941.003(b)(3) or (c);
	(3)  Section 942.003 with respect to the application of
	a law described by Section 942.003(b)(3) or (c);
	(4)  Subchapter A, B, C, or D, Chapter 5;
	(5)  Subchapter H, Chapter 544;
	(6)  Subchapter A, Chapter 2301;
	(7)  Chapter 252, 253, 254, 255, 426, 1806, 1807, 2001,
	2002, 2003, 2004, 2005, 2006, 2051, 2052, 2053, 2055, 2171, 2251, or
	2252;
	(8)  Subtitle B or C, Title 10; or
	(9)  [Chapter 406A, Labor Code; or
	[(10)] Chapter 2154, Occupations Code.
	(f)  Section 2051.002, Insurance Code, is amended to conform
	to the redesignation of Chapter 406A, Labor Code, as Chapter 2055,
	Insurance Code, by Subsection (a)(1) of this section to read as
	follows:
	Sec. 2051.002.  CONSTRUCTION OF CERTAIN LAWS. The following
	shall be construed and applied independently of any other law that
	relates to insurance rates and forms or prescribes the duties of the
	commissioner or the department:
	(1)  this chapter;
	(2)  Subchapter D, Chapter 5;
	(3)  Chapter 251, as that chapter relates to workers'
	compensation insurance; and
	(4)  Chapters 255, 426, 2052, [and] 2053, and 2055[;
	and
	[(5)Chapter 406A, Labor Code].
	SECTION 3B.060.  (a) Subchapter C, Chapter 2203, Insurance
	Code, is amended to conform to Section 1, Chapter 246, Acts of the
	79th Legislature, Regular Session, 2005, and Section 2, Chapter
	1136, Acts of the 79th Legislature, Regular Session, 2005, by
	adding Section 2203.1021 to read as follows:
	Sec. 2203.1021.  VOLUNTEER HEALTH CARE PROVIDERS.  (a)  In
	this section:
	(1)  "Charitable organization" has the meaning
	assigned by Section 84.003, Civil Practice and Remedies Code.
	(2)  "Volunteer health care provider" has the meaning
	assigned by Section 84.003, Civil Practice and Remedies Code.
	(b)  The association shall make available medical liability
	insurance or appropriate health care liability insurance covering a
	volunteer health care provider for the legal liability of the
	person against any loss, damage, or expense incident to a claim
	arising out of the death or injury of any person as the result of
	negligence in rendering or the failure to render professional
	service while acting in the course and scope of the person's duties
	as a volunteer health care provider as described by Chapter 84,
	Civil Practice and Remedies Code.
	(c)  A volunteer health care provider who is serving as a
	direct service volunteer of a charitable organization is eligible
	to obtain from the association the liability insurance made
	available under this section.  A volunteer health care provider who
	obtains coverage under this section is subject to Section 2203.302
	and the other provisions of this chapter in the same manner as
	physicians who are eligible to obtain medical liability insurance
	from the association.
	(d)  This section does not affect the liability of a
	volunteer health care provider who is serving as a direct service
	volunteer of a charitable organization.  Section 84.004(c), Civil
	Practice and Remedies Code, applies to the volunteer health care
	provider without regard to whether the volunteer health care
	provider obtains liability insurance under this section.
	(b)  Section 1, Chapter 246, Acts of the 79th Legislature,
	Regular Session, 2005, and Section 2, Chapter 1136, Acts of the 79th
	Legislature, Regular Session, 2005, which added Section 3C to
	former Article 21.49-3, Insurance Code, are repealed.
	SECTION 3B.061.  (a) Sections 2210.004(a) and (g),
	Insurance Code, are amended to conform to Section 1, Chapter 1153,
	Acts of the 79th Legislature, Regular Session, 2005, to read as
	follows:
	(a)  For purposes of this chapter and subject to this
	section, "insurable property" means immovable property at a fixed
	location in a catastrophe area or corporeal movable property
	located in that immovable property, as designated in the plan of
	operation, that is determined by the association according to the
	criteria specified in the plan of operation to be in an insurable
	condition against windstorm and hail or fire and explosion, as
	appropriate, as determined by normal underwriting standards.  The
	term includes property described by Section 2210.209.
	(g)  For purposes of this chapter, a residential structure is
	insurable property if:
	(1)  the residential structure is not:
	(A)  a condominium, apartment, duplex, or other
	multifamily residence; or
	(B)  a hotel or resort facility;
	(2)  the residential structure is located within an
	area designated as a unit under the Coastal Barrier Resources Act
	(Pub. L. No. 97-348); and
	(3)  a building permit or plat for the residential
	structure was filed with the municipality, the county, or the
	United States Army Corps of Engineers before June 11, 2003 [January
	1, 2004].
	(b)  Section 1, Chapter 1153, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Subsection (f), Section
	3, Article 21.49, Insurance Code, is repealed.
	SECTION 3B.062.  (a) Subchapter E, Chapter 2210, Insurance
	Code, is amended to conform to Section 2, Chapter 1153, Acts of the
	79th Legislature, Regular Session, 2005, by adding Section 2210.209
	to read as follows:
	Sec. 2210.209.  WINDSTORM AND HAIL INSURANCE:  COVERAGE FOR
	CERTAIN PROPERTY LOCATED OVER WATER. (a)  A windstorm and hail
	insurance policy issued by the association may include coverage
	for:
	(1)  a building or other structure located in the
	seacoast territory that is built wholly or partially over water;
	and
	(2)  the corporeal movable property contained in a
	building or structure described by Subdivision (1).
	(b)  The association may impose appropriate limits of
	coverage and deductibles for coverage described by Subsection (a).
	(c)  The board of directors of the association shall submit
	any proposed changes to the plan of operation necessary to
	implement Subsections (a) and (b) to the commissioner in the manner
	provided by Section 2210.153.
	(d)  The commissioner shall adopt rules as necessary to
	implement this section, including any rules necessary to implement
	changes in the plan of operation proposed under Subsection (c).
	(b)  Section 2, Chapter 1153, Acts of the 79th Legislature,
	Regular Session, 2005, which added Section 3A to former Article
	21.49, Insurance Code, is repealed.
	SECTION 3B.063.  (a) Section 2210.006(b), Insurance Code,
	is amended to conform to Section 1, Chapter 1251, Acts of the 79th
	Legislature, Regular Session, 2005, to read as follows:
	(b)  This chapter does not apply to:
	(1)  a farm mutual insurance company operating under
	Chapter 911;
	(2)  a nonaffiliated county mutual fire insurance
	company described by Section 912.310 that is writing exclusively
	industrial fire insurance policies as described by Section
	912.310(a)(2); or
	(3)  a mutual insurance company or a statewide mutual
	assessment company engaged in business under Chapter 12 or 13,
	Title 78, Revised Statutes, respectively, before those chapters'
	repeal by Section 18, Chapter 40, Acts of the 41st Legislature, 1st
	Called Session, 1929, as amended by Section 1, Chapter 60, General
	Laws, Acts of the 41st Legislature, 2nd Called Session, 1929, that
	retains the rights and privileges under the repealed law to the
	extent provided by those sections.
	(b)  Section 1, Chapter 1251, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Subsection (k), Section
	3, Article 21.49, Insurance Code, is repealed.
	SECTION 3B.0631.  Section 2210.359(a), Insurance Code, is
	amended to conform more closely to the source law from which it was
	derived to read as follows:
	(a)  Except as otherwise provided by this subsection, a [A]
	rate approved by the commissioner under this subchapter may not
	reflect an average rate change that is more than 10 percent higher
	or lower than the rate for commercial windstorm and hail insurance
	or 10 percent higher or lower than the rate for noncommercial
	windstorm and hail insurance in effect on the date the filing is
	made.  The rate may not reflect a rate change for an individual
	rating class that is 15 percent higher or lower than the rate for
	that individual rating class in effect on the date the filing is
	made.  This subsection does not apply to a rate filed under Sections
	2210.351(a)-(d).
	SECTION 3B.064.  Subchapter I, Chapter 2210, Insurance Code,
	is repealed to conform to Section 1, Chapter 222, Acts of the 79th
	Legislature, Regular Session, 2005.
	SECTION 3B.065.  (a) Section 2211.051, Insurance Code, is
	amended to conform to Section 1, Chapter 1082, Acts of the 79th
	Legislature, Regular Session, 2005, to read as follows:
	Sec. 2211.051.  ESTABLISHMENT OF FAIR PLAN.  The
	commissioner may establish a Fair Access to Insurance Requirements
	Plan to deliver residential property insurance to residents of this
	state in underserved areas if the commissioner determines, after a
	public hearing, that:
	(1)  in all or any part of the state, residential
	property insurance is not reasonably available in the voluntary
	market to a substantial number of insurable risks; or [and]
	(2)  at least 25 percent of the applicants to the
	residential property market assistance program who are qualified
	under that program's plan of operation have not been placed with an
	insurer in the preceding six months.
	(b)  Section 2211.052, Insurance Code, is amended to conform
	to Section 2, Chapter 1082, Acts of the 79th Legislature, Regular
	Session, 2005, by amending Subsections (b) and (d) and adding
	Subsection (e) to read as follows:
	(b)  The governing committee is composed of 11 members
	appointed by the commissioner as follows:
	(1)  five members who represent the interests of
	insurers;
	(2)  four public members who reside in this state; and
	(3)  two members who are general property and casualty
	agents.
	(d)  Each member of the governing committee who represents
	the interests of insurers must be a full-time employee of an insurer
	that is a member of the association.
	(e)  The commissioner may remove a member of the governing
	committee without cause and may replace the member in accordance
	with Subsection (b).
	(c)  Subchapter B, Chapter 2211, Insurance Code, is amended
	to conform to Section 2, Chapter 1082, Acts of the 79th Legislature,
	Regular Session, 2005, by adding Section 2211.0521 to read as
	follows:
	Sec. 2211.0521.  MEETINGS OF GOVERNING BODY.  (a)
	Notwithstanding Chapter 551, Government Code, or any other law,
	members of the governing committee may meet by telephone conference
	call, video conference, or other similar telecommunication method.
	The governing committee may use telephone conference call, video
	conference, or other similar telecommunication method for purposes
	of establishing a quorum or voting or for any other meeting purpose
	in accordance with this subsection and Subsection (b).  This
	subsection applies without regard to the subject matter discussed
	or considered by the members of the governing committee at the
	meeting.
	(b)  A meeting held by telephone conference call, video
	conference, or other similar telecommunication method:
	(1)  is subject to the notice requirements applicable
	to other meetings of the governing committee;
	(2)  may not be held unless notice of the meeting
	specifies the location of the meeting at which at least one member
	of the governing committee is physically present;
	(3)  must be audible to the public at the location
	specified in the notice under Subdivision (2); and
	(4)  must provide two-way audio communication between
	all members of the governing committee attending the meeting during
	the entire meeting, and if the two-way audio communication link
	with members attending the meeting is disrupted so that a quorum of
	the governing committee is no longer participating in the meeting,
	the meeting may not continue until the two-way audio communication
	link is reestablished.
	(d)  Sections 2211.101(b) and (c), Insurance Code, are
	amended to conform to Sections 1, 2, and 3, Chapter 1082, Acts of
	the 79th Legislature, Regular Session, 2005, to read as follows:
	(b)  Except as provided by this subsection, each [Each]
	insurer, as a condition of the insurer's authority to engage in the
	business of residential property insurance in this state, shall
	participate in the association in accordance with this chapter,
	including participating in the association's assessments
	[writings, expenses, and losses] in the proportion that the
	insurer's net direct premiums written in this state during the
	preceding calendar year bear to the aggregate net direct premiums
	written in this state by all participating insurers.  The Texas
	Windstorm Insurance Association established by Chapter 2210 may not
	participate in the association for any purpose.
	(c)  An insurer's participation under Subsection (b) in the
	association's assessments [writings, expenses, and losses] must be
	determined in accordance with the residential property statistical
	plan adopted by the commissioner.
	(e)  The following are repealed:
	(1)  Section 1, Chapter 1082, Acts of the 79th
	Legislature, Regular Session, 2005, which amended former
	Subsections (a) and (b), Section 1, Article 21.49A, Insurance Code;
	(2)  Section 2, Chapter 1082, Acts of the 79th
	Legislature, Regular Session, 2005, which amended former Section 3,
	Article 21.49A, Insurance Code, by amending Subsections (b), (d),
	and (e) and adding Subsections (f) and (g); and
	(3)  Section 3, Chapter 1082, Acts of the 79th
	Legislature, Regular Session, 2005, which amended former
	Subsection (d), Section 5, Article 21.49A, Insurance Code.
	SECTION 3B.066.  (a) Section 2211.104, Insurance Code, is
	amended to conform to Section 4, Chapter 1082, Acts of the 79th
	Legislature, Regular Session, 2005, by amending Subsections (b),
	(c), and (d) and adding Subsection (e) to read as follows:
	(b)  As reimbursement for assessments paid under this
	section or service fees paid under Section 2211.209, each [If the
	association assesses participating insurers under this section,
	each] insurer may charge a premium surcharge on every property
	insurance policy insuring property in this state that the insurer
	issues, the effective date of which is within the three-year period
	beginning on the 90th day after the date of the assessment or the
	90th day after the date the service fee under Section 2211.209 is
	paid, as applicable.
	(c)  The insurer shall compute the amount of the surcharge
	under Subsection (b) as a uniform percentage of the premium on each
	policy described by Subsection (b).  The percentage must be equal to
	one-third of the ratio of the amount of the participating insurer's
	assessment or service fee payment to the amount of the insurer's
	direct earned premiums, as reported to the department in the
	insurer's financial statement for the calendar year preceding the
	year in which the assessment or service fee payment is made so that,
	over the three-year period, the aggregate of all surcharges by the
	insurer under this section is at least equal to [equals] the amount
	of the assessment or service fee payment.
	(d)  The amount of any assessment paid and surcharged under
	this section may be carried by the insurer as an admitted asset of
	the insurer for all purposes, including exhibition in annual
	statements under Section 862.001, until collected [The minimum
	surcharge on a policy may be $1.  A surcharge may be rounded to the
	nearest dollar].
	(e)  The commissioner shall adopt rules and procedures as
	necessary to implement this section.
	(b)  Section 4, Chapter 1082, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Section 11, Article
	21.49A, Insurance Code, is repealed.
	SECTION 3B.067.  (a) Subchapter B, Chapter 2211, Insurance
	Code, is amended to conform to Section 5, Chapter 1082, Acts of the
	79th Legislature, Regular Session, 2005, by adding Section 2211.059
	to read as follows:
	Sec. 2211.059.  ASSETS OF ASSOCIATION.  On dissolution of
	the association, all assets of the association shall be deposited
	in the general revenue fund.
	(b)  Section 5, Chapter 1082, Acts of the 79th Legislature,
	Regular Session, 2005, which added Section 16 to former Article
	21.49A, Insurance Code, is repealed.
	SECTION 3B.068.  (a) Subchapter D, Chapter 2211, Insurance
	Code, is amended to conform to Section 3, Chapter 1153, Acts of the
	79th Legislature, Regular Session, 2005, by adding Section 2211.157
	to read as follows:
	Sec. 2211.157.  COVERAGE FOR CERTAIN WINDSTORM AND HAIL
	DAMAGE; COVERAGE FOR CERTAIN PROPERTY LOCATED OVER WATER.  (a)  A
	policy issued by the association may include coverage against loss
	or damage by windstorm or hail for:
	(1)  a building or other structure that is built wholly
	or partially over water; and
	(2)  the corporeal movable property contained in a
	building or structure described by Subdivision (1).
	(b)  The association may impose appropriate limits of
	coverage and deductibles for coverage described by Subsection (a).
	(c)  The governing committee of the association shall submit
	any proposed changes to the plan of operation necessary to
	implement Subsections (a) and (b) to the commissioner for the
	approval of the commissioner in the manner provided by Section
	2211.053.
	(d)  The commissioner shall adopt rules as necessary to
	implement this section, including any rules necessary to implement
	changes in the plan of operation proposed under Subsections (a) and
	(b).
	(b)  Section 3, Chapter 1153, Acts of the 79th Legislature,
	Regular Session, 2005, which added Section 5A to former Article
	21.49A, Insurance Code, is repealed.
	SECTION 3B.069.  (a) Section 2212.001, Insurance Code, is
	amended to conform to Section 2, Chapter 184, Acts of the 79th
	Legislature, Regular Session, 2005; Section 2, Chapter 246, Acts of
	the 79th Legislature, Regular Session, 2005; and Section 3, Chapter
	1136, Acts of the 79th Legislature, Regular Session, 2005, to read
	as follows:
	Sec. 2212.001.  DEFINITIONS.  In this chapter:
	(1)  "Charitable organization" has the meaning
	assigned by Section 84.003, Civil Practice and Remedies Code.
	(2)  "Dentist" means a person licensed to practice
	dentistry in this state.
	(3) [(2)]  "Health care liability claim" means a cause
	of action against a physician or dentist for treatment, lack of
	treatment, or other claimed departure from accepted standards of
	health care or safety that proximately results in injury to or death
	of the patient, whether the patient's claim or cause of action
	sounds in tort or contract.
	(4) [(3)]  "Physician" means a person licensed to
	practice medicine in this state.
	(5) [(4)]  "Trust" means a self-insurance trust
	organized and operated under this chapter.
	(6)  "Volunteer health care provider" has the meaning
	assigned by Section 84.003, Civil Practice and Remedies Code.
	(b)  Section 2, Chapter 184, Acts of the 79th Legislature,
	Regular Session, 2005; Section 2, Chapter 246, Acts of the 79th
	Legislature, Regular Session, 2005; and Section 3, Chapter 1136,
	Acts of the 79th Legislature, Regular Session, 2005, all of which
	added Subdivisions (4) and (5) to former Subsection (a), Article
	21.49-4, Insurance Code, are repealed.
	SECTION 3B.070.  (a) Subchapter C, Chapter 2212, Insurance
	Code, is amended to conform to Section 3, Chapter 184, Acts of the
	79th Legislature, Regular Session, 2005; Section 3, Chapter 246,
	Acts of the 79th Legislature, Regular Session, 2005; and Section 4,
	Chapter 1136, Acts of the 79th Legislature, Regular Session, 2005,
	by adding Section 2212.102 to read as follows:
	Sec. 2212.102.  COVERAGE FOR VOLUNTEER HEALTH CARE
	PROVIDERS.  (a)  The trust, in accordance with Section 2212.054, may
	make available professional liability insurance covering a
	volunteer health care provider for an act or omission resulting in
	death, damage, or injury to a patient while the person is acting in
	the course and scope of the person's duties as a volunteer health
	care provider as described by Chapter 84, Civil Practice and
	Remedies Code.
	(b)  This section does not affect the liability of a
	volunteer health care provider who is serving as a direct service
	volunteer of a charitable organization.  Section 84.004(c), Civil
	Practice and Remedies Code, applies to the volunteer health care
	provider without regard to whether the volunteer health care
	provider obtains liability insurance under this section.
	(c)  The trust may make professional liability insurance
	available under this section to a volunteer health care provider
	without regard to whether the volunteer health care provider is a
	physician or dentist.
	(b)  Section 3, Chapter 184, Acts of the 79th Legislature,
	Regular Session, 2005; Section 3, Chapter 246, Acts of the 79th
	Legislature, Regular Session, 2005; and Section 4, Chapter 1136,
	Acts of the 79th Legislature, Regular Session, 2005, all of which
	added Subsection (c-1) to former Article 21.49-4, Insurance Code,
	are repealed.
	SECTION 3B.071.  (a) Section 2251.003(b), Insurance Code,
	is amended to conform to Section 1, Chapter 70, Acts of the 79th
	Legislature, Regular Session, 2005; Section 1, Chapter 71, Acts of
	the 79th Legislature, Regular Session, 2005; and Section 4, Chapter
	102, Acts of the 79th Legislature, Regular Session, 2005, to read as
	follows:
	(b)  This subchapter and Subchapters B, C, D, and E apply to
	all lines of the following kinds of insurance written under an
	insurance policy or contract issued by an insurer authorized to
	engage in the business of insurance in this state:
	(1)  general liability insurance;
	(2)  residential and commercial property insurance,
	including farm and ranch insurance and farm and ranch owners
	insurance;
	(3)  personal and commercial casualty insurance,
	except as provided by Section 2251.004;
	(4)  medical professional liability insurance;
	(5)  fidelity, guaranty, and surety bonds other than
	criminal court appearance bonds;
	(6)  personal umbrella insurance;
	(7)  personal liability insurance;
	(8)  guaranteed auto protection (GAP) insurance;
	(9)  involuntary unemployment insurance;
	(10)  financial guaranty insurance;
	(11)  inland marine insurance;
	(12)  rain insurance;
	(13)  hail insurance on farm crops; [and]
	(14)  personal and commercial automobile insurance;
	(15)  multi-peril insurance; and
	(16)  identity theft insurance issued under Chapter
	706.
	(b)  Section 2301.003(b), Insurance Code, is amended to
	conform to Section 1, Chapter 70, Acts of the 79th Legislature,
	Regular Session, 2005; Section 1, Chapter 71, Acts of the 79th
	Legislature, Regular Session, 2005; and Section 4, Chapter 102,
	Acts of the 79th Legislature, Regular Session, 2005, to read as
	follows:
	(b)  This subchapter applies to all lines of the following
	kinds of insurance written under an insurance policy or contract
	issued by an insurer authorized to engage in the business of
	insurance in this state:
	(1)  general liability insurance;
	(2)  residential and commercial property insurance,
	including farm and ranch insurance and farm and ranch owners
	insurance;
	(3)  personal and commercial casualty insurance,
	except as provided by Section 2301.005;
	(4)  medical professional liability insurance;
	(5)  fidelity, guaranty, and surety bonds other than
	criminal court appearance bonds;
	(6)  personal umbrella insurance;
	(7)  personal liability insurance;
	(8)  guaranteed auto protection (GAP) insurance;
	(9)  involuntary unemployment insurance;
	(10)  financial guaranty insurance;
	(11)  inland marine insurance;
	(12)  rain insurance;
	(13)  hail insurance on farm crops; [and]
	(14)  personal and commercial automobile insurance;
	(15)  multi-peril insurance; and
	(16)  identity theft insurance issued under Chapter
	706.
	(c)  Section 1, Chapter 70, Acts of the 79th Legislature,
	Regular Session, 2005; Section 1, Chapter 71, Acts of the 79th
	Legislature, Regular Session, 2005; and Section 4, Chapter 102,
	Acts of the 79th Legislature, Regular Session, 2005, all of which
	amended former Subsection (a), Section 2, Article 5.13-2, Insurance
	Code, are repealed.
	SECTION 3B.072.  (a) Subchapter E, Chapter 2251, Insurance
	Code, is amended by adding Section 2251.205 to conform to Section 1,
	Chapter 1118, Acts of the 79th Legislature, Regular Session, 2005,
	to read as follows:
	Sec. 2251.205.  APPLICATION OF FILING REQUIREMENTS TO OTHER
	INSURERS.  An insurer is subject to the filing requirements
	determined by the commissioner by rule under Section 2251.204 if:
	(1)  the insurer, along with the insurer's affiliated
	companies or group, issues personal automobile liability insurance
	policies only below 101 percent of the minimum limits required by
	Chapter 601, Transportation Code; and
	(2)  the insurer, along with the insurer's affiliated
	companies or group, has a market share of less than 3.5 percent of
	the personal automobile insurance market in this state.
	(b)  Section 1, Chapter 1118, Acts of the 79th Legislature,
	Regular Session, 2005, which added Subsection (h) to former Section
	13, Article 5.13-2, Insurance Code, is repealed.
	SECTION 3B.073.  (a) Section 2253.001, Insurance Code, is
	amended to conform to Section 2, Chapter 291, Acts of the 79th
	Legislature, Regular Session, 2005, to read as follows:
	Sec.2253.001.RATING TERRITORIES.  (a)  Notwithstanding
	any other provision of this code, an insurer, in writing
	residential property or personal automobile insurance, may use
	rating territories that subdivide a county only if:
	(1)  the county is subdivided; and
	(2)  the rate for any subdivision in the county is not
	greater than 15 percent higher than the rate used in any other
	subdivision in the county by that insurer.
	(b)  The [For residential property insurance or personal
	automobile insurance, the] commissioner by rule may allow a greater
	rate difference than the rate difference specified by Subsection
	(a).
	(b)  Section 2, Chapter 291, Acts of the 79th Legislature,
	Regular Session, 2005, which amended former Article 5.171,
	Insurance Code, is repealed.
	SECTION 3B.074.  Section 4151.206(a), Insurance Code, is
	amended to conform more closely to the source law from which the
	section was derived to read as follows:
	(a)  The commissioner shall collect and an applicant or
	administrator shall pay to the commissioner fees in an amount to be
	determined by the commissioner as follows:
	(1)  a filing fee not to exceed $1,000 for processing an
	original application for a certificate of authority for an
	administrator;
	(2)  a fee not to exceed $500 for an examination under
	Section 4151.201 [4201.201]; and
	(3)  a filing fee not to exceed $200 for an annual
	report.
	SECTION 3B.075.  (a) Sections 4201.054(a) and (d),
	Insurance Code, are amended to conform to Section 6.072, Chapter
	265, Acts of the 79th Legislature, Regular Session, 2005, to read as
	follows:
	(a)  Except as provided by this section, this chapter applies
	to utilization review of a health care service provided to a person
	eligible for workers' compensation medical benefits under Title 5,
	Labor Code. The commissioner of workers' compensation shall
	regulate as provided by this chapter a person who performs
	utilization review of a medical benefit provided under Title 5
	[Chapter 408], Labor Code.
	(d)  The commissioner of workers' compensation [and the
	Texas Workers' Compensation Commission] may adopt rules [and enter
	into memoranda of understanding] as necessary to implement this
	section.
	(b)  Section 4201.054(b), Insurance Code, is repealed to
	conform to Section 6.072, Chapter 265, Acts of the 79th
	Legislature, Regular Session, 2005.
	(c)  Section 6.072, Chapter 265, Acts of the 79th
	Legislature, Regular Session, 2005, which amended former
	Subsection (c), Section 14, Article 21.58A, Insurance Code, is
	repealed.
	SECTION 3B.076.  (a) Section 4201.207(b), Insurance Code,
	is amended to conform to Section 6.071, Chapter 265, Acts of the
	79th Legislature, Regular Session, 2005, to read as follows:
	(b)  A health care provider's charges for providing medical
	information to a utilization review agent may not:
	(1)  exceed the cost of copying records regarding a
	workers' compensation claim as set by rules adopted by the
	commissioner of workers' compensation [Texas Workers' Compensation
	Commission]; or
	(2)  include any costs otherwise recouped as part of
	the charges for health care.
	(b)  Section 6.071, Chapter 265, Acts of the 79th
	Legislature, Regular Session, 2005, which amended former
	Subsection (l), Section 4, Article 21.58A, Insurance Code, is
	repealed.
	SECTION 3B.077.  This article takes effect September 1, 2007.
	____________________________________________________________
	President of the SenateSpeaker of the House
	I certify that H.B. No. 2636 was passed by the House on April
	25, 2007, by the following vote:  Yeas 145, Nays 0, 1 present, not
	voting; and that the House concurred in Senate amendments to H.B.
	No. 2636 on May 17, 2007, by the following vote:  Yeas 144, Nays 0,
	1 present, not voting.
	______________________________
	Chief Clerk of the House
	I certify that H.B. No. 2636 was passed by the Senate, with
	I certify that H.B. No. 2636 was passed by the Senate, with
	amendments, on May 15, 2007, by the following vote:  Yeas 31, Nays
	0.
	______________________________
	Secretary of the Senate
	APPROVED: __________________
	APPROVED: __________________
	Date
	__________________
	Governor