HB 0599 Revises receivership law by exempting commercial property and casualty policies from certain regulations
Bill Summary
- Prepared by Senate Research -

SCS/HCS/HB 599 - This act makes several changes to the administration of insurance receiverships. It requires a liquidator to make early access disbursements to a guaranty association and establishes standards for these disbursements. It also prohibits a receiver from requiring payment from a reinsurer based on estimated incurred but not reported losses. This portion of the act expires on December 31, 2000.

This act excludes companies that provide commercial property and casualty insurance from the requirements to submit certain information for review by the Department of Insurance. Commercial property and commercial casualty insurance policies which meet requirements (see below) shall not be required to submit policy forms and rating plans for review by the Department of Insurance. To be exempt from the regulations regarding policy forms and rating, the policyholder must either use the services of an independent insurance advisor, or its commercial operations must meet any two of the following six criteria:

(1) 100 or more employees;

(2) Net worth of over $25 million;

(3) Net revenues or sales of over $50 million;

(4) Paid aggregate annual insurance premiums of over $50,000, excluding workers' compensation and employer's liability insurance;

(5) Is a not-for-profit or public entity with an annual budget or assets of at least $25 million; or

(6) Is a municipality with a population over 50,000 inhabitants.

The Department of Insurance still retains authority to make certain that the rates for commercial property or commercial casualty policies insurance rates are not excessive, inadequate, or unfairly discriminatory. A portion of this act is similar to provisions contained in HCS/SCS/SB 386.
STEPHEN WITTE

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