Bill Text: TX SB734 | 2013-2014 | 83rd Legislature | Enrolled
Bill Title: Relating to the licensing of captive insurance companies; authorizing fees and authorizing and imposing taxes.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Passed) 2013-06-14 - Effective immediately [SB734 Detail]
Download: Texas-2013-SB734-Enrolled.html
S.B. No. 734 |
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relating to the licensing of captive insurance companies; | ||
authorizing fees and authorizing and imposing taxes. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Subtitle B, Title 3, Insurance Code, is amended | ||
by adding Chapter 223A to read as follows: | ||
CHAPTER 223A. CAPTIVE INSURANCE PREMIUM TAX | ||
Sec. 223A.001. DEFINITION. In this chapter, "captive | ||
insurance company" means a captive insurance company holding a | ||
certificate of authority under Chapter 964. | ||
Sec. 223A.002. APPLICABILITY OF CHAPTER. This chapter | ||
applies to a captive insurance company holding a certificate of | ||
authority under Chapter 964. | ||
Sec. 223A.003. TAX IMPOSED; RATE. (a) An annual tax is | ||
imposed on each captive insurance company that receives gross | ||
premiums subject to taxation under this chapter. The rate of the | ||
tax is one-half percent of the company's taxable premium receipts | ||
for a calendar year. | ||
(b) Except as provided by Subsection (c), in determining a | ||
captive insurance company's taxable premium receipts, the captive | ||
insurance company shall include the total gross amounts of | ||
premiums, membership fees, assessments, dues, revenues, and other | ||
considerations for insurance written by the captive insurance | ||
company in a calendar year from any kind of insurance written by the | ||
company on each kind of property or risk without regard to the | ||
location of the property or risk. | ||
(c) The following premium receipts are not included in | ||
determining a captive insurance company's taxable premium | ||
receipts: | ||
(1) premium receipts received from another authorized | ||
insurer for reinsurance; | ||
(2) returned premiums and dividends paid to | ||
policyholders; and | ||
(3) premiums excluded by another law of this state. | ||
(d) In determining a captive insurance company's taxable | ||
premium receipts, a company is not entitled to a deduction for | ||
premiums paid for reinsurance. | ||
(e) The annual minimum aggregate tax to be paid by a captive | ||
insurance company under this chapter is $7,500 and the annual | ||
maximum aggregate tax to be paid by a company under this chapter is | ||
$200,000. Gross premiums subject to taxation under this chapter | ||
are not subject to taxes, surcharges, or other regulatory | ||
assessments or fees under this code other than insurance | ||
maintenance taxes as provided by Section 964.068. | ||
Sec. 223A.004. TAX DUE DATES. (a) The total tax imposed by | ||
this chapter is due and payable not later than March 1 after the end | ||
of the calendar year for which the tax is due. | ||
(b) A captive insurance company that had a net tax liability | ||
for the previous calendar year of more than $1,000 shall make | ||
semiannual prepayments of tax on March 1 and August 1. The tax paid | ||
on each date must be equal to 50 percent of the total amount of tax | ||
the company paid under this chapter for the previous calendar year. | ||
If the company did not pay a tax under this chapter during the | ||
previous calendar year, the tax paid on each date must be equal to | ||
the tax that would be owed on the aggregate of the gross premiums | ||
for the two previous calendar quarters. | ||
(c) The comptroller may refund any overpayment of taxes that | ||
results from the semiannual prepayment system prescribed by this | ||
section. | ||
Sec. 223A.005. TAX REPORT. (a) A captive insurance | ||
company liable for the tax imposed by this chapter must file | ||
annually with the comptroller a tax report on a form prescribed by | ||
the comptroller. | ||
(b) The tax report is due on the date the tax is due under | ||
Section 223A.004(a). | ||
Sec. 223A.006. CHANGE IN DUE DATES. (a) The comptroller | ||
by rule may change the dates for reporting and paying taxes under | ||
this chapter to improve operating efficiencies within the agency. | ||
(b) A change by the comptroller in a reporting or payment | ||
date must retain the system of semiannual prepayments prescribed by | ||
Section 223A.004. | ||
Sec. 223A.007. CREDIT FOR FEES PAID. (a) A captive | ||
insurance company is entitled to a credit on the amount of tax due | ||
under this chapter for all examination and evaluation fees paid to | ||
this state during the calendar year for which the tax is due. The | ||
limitations provided by Sections 803.007(1) and (2)(B) for a | ||
domestic insurance company apply to a captive insurance company. | ||
(b) The credit provided by this section is in addition to | ||
any other credit authorized by statute. | ||
Sec. 223A.008. FAILURE TO PAY TAXES. A captive insurance | ||
company that fails to pay all taxes imposed by this chapter is | ||
subject to Section 203.002 of this code and Subtitles A and B, Title | ||
2, Tax Code. | ||
SECTION 2. Subtitle H, Title 6, Insurance Code, is amended | ||
by adding Chapter 964 to read as follows: | ||
CHAPTER 964. CAPTIVE INSURANCE COMPANIES | ||
SUBCHAPTER A. GENERAL PROVISIONS | ||
Sec. 964.001. DEFINITIONS. (a) In this chapter: | ||
(1) "Affiliated company" or "affiliate" has the | ||
meaning assigned by Section 823.003 and includes a parent entity | ||
that controls a captive insurance company. | ||
(2) "Captive insurance company" means a company that | ||
holds a certificate of authority under this chapter to insure the | ||
operational risks of the company's affiliates or risks of a | ||
controlled unaffiliated business. | ||
(3) "Captive management company" means an entity | ||
providing administrative services to a captive insurance company. | ||
(4) "Control" means the power to direct, or cause the | ||
direction of, the management and policies of an entity, other than | ||
the power that results from an official position with or corporate | ||
office held in the entity. The power may be possessed directly or | ||
indirectly by any means, including through the ownership of voting | ||
securities or by contract, other than a commercial contract for | ||
goods or nonmanagement services. | ||
(5) "Controlled unaffiliated business" means a | ||
person: | ||
(A) that is not an affiliate; | ||
(B) that has an existing contractual | ||
relationship with an affiliate under which the affiliate bears a | ||
potential financial loss; and | ||
(C) the risks of which are managed by a captive | ||
insurance company under Section 964.066. | ||
(6) "Operational risk" means any potential financial | ||
loss of an affiliate, except for a loss arising from an insurance | ||
policy issued by a captive or insurance affiliate. | ||
(7) "Redomestication" means the transfer to or from | ||
this state of the insurance domicile of an authorized captive | ||
insurer. | ||
(b) Notwithstanding Section 30.003, in this chapter, | ||
"person" has the meaning assigned by Section 311.005, Government | ||
Code. | ||
Sec. 964.002. APPLICABILITY OF OTHER LAWS. (a) Except as | ||
otherwise provided by this chapter, this code does not apply to a | ||
captive insurance company except: | ||
(1) Title 2; | ||
(2) Chapter 223A and Subtitles A and C, Title 3; | ||
(3) Chapter 401; | ||
(4) Chapter 441; | ||
(5) Chapter 443; and | ||
(6) Chapter 803. | ||
(b) A captive insurance company operating under this | ||
chapter is subject to the Business Organizations Code, including | ||
the requirement to be authorized by the secretary of state, to the | ||
extent those laws do not conflict with this chapter. | ||
(c) Chapter 823 applies to a captive insurance company only | ||
if the company is affiliated with another insurer that is subject to | ||
Chapter 823. | ||
SUBCHAPTER B. CAPTIVE INSURANCE COMPANIES | ||
Sec. 964.051. AUTHORITY TO WRITE DIRECT BUSINESS. | ||
(a) Except as provided by this section, a captive insurance | ||
company may write any type of insurance, but may only insure the | ||
operational risks of the company's affiliates and risks of a | ||
controlled unaffiliated business. | ||
(b) A captive insurance company may not issue: | ||
(1) life insurance; | ||
(2) annuities; | ||
(3) accident and health insurance for the company's | ||
parent and affiliates, except to insure employee benefits that are | ||
subject to the Employee Retirement Income Security Act of 1974 (29 | ||
U.S.C. Section 1001 et seq.); | ||
(4) title insurance; | ||
(5) mortgage guaranty insurance; | ||
(6) financial guaranty insurance; | ||
(7) residential property insurance; | ||
(8) personal automobile insurance; or | ||
(9) workers' compensation insurance. | ||
(c) A captive insurance company may not issue a type of | ||
insurance, including automobile liability insurance, that is | ||
required, under the laws of this state or a political subdivision of | ||
this state, as a prerequisite for obtaining a license or permit if | ||
the law requires that the liability insurance be issued by an | ||
insurer authorized to engage in the business of insurance in this | ||
state. | ||
(d) A captive insurance company is authorized to issue a | ||
contractual reimbursement policy to: | ||
(1) an affiliated certified self-insurer authorized | ||
under Chapter 407, Labor Code, or a similar affiliated entity | ||
expressly authorized by analogous laws of another state; or | ||
(2) an affiliate that is insured by a workers' | ||
compensation insurance policy with a negotiated deductible | ||
endorsement. | ||
Sec. 964.052. AUTHORITY TO PROVIDE REINSURANCE. (a) A | ||
captive insurance company may provide reinsurance to an insurer | ||
covering the operational risks of the captive insurance company's | ||
affiliates or risks of a controlled unaffiliated business that the | ||
captive insurance company may insure directly under Section 964.051 | ||
and: | ||
(1) employee benefit plans offered by affiliates; | ||
(2) liability insurance an affiliate must maintain as | ||
a prerequisite for obtaining a license or permit if the law requires | ||
maintenance of the liability insurance; and | ||
(3) workers' compensation insurance and employer | ||
liability policies issued to affiliates if the insurer that | ||
directly issues workers' compensation insurance and employer's | ||
liability policies or its licensed, if required by law, | ||
administrator or adjuster: | ||
(A) services all claims incurred during the | ||
policy period; and | ||
(B) complies with all requirements for an insurer | ||
under this code, including Chapter 462, and under Title 5, Labor | ||
Code. | ||
(b) A captive insurance company shall provide notice to the | ||
commissioner of a reinsurance agreement that the company becomes a | ||
party to not later than the 30th day after the date of the execution | ||
of the agreement. | ||
(c) A captive insurance company shall provide notice of a | ||
termination of a previously filed reinsurance agreement to the | ||
commissioner not later than the 30th day after the date of | ||
termination. | ||
(d) A captive insurance company may take credit for reserves | ||
on risks or portions of risks ceded to reinsurers under Subchapter | ||
C, Chapter 492, and Subchapter C, Chapter 493. | ||
Sec. 964.053. FORMATION. (a) A captive insurance company | ||
must be formed for the purpose of engaging in the business of | ||
insurance under this chapter. | ||
(b) A captive insurance company may be formed and operated | ||
in any form of business organization authorized under the Business | ||
Organizations Code except a risk retention group or general | ||
partnership. A captive insurance company may only be formed as a | ||
nonprofit corporation if it is controlled by a nonprofit | ||
corporation. | ||
(c) The certificate of formation of a captive insurance | ||
company must include: | ||
(1) the name of the company, which may not be the same | ||
as, deceptively similar to, or likely to be confused with or | ||
mistaken for any other existing business name registered in this | ||
state; | ||
(2) the location of the company's principal business | ||
office; | ||
(3) the type of insurance business in which the | ||
company proposes to engage; | ||
(4) the number of directors or members of the | ||
governing body of the company; | ||
(5) the number of authorized shares and the par value | ||
of the company's capital stock for a captive insurance company | ||
formed as a corporation; | ||
(6) the amount of the company's initial capital and | ||
surplus; and | ||
(7) any other information required by the commissioner | ||
as necessary to explain the company's objectives, management, and | ||
control. | ||
(d) The board of directors or governing body of a captive | ||
insurance company formed in this state must have at least three | ||
members, and at least one of the members must be a resident of this | ||
state. | ||
(e) The certificate of formation or bylaws of a captive | ||
insurance company must authorize a quorum of the board of directors | ||
or governing body to consist of not fewer than one-third of the | ||
fixed number of directors or members of the governing body. | ||
Sec. 964.054. RESERVES AND ACCOUNTING BASIS. (a) A | ||
captive insurance company shall maintain reserves in an amount | ||
stated in the aggregate to provide for the payment of all losses or | ||
claims for which the captive insurance company may be liable and | ||
that are: | ||
(1) incurred on or before the date of the annual report | ||
under Section 964.060, whether reported or unreported; and | ||
(2) unpaid as of the date of the annual report under | ||
Section 964.060. | ||
(b) In addition to the reserves required by Subsection (a), | ||
a captive insurance company shall maintain reserves in an amount | ||
estimated to provide for the expenses of adjustment or settlement | ||
of the losses or claims described by Subsection (a). | ||
(c) The captive insurance company shall use generally | ||
accepted accounting principles as an accounting basis except that a | ||
captive insurance company that is required to hold a certificate of | ||
authority under another jurisdiction's insurance laws shall use | ||
statutory accounting principles. | ||
Sec. 964.055. CERTIFICATE OF AUTHORITY REQUIRED. (a) An | ||
entity may not engage in business as a captive insurance company | ||
domiciled in this state unless it holds a certificate of authority | ||
issued by the department to act as a captive insurance company. A | ||
captive insurance company, when permitted by its certificate of | ||
formation, may apply for a certificate of authority under this | ||
chapter. | ||
(b) An entity does not qualify for a certificate of | ||
authority under this chapter unless: | ||
(1) its affiliates have significant operations in this | ||
state, as determined by the commissioner; | ||
(2) its board of directors or governing body holds at | ||
least one meeting each year in this state; | ||
(3) it maintains its principal office and books and | ||
records in this state, unless the commissioner grants an | ||
application to relocate the entity's books and records under | ||
Chapter 803; and | ||
(4) it complies with Section 804.101 or 804.102. | ||
Sec. 964.056. CAPITAL AND SURPLUS REQUIREMENTS. (a) The | ||
department may not issue a certificate of authority to a captive | ||
insurance company unless the company possesses and maintains | ||
unencumbered capital and surplus in an amount determined by the | ||
commissioner after considering: | ||
(1) the amount of premium written by the captive | ||
insurance company; | ||
(2) the characteristics of the assets held by the | ||
captive insurance company; | ||
(3) the terms of reinsurance arrangements entered into | ||
by the captive insurance company; | ||
(4) the type of business covered in policies issued by | ||
the captive insurance company; | ||
(5) the underwriting practices and procedures of the | ||
captive insurance company; and | ||
(6) any other criteria that has an impact on the | ||
operations of the captive insurance company determined to be | ||
significant by the commissioner. | ||
(b) The amount of capital and surplus determined by the | ||
commissioner under Subsection (a) may not be less than $250,000. | ||
(c) The capital and surplus required by Subsection (a) must | ||
be in the form of: | ||
(1) United States currency; | ||
(2) an irrevocable letter of credit, in a form | ||
approved by the commissioner and not secured by a guarantee from an | ||
affiliate, naming the commissioner as beneficiary for the security | ||
of the captive insurance company's policyholders and issued by a | ||
bank approved by the commissioner; | ||
(3) bonds of this state; or | ||
(4) bonds or other evidences of indebtedness of the | ||
United States, the principal and interest of which are guaranteed | ||
by the United States. | ||
Sec. 964.057. APPLICATION FOR CERTIFICATE OF AUTHORITY. | ||
(a) To obtain a certificate of authority for a captive insurance | ||
company, the incorporators or organizers must pay to the | ||
commissioner an application fee and file with the commissioner an | ||
application for the certificate of authority, which must include: | ||
(1) a financial statement certified by two principal | ||
officers; | ||
(2) a plan of operation and projections, which must | ||
include an actuarial report prepared by a qualified independent | ||
actuary; | ||
(3) the captive insurance company's certificate of | ||
formation; | ||
(4) an affidavit by the incorporators, organizers, or | ||
officers of the captive insurance company stating that: | ||
(A) the capital and surplus are the bona fide | ||
property of the company; and | ||
(B) the certificate of formation is true and | ||
correct; and | ||
(5) if the application provides for the issuance of | ||
shares of stock or other type of equity instrument without par | ||
value, a certificate authenticated by the incorporators or officers | ||
stating: | ||
(A) the number of shares or other type of equity | ||
instrument without par value that are subscribed; and | ||
(B) the actual consideration received by the | ||
captive insurance company for those shares or other type of equity | ||
instrument. | ||
(b) If the commissioner is not satisfied with the affidavit | ||
filed under Subsection (a)(4), the commissioner may require that | ||
the incorporators, organizers, or officers provide at their expense | ||
additional evidence as described by Subsection (a) before the | ||
commissioner takes action on the application. | ||
(c) The application fee required under this section is | ||
$1,500 or a greater amount set by the commissioner by rule as | ||
necessary to recover the cost of administering this section. | ||
(d) Notwithstanding Subsection (c), for a complete | ||
application filed on or before December 30, 2018, the application | ||
fee may not exceed $1,500. This subsection expires January 1, 2019. | ||
(e) Fees collected under this section shall be deposited to | ||
the credit of the Texas Department of Insurance operating account. | ||
Sec. 964.058. EXAMINATION BY COMMISSIONER. (a) After the | ||
application and application fee for a certificate of authority | ||
under Section 964.057 are filed with the department and the | ||
applicant has complied with all legal requirements, the | ||
commissioner shall conduct an examination of the applicant to | ||
determine whether: | ||
(1) the minimum capital and surplus requirements of | ||
Section 964.056 are satisfied; | ||
(2) the capital and surplus are the bona fide property | ||
of the applicant; and | ||
(3) the applicant has fully complied with applicable | ||
insurance laws. | ||
(b) The commissioner may appoint a competent and | ||
disinterested person to conduct the examination required by this | ||
section. The examiner shall file an affidavit of the examiner's | ||
findings with the commissioner. The commissioner shall record the | ||
affidavit. | ||
Sec. 964.059. ACTION ON APPLICATION. (a) The commissioner | ||
shall determine whether: | ||
(1) the capital structure of the applicant meets the | ||
requirements of this chapter; | ||
(2) the officers or directors of the applicant have | ||
sufficient insurance experience, ability, standing, and good | ||
record to make success of the captive insurance company probable; | ||
(3) the applicant is acting in good faith; and | ||
(4) the applicant otherwise satisfies the | ||
requirements of this chapter. | ||
(b) In evaluating the application, the commissioner shall | ||
consider: | ||
(1) the amount and liquidity of the applicant's assets | ||
relative to the risks to be assumed; | ||
(2) the adequacy of the expertise, experience, and | ||
character of each individual who will manage the applicant; | ||
(3) the overall soundness of the applicant's plan of | ||
operations and the projections contained in that plan; | ||
(4) whether the applicant's affiliates have | ||
significant operations located in this state; and | ||
(5) any other factors the commissioner considers | ||
relevant to determine whether the applicant will be able to meet its | ||
policy obligations. | ||
(c) If the commissioner determines that the applicant has | ||
not met the standards set out by Subsection (a), the commissioner | ||
shall deny the application in writing, giving the reason for the | ||
denial. On the applicant's request, the commissioner shall hold a | ||
hearing on a denial. Not later than the 30th day after the date the | ||
commissioner receives the applicant's request for a hearing, the | ||
commissioner shall set a hearing date. | ||
(d) If the commissioner does not deny the application under | ||
Subsection (c), the commissioner shall approve the application and: | ||
(1) issue to the applicant a certificate of authority | ||
to engage in business as provided for in the applicant's | ||
certificate of formation; | ||
(2) certify and file the approved document with the | ||
department; and | ||
(3) issue a certified copy of the certificate of | ||
authority to the applicant's incorporators or officers. | ||
(e) A certificate of authority issued to a captive insurance | ||
company under this section may not be sold. | ||
Sec. 964.060. ANNUAL REPORT. (a) A captive insurance | ||
company holding a certificate of authority under this chapter is | ||
not required to file a report, except as provided by this section, | ||
Chapter 223A, and Subtitle C, Title 3. | ||
(b) A captive insurance company that holds a certificate of | ||
authority to engage in captive insurance business in this state | ||
shall file with the commissioner: | ||
(1) on or before March 1 of each year, a statement of | ||
the company's financial condition, verified by two of its executive | ||
officers and filed in a format prescribed by the commissioner; and | ||
(2) on or before June 1 of each year, a report of its | ||
financial condition at last year-end with an independent certified | ||
public accountant's opinion of the company's financial condition. | ||
(c) A captive insurance company may make a written | ||
application to the commissioner for filing its annual report | ||
required under this section on a fiscal year-end. If an alternative | ||
filing date is granted, the company shall file: | ||
(1) the annual report not later than the 60th day after | ||
the date of the company's fiscal year-end; | ||
(2) the report of its financial condition at last | ||
year-end with an independent certified public accountant's opinion | ||
of the company's financial condition not later than the 150th day | ||
after the date the annual report is due; and | ||
(3) its balance sheet, income statement, and statement | ||
of cash flows, verified by two of its executive officers, before | ||
March 1 of each year to provide sufficient detail to support a | ||
premium tax return. | ||
Sec. 964.061. INVESTMENTS. (a) A captive insurance | ||
company is not subject to a restriction on allowable investments, | ||
except as provided by this section. | ||
(b) A captive insurance company may make loans to its | ||
affiliates with the prior approval of the commissioner. Each loan | ||
must be evidenced by a note approved by the commissioner. A captive | ||
insurance company may not make a loan of the minimum capital and | ||
surplus funds required by this chapter. | ||
(c) The commissioner may prohibit or limit an investment | ||
that threatens the solvency or liquidity of a captive insurance | ||
company. | ||
Sec. 964.062. AMENDMENTS TO CERTIFICATE OF FORMATION. A | ||
captive insurance company may not amend its certificate of | ||
formation unless the amendment has been filed with and approved by | ||
the commissioner. | ||
Sec. 964.063. NOTICE OF DIVIDENDS. A captive insurance | ||
company shall notify the commissioner in writing when issuing | ||
policyholder dividends. | ||
Sec. 964.064. PROHIBITION ON JOINING OR CONTRIBUTING TO | ||
CERTAIN ENTITIES AND FUNDS. A captive insurance company may not | ||
join or contribute financially to any plan, pool, association, or | ||
guaranty or insolvency fund in this state, and a captive insurance | ||
company, its insured, or any affiliate is not entitled to receive | ||
any benefit from a plan, pool, association, or guaranty or | ||
insolvency fund for claims arising out of the operations of the | ||
company. | ||
Sec. 964.065. SUSPENSION OR REVOCATION OF CERTIFICATE OF | ||
AUTHORITY. The commissioner, after notice and an opportunity for | ||
hearing, may revoke or suspend the certificate of authority of a | ||
captive insurance company for: | ||
(1) insolvency or impairment of required capital or | ||
surplus to policyholders; | ||
(2) failure to submit an annual report, as required by | ||
Section 964.060; | ||
(3) failure to comply with the provisions of its own | ||
charter or bylaws; | ||
(4) failure to submit to examination, as required by | ||
Chapter 401; | ||
(5) failure to pay the cost of examination, as | ||
required by Chapter 401; | ||
(6) failure to pay any tax or fee required by this | ||
code; | ||
(7) removal of its principal office or books and | ||
records from this state without prior approval of the commissioner; | ||
(8) use of practices that render its operation | ||
detrimental to the public or its condition unsound; or | ||
(9) failure to otherwise comply with the laws of this | ||
state. | ||
Sec. 964.066. STANDARDS FOR RISK MANAGEMENT OF CONTROLLED | ||
UNAFFILIATED BUSINESS. The commissioner may adopt rules | ||
establishing standards to ensure that an affiliated company is able | ||
to exercise control of the risk management function of any | ||
controlled unaffiliated business to be insured by the captive | ||
insurance company. Until rules under this section are adopted, the | ||
commissioner may approve the coverage of these risks by a captive | ||
insurance company. | ||
Sec. 964.067. CAPTIVE MANAGERS. Before providing captive | ||
management services to a licensed captive insurance company, a | ||
captive management company shall register with the commissioner by | ||
providing the information required on a form adopted by the | ||
commissioner. | ||
Sec. 964.068. MAINTENANCE TAX. A captive insurance company | ||
is subject to maintenance tax under Subtitle C, Title 3, on the | ||
correctly reported gross premiums from writing insurance on risks | ||
located in this state as applicable to the individual lines of | ||
business written by the captive insurance company. | ||
Sec. 964.069. RULEMAKING AUTHORITY. The commissioner may | ||
adopt reasonable rules as necessary to implement the purposes and | ||
provisions of this chapter. | ||
Sec. 964.070. CONFIDENTIALITY. (a) Any information filed | ||
by an applicant or captive insurance company under this chapter is | ||
confidential and privileged for all purposes, including for | ||
purposes of Chapter 552, Government Code, a response to a subpoena, | ||
or evidence in a civil action. Except as provided by Subsections | ||
(b) and (c), the information may not be disclosed without the prior | ||
written consent of the applicant or captive insurance company to | ||
which the information pertains. | ||
(b) If the recipient of the information described by | ||
Subsection (a) has the legal authority to maintain the confidential | ||
or privileged status of the information and verifies that authority | ||
in writing, the commissioner or another person may disclose the | ||
information to any of the following entities functioning in an | ||
official capacity: | ||
(1) a commissioner of insurance or an insurance | ||
department of another state; | ||
(2) an authorized law enforcement official; | ||
(3) a district attorney of this state; | ||
(4) the attorney general; | ||
(5) a grand jury; | ||
(6) the National Association of Insurance | ||
Commissioners if the captive insurance company is affiliated with | ||
an insurance company that is part of an insurance holding company | ||
system as described in Chapter 823; | ||
(7) another state or federal regulator if the | ||
applicant or captive insurance company to which the information | ||
relates operates in the entity's jurisdiction; | ||
(8) an international insurance regulator or analogous | ||
financial agency if the captive insurance company is affiliated | ||
with an insurance company that is part of an insurance holding | ||
company system as described in Chapter 823 and the holding company | ||
system operates in the entity's jurisdiction; or | ||
(9) members of a supervisory college described by | ||
Section 823.0145, if the captive insurance company is affiliated | ||
with an insurance company that is part of an insurance holding | ||
company system as described in Chapter 823. | ||
(c) The commissioner may use information described by | ||
Subsection (a) in the furtherance of a legal or regulatory action | ||
relating to the administration of this code. | ||
Sec. 964.071. REDOMESTICATION. (a) An authorized foreign | ||
or alien captive insurance company licensed under laws of any | ||
jurisdiction may become a domestic captive insurance company in | ||
this state on a determination by the commissioner that the | ||
authorized foreign or alien captive insurance company has complied | ||
with all of the requirements of this chapter for the issuance of a | ||
certificate of authority to, and the Business Organizations Code | ||
for converting to an entity of this state for, a domestic captive | ||
insurance company of the same type. | ||
(b) A domestic captive insurance company, on the approval of | ||
the commissioner, may transfer its domicile. On the transfer, the | ||
captive insurance company ceases to be a domestic captive insurance | ||
company. The commissioner shall approve any proposed transfer | ||
unless the commissioner determines the transfer is not in the best | ||
interest of the policyholders. | ||
(c) The commissioner may postpone or waive the imposition of | ||
any fees or taxes under this code for a period not to exceed two | ||
years for any foreign or alien captive insurance company | ||
redomesticating to this state. | ||
SECTION 3. Subsection (b), Section 203.001, Insurance Code, | ||
is amended to read as follows: | ||
(b) Except as otherwise provided by this code or the Labor | ||
Code, an insurer or health maintenance organization subject to a | ||
tax imposed by Chapter 4, 221, 222, 223A, 224, or 257 may not be | ||
required to pay any additional tax imposed by this state or a county | ||
or municipality in proportion to the insurer's or health | ||
maintenance organization's gross premium receipts. | ||
SECTION 4. Subdivision (11), Section 228.001, Insurance | ||
Code, is amended to read as follows: | ||
(11) "State premium tax liability" means: | ||
(A) any liability incurred by any person under | ||
Chapter 221, 222, 223, 223A, 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. | ||
SECTION 5. Subsection (a), Section 171.052, Tax Code, is | ||
amended to read as follows: | ||
(a) Except as provided by Subsection (c), an insurance | ||
organization, title insurance company, or title insurance agent | ||
authorized to engage in insurance business in this state now | ||
required to pay an annual tax under Chapters 221, 222, 223, 223A, | ||
and 224 [ |
||
premium receipts is exempted from the franchise tax. A nonadmitted | ||
insurance organization that is required to pay a gross premium | ||
receipts tax during a tax year is exempted from the franchise tax | ||
for that same tax year. | ||
SECTION 6. As soon as practicable after the effective date | ||
of this Act, but not later than January 1, 2014, the commissioner of | ||
insurance shall adopt rules and procedures necessary to implement | ||
Chapter 964, Insurance Code, as added by this Act. | ||
SECTION 7. This Act takes effect immediately if it receives | ||
a vote of two-thirds of all the members elected to each house, as | ||
provided by Section 39, Article III, Texas Constitution. If this | ||
Act does not receive the vote necessary for immediate effect, this | ||
Act takes effect September 1, 2013. | ||
______________________________ | ______________________________ | |
President of the Senate | Speaker of the House | |
I hereby certify that S.B. No. 734 passed the Senate on | ||
April 16, 2013, by the following vote: Yeas 29, Nays 0; and that | ||
the Senate concurred in House amendments on May 20, 2013, by the | ||
following vote: Yeas 31, Nays 0. | ||
______________________________ | ||
Secretary of the Senate | ||
I hereby certify that S.B. No. 734 passed the House, with | ||
amendments, on May 16, 2013, by the following vote: Yeas 139, | ||
Nays 1, two present not voting. | ||
______________________________ | ||
Chief Clerk of the House | ||
Approved: | ||
______________________________ | ||
Date | ||
______________________________ | ||
Governor |