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Relating to the operation of the Texas Property and Casualty Insurance Guaranty Association.
No significant fiscal implication to the State is anticipated.
SB 1063 would make several changes to statutes regarding the Texas Property and Casualty Insurance Guaranty Association, which operates as a safety net to provide financial protections for insurance consumers in the event a member insurer becomes insolvent. First, this bill would amend the process for filling vacancies on the board of directors.
Second, this bill would entitle the Association to recover costs, expenses, and reasonable attorney's fees incurred in defending the association or an impaired insurer's insured against a claim brought by a reinsurer, insurer, self-insurer, insurance pool, or underwriting association.
Third, this bill would require a court to award the Association costs, expenses, and reasonable attorney's fees incurred in seeking recovery for a claim and costs of defense paid in a bankruptcy or receivership proceeding.
Finally, this bill would authorize the Association to handle a claim through a contract claims adjuster, and require a servicing agreement or loss portfolio transfer agreement for handling claims through an insurer designated as a servicing facility. The Association would be prohibited from reducing proceeds recovered by the Association from the sale of salvage property related to a covered claim in the amount of certain expenses that are not part of a covered claim under statute. The bill would also extend an association's right to recover the amount of a covered claim for workers' compensation insurance benefits and the costs of administration and defense of the claim to any successor entity to the insured employer under state, federal, or international law.
Texas Action is neutral on SB 1063 because it does not affect our liberty principles.