HBA-KMH H.B. 2751 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2751
By: Smithee
Insurance
4/1/1999
Introduced


BACKGROUND AND PURPOSE

Currently, boards of directors of domestic insurance companies must
annually approve employee compensation which exceeds $50,000 per year.  Due
to salary increases, the number of people covered under this restriction
has grown significantly for many companies. Securing board approval for
each employee's salary which is over the statutory limit has become a
time-consuming process.  
H.B. 2751 prohibits a "domestic" company from paying any salary in an
amount greater than $100,000 in any year to any officer, trustee, or
director or to any person, firm, or corporation, unless the compensation is
first authorized by the board of directors. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Article 3.12(a), Insurance Code, to prohibit, rather
than require, a "domestic" company from paying any salary, compensation, or
emolument which, together with any salary, compensation, or emolument from
an affiliated "domestic" company, amounts in any year to more than
$100,000, rather than $50,000, to any officer, trustee, or director of the
"domestic" company or to any person, firm, or corporation, unless such
payment is first authorized by a vote of the board of directors of such
company, or by a committee of such board charged with the duty of
authorizing such payments.  Provides that the limitation as to the time
contained in this article does not, rather than shall, prevent a "domestic"
company from entering into contracts with its agents for the payment of
renewal commissions. 

SECTION 2.Effective date: September 1, 1999.

SECTION 3.Emergency clause.