HBA-NLM H.B. 2284 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2284
By: Averitt
Financial Institutions
3/11/1999
Introduced



BACKGROUND AND PURPOSE 

Currently, an insurance company is required to give a 30-day advance notice
of a proposed increase in premiums if the insurer withdraws the premiums
from a traditional bank account. An insurer is required to provide
consumers of traditional accounts with a prepaid postage form with which
the consumer may dispute the increase.  The consumer must provide the
insurer with any disputes within five days of  the effective date of the
proposed premium increase.  Alternatively, premiums withdrawn from escrow
accounts are subject to a 60-day notification from the insurer, and escrow
account holders are required to dispute a premium increase within 30 days
of the effective date.  H.B. 2284 subjects escrow accounts to the same
timetable as a traditional bank account regarding insurer notification and
consumer disputes for proposed premium increases. 

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 21.57(b), Insurance Code, to subject a person's
escrow account to the existing provisions of this section, regarding
automatic premium payments to an insurer through withdrawal of funds from
the account. 

SECTION 2.  Repealer: Article 21.57(d) (Withdrawals for Premium Payments,
Prohibited Practices), Insurance Code.  Subsection (d) states that for the
purposes of a policy insuring property under a deed of trust with premiums
paid from an escrow account, notification by the insurer may not be later
than the 60th day before the effective date of the increase in premium, and
written objection to the increase must be at least 30 days before the date
the increase takes effect. 

SECTION 3.  Effective date: September 1, 1999.

SECTION 4.  Emergency clause.