HBA-TYH H.B. 2501 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2501 By: Moreno, Joe Insurance 4/13/1999 Introduced BACKGROUND AND PURPOSE Under current law, an insurance company may use the fact that an individual was previously insured by a county mutual insurance company as an underwriting guideline for a personal automobile insurance policy. H.B. 2501 prohibits the use of an applicant's previous coverage by a nonstandard insurer as the individual's motor vehicle insurance underwriting guideline. 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 Subchapter B, Chapter 21, Insurance Code, by adding Article 21.21-12, as follows: Art. 21.21-12. PROHIBITION ON USE IN MOTOR VEHICLE INSURANCE OF UNDERWRITING GUIDELINES BASED ON CERTAIN PREVIOUS COVERAGE Sec. 1. DEFINITIONS. Defines "insurer," "nonstandard insurer," and "underwriting guideline." Sec. 2. APPLICATION. Provides that this article applies to a personal automobile insurance policy. Sec. 3. PROHIBITION; EXEMPTION. Prohibits an insurer from using an underwriting guideline that rejects or limits insurance coverage based solely on whether an applicant for insurance had prior coverage written through a nonstandard insurer. Sec. 4. PENALTY. Provides that an insurer who violates this article commits an unfair practice in violation of Article 21.21 (Unfair Competition and Unfair Practices) of this code and is subject to the penalties imposed under that article. SECTION 2. Makes application of this Act prospective, as of January 1, 2000. SECTION 3. Effective date: September 1, 1999. SECTION 4. Emergency clause.