HBA-ATS H.B. 2559 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2559 By: Turner, Bob Insurance 4/4/1999 Introduced BACKGROUND AND PURPOSE Currently, the Insurance Code authorizes stipulated premium companies to assume liability on a life insurance risk on any one life under certain conditions. Group II life insurance agents, who are not required to take an examination or meet continuing education requirements, may be licensed to sell life insurance policies with a value of $10,000 or less. In general, these types of policies are not heavily marketed because they are usually only used to pay for funeral expenses and outstanding bills. H.B. 2559 increases from $10,000 to $15,000 the maximum amount of a life insurance policy that may be sold by a Group II agent. In addition, this bill increases from $10,000 to $15,000 the minimum amount of a life insurance policy for which an applicant for a license, who desires to write life insurance, is required to submit to a personal written examination. This bill also requires a stipulated premium company with adequate reserves to reinsure the insurance amount that exceeds $15,000, rather than $10,000, on a life insurance risk on any one life, and increases from $10,000 to $15,000 the maximum amount for which a stipulated premium company is authorized to assume liability on a life insurance risk on any one life.. 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 Section 3, Article 21.07, Insurance Code, as amended by Chapters 596 and 972, Acts of the 75th Legislature, Regular Session, 1997, to reenact and amend it, as follows: Sec. 3. ISSUANCE OF LICENSE UNDER CERTAIN CIRCUMSTANCES. Requires the commissioner of insurance (commissioner), rather than the Texas Department of Insurance (department), to issue a license to a person, corporation, or bank in such form as the department may prepare authorizing such applicant to write the types of insurance authorized by law to be issued by applicant's appointing insurance carrier. Increases from $10,000 to $15,000 the maximum amount of a life insurance policy that may be sold by an applicant, if not a partnership, corporation, or bank. Makes nonsubstantive changes. SECTION 2. Amends the heading to Section 4A, Article 21.07, Insurance Code, to make a conforming change. SECTION 3. Amends Sections 4A(a), (c), and (e), Article 21.07, Insurance Code, as follows: (a) Increases from $10,000 to $15,000 the minimum amount of a life insurance policy for which an applicant for a license, who desires to write life insurance, is required to submit to a personal written examination. (c) Makes a conforming change. (e) Makes a conforming change. SECTION 4. Amends Section 3, Article 22.07, Insurance Code, to require a stipulated premium company with adequate reserves to reinsure the insurance amount that exceeds $15,000, rather than $10,000, on a life insurance risk on any one life. SECTION 5. Amends Section 1(b), Article 22.13, Insurance Code, to increase from $10,000 to $15,000 the maximum amount for which a stipulated premium company is authorized to assume liability on a life insurance risk on any one life. Makes conforming changes. SECTION 6. Amends Article 22.23(a), Insurance Code, to make a conforming change. SECTION 7.Effective date: September 1, 1999. Makes application of this Act prospective. SECTION 8.Emergency clause.