BILL ANALYSIS
HBA-NIK H.B. 3307 76(R)

Office of House Bill AnalysisH.B. 3307
By: Thompson
Insurance
4/19/1999
Introduced

BACKGROUND AND PURPOSE 

Currently, the Residential Market Assistance Program (MAP) assists
homeowners in obtaining residential property insurance coverage in
underserved areas.  However, consumers cannot apply directly for coverage
through MAP due to the requirement that the Texas Department of Insurance
(department) accept applications only from licensed agents, known as
originating agents.  If a consumer contacts the department directly, the
department must then refer the applicant to an originating agent, which can
delay the processing of application to MAP.  H.B. 3307 allows the applicant
to bypass the originating agent and contact the department directly. 

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 2(b), Article 21.49-12, Insurance Code, to delete
the requirement that the plan of operation will include applications that
will be accepted only from agents duly licensed by the Texas Department of
Insurance (department) and that applications from all other sources will be
returned for referral to duly licensed agents of the applicant's choice for
preparation and resubmission to the program. Requires the market assistance
program (program) to notify the applicant or the applicant's agent if an
agent is used so that the placement of the insurance may be completed,
rather than authorizing the agent to complete it. Makes a conforming and
nonsubstantive change. Subdivisions (3)-(5) redesignated to (2)-(4).
Subdivisions (7)-(8) redesignated to (6)-(7). 

SECTION 2. Amends Section 4, Article 21.49-12, Insurance Code, as follows:

Sec. 4. New title: DIRECT REFERRAL TO INSURER; AGENTS. (a)  Authorizes the
department to assist an applicant for coverage through the program in
completing an initial application, and refer the applicant to one or more
participating companies. 

(c) Provides that an applicant is not required to submit the application
through an originating agent.  Provides that if an originating agent is
used, the originating agent is not required to be appointed to represent
the ultimate insurer.  Makes a conforming and nonsubstantive change. 

(e) Requires the, rather than an, originating agent, if any, to share
commissions with the issuing agent under certain conditions. Makes a
conforming change. 

(f) Authorizes the originating agent, if any, and the issuing agent to be
the same person. 

SECTION 3. Effective date: September 1, 1999.  
Makes application of this Act prospective in regard to an application for
assistance under the market assistance program established by Article
21.49-12, Insurance Code, that is submitted on or after January 1, 2000. 

SECTION 4.  Emergency clause.