HBA-MSH H.B. 1703 77(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 1703
By: Smithee
Insurance
7/18/2001
Enrolled



BACKGROUND AND PURPOSE 

A recodification of insurance statutes that occurred prior to the 77th
Legislature introduced a grammatical error into the statute relating to
captive insurance, which is insurance that is owned by a corporation and
only insures the parent corporation or its affiliates.  The error had the
effect of removing certain exemptions relating to advertising and
definitions of insurance activities that applied to a captive insurer's
ability to insure the parent company.   House Bill 1703 applies these
exemptions to certain captive insurance companies. 

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. 

ANALYSIS

House Bill 1703 amends the Insurance Code to exempt from provisions
specifying the conduct that constitutes the business of insurance and
provisions relating to Medicare supplement policies advertising an activity
in the state by or on the sole behalf of a nonadmitted captive insurance
company that insures solely directors' and officers' liability insurance
for the directors and officers of the company's parent and affiliated
companies. 

EFFECTIVE DATE

September 1, 2001