HBA-JEK H.B. 2389 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2389 By: Turner, Bob Insurance 4/1/2001 Introduced BACKGROUND AND PURPOSE A group of five to 35 citizens of this state may associate themselves to form a stipulated premium insurance company for the purpose of offering life, accident, or health insurance with $15,000 in capital stock and $7,500 in surplus at the company. Current law restricts the investment options of these companies to protect their financial stability. However, the financial growth of some stipulated premium insurance companies makes current investment restrictions unnecessary and less profitable for companies. House Bill 2389 authorizes a stipulated premium insurance company to elect its investments and transactions to be governed by law pertaining to the investments of large life, health, and accident 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 2389 amends the Insurance Code to authorize a stipulated premium insurance company issuing life, health, or accident coverages or maintaining certain types of policies to elect that its investments and transactions be governed by rules and statutes for capital stock domestic life, health, and accident insurance companies. The bill requires the election to be made by written notice to the commissioner of insurance and specifies that the election will be effective on the first day of the calendar quarter following the day on which the notice is filed. H.B. 2389 authorizes a stipulated premium insurance company to elect that its investments and transactions be governed by law regarding domestic life insurance companies after the second anniversary of the effective date of the initial election by written notice to the commissioner of insurance. In the event of a subsequent election, no further election by the stipulated premium insurance company may be made. EFFECTIVE DATE September 1, 2001.