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.