HBA-CMT C.S.H.B. 2415 77(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 2415 By: Giddings Insurance 4/19/2001 Committee Report (Substituted) BACKGROUND AND PURPOSE Currently, many observers believe that the premiums charged by life insurance companies in connection with small face amount policies are unreasonable in relation to the benefits received. In some cases the insurance companies do not disclose to consumers the relationship between the pricing of life insurance policies with a small face amount and the benefits received under that policy. C.S.H.B. 2415 requires the commissioner of insurance to conduct a marketplace study in the state for life insurance policies issued with a small face amount, evaluate whether the actuarial and expense experience supports the pricing of the small face value life insurance policies, and evaluate whether statutory changes are needed. 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 C.S.H.B. 2415 requires the commissioner of insurance (commissioner) to conduct a study of the marketplace in the state for life insurance issued with a small face amount and report the commissioner's findings to the legislature on or before January 1, 2003. The bill sets forth requirements for the commissioner to follow when conducting the study. The bill requires the commissioner to appoint an advisory committee to assist in conducting the study required by the bill and to obtain comments from interested parties The bill sets forth requirements for the selection of members of the advisory committee. The bill provides that on September 1, 2003 the provisions of the bill expire and the advisory committee is abolished. EFFECTIVE DATE September 1, 2001. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 2415 modifies the original bill by removing the requirement that the commissioner of insurance investigate the extent to which premiums charged and benefits provided under life insurance policies issued in this state are inequitable as a result of race-based practices by life insurers and removes the provisions of the bill pertaining to that investigation. The substitute adds the requirement that the commissioner of insurance conduct a study of the marketplace in the state for life insurance issued with a small face amount, and sets forth requirements pertaining to that study. The substitute also requires the commissioner to appoint an advisory committee to assist in conducting the study.