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.