HBA-JEK H.B. 2527 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2527
By: Junell
Business & Industry
3/25/2001
Introduced



BACKGROUND AND PURPOSE 

Certificates of insurance for workers' compensation policies are documents
issued by insurance companies to be used as evidence of the existence of
such a policy.  However, these documents can be easily duplicated and used
fraudulently to assert the existence of insurance when in fact there is no
coverage. House Bill 2527 standardizes information that must be contained
in a workers' compensation insurance certificate, and requires the
commissioner of insurance to adopt rules to ensure that a fraudulent
document can be distinguished from an authentic certificate. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the commissioner of insurance in
SECTION 1 (Article 5.56A, Insurance Code) and SECTION 3 of this bill. 

ANALYSIS

House Bill 2527 amends the Insurance Code to require the commissioner of
insurance (commissioner) by rule to establish requirements for a
certificate of insurance issued by an insurance company to be used as
evidence of the existence of a workers' compensation policy.  The bill
provides that these rules must include requirements designed to ensure that
a fraudulent document can be distinguished from an authentic certificate of
insurance issued by an insurance company.  The bill also specifies the
information that the certificate of insurance must include.  These
provisions apply only to a certificate of insurance issued by an insurance
company on or after January 1, 2002.  The commissioner is required to adopt
rules no later than December 1, 2001. 

H.B. 2527 amends the Labor Code to require an insurance company that
cancels or does not renew a workers' compensation policy to deliver notice
of the cancellation or nonrenewal to each person who provides a written
request for the notice. 

EFFECTIVE DATE

September 1, 2001.