HBA-MSH C.S.H.B. 2829 77(R)    BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 2829
By: Smithee
Insurance
4/18/2001
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Under current law, companies wishing to provide commercial automobile
liability, professional liability, and workers' compensation insurance in
Texas are required to file information regarding their loss control
services before obtaining a license to issue that type of insurance.  When
large national insurance companies apply for a license to provide insurance
in Texas, they often seek authorization to write the same lines of
insurance they write in other states even if they do not intend to write
each line in Texas.  This creates administrative problems for the insurance
companies and does not increase the protection afforded by the provision of
loss control information or loss control or accident prevention facilities.
Requiring insurers to provide the information only before actually writing
the insurance will provide the same level of disclosure regarding loss
control services or loss control or accident prevention facilities while
easing administrative difficulties.  C.S.H.B. 2829 provides that insurers
wishing to provide commercial automobile liability, professional liability,
and workers' compensation insurance must file loss control information as a
prerequisite for writing that line of insurance. 

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 5.06-4, Insurance Code), SECTION 2 (Article 5.15-2,
Insurance Code), and SECTION 3 (Article 5.15-3, Insurance Code) of this
bill. 

ANALYSIS

C.S.H.B. 2829 amends the Insurance Code to provide that an insurer desiring
to write commercial automobile liability insurance and professional
liability insurance, and workers' compensation must provide loss control
information or services or loss control or accident prevention facilities
as a prerequisite for writing that line of insurance rather than as a
prerequisite for a license to write that line of insurance. The bill
transfers duties and powers including rulemaking authority relating to loss
control requirements of these types of insurance to the commissioner of
insurance from the State Board of Insurance. 

EFFECTIVE DATE

September 1, 2001.

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 2829 differs from the original by removing the provision in the
original that requires the commissioner of insurance to approve the loss
control information filed by providers of commercial automobile liability,
professional liability, and workers compensation insurance before the
insurer is authorized to write that line of insurance.