HBA-DMH H.B. 3327 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 3327
By: Averitt
Insurance
4/8/2001
Introduced



BACKGROUND AND PURPOSE 

Under current law, a gap exists between the formal inquiry process and the
formal subpoena process utilized by the Texas Department of Insurance
(department) to obtain information from certain insurers. In situations
concerning consumer complaints, the department may benefit from a process
that allows it to review insurance-related claim files or company
procedures.  The department has no express authority to request documents
pursuant to an investigation.  House Bill 3327 authorizes the department to
request relevant documents as part of an investigation from an insurance
company, agent, or holder of an authorization. 

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 3327 amends the Insurance Code to authorize the Texas Department
of Insurance (department) to request relevant documents as part of an
investigation from an insurance company, agent, or holder of an
authorization relating to: 

_the insurer's business activities; or 

_any matter connected with the insurer's transactions that the department
considers necessary for the public good or for the proper discharge of the
department's duties.  

The bill provides requirements for responding to an inquiry for documentary
evidence. 

The bill prohibits any documentary material produced pursuant to an
inquiry, unless otherwise ordered by a court for good cause shown, from
being produced for inspection or copying by, or its contents from being
disclosed to any person other than the authorized employee of the
department without the consent of the person who produced the material. The
bill requires the department to prescribe reasonable terms and conditions
allowing the documentary material to be available for inspection and
copying by the person who produced the material or any duly authorized
representative of that person. The bill authorizes the department to use
the documentary material or copies as it determines necessary in the
discharge of the department's duties, including presentation before any
court. 

 The bill prohibits any material which contains trade secrets from being
presented except with the approval of the court in which the action is
pending after adequate notice to the person furnishing the material.  

EFFECTIVE DATE

91st day after adjournment.