HBA-TYH H.B. 2501 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2501
By: Moreno, Joe
Insurance
4/13/1999
Introduced



BACKGROUND AND PURPOSE 

Under current law, an insurance company may use the fact that an individual
was previously insured by a county mutual insurance company as an
underwriting guideline for a personal automobile insurance policy.  H.B.
2501 prohibits the use of an applicant's previous coverage by a nonstandard
insurer as the individual's motor vehicle insurance underwriting guideline. 

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. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subchapter B, Chapter 21, Insurance Code, by adding
Article 21.21-12, as follows: 
 
Art. 21.21-12.  PROHIBITION ON USE IN MOTOR VEHICLE INSURANCE OF
UNDERWRITING GUIDELINES BASED ON CERTAIN PREVIOUS COVERAGE  
 
Sec. 1.  DEFINITIONS.  Defines "insurer," "nonstandard insurer," and
"underwriting guideline." 
  
Sec. 2.  APPLICATION.  Provides that this article applies to a personal
automobile insurance policy.  
 
Sec. 3.  PROHIBITION; EXEMPTION.  Prohibits an insurer from using an
underwriting guideline that rejects or limits insurance coverage based
solely on whether an applicant for insurance had prior coverage written
through a nonstandard insurer.  
 
Sec. 4.  PENALTY.  Provides that an insurer who violates this article
commits an unfair practice in violation of Article 21.21 (Unfair
Competition and Unfair Practices) of this code and is subject to the
penalties imposed under that article. 

SECTION 2.  Makes application of this Act prospective, as of January 1,
2000. 

SECTION 3.  Effective date: September 1, 1999.

SECTION 4.  Emergency clause.