HBA-EVB C.S.S.B. 139 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.S.B. 139 By: Moncrief Insurance 4/29/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE Currently, state law provides an insurance premium discount to a homeowner who uses certain fire alarms or sprinkler systems. A less costly fire suppression system, known as a stovetop fire suppression device, is not eligible for existing premium discounts, although the device self-activates and produces a fire-retardant powder when temperatures exceed a certain level. C.S.S.B. 139 provides that a policyholder of a single-family or multifamily dwelling or an apartment or condominium owner is eligible for a premium reduction for homeowners insurance coverage or fire or commercial fire insurance coverage if the policyholder has correctly installed on the covered property a stovetop fire suppression device that has been approved by the state fire marshal through the commissioner of insurance (commissioner). Under this bill, a homeowner, fire, or commercial fire insurer is authorized to grant a discount in the premiums charged for a dwelling, apartment, or condominium that has a correctly installed and functioning stovetop fire suppression device. This bill requires the commissioner to establish, by rule, the amount of the premium reduction. 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 5.33C, Insurance Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter C, Chapter 5, Insurance Code, by adding Article 5.33C, as follows: Art. 5.33C. REDUCTION IN HOMEOWNERS INSURANCE AND FIRE INSURANCE PREMIUMS FOR APPROVED FIRE SUPPRESSION DEVICES Sec. 1. DEFINITIONS. Defines "stovetop fire suppression device" and "homeowners insurance." Sec 2. ELIGIBILITY FOR PREMIUM REDUCTION. Provides that a policyholder of a single-family or multifamily dwelling or an apartment or condominium owner is eligible for a premium reduction for homeowners insurance coverage or fire or commercial fire insurance coverage if the policyholder has correctly installed on the covered property a stovetop fire suppression device that has been approved by the state fire marshal through the commissioner of insurance (commissioner). Sec. 3. PREMIUM DISCOUNT. Authorizes an insurer who delivers or issues a homeowners, fire, or commercial fire insurance policy to grant a discount in the premiums charged for a dwelling, apartment, or condominium that has a correctly installed and functioning stovetop fire suppression device. Requires the commissioner to establish, by rule, the amount of a premium reduction applicable under this article. Authorizes the commissioner to adopt rules necessary for the implementation of this article. SECTION 2.Effective date: September 1, 1999. Makes application of this Act prospective beginning January 1, 2000. SECTION 3.Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.S.B. 139 differs from the original bill in SECTION 1, as follows: In proposed Section 2, Article 5.33C, Insurance Code, the substitute includes apartment and condominium owners, in addition to policyholders of a single-family or multifamily dwelling, as people who are eligible for a premium reduction for homeowners insurance coverage or fire or commercial fire insurance coverage, rather than for homeowners insurance coverage and for fire insurance coverage. In proposed Section 3, Article 5.33C, Insurance Code, the substitute adds Subsection (1) to authorize an insurer who delivers or issues a homeowners, fire, or commercial fire insurance policy to grant a discount in the premiums charged for a dwelling, apartment, or condominium that has a correctly installed and functioning stovetop fire suppression device. The substitute makes conforming and nonsubstantive changes. The substitute also changes the title of proposed Section 3, Article 5.33C, Insurance Code, from "Amount of Premium Reduction" to "Premium Discount."