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."