HBA-ATS S.B. 324 76(R) BILL ANALYSIS HBA-ATS S.B. 324 76(R) Office of House Bill AnalysisS.B. 324 By: Ellis Insurance 5/5/1999 Engrossed BACKGROUND AND PURPOSE The Residential Market Assistance Program (MAP) assists homeowners in obtaining residential property insurance coverage in underserved areas by linking these homeowners with participating insurers. To apply for insurance through MAP, a consumer must contact the Texas Department of Insurance (department). If the department determines the home is eligible for MAP coverage, it partially completes an application and sends it to a participating insurance agent. After the agent inspects the property, the agent completes the application and returns it to the department. The department then sends the application to all participating companies. Under the present law, consumers cannot apply directly for coverage. Because the department can accept applications only from licensed agents, known as originating agents, an application from a consumer must be referred to an originating agent for preparation and resubmission. These procedures may unnecessarily delay the application process. S.B. 324 deletes the requirement that the plan of operation for MAP include the provisions that applications will be accepted only from agents duly licensed by the department and that applications from all other sources will be returned for referral to duly licensed agents of the applicant's choice for preparation and resubmission to MAP. Consequently, an applicant is not required to submit the application through an originating agent. This bill also repeals Section 5 (Confidentiality), Article 21.49-12 (Market Assistance Programs), Insurance Code. Section 5 requires the department to maintain the confidentiality of all application files and related documents received under Article 21.49-12. 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 Section 2(b), Article 21.49-12, Insurance Code, to delete the requirement that the plan of operation for the Residential Market Assistance Program (MAP) include the provisions that applications will be accepted only from agents duly licensed by the Texas Department of Insurance (department) and that applications from all other sources will be returned for referral to duly licensed agents of the applicant's choice for preparation and resubmission to MAP. Requires the insurer, rather than MAP, if a premium quote is made, to notify the applicant or notify the applicant's agent, if applicable, so that the placement of the insurance may be completed. Deletes provision that authorizes the agent to complete the application. Redesignates existing Subdivisions (3)-(8) to (2)-(7). SECTION 2. Amends Section 4, Article 21.49-12, Insurance Code, as follows: Sec. 4. New title: DIRECT REFERRAL TO INSURER; AGENTS. (a) Authorizes the department to assist an applicant for coverage through MAP in completing an initial application and to refer the applicant to one or more participating companies. (c) Provides that an applicant is not required to submit the application through an originating agent. Provides that if an originating agent is used, the originating agent is not required to be appointed to represent the ultimate insurer. Makes a conforming and nonsubstantive change. (e) Makes conforming changes. (f) Authorizes the originating agent, if any, and the issuing agent to be the same person. SECTION 3. Repealer: Section 5 (Confidentiality), Article 21.49-12, Insurance Code. Section 5 requires the department to maintain the confidentiality of all application files and related documents received under Article 21.49-12 (Market Assistance Programs). SECTION 4.Effective date: September 1, 1999. Makes application of this Act prospective, beginning January 1, 2000. SECTION 5.Emergency clause.