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.