HBA-CMT H.B. 2415 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2415
By: Giddings
Insurance
7/25/2001
Enrolled



BACKGROUND AND PURPOSE 

Prior to the 77th Legislature, many observers believed that the premiums
charged by life insurance companies in connection with small face amount
policies were unreasonable in relation to the benefits received.  In some
cases the insurance companies did not disclose to consumers the
relationship between the pricing of life insurance policies with a small
face amount and the benefits received under that policy. House Bill 2415
requires the commissioner of insurance to conduct a marketplace study in
the state for life insurance policies issued with a small face amount,
evaluate whether the actuarial and expense experience supports the pricing
of the small face value life insurance policies, and evaluate whether
statutory changes are needed.     

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. 

ANALYSIS

House Bill 2415 requires the commissioner of insurance (commissioner) to
conduct a study of the marketplace in the state for life insurance issued
with a small face amount and report the commissioner's findings to the
legislature on or before January 1, 2003.  The bill sets forth requirements
for the commissioner  to follow when conducting the study.  The bill
requires the commissioner to appoint an advisory committee to assist in
conducting the study required by the bill and to obtain comments from
interested parties   The bill sets forth requirements for the selection of
members of the advisory committee. The bill provides that on September 1,
2003 the provisions of the bill expire and the advisory committee is
abolished.  

EFFECTIVE DATE

September 1, 2001.