HBA-JEK H.B. 2527 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2527 By: Junell Business & Industry 3/25/2001 Introduced BACKGROUND AND PURPOSE Certificates of insurance for workers' compensation policies are documents issued by insurance companies to be used as evidence of the existence of such a policy. However, these documents can be easily duplicated and used fraudulently to assert the existence of insurance when in fact there is no coverage. House Bill 2527 standardizes information that must be contained in a workers' compensation insurance certificate, and requires the commissioner of insurance to adopt rules to ensure that a fraudulent document can be distinguished from an authentic certificate. 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 5.56A, Insurance Code) and SECTION 3 of this bill. ANALYSIS House Bill 2527 amends the Insurance Code to require the commissioner of insurance (commissioner) by rule to establish requirements for a certificate of insurance issued by an insurance company to be used as evidence of the existence of a workers' compensation policy. The bill provides that these rules must include requirements designed to ensure that a fraudulent document can be distinguished from an authentic certificate of insurance issued by an insurance company. The bill also specifies the information that the certificate of insurance must include. These provisions apply only to a certificate of insurance issued by an insurance company on or after January 1, 2002. The commissioner is required to adopt rules no later than December 1, 2001. H.B. 2527 amends the Labor Code to require an insurance company that cancels or does not renew a workers' compensation policy to deliver notice of the cancellation or nonrenewal to each person who provides a written request for the notice. EFFECTIVE DATE September 1, 2001.