HBA-JEK C.S.H.B. 2527 77(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 2527 By: Junell Business & Industry 4/8/2001 Committee Report (Substituted) 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 a policy. However, these documents can be easily duplicated and used fraudulently as evidence of insurance. C.S.H.B. 2527 standardizes information that must be contained in a workers' compensation and commercial liability 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 21.29, Insurance Code) and SECTION 3 of this bill. ANALYSIS C.S.H.B. 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 or commercial liability policy, including commercial automobile and general liability. The bill provides that these rules must include requirements to assist an individual relying on a certificate of insurance as proof of insurance to verify the accuracy of the information contained in the certificate. The bill 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. C.S.H.B. 2527 amends the Insurance and Labor codes to require an insurance company that cancels or does not renew a workers' compensation policy to deliver notice of the cancellation or nonrenewal to the insured and each certificate holder who provides a written request for the notice. EFFECTIVE DATE September 1, 2001. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 2527 modifies the original bill by requiring the commissioner of insurance (commissioner) to establish requirements for a certificate of insurance issued by an insurance company to be used as evidence of a commercial liability policy, including commercial automobile and general liability. The substitute changes the information that must be included in a certificate of insurance and specifies that a certificate must include any information required by the commissioner.