HBA-CBW H.B. 2830 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2830
By: Smithee
Insurance
4/22/2001
Introduced



BACKGROUND AND PURPOSE 

The Texas Department of Insurance (department) has been unsuccessful in
obtaining convictions against individuals involved in the sale of
unauthorized insurance from locations in Texas to persons who are residents
of other states.  There is a need to clarify the statutes with regard to
this unauthorized insurance activity to eliminate any possible safe harbors
for individuals who are engaged in such activities.  House Bill 2830
clarifies law to enforce unauthorized insurance activity in Texas.   

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 2830 amends the Insurance Code to provide that a person commits
a third degree felony offense if the person engages in the business of
insurance without a valid certificate of authority, license, or specific
authorization or exemption, or after the person's certificate of authority,
license, or authorization has been suspended or revoked.  The bill removes
the provision pertaining to a defense to prosecution regarding the conduct
that constitutes the business of insurance.  The bill authorizes the
commissioner of insurance, if the commissioner has reason to believe a
person has violated or is threatening to violate the provisions or adopted
rules to request the Travis County district attorney to proceed with
criminal prosecution.  The bill modifies that acts that constitute the
business of insurance in this state to include issuing or delivering an
insurance contract, rather than issuing or delivering an insurance contract
to a resident of this state or a person authorized to do business in this
state. The bill applies to all persons, rather than residents of Texas
only. 

EFFECTIVE DATE

September 1, 2001.