HBA-TBM H.B. 3455 77(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 3455
By: Tillery
Insurance
4/23/2001
Committee Report (Amended)



BACKGROUND AND PURPOSE 

Currently, there is no mechanism available to insure that a consumer
receives information regarding previous damage to a vehicle the consumer
purchased.  Insurance companies have a complete claims history available on
each automobile for which a claim has been filed, and the information is
available at the time an application for insurance is made.  Insurers have
the ability to write and collect for full coverage insurance at market
rates on substantially damaged automobiles, yet some insurers reduce the
liability if the automobile is damaged later and totaled by reducing the
settlement by the loss of market value sustained in the initial accident.
This may cause insurers an unfair advantage over consumers at the time of
application for insurance.  House Bill 3455 requires an insurer to disclose
information regarding the history of substantial damage to a vehicle at the
first application for insurance that a person makes after purchasing the
vehicle.   

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 21.76, Insurance Code) of this bill.   

ANALYSIS

House Bill 3455 amends the Insurance Code to require an insurance agent to
inform a person who applies for the first motor vehicle liability insurance
policy (policy) of any information obtained by the agent through an
underwriting exchange that indicates that the motor vehicle for which
coverage is sought sustained substantial damage before the date the person
purchased the vehicle.  The bill requires the commissioner of insurance to
adopt rules as necessary to implement this provision not later than
November 1, 2001.  This provision applies only to an application for the
first policy to cover a motor vehicle after it is purchased by the insured.

EFFECTIVE DATE

September 1, 2001.  

EXPLANATION OF AMENDMENTS

Committee Amendment No. 1 replaces references to an "insurance agent" or
"agent" with "insurer."