HBA-DMH S.B. 1658 77(R)    BILL ANALYSIS


Office of House Bill AnalysisS.B. 1658
By: Sibley
Insurance
5/7/2001
Engrossed



BACKGROUND AND PURPOSE 

Under current law, a gap exists between the formal inquiry process and the
formal subpoena process utilized by the Texas Department of Insurance
(department) to obtain information from certain insurers. In situations
concerning consumer complaints, the department may benefit from a process
that allows it to review insurance-related claim files or company
procedures.  The department has no express authority to request documents
pursuant to an investigation.  Senate Bill 1658 authorizes the department
to request relevant documents as part of an investigation from an insurance
company, agent, or holder of an authorization. 

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

Senate Bill 1658 amends the Insurance Code to authorize the Texas
Department of Insurance (department) to request relevant documents as part
of an investigation from an insurance company, agent, or holder of an
authorization relating to: 

_the insurer's business activities; or 

_any matter connected with the insurer's transactions that the department
considers necessary for the public good or for the proper discharge of the
department's duties.  

The bill provides requirements for responding to a request for documentary
evidence. 

The bill prohibits any documentary material produced pursuant to a request,
unless otherwise ordered by a court for good cause shown, from being
produced for inspection or copying by, or its contents from being disclosed
to any person other than the authorized employee of the department without
the consent of the person who produced the material. The bill requires the
department to prescribe reasonable terms and conditions under which the
documentary material is made available for inspection and copying by the
person who produced the material or any authorized representative of that
person. The bill authorizes the department to use the documentary material
or copies as it considers necessary in the discharge of the department's
duties, including for presentation before any court. 

The bill prohibits any material which contains trade secrets from being
presented except with the approval of the court in which the action is
pending after adequate notice to the person furnishing the material.  

EFFECTIVE DATE

September 1, 2001.