BILL ANALYSIS



Insurance Committee
H.B. 347
By: T. Hunter
03-22-95
Committee Report (Substituted)


BACKGROUND

     The 73rd Texas Legislature passed House Bill 1461 which
included a provision that required the Texas Insurance Commissioner
to adopt an endorsement form (an amendment to an existing policy)
which excluded coverage for damage to foundations or slabs of a
policyholder's home.  Losses caused by specified disasters to a
homeowner's, farm and ranch owner's, or a fire insurance policy
would still be covered.  The endorsement would have only been
applicable to homes 10 years old or older.

     The provision was added as an amendment to House Bill 1461 and
had not been part of any public hearing, sunset review, or study by
the Texas Department of Insurance to determine if an endorsement
was necessary.  Prior to House Bill 1461, the Insurance
Commissioner had discretion in determining policy forms.

     In June 1994, the Commissioner of Insurance, as required by
statute, published proposed rules and policy forms for the
endorsement.  A public hearing on those rules was held in July 1994
and the rules were adopted pending a determination of a premium
offset which would be set at the 1994 rate hearing.  The State
Office of Hearing Examiners held a rate hearing in December 1994,
but no recommendation was made on the premium offset. 
Consequently, there are no endorsements in effect today.

PURPOSE

     As proposed House Bill 347 would repeal the mandatory
slab/foundation endorsement and would specify that this action
would in no way effect the commissioner's authority to promulgate
policy and endorsement provisions.

RULEMAKING AUTHORITY

     It is the committee's opinion that this bill does not
expressly grant any additional rulemaking authority to a state
officer, department, agency or institution.

SECTION BY SECTION ANALYSIS

SECTION 1.

Repeals Article  5.32-2, Insurance Code.

SECTION 2.

(a) Prohibits the use of an endorsement authorized in Article 5.35-2, Insurance Code, on any policy delivered, issued for delivery, or
renewed on or after the effective date of the Act.

(b) The repeal of Article 5.35-2, Insurance Code, does not
otherwise affect the authority of the commissioner of insurance
under other provisions of the Insurance Code to promulgate policy
and endorsement provisions regarding the foundation or slab of an
insured dwelling.




SECTION 3.

Emergency Clause and Effective Date


COMPARISON OF ORIGINAL TO SUBSTITUTE

     The substitute to House Bill 347 adds subsection (a) to
prohibit the use of an endorsement authorized in Article 5.35-2,
Insurance Code, on any policy delivered, issued for delivery, or
renewed on or after the effective date of the Act and re-letters
corresponding subsection as (b).

SUMMARY OF COMMITTEE ACTION

     In accordance with House rules H.B. 347 was heard in a public
hearing on March 22, 1995.  The Chair laid out H.B. 347 and
recognized Representative T. Hunter to explain the bill.  The Chair
recognized the following persons to testify in support of H.B. 347:
Edwin D. Benjamin, Texas Loss Consultants Association; Rob
Schneider, Consumers Union.  No one testified in opposition to or
neutrally on H.B. 347.

     The Chair recognized Representative Duncan who offered a
substitute to H.B. 347 and moved the Committee adopt the substitute
to H.B. 347. The Chair heard no objections and the substitute was
adopted.

     The Chair recognized Representative Duncan who moved the
Committee report H.B. 347 as substituted to the full House with the
recommendation that it do pass and be printed.  Representative
Averitt seconded the motion and the motion prevailed by the
following vote:
AYES (6); NAYES (0); ABSENT (3); PNV (0).