BILL ANALYSIS


                                                         H.B. 347
                                           By: Hunter, T. (Truan)
                                             Economic Development
                                                         05-17-95
                              Senate Committee Report (Unamended)
BACKGROUND

In 1993, the 73rd Legislature passed H.B. 1461, the Sunset Act for
the State Department of Insurance, which contained Article 5.35-2
of the Insurance Code, requiring the commissioner of insurance to
allow insurance companies to deny insurance coverage for damage to
slab foundations from existing and future policies for homeowners,
farmers, and ranch owners.  The exclusion from coverage applied to
houses 10 years old or older.  The exclusion is referred to in
insurance jargon as an endorsement.  Certain disasters could
continue to be covered.

The commissioner of insurance initiated the rulemaking procedure on
the slab foundation provision of H.B. 1461, but the rule was
contested and the case is continuing before the State Office of
Hearing Examiners; therefore, the exclusion has not been adopted.

PURPOSE

As proposed, H.B. 347 repeals Article 5.35-2, Insurance Code,
relating to insurance coverage for certain real property
foundations.

RULEMAKING AUTHORITY

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

SECTION BY SECTION ANALYSIS

SECTION 1. Repealer:  Article 5.35-2, Insurance Code (Coverage for
real property foundations).

SECTION 2. (a)  Makes application of this Act prospective.

           (b)  Provides that 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.
           Effective date: upon passage.