BILL ANALYSIS


                                                         H.B. 354
                                              By: Duncan (Sibley)
                                             Economic Development
                                                         05-22-95
                              Senate Committee Report (Unamended)
BACKGROUND

Section 84.007(g), Title 4, Civil Practice and Remedies Code
(Charitable Immunity Act of 1987)  sets out minimum liability
insurance limits that charitable organizations must have to cover
employees and volunteers in order to limit the organization's
liability exposure. The coverages in this Act are written as split
limits requiring $500,000 per person and $1,000,000 per occurrence
for death or bodily injury, and $100,000 per occurrence for injury
to or destruction of property. Most insurance companies today,
however, write these types of policies in combined single limits.

A charitable organization purchasing liability insurance in
combined single limits would have to have $1,100,000 in coverage to
be protected by the Charitable Immunity Act of 1987. Most insurance
companies today, however, do not write liability coverage in that
amount. As a result many organizations are having to purchase
excessive coverage which results in increased premiums.

PURPOSE

As proposed, H.B. 354 authorizes the insurance coverage for a
charitable organization to be satisfied by the purchase of a
$1,000,000 bodily injury and property damage combined single limit
policy; and authorizes the commissioner of insurance to establish
a classification of risk applicable to motor vehicles used by
nonprofit organizations.

RULEMAKING AUTHORITY

It is the committee's opinion that rulemaking authority is granted
to the commissioner of insurance under SECTION 2 (Article 5.01(g),
Insurance Code) of this bill.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 84.007(g), Civil Practice and Remedies
Code, to authorize the coverage to be satisfied by the purchase of
a $1,000,000 bodily injury and property damage combined single
limit policy.

SECTION 2. Amends Article 5.01, Insurance Code, by adding
Subsection (g) to authorize the commissioner of insurance
(commissioner) to establish, by rule, a classification of risk
applicable to motor vehicles used for limited purposes by nonprofit
organizations. Requires the commissioner to adopt rules to classify
risks and define the limited uses permissible for motor vehicles
insured under the classification. Prohibits the commissioner from
adopting rules under this subsection that result in insurance
premium rates for nonprofit organizations exceeding the insurance
premium rates of other analogous classifications of risk applicable
to motor vehicles used by entities other than nonprofit
organizations. Defines "nonprofit organization."

SECTION 3. Emergency clause.
           Effective date: 90 days after adjournment.