BILL ANALYSIS



H.B. 1670
By: Driver
03-29-95
Committee Report (Amended)


BACKGROUND

     Article 21.07, Section 18, Insurance Code, was passed into law
by the 67th Legislature and originally granted the right for an
employee, officer, director, or shareholder of certain types of
licensed lending institutions a statutory right to assign
commissions earned in the sale of a credit life or credit accident
and health policy to the employer lending institution.

     The 69th Legislature amended Article 21,07, Section 18,
Insurance Code to expand the right of assignment and allowed for
the compensation to be assigned to a state or federal savings and
loan association or corporation.  Additionally, the 72nd
Legislature also amended this Article to expand the right of
assignment to be granted to state and federal credit unions.


PURPOSE

     As proposed, House Bill 1670 would expand the current
statutory right of commission assignment to dealerships having a
dealers license issues by the Texas Department of Transportation. 
An actual insurance sale could still be made by only by a licensed
agent, but the agent could assign an earned commission.


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.

Amends Section 18, Article 21.07, Insurance Code, by making the
existing language Subsection (a) and adding a new subsection (b) to
permit an employee, officer, director, or shareholder of a licensed
automobile dealer who is a licensed insurance agent and who enters
into a contract with an insurer to solicit or write policies or
certificates of credit life insurance, credit accident and health
insurance, or both, to assign and transfer to the dealer or an
affiliate of the dealer any commissions, fees, or other
compensation to be paid to the agent under the agent's contract
with the insurer.

SECTION 2.  Effective Date and Emergency Clause.


EXPLANATION OF AMENDMENTS

     The amendment to House Bill 1670 strikes the word "person" and
inserts "dealer" to  provide for the uniform and consistent use of
the term "dealer" throughout the amending language.




SUMMARY OF COMMITTEE ACTION

     In accordance with House Rules, H.B. 1670 was heard in a
public hearing on March 29, 1995.  The Chair laid out H.B. 1670 and
recognized Representative Driver who offered an amendment to H.B.
1670.  The Chair heard no objections and the amendment to H.B. 1670
was adopted.  The Chair recognized the following person to testify
in support of H.B. 1670:  Jim Shawn, Texas Automobile Dealers
Association.  No one testified in opposition to or neutrally on
H.B. 1670. 

     The Chair recognized Representative G. Lewis who moved the
Committee report H.B. 1670 as amended to the full House with the
recommendation that it do pass, be printed, and sent to the
Committee on Local and Consent Calendars.  Representative Averitt
seconded the motion and the motion prevailed by the following vote: 
AYES (7); NAYES (0); ABSENT (2); PNV (0).