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).