BILL ANALYSIS



C.S.H.B. 2122
By: Brimer
4-11-95
Committee Report (Substituted)


BACKGROUND

When the Texas Workers' Compensation Reform Act was passed, it
included a provision mandating the offering of deductibles on all
workers' compensation insurance policies issued in Texas.  At the
same time, deductibles were a relatively new feature for workers'
compensation policies, as only one other state permitted the
offering of deductibles.  The bill sponsors felt it was necessary
to mandate the offering of deductibles in order to make sure
policyholders had the opportunity to take advantage of this cost
lowering feature.  Since then, deductibles have become very common,
and the insurance industry has embraced their use.  In fact,
deductibles are used as a competitive tool in the marketplace
today.  As a result, the mandating of deductibles is no longer
necessary.

PURPOSE

HB 2122 amends the current Article 5.55C, Texas Insurance Code,
establishing the Board to require optional deductible plans on the
part of insurers.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill may grant additional
rulemaking authority under SECTION 1, Section (a), Article 5.55C of
the Insurance Code to the Department of Insurance who shall require
companies and associations to provide upon request optional
deductible plans. 

Rulemaking authority may also be found under SECTION 2, giving the
Texas Department of Insurance authority to review and make
recommendations regarding the amount of the premium reduction
allowable for deductible options.  

SECTION BY SECTION ANALYSIS

     SECTION 1. Amends Section (a), Article 5.55C, Texas Insurance
Code, that specifies the Board shall require companies or
associations who write workers' compensation insurance policies to
provide, upon request optional deductible plans that permit
policyholders to self-insure for the deductible amount.
     
     SECTION 2. The Department of Insurance shall review and
analyze data applicable to optional deductible plans as explained
under Article 5.55C and make recommendations to the commissioner of
insurance regarding the amount of the premium reduction allowable
for deductible options no later January 1, 1996.

     SECTION 3.  Emergency Clause; The effective date of this Act
occurs after its passage.

COMPARISON OF ORIGINAL TO SUBSTITUTE

The major points of difference between H.B. 2122, as introduced and
the committee substitute are: 

SECTION 1. Deletes "commissioner" and reinstates the "Board". 
Deletes "allow" and adds a re-     establishes a requirement on the
part of companies and associations who write workers'  compensation
insurance to provide upon request by the Board, optional deductible
plans.     A techical correction is also added to clarify the
language under this section.     

SECTION 2. The substitute provides that the Department of Insurance
shall review and analyze      the data applicable to the optional
deductible plans and shall make a recommendation  regarding the
amount of the premium reduction allowable for deductibles to the      commissioner of insurance no later than January 1, 1996.    

SECTION 3.  Emergency Clause.

SUMMARY OF COMMITTEE ACTION

The Business and Industry Committee considered HB 2122 in a public
hearing on April 4, 1995.  Testifying in support of HB 2122 were
Ron Cobb, representing American Insurance Association and David
Pinkus, representing Small Business United of Texas.  Testifying
against H.B. 2122 was Pam Beachley, representing Business Insurance
Consumers Association.  A complete committee substitute was
considered by the committee. Without objection, the complete
committee substitute to H.B. 2122 was withdrawn.  H.B. 2122 was
referred to subcommittee consisting of Representative Brady.  After
being recalled from subcommittee, H.B. 2122 was considered by the
committee on April 11, 1995. A complete comittee substitute was
considered by the committee. Without objection, the complete
committee substitute to H.B. 2122 was adopted.  A motion to report
H.B. 2122 as substituted to the full house with the recommendation
that it do pass and be printed carried with a record vote of 9
(nine) ayes,  0 (zero) nays,  0 (zero) present-not-voting,  0
(zero) absent.