BILL ANALYSIS H.B. 2256 By: Shields 3-15-95 Committee Report (Unamended) BACKGROUND The first viatical company appeared in 1988. the concept of a viatical settlement agreement is this: An investor buys the life insurance policy of someone terminally ill for less than the face value, becomes the beneficiary and makes money when the person dies. In return, the terminally ill person receives a large amount of cash, usually 50 to 80 percent of the policy depending on his or her life expectancy, to pay off debts or just enjoy. Cancer patients make up about 10 percent of these participants. The industry has grown rapidly with the onset of AIDS. PURPOSE The Texas Attorney General has declared Article 3.50-6A of the Insurance Code an unconstitutional delegation of regulatory authority and therefore that the department has no authority under this statute to regulate viatical settlements. House Bill 2256 repeals this portion of the statute. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Repeals Article 3.50-6A of the Insurance Code. SECTION 2. Emergency Clause and Effective Date SUMMARY OF COMMITTEE ACTION In accordance with House rules, H.B. 2256 was heard in a Public Hearing on March 15, 1995. The Chair laid out H.B. 2256 and recognized Representative Shields to explain the bill. No one testified in opposition to or in support of H.B. 2256. The Chair recognized Representative Counts who moved the Committee report H.B. 2256 as filed to the full House with the recommendation that it do pass, be printed and sent to Local & Consent Calendar. Representative Averitt seconded the motion and the motion prevailed by the following vote: AYES (7); NAYES (0); ABSENT (2); PNV (0).