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).