BILL ANALYSIS


                                                        H.B. 2257
                                         By: Shields (Harris, C.)
                                             Economic Development
                                                          5-23-95
                              Senate Committee Report (Unamended)
BACKGROUND

Currently, the Texas Department of Insurance is not specifically
required to implement a policy of confidentiality regarding
proprietary and confidential information obtained through inquiry.

PURPOSE

As proposed, H.B. 2257 authorizes the Department of Insurance to
make inquiries into any matter relating to activities regulated
under the Insurance Code; requires information in the response to
be confidential.

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 Article 1.24, Insurance Code, as follows:

     Art.  1.24.  TO MAKE INQUIRIES.  (a) Provides that the
     Department of Insurance (department), rather than the State
     Board of Insurance, is authorized to address any inquiries
     into any insurance company or agent, or to the holder of any
     permit, certificate of registration, or other authorization in
     relation to the company's, agent's, or holder's business
     condition, or any matter connected with its regulated
     activities or transactions which the department may deem
     necessary for the proper discharge of the department's duties. 
     Provides that a response made under this article is the
     exclusive use of the department in the discharge of its
     regulatory duties.  Requires information provided in a
     response that is proprietary in nature to be maintained as
     confidential by the department.  Requires use of the response
     or information provided in the response at an administrative
     hearing or in a court to comply with applicable rules of
     evidence and procedure.  Makes conforming and nonsubstantive
     changes.
     
     (b) Requires an inquiry to be signed by the commissioner of
       insurance (commissioner) or by one of the four associate
       commissioners with jurisdiction over the subject matter of
       the inquiry.  Prohibits the commissioner or associate
       commissioner from delegating the duty imposed by his
       subsection to another individual.
       
       (c) Provides that a response and the information contained
       in a response is not subject to Chapter 551 or 2001,
       Government Code, or to discovery from the department under
       the Texas Rules of Civil Procedure.
       
       SECTION 2.   Makes application of this Act prospective.

SECTION 3. Emergency clause.
           Effective date: upon passage.