BILL ANALYSIS

Insurance Committee

By: Patterson
04-26-95
Committee Report (Unamended)

BACKGROUND

     Under current law, a person or insurer who engages in the
unauthorized business of insurance in Texas, as defined in Article
1.1.4-2 of the Texas Insurance Code, "constitutes an irrevocable
appointment of the [C]ommissioner [of Insurance] . . . to be the
lawful attorney for service of that person or insurer."  Similarly,
the commissioner is also the attorney for service for foreign and
alien insurers who fail to appoint an attorney for service of
process.  When the commissioner is served as the attorney for
service for an unauthorized or foreign insurer, the commissioner is
required to forward one copy of the citation and petition forwarded
by certified mail to the person or insurer engaged in the
unauthorized business of insurance.

     Currently, it is the burden of the plaintiff to assure proof
that the commissioner discharged the duty of forwarding the
citation to the person or insurer is made part of the record in the
trial court.  Article 1.36.3(f) of the Insurance Code currently
provides only that "[t]he commissioner shall provide on request a
certificate showing the service and proof of delivery by a return
receipt for certified or registered mail."  If the plaintiff fails
to take the measures necessary to assure that this proof of
delivery by the commissioner to the person or insurer engaged in
the unauthorized business of insurance, then any judgement rendered
against such person or insurer who does not otherwise appear in the
suit is void.

PURPOSE

     As proposed, House Bill 2952 will relieve the consumer of the
burden of obtaining the certificate from the commissioner and
filing it with the clerk of the court.  It directs the commissioner
to automatically forward such proof of delivery with the clerk of
the court in which the suit is pending.

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. 

Amends Article 1.36, Section 3(f), Insurance Code, to require the
Commissioner of Insurance to issue a certificate to the plaintiff
and clerk of the court or agency showing the service and proof of
delivery.

SECTION 2.  Effective date is September 1, 1995.

SECTION 3.  Emergency clause.

SUMMARY OF COMMITTEE ACTION

     In accordance with House rules, H.B. 2952 was heard in a
public hearing on April 26, 1995.  The Chair laid out H.B. 2952 and
recognized Representative Patterson to explain the bill.  The Chair
recognized the following person to testify neutrally on H.B. 2952:
Kevin Brady, Texas Department of Insurance.  The Chair left H.B.
2952 as pending business before the Committee.



SUMMARY OF COMMITTEE ACTION   (continued)

     The Chair laid out H.B. 2952 as pending business and
recognized Representative Duncan who moved the Committee report
H.B. 2952 as filed to the full House with the recommendation that
it do pass, be printed, and sent to the Committee on Local and
Consent.  Representative Counts seconded the motion and the motion
prevailed by the following vote: AYES (5); NAYES (0); ABSENT (4);
PNV (0).