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).