BILL ANALYSIS C.S.S.B. 490 By: Bivins (Smithee) 04-12-95 Committee Report (Substituted) BACKGROUND Article 5.33A of the Insurance Code, originally called the "dead-bolt" law, now includes premium discounts for homeowner policy holders who have security systems placed in their homes. To receive the discount from insurers, an inspection from a certified police officer is required. Inspectors are liable for providing that service, and due to liability problems with inspectors, consumers have had difficulties receiving the premium discount. PURPOSE As substituted, Senate Bill 490 provides qualifications for premium reduction for homeowners insurance coverage for persons installing home security devices and allows a person to submit a certificate of installation to receive a premium discount. 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 Section 1, Article 5.33A, Insurance Code, by adding Subdivisions (4) and (5), to define "U.L." and "siren." SECTION 2. Amends Section 2, Article 5.33A, Insurance Code, to entitle a person to premium reduction for homeowners insurance coverage if that person's property, rather than that person, is found by an inspector to be in compliance with specifications under Section 6 of this article; or if the person's property is in compliance with Section 6(a)(2) of this article, the person possesses a certificate of installation issued by the installer of the electronic burglar alarm and the person furnishes the certificate to the insurer. SECTION 3. Amends Section 3(a), Article 5.33A, Insurance Code, to make a conforming change. SECTION 4. Amends Section 4(a), Article 5.33A, Insurance Code, to make a conforming change. SECTION 5. Amends Section 6(a), Article 5.33A, Insurance Code, to provide that a person's property qualifies for a homeowners insurance premium reduction if the property meets with certain minimum specifications regarding doors and windows; or the property is equipped with an electronic burglar alarm system in which the doors and windows meet certain specifications with respect to protective and security devices. SECTION 5. (continued) Amends Section 6(a), Article 5.33A, Insurance Code, to provide if the system includes a siren audible inside the house, and except where prohibited by other law or ordinance, a siren audible outside the house; all equipment, except for sirens, is U.L. or Factory Mutual Research Corporation listed, the system is monitored by a U.L. listed central station; a backup battery is included; and the equipment sales and system installation and monitoring are in compliance with the Private Investigators and Private Security Agencies Act. SECTION 6. Amends Section 7, Article 5.33A, Insurance Code, to make a conforming change. SECTION 7. Amends Section 8(a), Article 5.33A, Insurance Code, to make a non-substantive change. SECTION 8. Effective date: September 1, 1995. Makes application of this Act prospective from January 1, 1996. SECTION 9. Emergency Clause. COMPARISON OF ORIGINAL TO SUBSTITUTE As substituted, S.B. 490 requires the insurer to determine that a person's property is in compliance with Section 6(a)(2) of this article and permits exterior windows to be protected by motion detectors in the immediate vicinity of each exterior window in order for a policyholder to receive an insurance premium discount. SUMMARY OF COMMITTEE ACTION In accordance with House rules, S.B. 490 was heard in a public hearing on April 12, 1995. Since Representative Smithee was the House Sponsor of S.B. 490, Representative Smithee turned the chair\gavel over to Representative Duncan. The Chair (Duncan) laid out S.B. 490 and recognized Representative Smithee to explain the bill. The Chair recognized the following person to testify in support of S.B. 490: Bob Leonard, Jr.; Texas Burglar & Fire Alarm Association The Chair laid out Committee amendment #1 by Representative Smithee and after further discussion by the Committee, Committee amendment #1 was withdrawn from consideration by Representative Smithee. The Chair laid out Committee amendment #2 by Representative Smithee to S.B. 490 and recognized Representative Smithee to explain Committee amendment #2. The Chair recognized Representative Dutton who moved the Committee adopt Committee amendment #2. The Chair recognized Representative Counts who objected to the adoption of Committee amendment #2. The Chair instructed the Clerk to call the roll for a record vote on the question of adoption of Committee amendment #2. Committee amendment #2 was adopted by the following vote: AYES (6); NAYES (3); ABSENT (0); PNV (0). The Chair laid out Committee amendment #3 by Representative Smithee to S.B. 490 and recognized Representative Smithee to explain the amendment. The Chair recognized Representative Dutton who moved the Committee adopt Committee amendment #3. The Chair heard no objection and Committee amendment #3 was adopted. The Chair recognized Rep. Counts who moved the Committee re-draft S.B. 490 as substituted incorporating all the adopted amendments into a complete and new substitute of S.B. 490. The Chair heard no objections and the motion was adopted. The Chair recognized Representative Dutton who moved the Committee report S.B. 490 as substituted to the full House with the recommendation that it do pass and be printed. Representative De La Garza seconded the motion and the motion passed by the following vote: AYES (9); NAYES (0); ABSENT (0); PNV (0).