BILL ANALYSIS



S.B. 553
By: Nelson (Goolsby)
05-10-95
Committee Report (Amended)


BACKGROUND

     Currently, insurance companies do not provide automobile
insurance premium discounts based on academic achievement for
students in Texas. Other U.S. states allow insurance companies to
provide for such a discount. In Georgia, this academic achievement
discount is required.

PURPOSE

     S.B. 553 provides a discount on motor vehicle insurance
premiums for certain students based on academic achievement.

RULEMAKING AUTHORITY

     It is the committee's opinion that rulemaking authority is
granted to the commissioner of insurance under SECTION 1 (Article
5.03-3, Section 2(c), Insurance Code) of this bill.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter 5A, Insurance Code, by adding Article
5.03-3, as follows:

     Art. 5.03-3. PREMIUM DISCOUNT FOR ACADEMIC ACHIEVEMENT

     Sec. 1. DEFINITIONS. Defines "honor student," "insurer,"
     "motor vehicle," and "traffic safety regulation."
     
     Sec. 2. DISCOUNT AUTHORIZED. (a) Authorizes an insurer who
     delivers or issues for delivery in this state a motor vehicle
     insurance policy, on receipt of written verification from the
     insured that the insured or a family member covered by the
     policy is eligible, to grant a discount in the premiums
     charged for the liability, medical payments, personal injury
     protection, and collision coverage only for the motor vehicle
     designated to be driven by the honor student.
     
     (b) Requires an applicant, to be eligible for a discount, to
       file with the insurer annually the grade report issued by
       the school and other information that presents evidence
       satisfactory to establish that the person covered by the
       discount:
       
       (1) is licensed to drive in this state;
         
         (2) is under 25 years of age and qualifies as a youthful
         driver under the Texas Department of Insurance automobile
         classification plan; and
         
         (3) is enrolled as a full-time student in the junior or
         senior year of high school; or academic courses in an
         institution of higher education.
       (c) Provides that the commissioner, by rule, shall set the
       amount of the discounts applicable under this article and
       may adopt other rules necessary for the implementation of
       this article.
       
       
       Sec. 3. INELIGIBILITY; REVOCATION OF DISCOUNT. (a) Prohibits
     a person from continuing to receive a discount under his
     article after the first date on which the person fails to
     satisfy the requirements of Section 2(b) of this section
     unless the person reestablishes eligibility under this
     article.
     
     (b) Requires an insurer to revoke a discount under this
       article if an applicant for the discount knowingly provides
       false information in or with the application.
       
     SECTION 2.     Effective date: September 1, 1995.
           Makes application of this Act prospective beginning
January 1, 1996.

SECTION 3. Emergency clause.

EXPLANATION OF AMENDMENTS

     As amended, S.B. 553 provides for the continuation of the
motor vehicle insurance premium discount to a person who has
graduated from an institution of higher education if the person is
a full-time student for at least two consecutive years and was an
honor student for at least the last two years and is under 25 years
old.

SUMMARY OF COMMITTEE ACTION

     In accordance with House rules, S.B. 553 was heard in a public
hearing on May 10, 1995.  The Chair laid out S.B. 553 and an
amendment by Representative Driver.  The Chair recognized
Representative Driver to explain the bill and amendment. 
Representative Driver moved the Committee adopt the amendment to
S.B. 553.  The Chair heard no objections and the amendment was
adopted.

     The Chair recognized Representative Driver who moved the
Committee report S.B. 553 as amended to the full House with the
recommendation that it do pass, be printed, and be sent to the
Committee on Local and Consent.  The motion prevailed by the
following vote: AYES: (8); NAYES: (0); PNV: (0); Absent (1).