BILL ANALYSIS S.B. 1222 By: Leedom (Averitt) 05-17-95 Committee Report (Unamended) BACKGROUND The 72nd Legislature repealed a statute requiring insurance companies to pay life insurance claims within 30 days. Since then, no new laws have been passed to encourage insurance companies to pay claims promptly. PURPOSE S.B. 1222 requires the interest on a life insurance policy to accrue from the date due proof of loss is received by the insurance company to the date the insurer accepts the claim and offers to pay; sets forth the rate of interest. 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 3.48, Insurance Code, to require the interest on a life insurance policy to accrue from the date due proof of loss is received by the insurance company to the date the insurer accepts the claim and offers to pay. Requires interest to be paid at the same time that proceeds from the policy are paid hereunder. Requires the rate of interest to be either the rate so provided in the policy or, if there is no such provision in the policy, the rate of interest on proceeds left on deposit with the insurer. SECTION 2. Emergency clause. Effective date: upon passage. SUMMARY OF COMMITTEE ACTION Pursuant to an announcement filed with the Journal Clerk and read by the Reading Clerk, in accordance with House Rules, the House Committee on Insurance met in a formal meeting on May 17, 1995 at desk #24 on the House Floor and was called to order by the Chair, Representative John Smithee. The Chair laid out S.B. 1222 and recognized Representative Driver who moved the Committee report S.B. 1222 as engrossed to the full House with the recommendation that it do pass, be printed, and be sent to the Committee on Local and Consent. Representative Duncan seconded the motion and the motion prevailed by the following vote: AYES: (7); NAYES: (0); PNV: (0); ABSENT: (2).