SRC-JFA H.B. 1170 75(R)   BILL ANALYSIS


Senate Research Center   H.B. 1170
By: Smithee (Shapiro)
Economic Development
5-5-97
Engrossed


DIGEST 

Currently, the Insurance Code prohibits not-for-profit nursing homes from
purchasing punitive damage insurance coverage under medical professional
liability insurance from an admitted carrier. Not-for-profit nursing homes
may purchase such insurance from non-admitted, out-of-state carriers.
These policies do not include oversight and protections under the
Department of Insurance.  This current law reflects a time when the
not-for-profit nursing homes were less concerned about litigation than
today.  This bill would include a not-for-profit nursing home under the
definition of a hospital as described in Section 8, Article 5.15-1,
Insurance Code, authorizing the commissioner of insurance to approve an
endorsement form that provides for coverage for punitive damages to be
used on a policy of medical professional liability insurance issued to a
not-for-profit nursing home. 
  
PURPOSE

As proposed, H.B. 1170 includes a not-for-profit nursing home under the
definition of a hospital as described in Section 8, Article 5.15-1,
Insurance  Code, authorizing the commissioner of insurance to approve an
endorsement that provides for coverage for punitive damages to be used on
a policy of medical professional liability insurance issued to a
not-for-profit nursing home.   

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 8, Article 5.15-1, Insurance Code, to prohibit a
policy of medical professional liability insurance issued to or renewed
for a health care provider or physician in this state from including
coverage for punitive damages that may be assessed against the health care
provider or physician; provided, however, that the commissioner of
insurance, rather than the State Board of Insurance, may approve an
endorsement form that provides for coverage for punitive damages to be
used on a policy of medical professional liability insurance  issued to a
hospital, as the term "hospital" is defined in this article, to a
not-for-profit nursing home, or to a for-profit nursing home with a
Medicaid census greater than 30 percent of the home's total census.   

SECTION 2. Effective date: September 1, 1997.
  Makes application of this Act prospective to January 1, 1998. 

SECTION 3. Emergency clause.