ZEM C.S.H.B. 1477 75(R)BILL ANALYSIS


CIVIL PRACTICES
C.S.H.B. 1477
By: Bonnen
4-1-97
Committee Report (Substituted)



BACKGROUND 

The Texas Catastrophe Property Insurance Association (TCPIA) is composed
of all Texas property and casualty insurers.  The Association is governed
by a nine member board of directors, five members of which represent
insurance companies and are elected by the members of the association, two
members of the board represent insurance agents and two members of the
board are consumers who represent policy holders.  The Commissioner of
Insurance appoints the board members representing insurance agents and
consumers.  All TCPIA board members serve on a volunteer basis and are not
compensated for their services.  The TCPIA board members are not protected
from liability for most actions undertaken in the course of their official
duties. 

PURPOSE

House Bill 1477, as substituted, relieves directors of the Texas
Catastrophe Property Insurance Association, but not the Association
itself, from liability arising from good faith actions occurring in the
performance of their duties.  House Bill 1477 does not extend to acts of
intentional misconduct or willful violation of the law.  This bill will
help the Commissioner of Insurance in his efforts to appoint qualified
TCPIA board members who might be unwilling to serve in these volunteer
positions in the face of personal liability exposure.  

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 9A(a), Article 21.49, Insurance Code, by
adding language   clarifying the applicability of Section 9. 

SECTION 2.   Amends Section 10, Article 21.49, Insurance Code, as follows:

 (a) Relieves a director of the Texas Catastrophe Property Insurance
Association from liability for any action or failure to act in the
performance of powers and duties as members of the Association; not
applicable to a bad faith act, failure to act, or to an act that involves
gross negligence, intentional misconduct or a knowing violation of the
law. 

SECTION 3.  Effective Date: September 1, 1997.  Applies prospectively.
Savings clause. 

SECTION 4.  Emergency clause.


COMPARISON OF ORIGINAL TO SUBSTITUTE

The committee substitute provides that the immunity from liability is
extended only to directors of the association, not to officers, agents, or
employees, and clarifies that the immunity applies only to the performance
of official powers and duties and does not apply to acts of gross
negligence.  The substitute also reinstates current language in the
statute deleted from the original  bill which provides that the directors,
the Board and its staff, the Association and its employees and agents are
not liable for inspections.