RS H.B. 1498 75(R)BILL ANALYSIS INSURANCE H.B. 1498 By: Wise 4-16-97 Committee Report (Unamended) BACKGROUND Offering insurance premium discounts to groups like the Boy Scouts of America and other youth organizations that advocate drug awareness programs would be an excellent incentive to encourage more participation in these programs and thus cut down on many other societal problems. Information reveals that participants in the Boy Scouts program traditionally have good grades, excellent driving records, lower incidences of cheating or fraud, ethical conduct at home and at work, and higher economic potential in employment later in life. Recently, Texas Commissioner of Insurance Elton Bomer marketed a similar program encouraging insurance companies to offer similar academic achievement insurance discounts to students who make good grades. Commissioner Bomer implemented the optional 10 percent discount effective February 1, 1997, and so far five insurance companies have notified TDI of their interest. PURPOSE The purpose of this legislation is to authorize the Texas Department of Insurance (TDI) to establish rules which would allow certain premium discounts on automobile insurance coverage for certain youth groups and their volunteers. RULEMAKING AUTHORITY It is the opinion of the committee that this bill does grant rule-making authority to the Commissioner of Insurance in SECTION 1 of the bill (Section 2 (e) and (f) of Article 5.03-5, Insurance Code). SECTION BY SECTION ANALYSIS SECTION 1. - Amend Subchapter A, Chapter 5, Insurance Code, by adding Article 5.03-5 as follows: Art. 5.03-5 PREMIUM DISCOUNT FOR CERTAIN YOUTH GROUP MEMBERS Sec. 1. - DEFINITIONS: Defines "Applicant," "Driving Record," "Insurer," "Motor Vehicle," "Traffic safety regulation," and "Youth group." Sec. 2. - DISCOUNT AUTHORIZED; ELIGIBILITY CONDITIONS FOR DRIVERS: (a) An insurance company may offer a discount of insurance premiums for liability, medical payments, personal injury protection, and collision coverage, to an insured person who provides written verification of their qualifications under subsection (b). (b) Applicant for discount must be: 1) licensed to drive in this state, 2) a member of a youth group, including adult member of group, 3) have held a drivers license for at least three years, 4) not been convicted of a moving violation in the past three years, 5) nor found at fault in traffic accident over the three years prior to applying. (c) An applicant is not eligible for discount if they have been convicted of an offense with a motor vehicle as described by (1) Chapter 49, Penal code; (2) Article 67011-1 revised statute as applied prior to 73rd Legislature, or Section 19.05, Penal Code, as existed prior to 73rd Legislature, or (3) another state's statutes similar to those described in (1) and (2). (d) For purposes of subsection (b) and (c) a conviction involves a sentence being imposed or community service or similar treatment. (e) The commissioner may adopt rules for additional requirements for receipt of a discount under this article. (f) The commissioner shall set the amount of discount by rule, and may adopt additional rules as necessary for implementation of this article. Sec. 3. - INELIGIBILITY; REVOCATION OF DISCOUNT. (a) A discount may be revoked upon the first day a person cannot satisfy the requirements under section 2 of this article. (b) A person may not receive a discount under this article if they receive a discount under section 5.03-3. (c) An applicant shall have their discount revoked if they knowingly provide false information on an application. SECTION 2. - Effective Date September 1, 1997, and applies to policies issued or renewed after January 1, 1998. SECTION 3. - Emergency clause.