SRC-JRN H.B. 1789 75(R)   BILL ANALYSIS


Senate Research Center   H.B. 1789
By: Lewis, Glenn (Moncrief)
Economic Development
5-17-97
Engrossed


DIGEST 

Currently, when an insurance company decides to stop writing policies in a
particular area, policyholders may have difficulty getting their claims
paid or finding coverage with another company.  Many states require
insurers to notify regulators of their plans to withdraw in advance and to
provide for an orderly transition to their policyholders.  This bill
expands the circumstances under which an insurer is required to file a
withdrawal plan when the insurer plans to discontinue writing insurance
policies, but plans to continue writing policies in other areas of the
state. 

PURPOSE

As proposed, H.B. 1789 expands the circumstances under which an insurer is
required to file a withdrawal plan when the insurer plans to discontinue
writing insurance policies, but plans to continue writing policies in
other areas of the state. 

RULEMAKING AUTHORITY

Rulemaking authority is granted to the commissioner of insurance in
SECTION 1 (Article 21.49-2C, Insurance Code) of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Article 21.49-2C, Insurance Code, Subsections (a) and
(g), and adds Subsection (h), to require an authorized insurer to file
with the commissioner of insurance (commissioner) a plan for orderly
withdrawal if the insurer proposes to withdraw from writing a line of
insurance in this state or to reduce its total annual premium volume by 75
percent or more or proposes, in a personal line of motor vehicle
comprehensive or residential property insurance, to reduce its total
annual premium volume in a rating territory by 50 percent or more.
Deletes a provision requiring an authorized insurer to file with the
commissioner a plan of orderly withdrawal. Sets forth provisions regarding
the restriction of writing new business by an insurer of comprehensive
motor vehicle or residential property insurance plans in response to
catastrphic events.  Defines "rating territory."  Sets forth provisions
authorizing the commissioner to impose certain moratoriums.  Requires the
commissioner, by rule, to establish reasonable criteria for applying
certain standards for determining whether to impose a moratorium. 

SECTION 2. Provides that this Act takes effect September 1, 1997.
  Makes application of this Act prospective.

SECTION 3. Emergency clause.