RS H.B. 1901 75(R) BILL ANALYSIS INSURANCE H.B. 1901 By: Lewis, Glenn 4-7-97 Committee Report (Unamended) BACKGROUND In determining what sanction to assess against a licensee for violation of the Insurance Code or TDI rules, the Commissioner may only order restitution to injured parties in lieu of license cancellation or revocation. [Art. 1.10 7(a)] Thus, when consumers have lost substantial sums of money as the result of illegal activity by a licensee, the Commissioner must choose whether to revoke a license so that the licensee may not continue in the business of insurance and possibly cause additional harm or to order restitution so that those people who the licensee has already harmed may be made whole. The Commissioner should have the authority to revoke a license and order restitution. PURPOSE This bill will allow the Commissioner to use any combination of remedies available under Article 1.10. This flexibility will eliminate the department's current dilemma of whether to revoke a license or obtain restitution for injured policyholders. It will also help prevent persons whose licenses have been revoked from becoming relicensed until the ordered restitution has been fully paid. 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 1.10 7(a) by deleting the provision that other remedies available under the section may be ordered only "in lieu of . . . cancellation or revocation," to allow for the commissioner to enact the sanctions as well as revoke the license, certificate of authority, or authorization of an agent. SECTION 2. Clarifies that this change is available only for conduct occurring on or after the effective date of the act. SECTION 3. Act takes effect September 1, 1997. SECTION 4. Emergency Clause.