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whose licenses have been revoked from becoming relicensed until the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.