BWM C.S.H.B. 2351 75(R)BILL ANALYSIS FINANCIAL INSTITUTIONS C.S.H.B. 2351 By: Marchant 4-2-97 Committee Report (Substituted) BACKGROUND In 1993, the Texas Legislature amended the Consumer Credit Code to allow the sale of collateral insurance to cover any difference, or "gap", between an outstanding auto loan balance and the actual cash value of a car that is totaled in an accident. However, the approval of "Group II" agents (licensed under Art. 21.07) to sell this "gap insurance" product would greatly broaden the availability of this product. PURPOSE To allow insurance agents licensed under Article 21.07 of the Texas Insurance Code to sell "gap" insurance. 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. Adds Section 6A to Article 21.07, Texas Insurance Code to authorize an insurance agent licensed under Article 21.07 to sell insurance policies, issued by licensed insurance carriers, covering the difference between the actual market value and the outstanding loan balance owed on a vehicle suffering a total damage loss. SECTION 2. Effective date: September 1, 1997. SECTION 3. Emergency Clause. COMPARISON OF ORIGINAL TO SUBSTITUTE Instead of amending Section 15, Article 21.07, Texas Insurance Code, as found in the original bill, the Committee Substitute to H.B. 2351 adds Section 6A to allow insurance agents to sell "gap" insurance. Also, the Substitute does not amend Subsection(b), Section 18, Article 21.07, Insurance Code.