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.