SRC-SLL, AAA H.B. 2437 75(R) BILL ANALYSIS Senate Research Center H.B. 2437 By: Bonnen (Sponsor) Economic Development 5-12-97 Engrossed DIGEST Currently, under Article 21.28-C, Insurance Code, the Texas Property and Casualty Insurance Guaranty Association is required to pay the unpaid covered claims of an insolvent insurer. The limit on covered claims is $100,000, and unearned premium refunds are limited to 75 percent up to a maximum of $1,000. However, a family could easily experience a homeowners insurance loss in excess of $100,000, particularly in the event of a natural disaster. This bill would remove the 75 percent limit and raise the maximum allowable amount to be paid on individual covered claims to $300,000. PURPOSE As proposed, H.B. 2437 removes the 75 percent limit on unearned premiums, raises the maximum allowable amount to be paid on covered claims to $25,000, and raises the limit on individual covered claims to $300,000. RULEMAKING AUTHORITY This bill does not grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 5(8), Article 21.28-C, Insurance Code, to redefine "covered claim" by deleting the 75 percent limit on unearned premiums, raising the maximum allowable amount to be paid on covered claims to $25,000, and raising the limit on individual covered claims to $300,000. SECTION 2. Effective date: September 1, 1997. Makes application of this Act prospective. SECTION 3. Emergency clause.