RS H.B. 2437 75(R) BILL ANALYSIS INSURANCE H.B. 2437 By: Bonnen 3-25-97 Committee Report (Unamended) BACKGROUND The Texas Property Casualty Insurance Guaranty Association currently has statutory limits that are obsolete. Article 21-28C, Texas Insurance Code, establishes a limit of $100,000 on covered claims, and unearned premium refunds are limited to 75%, up to a maximum of $1000. However, a $100,000 house is no longer considered unusual or particularly expensive; such a home may even be owned by persons of relatively modest means. People owning a home worth $100,000 or more could easily experience a homeowners insurance loss in excess of the present guaranty association limit, especially in the event of a natural disaster such as a hurricane or tornado. Similarly, a business could easily pay $50,000 or more in workers' comp premiums, yet get back no more than $1000 in unearned premium refund under present law. PURPOSE This bill increases the Property and Casualty guaranty fund claim limit to $300,000 and raises the maximum refund of unearned premium to $25,000. 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 Section 5(8), Article 21.28-C, Insurance Code by deleting the 75% limit on unearned premium refunds and raising the maximum amount of a refund from $1,000 to $25,000. Raises the Property and Casualty guaranty fund claim limit from $100,000 to $300,000. SECTION 2. Effective Date: September 1, 1997. Applies only to a claim against an insurer who, on or after that date, was designated an impaired insurer under Article 21.28-C, Insurance Code. A claim against an insurer who, before September 1, 1997, was designated an impaired insurer under Article 21.28-C, Insurance Code is governed by the law as it existed immediately before the effective date of this Act, and that law is continued in effect for this purpose. SECTION 3. Emergency Clause.