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.