SRC-SLL, AAA C.S.H.B. 2437 75(R)BILL ANALYSIS


Senate Research CenterC.S.H.B. 2437
By: Bonnen (Sibley)
Economic Development
5-13-97
Committee Report (Substituted)


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, C.S.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. Amends Section 5(10)(A), Article 21.28-C, Insurance Code, to
redefine "member insurer." 

SECTION 3. (a) Effective date for SECTION 1: September 1, 1997.  Makes
application of this Act prospective. 

(b) Effective date for SECTION 2: September 1, 1997.

SECTION 4. Emergency clause.

SUMMARY OF COMMITTEE CHANGES

SECTION 2.

Adds Section 5(10)(A), Article 21.28-C, Insurance Code, to redefine
"member insurer." Redesignates subsequent SECTIONS. 

SECTION 3.

Adds Subsection (b), to provide that SECTION 2 of this bill shall take
effect on September 1, 1997.