RS H.B. 2438 75(R)    BILL ANALYSIS


INSURANCE
H.B. 2438
By: Chisum
4-16-97
Committee Report (Unamended)


BACKGROUND 

Often small communities cannot support more than one volunteer 
fire department.  When that 
community is split by a state line, there is a decision made for 
the volunteer department to be located 
on one side or the other.  People from the community on both 
sides of the line volunteer for the fire 
department, and the department responds to emergencies on both 
sides of the state line.  A problem 
arises for the volunteer fire department when the insurance 
company does not recognize a 
department across the state line.  In setting insurance rates, 
the premiums can be considerably higher 
if there is no fire suppression service taken into account.  

PURPOSE

To require that the insurance commissioner, in adopting fire 
insurance rates for a municipality, take 
into account the nearby fire department or volunteer fire 
department that provides fire suppression 
in a Texas municipality.  The department must be considered even 
if that department is located 
across a state line or across the border with the United Mexican 
States.

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 Subchapter C, Chapter 5 of the Insurance Code 
by adding Art. 5.25-3.

Art. 5.25-3.  FIRE INSURANCE RATES AND FIRE SUPPRESSION RATINGS 
FOR BORDER 
MUNICIPALITY.  Requires that the commissioner will take into 
account the existence and 
capabilities of a fire department or volunteer fire department 
that serves an adjoining or nearby 
municipality when setting the fire suppression rating for a 
municipality at or near the border between 
this state and another state or the United Mexican States.

SECTION 2: Effective upon passage, emergency clause.