SRC-JFA H.B. 2736 75(R)BILL ANALYSIS


Senate Research CenterH.B. 2736
By: Uher (Armbrister)
Intergovernmental Relations
5-17-97
Committee Report (Amended)


DIGEST 

Currently, Texas insurance law provides that a notice of change in policy
be given to the policy holder prior to implementation.  This bill would
require the Texas Association of Counties, a quasigovernmental entity that
offers risk pool management, to comply with insurance industry standards
by providing written notice of a change in policy to all affected
counties.   

PURPOSE

As proposed, H.B. 2736 requires the Texas Association of Counties, a
quasigovernmental entity that offers risk pool management, to comply with
insurance industry standards by providing written notice of a change in
policy to all affected counties.  

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 Chapter 119, Local Government Code, by adding Sections
119.012 and 119.013, as follows: 

Sec. 119.012.  NOTICE OF CANCELLATION OF CHANGE OF COVERAGE.  (a)
Prohibits cancellation of coverage for liability provided through the pool
under this chapter other than cancellation for nonpayment of contribution,
or any change to the terms or conditions of the coverage, from taking
effect before the 60th day after the earlier of the date that written
notice of the change is delivered to the county judge or presiding officer
of the governing body of each affected county or other political
subdivision; or mailed, by certified mail, to the county judge or
presiding officer of the governing body of each affected county or other
political subdivision.   

(b)  Provides that notice is not required for cancellation or a change to
the terms or conditions of the coverage made at the request of the
affected county or other political subdivision; or by mutual agreement of
the governing body of the affected county or other political subdivision
and the pool if the mutual agreement is evidenced by a writing, and no
later than the 72nd hour before the governing body takes formal action
with respect to the agreement, the writing described by Paragraph (A) is
provided, electronically or by certified mail, to the county judge or
presiding officer of the governing body of the political subdivision.   

(c)   Sets forth the requirements for the font-type and contents of the
notice.   

(d)  Requires the notice, in the case of cancellation of the coverage, to
state that, on request of the affected county or other political
subdivision, the pool shall refund to the county or political subdivision
the pro rata unearned paid contribution of the county or political
subdivision.  Provides that this subsection does not apply if the refund
is paid at the time the notice is made.   

Sec.  119.013.  QUALIFICATIONS OF ADMINISTRATOR.  Sets forth the
qualifications  and requirements for the individual responsible for
administration of the pool, whether employed by the pool or any other
entity.   

SECTION 2. Makes application of this Act prospective to January 1, 1998.

SECTION 3. (a)  Provides that an individual responsible for administration
of the County Government Risk Management Pool under Chapter 119, Local
Government Code, is not required to satisfy the requirements of Sections
119.013(1) and (2), Local Government Code, as added by this Act, before
January 1, 1998, or the requirements of Section 119.013(3), Local
Government Code, as added by this Act, before December 31, 1998. 

(b)  Makes application of Section 119.013, Local Government Code, as added
by this Act, prospective.   

SECTION 4. Effective date: September 1, 1997.

SECTION 5. Emergency clause. 

SUMMARY OF COMMITTEE CHANGES

Amendment 1. 

Page 2, lines 4-6, strikes "not later than the 72nd hour after the time
the agreement is made, and prior to formal action by the governing body,"
and replaces with "not later than the 72nd hour before the governing body
takes formal action with respect to the agreement,".