RS H.B. 2873 75(R) BILL ANALYSIS INSURANCE H.B. 2873 By: Goodman 4-20-97 Committee Report (Unamended) BACKGROUND The current provisions of the Insurance Code exempt property and casualty insurers from the use of standard policy forms for large insurance risks. A "large risk" is currently defined as one for which the total property value meets of exceeds $10 million, the insured's revenue meets or exceeds $20 million, or the insurance premiums meet or exceed $50,000 for property insurance, $50,000 for general liability insurance, or $100,000 for multi-peril insurance. These large risks are nearly always businesses who have the sophistication and knowledge to evaluate the policies they purchase, and they prefer the flexibility to be able to choose the types of coverage they purchase rather than being forced to purchase standard coverages under the Insurance Department's promulgated policy forms. Originally authorized in 1991, this program has worked to benefit insureds coming under the large risk definition. PURPOSE The purpose of this bill is to expand the definition of "large risk", by reducing the levels at which an insured becomes eligible for this category. 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 8(f), Art. 5.13-2, Insurance Code by decreasing the thresholds which determine the eligibility to be a "large risk" to $5 million in insured property value, $10 million in annual gross revenue, or total premiums of $25,000 for property insurance, $25,000 for general liability insurance, or $50,000 for multi-peril insurance. SECTION 2. Emergency Clause.