SRC-TNM S.B. 79 75(R)            BILL ANALYSIS


Senate Research CenterS.B. 79
By: Ellis
Economic Development
3-4-97
As Filed


DIGEST 

Currently, although most churches' insurance policies are renewed after
arson, every church affected by arson may be threatened with cancellation
of insurance coverage.  In July 1996, USA Today reported that five
churches lost their insurance coverage after being affected by arson.  A
December 1996 USA Today survey of 109 churches affected by arson found
that two churches lost their insurance.  According to the Texas Commission
on Fire Protection, in 1995 there were 33 suspicious church fires in
Texas.  The goal of S.B. 79 is to prohibit an insurer from cancelling or
declining to renew an insurance policy solely because of a previous
occurrence of arson against the church or a verbal or written statement
regarding the church. 
 
PURPOSE

As proposed, S.B. 79 outlines provisions and provides penalties relating
to certain insurance covering church property. 

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 21B, Insurance Code, to add Article 21.21-9, as
follows: 
 
 Art. 21.21-9. CERTAIN COVERAGE FOR CHURCH PROPERTY

Sec. 1. DEFINITIONS. Defines "church," and "religious organization."

Sec. 2. APPLICATION. Provides that this article applies to any insurer
admitted to do business and authorized to write an insurance policy
providing coverage for losses resulting from fire in this state, including
a county mutual insurance company, a Lloyd's plan company, a reciprocal or
interinsurance exchange, or a farm mutual insurance company. 

Sec. 3. PROHIBITION. Prohibits an insurer from cancelling or declining to
renew an insurance policy providing coverage for losses resulting from
fire for a church solely because of a previous occurrence of arson against
the church or a verbal or written statement directed to the religious
organization or its official and threatening an act of arson against the
church. 

Sec. 4. EXEMPTION. Provides that Section 3(1) of this article does not
apply in the case of arson that was the act of an official of the
religious organization. 

Sec. 5. PENALTY. Provides that a violation of this article is an unfair
act in the business of insurance for purposes of Article 21.21, Insurance
Code, and an insurer that violates this article is subject to the
sanctions established by Article 21.21, Insurance Code. 

SECTION 2. Effective date: September 1, 1997.
         Makes application of this Act prospective to January 1, 1998.

SECTION 3. Emergency clause.