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


Senate Research CenterC.S.S.B. 79
By: Ellis
Economic Development
3-7-97
Committee Report (Substituted)


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 C.S.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, C.S.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 writing insurance for a church
from cancelling or declining to renew an insurance policy solely because
of a previous occurrence of arson against the church in which the church
has cooperated with police, fire and the authorities in the investigation
of the arson and prosecution of those responsible; or a verbal or written
statement directed to the religious organization threatening an act of
arson against the church when such official or organization within a
reasonable amount of time reported such threat to the appropriate law
enforcement agency. 

Sec. 4. PENALTY. Provides that a violation of this article is an unfair
act in the business of insurance for purposes of Article 21.21 and an
insurer that violates this article is subject to the sanctions established
by Article 21.21. 

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

SECTION 3. Emergency clause.
 
SUMMARY OF COMMITTEE CHANGES

Amends SECTION 1, by expanding Section 3, Insurance Code, prohibiting an
insurer writing insurance for a church from cancelling or declining to
renew a policy for certain reasons.