SRC-JFA S.B. 1037 75(R)   BILL ANALYSIS


Senate Research Center   S.B. 1037
By: Ellis
Economic Development
4-29-97
As Filed


DIGEST 

Insurance companies are a major source of capital in Texas, collecting
approximately $42 billion in premiums annually.  Communities are in need
of greater investment for small businesses, affordable housing, farms and
other economic development needs.  This bill would require insurance
companies to invest in low-income communities in a manner that has a
positive effect on those communities. Additionally, this bill would
require insurers to annually report to the Department of Insurance each
charitable  contribution and investment made in a low-income community.   

PURPOSE

As proposed, S.B. 1037 provides that each insurer that generates an annual
written premium of at least $2 million in this state has a continuing and
affirmative obligation to invest in low-income communities of this state
in a manner that has a positive effect on those communities.   

RULEMAKING AUTHORITY

Rulemaking authority is granted to the commissioner of insurance in
SECTION 1 (Sections 4(a)(5) and 5, Article 21.39-C, Insurance Code) of
this bill.   

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter 21E, Insurance Code, by adding Article 21.39-C,
as follows: 

Art. 21.39-C.  COMMUNITY INVESTMENTS; REPORT

Sec. 1.  LEGISLATIVE FINDINGS; PURPOSE.  Sets forth the legislative
findings in regard to increasing safe and sound investments by insurers in
low-income communities and providing to the state information on
investments in low-income communities. 

Sec. 2.  DEFINITIONS.  Defines "area median income," "insurer," and "low
income."  

Sec. 3.  COMMUNITY INVESTMENT.  Provides that each insurer that generates
an annual written premium of at least $2 million in this state has a
continuing and affirmative obligation to invest in low-income communities
of this state in a manner that has a positive effect on those communities.

Sec. 4.  REPORT.  Requires each insurer to annually report to the
Department of Insurance (department) certain information regarding
investments and other similar information required by rule of the
commissioner of insurance.  Requires the information required by
Subsection (a) of this section to be correct on the last day of the latest
month preceding the 30th day before the date on which the report is filed
with the department. 

Sec. 5.  RULES.  Requires the commissioner to adopt rules as necessary to
implement Section 3 of this article.  Requires the commissioner to adopt
rules on the submission of reports under this article.  Authorizes the
commissioner to establish different filing dates for different types of
insurers to coordinate the filing date with the filing date for a
different report required under this code. 

 Sec. 6.  INVESTMENTS NOT AUTHORIZED.  Provides that this article does not
authorize an insurer to make an investment not otherwise authorized by
this code. 

Sec. 7.  PUBLIC INFORMATION.  Provides that a report filed under this
article is public information.   

SECTION 2. (a)  Effective date: September 1, 1997, except as provided by
Subsection (b).  

(b)  Provides that an insurer is not required to file an annual report
under Article 21.39-C, Insurance Code, as added by this Act, before
January 31, 1998.  Provides that an insurer is not required to make a
community investment as required by Section 3, Article 21.39-C, Insurance
Code, as added by this Act, until the calender year beginning January 1,
1998.   

SECTION 3. Emergency clause.