RS C.S.S.B. 1155 75(R)    BILL ANALYSIS


INSURANCE
C.S.S.B. 1155
By: Harris (Pitts)
5-22-97
Committee Report (Substituted)

BACKGROUND 
Currently, the Insurance Code does not provide for the regulation of
controlled business organizations such as builders, realtors, developers
or lenders who own title companies.  

PURPOSE

As proposed, C.S.S.B. 1155 authorizes the commissioner of insurance to
regulate the business of title insurance by rulemaking.  The bill would
prohibit the Commissioner from granting or renewing a license as a title
agent unless that person, firm, association, or corporation is engaged in
the business of title insurance.   

RULEMAKING AUTHORITY

It is the committee's opinion that express rulemaking authority is granted
in SECTION 1 of the bill, (Article 9.01(C), Insurance Code). 

SECTION BY SECTION ANALYSIS
SECTION 1. Amends Article 9.01, Insurance Code, by adding subsection (C)
as follows: 

Art. 9.01 Short Title and Legislative Purpose and Intent

C. In addition to other requirements under this chapter, no issuance or
renewal of a license shall be granted to a person, firm, association or
corporation as a title agent or direct operation unless it is found by the
commissioner that such entity intends to be actively involved in the
business of title insurance.  The commissioner is authorized and required
to comprehensively regulate the title insurance business. The commissioner
shall adopt rules in order to implement this chapter. 

SECTION 2. Effective Date, September 1, 1997.

SECTION 3. Emergency Clause


COMPARISON OF ORIGINAL TO SUBSTITUTE

Amends caption to conform to the body of the bill.

SECTION 1. Changes from amending Article 9.37, Insurance Code, to amending
Article 9.01, Insurance Code.  The substitute section changes the language
to say that no issuance or renewal of a license shall be granted to a
person, firm, association, or corporation or direct operation shall be
granted unless it is determined by the commissioner that the entity
intends to be actively involved in the business of title insurance.  The
new section also provides rule-making authority. 

SECTION 2. Deletes old SECTION 2 which amended article 9.36B to set forth
additional licensing requirements for a title insurance agent or direct
operation.  Set forth the applicability of this article.  Set forth
requirements for being bonded or alternatives to being bonded. Set forth
requirements of a material agreement.  Provides that this article does not
impair any insurance activity expressly authorized by federal law.
Defined "affiliate." New SECTION 2 changes to the effective date. 

 SECTION 3.  Old SECTION 3  provided that this Act take effect September
1, 1998 for title agents or direct operations which are currently
licensed. Provides that for all new applications, this Act takes effect
September 1, 1997.  Provided that  title agents or direct operations are
not required to file the bond required by Article 9.37(c), Insurance Code,
as added by this Act, before April 1, 1999. New SECTION 3 changes section
from effective date to emergency clause.