Senate Research CenterC.S.S.B. 1257
By: Whitmire
State Affairs
Committee Report (Substituted)


Currently, a title insurance agent may engage in any lawful promotional,
educational activities on the agent's behalf.  Clarification of current
law in necessary to remove promotional, educational, recreational, and
entertainment expenses from the title insurance rate base and clarify that
these expenditures are not illegal rebate and violations of Article
9.30(AA), Insurance Code.  Elimination of these expenses from the title
insurance rate base would lower title insurance rates for the consumer.
C.S.S.B. 1257 would clarify existing law allowing lawful promotional,
educational activities on behalf of title insurance companies and to
eliminate these expenses from the rate base. 


As proposed, C.S.S.B. 1257 outlines provisions regarding promotional or
educational activities of title insurance entities, and title insurance
policy provisions. 


This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 


SECTION 1. Amends Article 9.07(b), Insurance Code, to prohibit the
commissioner of insurance of the State of Texas (commissioner) from
considering expenses relating to promotional and educational activities
authorized by Section B(6), Article 9.30, of this code, in fixing the rate
of premiums. 

SECTION 2. Amends Article 9.30, Insurance Code, by adding Subsection F, as

Sec. F. Provides that a legal promotional or educational activity
described by Section B(6) is not a rebate or discount prohibited under
Section A of this article.  Provides that a dispute as to whether an
expense is for a promotional or educational activity that is legal or that
is not conditioned on the referral of title insurance business is a
question of fact to be determined by the trier of fact in a court of law.
Requires an action under this section to be brought in a district court of
the county in which the principal place of business of the title insurance
agent or title insurance company that incurred the expense is located. 

SECTION 3. Amends Article 9.57, Insurance Code, to require each policy of
title insurance insuring an owner of real property delivered or issued for
delivery in this state to include certain provisions, the form, substance,
and content of which shall be promulgated by the commissioner, rather than
the State Board of Insurance, in accordance with this article.  Deletes
existing Subsection (c) regarding the reinsurance of the title to the
property.  Requires the commissioner, rather than the State Board of
Insurance, to adopt rules and regulations establishing standards and time
schedules for implementing and handling claims by title insurance
companies as provided in this article. Makes conforming changes. 

SECTION 4. Effective date: September 1, 1997.

SECTION 5. Emergency clause.

Amends proposed relating clause.


Amends Article 9.57, Insurance Code, regarding each policy of title
insurance.  Deletes existing Subsection (c) regarding reinsurance of the
title to the property.  Sets forth requirements and outlines provisions
regarding the commissioner of insurance.