RS S.B. 1291 75(R)    BILL ANALYSIS


INSURANCE
S.B. 1291
By: Cain (Dutton)
5-20-97
Committee Report (unamended)


BACKGROUND

Currently, provisions of the Texas Insurance Code limit the payment of
dividends to the policyholders to an individual line of insurance.  Many
businesses, and particularly those businesses operating in more than one
state, would like the ability to have the business' dividend calculated on
the basis of all lines of insurance purchased.  This ability to provide a
multiple line dividend is available in many other states.  This bill would
authorize insurers to pay to a commercial policyholder or group of
commercial policyholders a dividend which covers more than one class or
line of commercial business. 

PURPOSE

As proposed, S.B. 1291 permits policyholder dividends for multiple lines
of insurance. 

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 5, Insurance Code, by adding Article 5.41-2, as
follows: 

Article 5.41-2.  MULTIPLE LINE DIVIDENDS

Sec.  1.  Sets forth regulations regarding the payment of a dividend which
covers more than one class or line of commercial business to certain
policyholders. 

Sec.  2.  Prohibits limitation of the payment of a dividend on one or more
classes or lines of commercial business to a group of commercial
policyholders, from being unfair discrimination, so long as the group has
clearly identifiable underwriting characteristics or is an association or
group of business entities engaged in similar undertakings. 

Sec.  3.  Provides that the classes or lines of commercial business for
which such dividends are authorized include any or all of the commercial
classes or lines of commercial business regulated by Chapter 5. 

SECTION 2. Emergency clause.