SRC-AAA S.B. 1913 75(R)   BILL ANALYSIS


Senate Research Center   S.B. 1913
By: Sibley
Economic Development
4-6-97
As Filed


DIGEST 

Currently, Texas law is silent regarding the sale of a service contract by
the manufacturer or seller of the property covered.  This bill clarifies
that transactions involving service contracts by the manufacturer or
seller of the property covered are not subject to the Insurance Code.
Additionally, the bill requires third party obligors to insure their
obligation with an insurer licensed to do business in Texas. 
 
PURPOSE

As proposed, S.B. 1913 clarifies that transactions involving service
contracts by the manufacturer or seller of the property covered are not
subject to the Insurance Code.  Additionally, the bill requires third
party obligors to insure their obligation with an insurer licensed to do
business in Texas. 

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 Article 1.14-1(2), Insurance Code, by adding Subsection
(b)(9), to provide that transactions in this state involving service
contracts in which the manufacturer or seller of the property or a third
party is the obligor of the service contract; provided that, in the case
of a third party obligor, the third party's obligation is insured by a
certain party. Defines "service contract." 

SECTION 2. Effective date: September 1, 1997.

SECTION 3. Emergency clause.