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


Senate Research CenterC.S.S.B. 1913
By: Sibley
Economic Development
4-11-97
Committee Report (Substituted)


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, C.S.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 sold by the manufacturer or seller of the property covered by
the service contract where the  manufacturer or seller of  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 licensed Texas insurer. Defines "service contract." 

SECTION 2. Effective date: September 1, 1997.

SECTION 3. Emergency clause.

SUMMARY OF COMMITTEE CHANGES

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 sold
by the manufacturer or seller of the property covered by the service
contract where the  manufacturer or seller of  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."