By Whitmire                                     S.B. No. 1257

      75R8977 DLF-F                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to promotional or educational activities of title

 1-3     insurance entities.


 1-5           SECTION 1.  Article 9.07(b), Insurance Code, is amended to

 1-6     read as follows:

 1-7           (b)  The commissioner shall have the duty to fix and

 1-8     promulgate the premium rates to be charged by title insurance

 1-9     companies and title insurance agents created or operating under

1-10     this Chapter for policies of title insurance or other promulgated

1-11     or approved forms, and the premiums therefor shall be paid in the

1-12     due and ordinary course of business.  Premium rates for reinsurance

1-13     as between title insurance companies qualified under this Chapter

1-14     shall not be fixed or promulgated by the commissioner, and title

1-15     insurance companies may set such premium rates for reinsurance as

1-16     such title insurance companies shall agree upon.  Under no

1-17     circumstance shall any premium be charged for any policy of title

1-18     insurance or other promulgated or approved forms different from

1-19     those fixed and promulgated by the commissioner, except for

1-20     premiums charged for reinsurance.  The premium rates fixed by the

1-21     commissioner shall be reasonable to the public and nonconfiscatory

1-22     as to the title insurance companies and title insurance agents.

1-23     For the purpose of collecting data on which to determine the proper

1-24     rates to be fixed, the commissioner shall require all title

 2-1     insurance companies and all title insurance agents operating in

 2-2     Texas to submit such information in such form as the commissioner

 2-3     may deem proper, all information as to loss experience, expense of

 2-4     operation, and other material matters for the commissioner's

 2-5     consideration.  In fixing the rate of premiums, the commissioner

 2-6     shall consider all [relevant] income and expenses of title

 2-7     insurance companies and title insurance agents attributable to

 2-8     Texas title insurance business, but may not consider expenses

 2-9     relating to promotional and educational activities authorized by

2-10     Section B(6), Article 9.30, of this code.

2-11           SECTION 2.  Article 9.30, Insurance Code, is amended by

2-12     adding Section F to read as follows:

2-13           F.  A legal promotional or educational activity described by

2-14     Section B(6) of this Article is not a rebate or discount prohibited

2-15     under Section A of this Article.  A dispute as to whether an

2-16     expense is for a promotional or educational activity that is legal

2-17     or that is not conditioned on the referral of title insurance

2-18     business is a question of fact to be determined by the trier of

2-19     fact in a court of law. An action under this section must be

2-20     brought in a district court of the county in which the principal

2-21     place of business of the title insurance agent or title insurance

2-22     company that incurred the expense is located.

2-23           SECTION 3.  This Act takes effect September 1, 1997.

2-24           SECTION 4.  The importance of this legislation and the

2-25     crowded condition of the calendars in both houses create an

2-26     emergency and an imperative public necessity that the

2-27     constitutional rule requiring bills to be read on three several

 3-1     days in each house be suspended, and this rule is hereby suspended.