1-1     By:  Whitmire                                         S.B. No. 1257

 1-2           (In the Senate - Filed March 12, 1997; March 17, 1997, read

 1-3     first time and referred to Committee on State Affairs;

 1-4     April 11, 1997, reported favorably by the following vote:  Yeas 13,

 1-5     Nays 0; April 11, 1997, sent to printer.)

 1-6                            A BILL TO BE ENTITLED

 1-7                                   AN ACT

 1-8     relating to promotional or educational activities of title

 1-9     insurance entities.


1-11           SECTION 1.  Subsection (b), Article 9.07, Insurance Code, is

1-12     amended to read as follows:

1-13           (b)  The commissioner shall have the duty to fix and

1-14     promulgate the premium rates to be charged by title insurance

1-15     companies and title insurance agents created or operating under

1-16     this Chapter for policies of title insurance or other promulgated

1-17     or approved forms, and the premiums therefor shall be paid in the

1-18     due and ordinary course of business.  Premium rates for reinsurance

1-19     as between title insurance companies qualified under this Chapter

1-20     shall not be fixed or promulgated by the commissioner, and title

1-21     insurance companies may set such premium rates for reinsurance as

1-22     such title insurance companies shall agree upon.  Under no

1-23     circumstance shall any premium be charged for any policy of title

1-24     insurance or other promulgated or approved forms different from

1-25     those fixed and promulgated by the commissioner, except for

1-26     premiums charged for reinsurance.  The premium rates fixed by the

1-27     commissioner shall be reasonable to the public and nonconfiscatory

1-28     as to the title insurance companies and title insurance agents.

1-29     For the purpose of collecting data on which to determine the proper

1-30     rates to be fixed, the commissioner shall require all title

1-31     insurance companies and all title insurance agents operating in

1-32     Texas to submit such information in such form as the commissioner

1-33     may deem proper, all information as to loss experience, expense of

1-34     operation, and other material matters for the commissioner's

1-35     consideration.  In fixing the rate of premiums, the commissioner

1-36     shall consider all [relevant] income and expenses of title

1-37     insurance companies and title insurance agents attributable to

1-38     Texas title insurance business but may not consider expenses

1-39     relating to promotional and educational activities authorized by

1-40     Section B(6), Article 9.30, of this code.

1-41           SECTION 2.  Article 9.30, Insurance Code, is amended by

1-42     adding Section F to read as follows:

1-43           F.  A legal promotional or educational activity described by

1-44     Section B(6) of this Article is not a rebate or discount prohibited

1-45     under Section A of this Article.  A dispute as to whether an

1-46     expense is for a promotional or educational activity that is legal

1-47     or that is not conditioned on the referral of title insurance

1-48     business is a question of fact to be determined by the trier of

1-49     fact in a court of law.  An action under this section must be

1-50     brought in a district court of the county in which the principal

1-51     place of business of the title insurance agent or title insurance

1-52     company that incurred the expense is located.

1-53           SECTION 3.  This Act takes effect September 1, 1997.

1-54           SECTION 4.  The importance of this legislation and the

1-55     crowded condition of the calendars in both houses create an

1-56     emergency and an imperative public necessity that the

1-57     constitutional rule requiring bills to be read on three several

1-58     days in each house be suspended, and this rule is hereby suspended.

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