LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
February 10, 1997
TO: Honorable David Sibley, Chair IN RE: Senate Bill No. 206
Committee on Economic Development By: Madla
Senate
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on SB206 ( Relating to
licensing requirements for certain insurance agents.) this office has detemined
the following:
Biennial Net Impact to General Revenue Funds by SB206-As Introduced
Implementing the provisions of the bill would result in a net impact of $0 to
General Revenue Related Funds through the biennium ending August 31, 1999.
The bill would make no appropriation but could provide the legal basis for an
appropriation of funds to implement the provisions of the bill.
Fiscal Analysis
This bill would amend Articles 21.02, 21.07, 21.09, and 21.14 of the Texas Insurance Code.
The bill would require that 07-00 license holders (State Salaried Special Agent or Travel
Baggage Agent) pay an agent license fee of $50 for new licenses and $48 for renewal
licenses. Currently, these agents are exempt from paying licensing fees.
Methodolgy
Article 21.07, Insurance Code would be amended to require that each officer or employee
of any insurance company licensed to do business in Texas who negotiates or solicits any
type of insurance on behalf of that company must be individually licensed. The Article
would be amended to establish that a person negotiates or solicits insurance if that person
makes an oral, written, or electronic communication to another person regarding insurance
coverage, rates, benefits, or policy terms for the purpose of soliciting insurance.
Per the Texas Department of Insurance (TDI), any additional workload required to implement
this bill would be addressed with existing agency resources. However, the bill would create
a revenue gain for the state. TDI assumes that 50% of the 4,692 agents registered in TDI FY
1996 Licensing Database with 07-00 licenses (State Salaried Special Agent or Travel Baggage
Agent) would not apply due to cancellations, expirations, and multiple licenses. The estimated
2,346 that would apply would need to file new applications costing $50/each, creating a
revenue gain of $117,300 in the fiscal year 1998. Renewal applications costing $48/each
would be filed every two years after fiscal year 1998, creating a revenue gain of $112,608
in those years. TDI used actual license fees as stated in the Texas Administrative Code,
Title 28, Section 19.802 to arrive at these revenue gains. The probable fiscal implications
of implementing the provisions of the bill during each of the first five years following
passage is estimated as follows:
Five Year Impact:
Fiscal Year Probable Revenue
Gain/(Loss) from
Texas Department
of Insurance
Operating
Account/
GR-Dedicated
0036
1998 $117,300
1998 0
2000 112,608
2001 0
2002 112,608
Net Impact on General Revenue Related Funds:
The probable fiscal implication to General Revenue related funds during each of the
first five years is estimated as follows:
Fiscal Year Probable Net Postive/(Negative)
General Revenue Related Funds
Funds
1998 $0
1999 0
2000 0
2001 0
2002 0
Similar annual fiscal implications would continue as long as the provisions of the bill are in effect.
No fiscal implication to units of local government is anticipated.
Source: Agencies: 452 Department of Licensing and Regulation
454 Department of Insurance
LBB Staff: JK ,TH ,BK