HBA-ATS H.B. 2500 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2500
By: Moreno, Joe
Insurance
4/15/1999
Introduced



BACKGROUND AND PURPOSE 

Until recently, a Texas Department of Insurance regulation prohibited the
practice of blacklisting (rejecting or limiting insurance coverage based
solely on whether an applicant for insurance has had prior motor vehicle
insurance coverage canceled by an insurer) a prospective motor vehicle
insurance customer.  Because the regulation was overturned, motor vehicle
insurers are again permitted to blacklist potential customers.  H.B. 2500
prohibits an insurer from using an underwriting guideline that rejects or
limits insurance coverage based solely on whether an applicant for
insurance has had prior motor vehicle insurance coverage canceled by an
insurer.  An insurer who disregards this prohibition commits an unfair
practice in the business of insurance.   

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Subchapter B, Chapter 21, Insurance Code, by adding
Article 21.21-13, as follows: 

ARTICLE 21.21-13. PROHIBITION ON USE IN MOTOR VEHICLE INSURANCE OF
UNDERWRITING GUIDELINES BASED ON CANCELLATION OF CERTAIN PREVIOUS COVERAGE 

Sec. 1.  DEFINITIONS.  Defines "insurer" and "underwriting guideline."

Sec. 2.  APPLICATION.  Sets forth that this article applies to a personal
automobile insurance policy.  

Sec. 3.  PROHIBITION; EXEMPTION.  Prohibits an insurer from using an
underwriting guideline that rejects or limits insurance coverage based
solely on whether an applicant for insurance has had  prior motor vehicle
insurance coverage canceled by an insurer.  

Sec. 4.  PENALTY.  Provides that an insurer who violates this article
commits an unfair practice in violation of Article 21.21 (Unfair
Competition and Unfair Practices) and is subject to the penalties imposed
under that article. 

SECTION 2.  Makes application of this Act prospective for an insurance
policy delivered, issued for delivery, or renewed on or after January 1,
2000. 

SECTION 3.  Effective date: September 1, 1999.

SECTION 4.  Emergency clause.