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.