SRC-PNG S.B. 1792 76(R)   BILL ANALYSIS


Senate Research Center   S.B. 1792
By: Ellis
Economic Development
4/26/1999
As Filed


DIGEST 

Currently, under Texas law, insurers may use the circumstance of no prior
insurance as an underwriting guideline in the issuance of a motor vehicle
liability insurance policy.  This bill would set forth regulations
regarding the use of no prior insurance as an underwriting guideline in the
issuance of a motor vehicle liability insurance policy. 

PURPOSE

As proposed, S.B. 1792 sets forth regulations regarding the use of no prior
insurance as an underwriting guideline in the issuance of a motor vehicle
liability insurance policy. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter 21B, Insurance Code, by adding Article 21.21-10,
as follows: 

Art.  21.21-10. PROHIBITION AGAINST USING NO PRIOR INSURANCE AS AN
UNDERWRITING GUIDELINE 

(a) DEFINITIONS.  Defines "insurer" and "policy."  

(b) Prohibits an insurer, solely or in part because of an individual's or
individuals' lack of prior insurance, from refusing to issue a policy to
the individual, canceling a policy covering the individual, limiting the
amount, extent, or kind of coverage available to the individual under a
policy, or charging the individual a different rate for the policy. 

(c) Provides that a policy applicant currently or previously insured in a
higher-rated insurance company or through the Texas Automobile Insurance
Plan Association (the assigned risk plan) will be underwritten without
consideration of the applicant's prior insurance carrier.  
(d) Requires an insurer who makes a quote to a policy applicant with no
prior insurance, having no more than one accident and one violation within
the past three years, which quote equals or exceeds the premium available
through the assigned risk plan, to inform the applicant of the approximate
cost of coverage available through the assigned risk plan. 

(e) Provides that an insurer who violates this article commits an unfair
and deceptive practice as defined by Article 21.21 of this code and is
subject to the penalties under that article. 

SECTION 2. Effective date: September 1, 1999.

SECTION 3. Emergency clause.