By Moreno of Harris                                   H.B. No. 2500
         76R8484 PB-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to a prohibition on the use of certain underwriting
 1-3     guidelines in motor vehicle insurance.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Subchapter B, Chapter 21, Insurance Code, is
 1-6     amended by adding Article 21.21-13 to read as follows:
 1-7           Art. 21.21-13.  PROHIBITION ON USE IN MOTOR VEHICLE INSURANCE
 1-8     OF UNDERWRITING GUIDELINES BASED ON CANCELLATION OF CERTAIN
 1-9     PREVIOUS COVERAGE
1-10           Sec. 1.  DEFINITIONS.  In this article:
1-11                 (1)  "Insurer" means an insurer authorized to write
1-12     motor vehicle insurance in this state, including:
1-13                       (A)  a county mutual insurance company;
1-14                       (B)  a Lloyd's plan company; or
1-15                       (C)  a reciprocal or interinsurance exchange.
1-16                 (2)  "Underwriting guideline" means a rule, standard,
1-17     marketing decision, or practice that is used by an insurer or an
1-18     agent of an insurer to examine, bind, accept, reject, cancel, or
1-19     limit insurance coverage to groups of consumers of insurance.
1-20           Sec. 2.  APPLICATION.  This article applies to a personal
1-21     automobile insurance policy.
1-22           Sec. 3.  PROHIBITION; EXEMPTION.  An insurer may not use an
1-23     underwriting guideline that rejects or limits insurance coverage
1-24     based solely on whether an applicant for insurance has had  prior
 2-1     motor vehicle insurance coverage canceled by an insurer.
 2-2           Sec. 4.  PENALTY.  An insurer who violates this article
 2-3     commits an unfair practice in violation of Article 21.21 of this
 2-4     code and is subject to the penalties imposed under that article.
 2-5           SECTION 2.  Article 21.21-13, Insurance Code, as added by
 2-6     this Act, applies only to an insurance policy delivered, issued for
 2-7     delivery, or renewed on or after January 1, 2000.  A policy
 2-8     delivered, issued for delivery, or renewed before January 1, 2000,
 2-9     is governed by the law as it existed immediately before the
2-10     effective date of this Act, and that law is continued in effect for
2-11     that purpose.
2-12           SECTION 3.  This Act takes effect September 1, 1999.
2-13           SECTION 4.  The importance of this legislation and the
2-14     crowded condition of the calendars in both houses create an
2-15     emergency and an imperative public necessity that the
2-16     constitutional rule requiring bills to be read on three several
2-17     days in each house be suspended, and this rule is hereby suspended.