By Moreno of Harris                                   H.B. No. 2501
         Substitute the following for H.B. No. 2501:
         By Moreno of Harris                               C.S.H.B. No. 2501
                                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 21.21-12 to read as follows:
 1-7           Art. 21.21-12.  PROHIBITION ON USE IN MOTOR VEHICLE INSURANCE
 1-8     OF UNDERWRITING GUIDELINES BASED ON CERTAIN PREVIOUS COVERAGE
 1-9           Sec. 1.  DEFINITIONS.  In this article:
1-10                 (1)  "Insurer" means an insurer authorized to write
1-11     motor vehicle insurance in this state, including a nonstandard
1-12     insurer.
1-13                 (2)  "Nonstandard insurer" means:
1-14                       (A)  a county mutual insurance company;
1-15                       (B)  a Lloyd's plan company;
1-16                       (C)  a reciprocal or interinsurance exchange; or
1-17                       (D)  a surplus lines insurer.
1-18                 (3)  "Underwriting guideline" means a rule, standard,
1-19     marketing decision, or practice, whether written, oral, or
1-20     electronic, that is used by an insurer or an agent of an insurer
1-21     to:
1-22                       (A)  examine, bind, accept, reject, renew,
1-23     nonrenew, cancel, or limit insurance coverage made available to
1-24     groups of consumers of insurance;
 2-1                       (B)  classify risks for insurance coverage; or
 2-2                       (C)  charge different rates for the same
 2-3     insurance coverage.
 2-4           Sec. 2.  APPLICATION.  This article applies to a personal
 2-5     automobile insurance policy.
 2-6           Sec. 3.  PROHIBITION; EXEMPTION.  An insurer may not use an
 2-7     underwriting guideline that rejects or limits insurance coverage
 2-8     based solely on whether an applicant for insurance had prior
 2-9     coverage written through a nonstandard insurer.
2-10           Sec. 4.  PENALTY.  An insurer who violates this article
2-11     commits an unfair practice in violation of Article 21.21 of this
2-12     code and is subject to the penalties imposed under that article.
2-13           SECTION 2.  Article 21.21-12, Insurance Code, as added by
2-14     this Act, applies only to an insurance policy delivered, issued for
2-15     delivery, or renewed on or after January 1, 2000.  A policy
2-16     delivered, issued for delivery, or renewed before January 1, 2000,
2-17     is governed by the law as it existed immediately before the
2-18     effective date of this Act, and that law is continued in effect for
2-19     that purpose.
2-20           SECTION 3.  This Act takes effect September 1, 1999.
2-21           SECTION 4.  The importance of this legislation and the
2-22     crowded condition of the calendars in both houses create an
2-23     emergency and an imperative public necessity that the
2-24     constitutional rule requiring bills to be read on three several
2-25     days in each house be suspended, and this rule is hereby suspended.