By:  Madla                                             S.B. No. 984
                                A BILL TO BE ENTITLED
                                       AN ACT
 1-1     relating to insurers' written statements of the reasons for
 1-2     cancellation, declination, or nonrenewal of certain insurance
 1-3     policies.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Chapter 21, Insurance Code, is amended by adding
 1-6     Article 21.49-2E to read as follows:
 1-7           Art. 21.49-2E.  REQUIREMENTS FOR WRITTEN STATEMENT OF REASON
 1-8     FOR CANCELLATION, DECLINATION, OR NONRENEWAL.  (a)  An insurer's
 1-9     written statement giving the reason or reasons for cancellation,
1-10     declination, or nonrenewal of an insurance policy required by
1-11     Articles 21.49-2, 21.49-2A, and 21.49-2B of this code shall fully
1-12     explain a decision which adversely affects an applicant or
1-13     policyholder by denying the applicant or policyholder coverage or
1-14     continued coverage, and such statements shall:
1-15                 (1)  refer to a specific underwriting guideline or
1-16     guidelines on file with or available to the department and the
1-17     office of public insurance counsel under Article 1.24D of this
1-18     code;
1-19                 (2)  state the precise risk factor or factors of the
1-20     applicant or policyholder that violate the guideline or guidelines;
1-21                 (3)  state the source of information the insurer relied
1-22     on regarding the risk factor or factors; and
1-23                 (4)  specify any other information deemed relevant by
1-24     the commissioner.
 2-1           (b)  The commissioner is authorized and directed to issue
 2-2     rules necessary to implement this article.
 2-3           SECTION 2.  This Act takes effect September 1, 1999, and
 2-4     applies to a cancellation, declination, or nonrenewal of an
 2-5     insurance policy under Article 21.49-2E, Insurance Code, as added
 2-6     by this Act, that occurs on or after January 1, 2000.  A
 2-7     cancellation, declination, or nonrenewal that occurs before January
 2-8     1, 2000, is governed by the law as it existed immediately before
 2-9     the effective date of this Act, and that law is continued in effect
2-10     for that purpose.
2-11           SECTION 3.  The importance of this legislation and the
2-12     crowded condition of the calendars in both houses create an
2-13     emergency and an imperative public necessity that the
2-14     constitutional rule requiring bills to be read on three several
2-15     days in each house be suspended, and this rule is hereby suspended.
2-16                          COMMITTEE AMENDMENT NO. 1
2-17           Amend S.B. 984 as follows:
2-18           (1)  On page 1, lines 15 through 18, strike subsection (1)
2-19     and renumber the remaining subsections accordingly.
2-20           (2)  On page 1, lines 19 and 20, strike subsection (2) and
2-21     substitute "(1)  state the precise incident, circumstance, or risk
2-22     factor or factors applicable to the applicant or policyholder that
2-23     violate the guideline or guidelines;".
2-24           (3)  On page 1, line 22 insert "incident, circumstance, or"
2-25     between "the" and "risk".
2-26                                                                  Burnam