1-1     By:  Madla                                             S.B. No. 984
 1-2           (In the Senate - Filed March 8, 1999; March 9, 1999, read
 1-3     first time and referred to Committee on Economic Development;
 1-4     April 9, 1999, reported favorably by the following vote:  Yeas 6,
 1-5     Nays 0; April 9, 1999, sent to printer.)
 1-6                            A BILL TO BE ENTITLED
 1-7                                   AN ACT
 1-8     relating to insurers' written statements of the reasons for
 1-9     cancellation, declination, or nonrenewal of certain insurance
1-10     policies.
1-11           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12           SECTION 1.  Chapter 21, Insurance Code, is amended by adding
1-13     Article 21.49-2E to read as follows:
1-14           Art. 21.49-2E.  REQUIREMENTS FOR WRITTEN STATEMENT OF REASON
1-15     FOR CANCELLATION, DECLINATION, OR NONRENEWAL.  (a)  An insurer's
1-16     written statement giving the reason or reasons for cancellation,
1-17     declination, or nonrenewal of an insurance policy required by
1-18     Articles 21.49-2, 21.49-2A, and 21.49-2B of this code shall fully
1-19     explain a decision which adversely affects an applicant or
1-20     policyholder by denying the applicant or policyholder coverage or
1-21     continued coverage, and such statements shall:
1-22                 (1)  refer to a specific underwriting guideline or
1-23     guidelines on file with or available to the department and the
1-24     office of public insurance counsel under Article 1.24D of this
1-25     code;
1-26                 (2)  state the precise risk factor or factors of the
1-27     applicant or policyholder that violate the guideline or guidelines;
1-28                 (3)  state the source of information the insurer relied
1-29     on regarding the risk factor or factors; and
1-30                 (4)  specify any other information deemed relevant by
1-31     the commissioner.
1-32           (b)  The commissioner is authorized and directed to issue
1-33     rules necessary to implement this article.
1-34           SECTION 2.  This Act takes effect September 1, 1999, and
1-35     applies to a cancellation, declination, or nonrenewal of an
1-36     insurance policy under Article 21.49-2E, Insurance Code, as added
1-37     by this Act, that occurs on or after January 1, 2000.  A
1-38     cancellation, declination, or nonrenewal that occurs before January
1-39     1, 2000, is governed by the law as it existed immediately before
1-40     the effective date of this Act, and that law is continued in effect
1-41     for that purpose.
1-42           SECTION 3.  The importance of this legislation and the
1-43     crowded condition of the calendars in both houses create an
1-44     emergency and an imperative public necessity that the
1-45     constitutional rule requiring bills to be read on three several
1-46     days in each house be suspended, and this rule is hereby suspended.
1-47                                  * * * * *