HBA-TBM H.B. 1195 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1195
By: Brimer
Insurance
2/25/2001
Introduced



BACKGROUND AND PURPOSE 

Current law requires the commissioner of insurance to develop a mandatory
commercial automobile insurance rate, a process that is both inefficient
and costly.  As a result, rates are often three years old by the time they
are adopted.  Current law also requires commercial auto insurers to utilize
forms developed by the Texas Department of Insurance, which may prevent
consumers from receiving insurance policies individually tailored to the
consumers' specific needs.  Texas is the only state in the country to
develop its own commercial auto rates and forms.  House Bill 1195 requires
commercial automobile insurance coverage to be developed and regulated
under the same system currently used for other commercial lines.  
RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

House Bill 1195 amends the Insurance Code to exclude commercial automobile
liability insurance  from the flexible rating program and to include it in
the general liability and commercial property insurance coverage.  The bill
prohibits the rate of assessment of a maintenance tax from exceeding
one-fifth of one percent of the correctly reported gross premiums of all
insurers writing commercial automobile insurance in this state.  The
administrative procedure governing changes in manual rules, classification
plans, statistical plans, and policy and endorsement forms and for certain
rates and rating plans does not apply to commercial automobile insurance.   

EFFECTIVE DATE

September 1, 2001, and applies only to an insurance policy that is
delivered, issued for delivery, or renewed on or after January 1, 2002.