HBA-MSH H.B. 1703 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1703 By: Smithee Insurance 2/25/2001 Introduced BACKGROUND AND PURPOSE A previous recodification of insurance statutes introduced a grammatical error into the statute relating to captive insurance, insurance that is owned by a corporation and only insures the parent corporation or its affiliates. The error had the effect of removing certain exemptions relating to advertising and definitions of insurance activities that applied to a captive insurer's ability to insure the parent company. House Bill 1703 applies these exemptions to certain captive insurance companies. 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 1703 amends the Insurance Code to exempt from provisions specifying the conduct that constitutes the business of insurance and provisions relating to Medicare supplement policies advertising an activity in the state by or on the sole behalf of a nonadmitted captive insurance company that insures solely directors' and officers' liability insurance for the directors and officers of the company's parent and affiliated companies. EFFECTIVE DATE September 1, 2001.