HBA-TBM H.B. 3455 77(R)BILL ANALYSIS Office of House Bill AnalysisH.B. 3455 By: Tillery Insurance 4/23/2001 Committee Report (Amended) BACKGROUND AND PURPOSE Currently, there is no mechanism available to insure that a consumer receives information regarding previous damage to a vehicle the consumer purchased. Insurance companies have a complete claims history available on each automobile for which a claim has been filed, and the information is available at the time an application for insurance is made. Insurers have the ability to write and collect for full coverage insurance at market rates on substantially damaged automobiles, yet some insurers reduce the liability if the automobile is damaged later and totaled by reducing the settlement by the loss of market value sustained in the initial accident. This may cause insurers an unfair advantage over consumers at the time of application for insurance. House Bill 3455 requires an insurer to disclose information regarding the history of substantial damage to a vehicle at the first application for insurance that a person makes after purchasing the vehicle. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the commissioner of insurance in SECTION 1 (Article 21.76, Insurance Code) of this bill. ANALYSIS House Bill 3455 amends the Insurance Code to require an insurance agent to inform a person who applies for the first motor vehicle liability insurance policy (policy) of any information obtained by the agent through an underwriting exchange that indicates that the motor vehicle for which coverage is sought sustained substantial damage before the date the person purchased the vehicle. The bill requires the commissioner of insurance to adopt rules as necessary to implement this provision not later than November 1, 2001. This provision applies only to an application for the first policy to cover a motor vehicle after it is purchased by the insured. EFFECTIVE DATE September 1, 2001. EXPLANATION OF AMENDMENTS Committee Amendment No. 1 replaces references to an "insurance agent" or "agent" with "insurer."