HBA-MSH C.S.S.B. 431 77(R)    BILL ANALYSIS


Office of House Bill AnalysisC.S.S.B. 431
By: Carona
Insurance
5/1/2001
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Businesses that offer credit insurance, rental car insurance, travel
insurance, or self-storage facility insurance are authorized to obtain
specialty licenses to provide point of sale insurance coverage. Rental
property owners and property management firms cannot obtain specialty
licenses to provide renters insurance to their residents.  C.S.S.B. 431
provides for the issuance of a specialty license to rental property owners
and property management firms to offer renters insurance to residents.  

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 (Section 1, Article 21.09, Insurance Code) of this bill. 

ANALYSIS

C.S.S.B. 431 amends the Insurance Code to authorize the commissioner of
insurance (commissioner) to issue a specialty license to a residential
landlord or to the property manager of a residential landlord to act as an
agent for any authorized insurer only for limited purposes. The bill
prohibits insurance from being issued unless brochures or other written
materials containing the required disclosures pertaining to the insurance
are prominently displayed and readily available to the prospective
purchaser of the insurance coverage.  The bill requires each license holder
to include a conspicuous disclaimer in the format prescribed by the
commissioner containing certain provisions in each lease agreement under
which the license holder offers insurance.  A residential landlord or
property manager for a residential landlord is not required to be licensed
before January 1, 2002. 

EFFECTIVE DATE

September 1, 2001.

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.S.B. 431 differs from the original by amending the provisions required
in a disclaimer in a lease agreement under which insurance is offered.  The
substitute requires that the disclaimer state that the cost of any
insurance offered by the license holder if added to the rent due must be
specifically stated and that the license holder may not offer a consumer
insurance coverage if the license holder requires the consumer to have
insurance coverage as a condition of entering into the lease agreement.