LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
May 17, 2001
TO: Honorable Bill Ratliff, Lieutenant Governor, Senate
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB414 by Madla (Relating to the regulation of certain
insurance agents and to the consolidation of insurance
agent licenses; providing penalties.), As Passed 2nd
House
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB414, As Passed 2nd House: positive impact of $0 through the *
* biennium ending August 31, 2003. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $0 *
* 2003 0 *
* 2004 0 *
* 2005 0 *
* 2006 0 *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Revenue Gain/(Loss) Probable Revenue Gain/(Loss) *
* Year from Texas Department of from Texas Department of *
* Insurance Operating Fund Insurance Operating Fund *
* Account/ GR-Dedicated Account/ GR-Dedicated *
* 0036 0036 *
* 2002 $1,529,000 $(1,529,000) *
* 2003 1,529,000 (1,529,000) *
* 2004 1,529,000 (1,529,000) *
* 2005 1,529,000 (1,529,000) *
* 2006 1,529,000 (1,529,000) *
***************************************************************************
Fiscal Analysis
The provisions of the bill would consolidate various types of licenses
issued to insurance agents under the amended subchapter of the Insurance
Code. The provisions of bill give the Texas Department of Insurance
(TDI) authority to adjust the fees and stagger the renewal of licenses.
The bill would also allow TDI to issue more types of temporary licenses.
The bill gives TDI exclusive jurisdiction for all matters relating to
the continuing education of insurance agents. The Commissioner of
Insurance may appoint an Advisory Council to provide the Commissioner
with information and assistance with regard to a continuing education
program.
Methodology
The bill would eliminate the separate Variable Contracts license and
include its regulation with that of the General Lines Life, Accident,
Health, and HMO license and would result in a revenue loss. In addition,
the state would lose company appointment fees because companies would no
longer appoint agents as Variable Contract agents. It would also
include a loss of Variable Contract license application fees.
The provisions of the bill would fold the existing Solicitors license
into the new General Lines, Property and Casualty license (which is
currently the Local Recording Agent License). This would result in a
revenue loss because of the elimination of the Solicitors license.
The bill would ease the licensing requirements for non-resident agency
licenses which would increase the number of non-resident licenses and
result in a revenue gain in application and renewal fees. The increase
in the conversions to a General Lines Property Casualty license from a
Solicitors license would result in a revenue gain from application and
renewal fees. The bill would allow TDI to issue more types of temporary
licenses, which would result in an increase in revenue from application
fees.
It is assumed that TDI would adjust the fees to cover any loss or gain in
revenue associated with the implementation of the bill.
The bill would become effective September 1, 2001.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 304 Comptroller of Public Accounts, 302 Office of
the Attorney General, 454 Texas Department of
Insurance
LBB Staff: JK, JO, RT, DE