SRC-LBB H.B. 124 78(R)   BILL ANALYSIS


Senate Research Center   H.B. 124
By: Burnam (Van de Putte)
Business & Commerce
5/21/2003
Engrossed


DIGEST AND PURPOSE 

Fraud drives up premiums for all policyholders.  Because jewelry is easy
to dispose of and exchange for cash, insurance companies are reluctant to
write policies for cash value.  Therefore, such policies may be difficult
to obtain and expensive. H.B. 124 provides an insurer that provides
personal property insurance coverage the option to elect either to pay the
stated value or actual replacement of a jewelry item with one of like kind
and quality.  

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to
a state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subchapter C, Chapter 5, Insurance Code, by adding
Article 5.35-2, as follows: 

Art. 5.35-2.  JEWELRY COVERAGE

Sec. 1.  DEFINITION. Defines "personal property insurance." 

Sec. 2.  APPLICABILITY. Provides that this article applies to each insurer
that provides personal property insurance in this state, including a
county mutual insurer, farm mutual insurer, Lloyd's plan, or reciprocal or
interinsurance exchange. 

Sec. 3.  ELECTION OF STATED VALUE OR ACTUAL REPLACEMENT OF THE JEWELRY
ITEM WITH ONE OF LIKE KIND AND QUALITY.  Provides an insurer that provides
personal property insurance coverage in this state for jewelry the option
to elect either to pay the stated value or actual replacement of the
jewelry item with one of like kind and quality. 

SECTION 2.   (a)  Provides that this Act takes effect September 1, 2003,
and applies only to an insurance policy that is delivered, issued for
delivery, or renewed on or after January 1, 2004. Provides that a policy
that is delivered, issued for delivery, or renewed before January 1, 2004,
is governed by the law as it existed immediately before the effective date
of this Act, and that law is continued in effect for this purpose. 

(b)  Requires the commissioner of insurance, not later than December 31,
2003, to, in accordance with Article 5.35, Insurance Code, adopt any
policy forms and endorsements necessary to implement Article 5.35-2,
Insurance Code, as added by this Act.