SRC-LBB C.S.H.B. 1865 78(R)BILL ANALYSIS


Senate Research CenterC.S.H.B. 1865
78R17257 EBy: Bonnen (Williams)
State Affairs
5/21/2003
Committee Report (Substituted)


DIGEST AND PURPOSE 

Currently, the Insurance Code does not address commercial group property
insurance practices. C.S.H.B. 1865 adds an article to the Insurance Code
authorizing insurers to write commercial group property insurance for a
group of businesses as long as the businesses have identifiable
underwriting characteristics or an association, if the association's
members are engaged in similar undertakings. 

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 5.41-3, as follows: 

Art.  5.41-3.  COMMERCIAL GROUP PROPERTY INSURANCE.  (a)  Authorizes an
insurer to write commercial group property insurance for a group of
businesses or for an association that constitutes a large risk as that
term is described by Section 8(f), Article 5.13-2, of this code if the
members of a group of businesses have clearly identifiable underwriting
characteristics or the members of an association are engaged in similar
undertakings. 

(b)  Prohibits an insurance policy form, including a certificate of
insurance or other evidence of coverage, or endorsement form, for use in
writing group commercial property insurance under Subsection (a) of this
article, from being delivered or issued for delivery in this state unless
the form has been filed with and approved by the commissioner of insurance
(commissioner) in accordance with Sections 8(b),(c),(d), and (e), of
Article 5.13-2, of this code. 

(c)  Requires an insurer, in accordance with Sections 3 through 7, Article
5.13-2, of this code, to file with the commissioner all rates,
supplementary rating information, and pertinent supporting information for
commercial group property insurance written under this article in this
state. 

(d)  Requires an insurer filing a policy form or rates and related
information under Subsection (b) or (c) of this article to clearly
identify the group of businesses or the associations to be insured. 

SECTION 2.  Amends Article 5.57A(a)(3), Insurance Code, to redefine
"group." 

SECTION 3.  Amends Articles 5.57A (b) and (c), Insurance Code, as follows:

(b)  Authorizes two or more business entities or members of a trade
association to join together to form a group to purchase individual
workers' compensation insurance policies covering each member of the
group, on receiving approval of the State Board of Insurance. 
 

(c)  Requires a business entity to meet certain requirements to be
eligible to join a group. 

SECTION 4.  Effective date:  upon passage or September 1, 2003.