SRC-AMY, TJG S.B. 115 78(R)   BILL ANALYSIS


Senate Research Center   S.B. 115
78R1797 AJA-DBy: Van de Putte
Business & Commerce
2/26/2003
As Filed


DIGEST AND PURPOSE 

Many insurance companies have switched from the formerly dominant home
insurance form, the HO-B policy form, to national policy forms; a policy
form covering only losses resulting from specifically delineated perils,
the HO-A; or a modified HO-B form that reduces and limits the
comprehensive coverage offered under the standard HO-B.  Many consumers
were not informed when insurers made these changes.  The commissioner of
insurance issued a Commissioner's Bulletin, No. B-0017-02, to remind
insurers of their responsibility to fully explain any changes in types of
coverage and premium costs to policy holders and applicants.  However,
insurers' responsibilities in such situations remain unclear and current
law only applies to regulated insurers.  As proposed, S.B. 115 requires an
insurer to provide written notice in plain language to consumers of any
difference in each form of the policy offered on renewal and the policy
held prior to renewal.  S.B. 115 also authorizes the commissioner of
insurance to adopt rules to enforce these requirements. 

RULEMAKING AUTHORITY

Rulemaking authority is expressly granted to the commissioner of insurance
in SECTION 1 (Chapter 5C, Insurance Code) of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 5C, Insurance Code, by adding Article 5.45, as
follows: 

Art. 5.45.  NOTICE ON RENEWAL OF CERTAIN POLICIES.  (a) Requires an
insurer, including certain companies and types, to provide a policy holder
with written notice of any difference in each form of the policy offered
to the policy holder on renewal and the form of the policy held
immediately before renewal. 

(b) Requires a notice written under this article to be written in plain
language. 

(c) Authorizes the commissioner of insurance to adopt rules as necessary
to implement this article. 

SECTION 2.  Makes application of this Act prospective to the 30th day
after the effective date of this Act. 

SECTION 3.  Effective date: upon passage or September 1, 2003.