BILL ANALYSIS
Senate Research Center S.B. 1214
AUTHOR'S/SPONSOR'S STATEMENT OF INTENT
Municipalities and other political subdivisions in Texas are allowed the use of a broker of record when soliciting for excess or surplus insurance. Under certain market conditions, the same ability would be an advantage for certain counties when soliciting insurance bids. A broker of record, who is paid by the entity instead of a commission by the carrier, has access to a broader market and can introduce more competition in the purchasing process and generate greater savings for counties. This is especially true in a tight underwriting market.
As proposed, S.B. 1214 allows a county to select a broker of record who is a professional familiar with the way that underwriters and insurance companies in these highly specialized markets are accustomed to doing business. This bill allows the county to be more efficient and to take advantage of the broader market exposure that such brokers can afford.
RULEMAKING AUTHORITY
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Subchapter C, Chapter 262, Local Government Code, by adding Section 262.036, as follows:
Sec. 262.036. SELECTION OF INSURANCE BROKER. Authorizes a county, notwithstanding any other provision in this chapter, to select a licensed insurance broker as the sole broker of record to obtain proposals and coverages for insurance that provides necessary coverage in all areas of risk, including public official liability, property, casualty, workers' compensation, and specific and aggregate stop-loss coverage for self-funded health care. Authorizes the broker to be retained only on a fee basis and prohibits the broker from receiving any other remuneration from any other source.
SECTION 2. Effective date: upon passage or September 1, 2005.