LEGISLATIVE BUDGET BOARD

Austin, Texas

FISCAL NOTE, 80TH LEGISLATIVE REGULAR SESSION

March 19, 2007

TO:	Honorable Troy Fraser, Chair, Senate Committee on Business & Commerce
FROM:	John S. O'Brien, Director, Legislative Budget Board
IN RE:	SB1263 by Brimer (Relating to regulation and licensing of certain insurance agents.), As Introduced

Estimated Two-year Net Impact to General Revenue Related Funds for SB1263, As Introduced: an impact of $0 through the biennium ending August 31, 2009.

General Revenue-Related Funds, Five-Year Impact:

Fiscal Year	Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2008	$0
2009	$0
2010	$0
2011	$0
2012	$0

All Funds, Five-Year Impact:

Fiscal Year	Probable Revenue Gain from DEPT INS OPERATING ACCT 36
2008	$637,750
2009	$637,750
2010	$647,750
2011	$647,750
2012	$647,750

Fiscal Analysis

The bill would amend the Insurance Code to add a new "Personal Lines Property and Casualty Agent" license and a new "Life Agent" license.  The Texas Department of Insurance (TDI) has authority to collect license application fees for these two new licenses under current law.

The bill would take effect September 1, 2007.

Methodology

Based on the analysis of TDI, it is assumed TDI would not incur any costs as a result of the provisions of the bill.  Because TDI contracts with an external vendor to administer license examinations and process license applications, it is assumed that any duties and responsibilities associated with the bill could be absorbed within existing resources.

It is assumed that the bill would result in additional revenue from licensing fees.  Based on TDI's analysis of data from other states, it is assumed the volume of Life Agent license activity would be 5.6 percent of the volume of Texas General Lines Life, Accident and Health and that the volume of Personal Lines Property and Casualty Agent license activity would be 16.6 percent of the volume of Texas General Lines Property and Casualty.  It is assumed that for the Life Agent license there would be 4,614 new applications each year in fiscal years 2008 and 2009 and 1,402 new applications and 3,221 renewals each year beginning in fiscal year 2010.  It is assumed for the Personal Lines Property and Casualty Agent license there would be 8,141 new applications each year in fiscal years 2008 and 2009 and 2,594 new applications and 5,738 renewals each year beginning in fiscal year 2010.  It is assumed the cost per licensee for new and renewal applications for both new licenses would be $50.

Local Government Impact

No fiscal implication to units of local government is anticipated.

Source Agencies:

454 Department of Insurance

LBB Staff:

JOB, JRO, MW, SK