HBA-ATS H.B. 3000 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 3000
By: Janek
Insurance
4/11/1999
Introduced



BACKGROUND AND PURPOSE 

An insurer that offers a homeowner's policy charges its customers a
composite premium.  A composite premium consists of a one-time charge.
Because with this type of premium rate increases are not categorized,
unlike motor vehicle insurance premiums, a customer is less likely to be
aware of the increase in premiums and the reasons for that increase.  H.B.
3000 requires an insurer to give written notice of a premium rate increase
to a holder of a homeowner's policy by the 30th day before the increase is
scheduled to take effect.  Under this bill, the notice must include the
date on which the increase is to take effect and the cause of the increase. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 5, Insurance Code, by adding Article 5.33D, as
follows: 

Art. 5.33D.  NOTICE OF HOMEOWNER'S PREMIUM RATE INCREASE.  Requires an
insurer to give written notice of a premium rate increase to a holder of a
homeowner's policy by the 30th day before the increase is scheduled to take
effect.  Provides that the notice must include the date on which the
increase is to take effect and the cause of the increase, addressed by
reference to categories of possible causes established by the Texas
Department of Insurance (department).   Requires the department to develop
these categories for use by an insurer that is required to provide notice. 

SECTION 2.  (a) Effective date: September 1, 1999.  Makes application of
this Act prospective for a homeowner's policy that is delivered, issued for
delivery, or renewed on or after January 1, 2000. 

(b) Requires the Texas Department of Insurance to develop the categories by
November 1, 1999. 

SECTION 3.  Emergency clause.