HBA-TBM H.B. 3497 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 3497
By: Thompson
Insurance
4/1/2001
Introduced



BACKGROUND AND PURPOSE 

Currently, when an individual takes out a loan to buy a home, the lender
may require the buyer to purchase title insurance to protect the lender's
collateral.  The title insurance company (insurer) bases the policy on a
survey of the property.  Since the cost of a survey can be hundreds of
dollars, any rule adopted by the Texas Department of Insurance (TDI)
requiring an insurer to base each title insurance policy on a new survey
would discriminate against an economically disadvantaged individual.  House
Bill 3497 prohibits the adoption of a rule or regulation by TDI or a policy
by an insurer requiring a new title insurance policy to be based on a new
property survey.   

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. 

ANALYSIS

House Bill 3497 amends the Insurance Code to prohibit a title insurance
company (insurer) or a title insurance agent from discriminating in
providing title insurance coverage (coverage) as to discrepancies,
conflicts, encroachments, location of boundary lines or similar coverage,
based on whether a home or other land is located in a platted or unplatted
subdivision or based on the race, color, religion, gender, or national
origin of the owner.  The bill prohibits a rule or regulation relating to
coverage from discriminating against economically disadvantaged individuals
or requiring other goods or services to be provided or purchased by any
person from a third party or affiliate of an insurer.  The bill specifies
that no rule or regulation may prohibit an insurer from making sound
underwriting decisions in order to provide coverage.  The bill requires the
insurer's underwriting to be based on information or guidelines that the
insurer deems reasonable.  The bill prohibits an insurer from requiring an
indemnity from a seller, buyer, borrower, or lender to provide title
insurance coverage.  

EFFECTIVE DATE

September 1, 2001.