RS H.B. 2887 75(R) BILL ANALYSIS INSURANCE H.B. 2887 By: Dutton 5-5-97 Committee Report (Amended) BACKGROUND Under current law, a title insurance agent may engage in any lawful promotional educational activities on its behalf. Clarification of current law is needed to remove promotional, educational, recreational, and entertainment expenses from title insurance rate base and clarify that these expenditures are not illegal rebates and violations of Article 9.30 (A). Elimination of these expenses from the title insurance rate base will lower title insurance rates for the consumer. PURPOSE To clarify existing law allowing lawful promotional, educational activities on behalf of title insurance companies and to eliminate these expenses from the rate base. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Article 9.07(b), Insurance Code, as follows: (b) Amends section to exclude consideration of expenses relating to promotional and educational activities authorized by Section B(6), Article 9.30, Insurance Code. SECTION 2. Amends Article 9.30, Insurance Code, by adding Section F as follows: (F) A legal promotional or educational activity described by Section B(6) of this article is not a rebate or discount prohibited under Section A of this article. A dispute as to whether is an expense is for promotional or educational activity is a question of fact to be determined by the trier of fact in a court of law. An action under this section must be brought in a district court of the county in which the principal place of business of the title insurer that incurred the cost is located. SECTION 3. Effective Date, September 1, 1997. SECTION 4. Emergency Clause. EXPLANATION OF AMENDMENTS Amendment #1 Amends SECTION 2 of bill (Section F, Article 9.30, Insurance Code) by deleting language after the word "Article" on page 2, line 15.