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.