Texas Legislature Moves Few Bills

It will likely come as no surprise to those who have been following the Texas Legislature this session that very few insurance-related bills are expected to make it out of committee. At least it’s no surprise Bo Gilbert, legislative liaison for the Independent Insurance Agents of Texas.

So far, committees such as Insurance and Business & Industry have heard numerous bills, but few have been passed along to the Senate. More than 90 bills have been filed with the House Insurance Committee, but, at the time of this writing, only five had been passed out of committee. And none of those bills even show up on Gilbert’s list of bills of interest to the industry.

In fact, the only insurance-related bill Gilbert is almost certain will be passed successfully by both the House and Senate is SB 414 introduced by Sen. Frank Madla, D-San Antonio. That bill addresses agent licensing regulations. Essentially, the bill reduces the number of licenses offered while assuring reciprocal treatment with other states that grant the same rights to Texas agents. Major changes affecting agents include the ability for Texas to issue a nonresident corporate license and requiring only one officer or one active partner and all other persons performing any acts of an agent on behalf of the agency to be individually licensed. This change in corporate ownership also applies to surplus lines agencies.

While the requirement for continuing education is still 15 hours per year or 30 hours per renewal cycle, this number must now include four hours of ethics training. In addition, at least 50 percent of the required continuing education hours must be completed in a classroom setting or equivalent approved by TDI. Other changes bring the Texas Insurance Code into compliance with Gramm-Leach-Bliley.

These changes include amending the definition of a “depository institution” and removing the restriction on banks selling insurance from towns with a population exceeding 5,000. The commissioner is also granted rule-making authority to satisfy requirements under federal law or regulations. Another important change impacts county mutual agents. These agents will now be required to pass an examination given by their company and satisfy continuing education requirements.

While a similar bill has been introduced by Rep. Craig Eiland, D-Galveston, Eiland is awaiting the outcome of Madla’s bill before addressing it in committee. During House Insurance Committee hearings Feb. 26, Eiland indicated he wanted to tweak his bill depending on what happens with Madla’s bill before moving it out of committee. During the last session, Eiland introduced the same bill. It was later vetoed by then-Gov. George W. Bush.

The primary issue affecting movement of bills this session is redistricting, according to Gilbert. “Redistricting numbers are due out in two weeks,” he said. “Once we get those redistricting numbers, I think we’re going to see a shift in focus. Not that everything will stop, but we’ll see a definite shift.”

Another issue affecting some bills is simple opposition, such as HB 1195 introduced by Rep. Kim Brimer, R-Arlington, to move to a flex-rating system for commercial auto. That bill received hefty opposition during hearings Feb. 26 from county mutual companies, nonstandard independent agents and Rep. David Counts, D-Knox City. Committee members, including Rep. Senfronia Thompson, D-Houston, also questioned the viability of the bill for consumers. She questioned whether companies, who stand to save some administrative costs, would in turn pass those savings on to consumers.

While Gilbert voiced his support for the bill at the hearings, he said he believes there is simply too much opposition for the bill to be passed out of committee.

Other bills that top Gilbert’s list but, he believes, will likely not go anywhere this session include:

• HB 1205 introduced by Rep. Brimer. The bill proposes changing the name of the Texas Workers’ Compensation Commission to the Texas Department of Workers’ Compensation, eliminating the six-member board and substituting a commissioner appointed by the governor. Gilbert said some kind of deal to create a three-member appointed committee may be discussed, but even then, it probably won’t be enacted.
• SB 624 introduced by Sen. Robert Duncan, R-Lubbock. The bill proposes prohibiting employers from requiring employees to sign pre-injury waivers of liability. The bill is designed to undo two appellate court decisions from Amarillo that upheld the use of waivers by non-subscriber employers. Those cases are pending appeal.
• HB 1383 introduced by Rep. Jim Dunnam, D-Waco. The bill proposes to regulate the activities of insurance companies on the use of staff attorneys for policyholder defense.
• HB 955 introduced by Rep. Lon Burnam, D-Fort Worth. The bill proposes to restrict the use of non-OEM parts when repairing an automobile covered by an insurance policy.
• HB 1036 introduced by Rep. Senfronia Thompson, D-Houston. The bill proposes the establishment of a bill of rights for third parties in insurance claims.

Topics Texas Agencies Training Development