Texas House Bill HB992

Texas 2009 - 81st Regular

Caption

Relating to the classifications used in rating personal automobile insurance.

Impact

The implications of HB 992 on state laws are significant, as it mandates that insurers assign greater aggregate weight to preferred classifications when setting premiums. Non-preferred classifications cannot have more weight than preferred ones, which is intended to discourage excessive rates based on less favorable criteria. This restructuring could lead to a more equitable system for determining insurance costs among drivers, potentially lowering rates for safer drivers who qualify for preferred classifications.

Summary

House Bill 992 aims to modify the classifications used in the rating of personal automobile insurance in the state of Texas. The bill introduces definitions for 'preferred' and 'non-preferred' classifications, with the objective of standardizing how insurers determine rates based on various criteria including driving history, mileage, and driving experience. By establishing clear categories, the bill seeks to promote fairness and transparency in rate-setting processes, ensuring that rates reflect the risk associated with each classification adequately.

Contention

While supporters believe these changes will enhance regulatory clarity and protect consumers from unfair pricing practices, there may be some contention from insurance companies concerned about the new approval requirements for non-preferred classifications. Insurance providers will now have to seek approval from the commissioner before they can use non-preferred classifications, which adds a layer of bureaucracy. This requirement could lead to concerns over operational efficiency and delays in their rate-setting processes, potentially impacting their profit margins and ultimately the prices offered to consumers.