81R522 KCR-D
By: West S.B. No. 225
A BILL TO BE ENTITLED
AN ACT
relating to the classifications used in rating personal automobile
insurance.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2251.002, Insurance Code, is amended by
adding Subdivisions (2-a) and (2-b) to read as follows:
(2-a) "Non-preferred classification" means a
classification, other than a preferred classification, used in
rating personal automobile insurance in this state.
(2-b) "Preferred classification" means any of the
following classifications used in rating personal automobile
insurance in this state:
(A) the number of miles driven annually by the
insured;
(B) the insured's driving record; and
(C) the insured's number of years of driving
experience.
SECTION 2. The heading to Subchapter B, Chapter 2251,
Insurance Code, is amended to read as follows:
SUBCHAPTER B. RATE STANDARDS; RATE CLASSIFICATIONS
SECTION 3. Subchapter B, Chapter 2251, Insurance Code, is
amended by adding Section 2251.053 to read as follows:
Sec. 2251.053. RATE STANDARDS FOR PERSONAL AUTOMOBILE
INSURANCE. (a) Notwithstanding Section 2251.052, in setting rates
for personal automobile insurance in this state, an insurer:
(1) must assign the greatest aggregate weight to
preferred classifications;
(2) may not assign non-preferred classifications a
greater aggregate weight than the aggregate weight assigned to
preferred classifications; and
(3) may not use a non-preferred classification until
the classification has been filed with the department and approved
by the commissioner in accordance with Subchapter G.
(b) A rate set in accordance with this section:
(1) may not be excessive, inadequate, unreasonable, or
unfairly discriminatory for the risks to which the rate applies;
and
(2) must be based on actuarially sound principles.
SECTION 4. Chapter 2251, Insurance Code, is amended by
adding Subchapter G to read as follows:
SUBCHAPTER G. PRIOR APPROVAL OF CERTAIN RATING CLASSIFICATIONS
USED IN RATING PERSONAL AUTOMOBILE INSURANCE
Sec. 2251.301. APPLICABILITY OF SUBCHAPTER. This
subchapter applies only to classifications used in rating personal
automobile insurance in this state.
Sec. 2251.302. APPROVAL OF NON-PREFERRED CLASSIFICATION
REQUIRED. An insurer may not use a non-preferred classification
until the classification has been filed with the department and
approved by the commissioner in accordance with this subchapter.
Sec. 2251.303. COMMISSIONER ACTION. (a) Not later than
the 30th day after the date a non-preferred classification is filed
with the department under this subchapter, the commissioner shall:
(1) approve the classification if the commissioner
determines that the classification and rates resulting from the use
of the classification comply with the requirements of this chapter;
or
(2) disapprove the classification if the commissioner
determines that the classification or the rates resulting from the
use of the classification do not comply with the requirements of
this chapter.
(b) Except as provided by Subsection (c), if a non-preferred
classification has not been approved or disapproved by the
commissioner before the expiration of the 30-day period described
by Subsection (a), the classification is considered approved and
the insurer may use the non-preferred classification.
(c) For good cause, the commissioner may, on the expiration
of the 30-day period described by Subsection (a), extend the period
for approval or disapproval of a non-preferred classification for
one additional 30-day period. The commissioner and the insurer may
not by agreement extend the 30-day period described by Subsection
(a).
Sec. 2251.304. ADDITIONAL INFORMATION. (a) If the
department determines that the information filed by an insurer
under this chapter is incomplete or otherwise deficient, the
department may request additional information from the
insurer. If the department requests additional information from
the insurer during the 30-day period provided by Section
2251.303(a) or under a second 30-day period provided under Section
2251.303(c), the time between the date the department submits the
request to the insurer and the date the department receives the
information requested is not included in the computation of the
first 30-day period or the second 30-day period, as applicable.
(b) For purposes of this section, the date of the
department's submission of a request for additional information is:
(1) the date of the department's electronic mailing or
telephone call relating to the request for additional information;
or
(2) the postmarked date on the department's letter
relating to the request for additional information.
Sec. 2251.305. CLASSIFICATION DISAPPROVAL; HEARING. (a)
If the commissioner disapproves under Section 2251.303(a)(2) a
classification filed with the department, the commissioner shall
issue an order disapproving the filed classification in the manner
prescribed for a disapproved filing under Section 2251.103(b).
(b) An insurer whose non-preferred classification is
disapproved is entitled to a hearing in the manner prescribed for a
disapproved filing under Section 2251.103(c).
Sec. 2251.306. CLASSIFICATIONS PROVIDED TO PUBLIC. The
department shall periodically update insurer profiles maintained
on the department's Internet website to provide information to
policyholders and potential policyholders stating:
(1) whether or not an insurer uses non-preferred
classifications; and
(2) if an insurer uses non-preferred classifications:
(A) the names and content of any non-preferred
classifications used; and
(B) the aggregate weight assigned to any
non-preferred classifications used.
SECTION 5. The change in law made by this Act applies only
to a personal automobile insurance policy that is delivered, issued
for delivery, or renewed on or after January 1, 2010. An insurance
policy that is delivered, issued for delivery, or renewed before
January 1, 2010, is covered by the law in effect at the time the
policy was delivered, issued for delivery, or renewed, and that law
is continued in effect for that purpose.
SECTION 6. This Act takes effect September 1, 2009.