Texas 2009 - 81st Regular

Texas Senate Bill SB225 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	81R522 KCR-D
2	2	By: West S.B. No. 225
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the classifications used in rating personal automobile
8	8	insurance.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 2251.002, Insurance Code, is amended by
11	11	adding Subdivisions (2-a) and (2-b) to read as follows:
12	12	(2-a) "Non-preferred classification" means a
13	13	classification, other than a preferred classification, used in
14	14	rating personal automobile insurance in this state.
15	15	(2-b) "Preferred classification" means any of the
16	16	following classifications used in rating personal automobile
17	17	insurance in this state:
18	18	(A) the number of miles driven annually by the
19	19	insured;
20	20	(B) the insured's driving record; and
21	21	(C) the insured's number of years of driving
22	22	experience.
23	23	SECTION 2. The heading to Subchapter B, Chapter 2251,
24	24	Insurance Code, is amended to read as follows:
25	25	SUBCHAPTER B. RATE STANDARDS; RATE CLASSIFICATIONS
26	26	SECTION 3. Subchapter B, Chapter 2251, Insurance Code, is
27	27	amended by adding Section 2251.053 to read as follows:
28	28	Sec. 2251.053. RATE STANDARDS FOR PERSONAL AUTOMOBILE
29	29	INSURANCE. (a) Notwithstanding Section 2251.052, in setting rates
30	30	for personal automobile insurance in this state, an insurer:
31	31	(1) must assign the greatest aggregate weight to
32	32	preferred classifications;
33	33	(2) may not assign non-preferred classifications a
34	34	greater aggregate weight than the aggregate weight assigned to
35	35	preferred classifications; and
36	36	(3) may not use a non-preferred classification until
37	37	the classification has been filed with the department and approved
38	38	by the commissioner in accordance with Subchapter G.
39	39	(b) A rate set in accordance with this section:
40	40	(1) may not be excessive, inadequate, unreasonable, or
41	41	unfairly discriminatory for the risks to which the rate applies;
42	42	and
43	43	(2) must be based on actuarially sound principles.
44	44	SECTION 4. Chapter 2251, Insurance Code, is amended by
45	45	adding Subchapter G to read as follows:
46	46	SUBCHAPTER G. PRIOR APPROVAL OF CERTAIN RATING CLASSIFICATIONS
47	47	USED IN RATING PERSONAL AUTOMOBILE INSURANCE
48	48	Sec. 2251.301. APPLICABILITY OF SUBCHAPTER. This
49	49	subchapter applies only to classifications used in rating personal
50	50	automobile insurance in this state.
51	51	Sec. 2251.302. APPROVAL OF NON-PREFERRED CLASSIFICATION
52	52	REQUIRED. An insurer may not use a non-preferred classification
53	53	until the classification has been filed with the department and
54	54	approved by the commissioner in accordance with this subchapter.
55	55	Sec. 2251.303. COMMISSIONER ACTION. (a) Not later than
56	56	the 30th day after the date a non-preferred classification is filed
57	57	with the department under this subchapter, the commissioner shall:
58	58	(1) approve the classification if the commissioner
59	59	determines that the classification and rates resulting from the use
60	60	of the classification comply with the requirements of this chapter;
61	61	or
62	62	(2) disapprove the classification if the commissioner
63	63	determines that the classification or the rates resulting from the
64	64	use of the classification do not comply with the requirements of
65	65	this chapter.
66	66	(b) Except as provided by Subsection (c), if a non-preferred
67	67	classification has not been approved or disapproved by the
68	68	commissioner before the expiration of the 30-day period described
69	69	by Subsection (a), the classification is considered approved and
70	70	the insurer may use the non-preferred classification.
71	71	(c) For good cause, the commissioner may, on the expiration
72	72	of the 30-day period described by Subsection (a), extend the period
73	73	for approval or disapproval of a non-preferred classification for
74	74	one additional 30-day period. The commissioner and the insurer may
75	75	not by agreement extend the 30-day period described by Subsection
76	76	(a).
77	77	Sec. 2251.304. ADDITIONAL INFORMATION. (a) If the
78	78	department determines that the information filed by an insurer
79	79	under this chapter is incomplete or otherwise deficient, the
80	80	department may request additional information from the
81	81	insurer. If the department requests additional information from
82	82	the insurer during the 30-day period provided by Section
83	83	2251.303(a) or under a second 30-day period provided under Section
84	84	2251.303(c), the time between the date the department submits the
85	85	request to the insurer and the date the department receives the
86	86	information requested is not included in the computation of the
87	87	first 30-day period or the second 30-day period, as applicable.
88	88	(b) For purposes of this section, the date of the
89	89	department's submission of a request for additional information is:
90	90	(1) the date of the department's electronic mailing or
91	91	telephone call relating to the request for additional information;
92	92	or
93	93	(2) the postmarked date on the department's letter
94	94	relating to the request for additional information.
95	95	Sec. 2251.305. CLASSIFICATION DISAPPROVAL; HEARING. (a)
96	96	If the commissioner disapproves under Section 2251.303(a)(2) a
97	97	classification filed with the department, the commissioner shall
98	98	issue an order disapproving the filed classification in the manner
99	99	prescribed for a disapproved filing under Section 2251.103(b).
100	100	(b) An insurer whose non-preferred classification is
101	101	disapproved is entitled to a hearing in the manner prescribed for a
102	102	disapproved filing under Section 2251.103(c).
103	103	Sec. 2251.306. CLASSIFICATIONS PROVIDED TO PUBLIC. The
104	104	department shall periodically update insurer profiles maintained
105	105	on the department's Internet website to provide information to
106	106	policyholders and potential policyholders stating:
107	107	(1) whether or not an insurer uses non-preferred
108	108	classifications; and
109	109	(2) if an insurer uses non-preferred classifications:
110	110	(A) the names and content of any non-preferred
111	111	classifications used; and
112	112	(B) the aggregate weight assigned to any
113	113	non-preferred classifications used.
114	114	SECTION 5. The change in law made by this Act applies only
115	115	to a personal automobile insurance policy that is delivered, issued
116	116	for delivery, or renewed on or after January 1, 2010. An insurance
117	117	policy that is delivered, issued for delivery, or renewed before
118	118	January 1, 2010, is covered by the law in effect at the time the
119	119	policy was delivered, issued for delivery, or renewed, and that law
120	120	is continued in effect for that purpose.
121	121	SECTION 6. This Act takes effect September 1, 2009.