Texas 2009 - 81st Regular

Texas Senate Bill SB91 Compare Versions

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

Old	New	Differences
1	1	81R611 AJA-D
2	2	By: Van de Putte, Ellis, Lucio S.B. No. 91
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to regulation of property and casualty insurance rates.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Section 706.004, Insurance Code, as effective
10	10	April 1, 2009, is amended to read as follows:
11	11	Sec. 706.004. RATES AND FORMS. Notwithstanding any other
12	12	law, rates and forms for insurance coverage issued under this
13	13	chapter are governed by:
14	14	(1) Subchapters A-D [A-E], Chapter 2251;
15	15	(2) Subchapter A, Chapter 2301; and
16	16	(3) Article 5.13-2.
17	17	SECTION 2. Section 912.002(c), Insurance Code, as effective
18	18	April 1, 2009, is amended to read as follows:
19	19	(c) Rate regulation for a residential fire and allied lines
20	20	insurance policy written by a county mutual insurance company is
21	21	subject to Chapters 2251 and [Chapter] 2253. Rate [On and after
22	22	December 1, 2004, rate] regulation for a personal automobile
23	23	insurance policy and a residential fire and allied lines insurance
24	24	policy written by a county mutual insurance company is subject to
25	25	Article 5.13-2 and Chapter 2251. A county mutual insurance company
26	26	is subject to Chapter 2253. The commissioner may adopt rules as
27	27	necessary to implement this subsection.
28	28	SECTION 3. Section 1806.052, Insurance Code, is amended to
29	29	read as follows:
30	30	Sec. 1806.052. CONSTRUCTION OF SUBCHAPTER. This subchapter
31	31	may not be construed to prohibit the modification of rates by a
32	32	rating plan that complies [is filed in accordance] with the
33	33	requirements of Chapter 2251 or Article 5.13-2, as applicable,
34	34	[that has not been disapproved by the commissioner,] and that is
35	35	designed to encourage the prevention of accidents, and to account
36	36	for all relevant factors inside and outside this state, including
37	37	the peculiar hazards and experience of past and prospective
38	38	individual risks.
39	39	SECTION 4. Section 2151.001(2), Insurance Code, is amended
40	40	to read as follows:
41	41	(2) "Authorized insurer" means an insurer authorized
42	42	by the department to write automobile liability coverage under this
43	43	title. The [Except as provided by Section 2251.204, the] term does
44	44	not include a county mutual insurance company organized under
45	45	Chapter 912.
46	46	SECTION 5. Section 2251.003(c), Insurance Code, is amended
47	47	to read as follows:
48	48	(c) Sections 2251.008, 2251.052, 2251.101, 2251.102,
49	49	[2251.103,] 2251.104, 2251.105, [and] 2251.107, and 2251.151(a) do
50	50	not apply to a Lloyd's plan or a reciprocal or interinsurance
51	51	exchange with respect to commercial property insurance, inland
52	52	marine insurance, rain insurance, or hail insurance on farm crops.
53	53	SECTION 6. Section 2251.101(a), Insurance Code, is amended
54	54	to read as follows:
55	55	(a) For [Except as provided by Subchapter D, for] risks
56	56	written in this state, each insurer shall file with the
57	57	commissioner all rates, applicable rating manuals, supplementary
58	58	rating information, and additional information as required by the
59	59	commissioner.
60	60	SECTION 7. The heading of Subchapter D, Chapter 2251,
61	61	Insurance Code, is amended to read as follows:
62	62	SUBCHAPTER D. PRIOR APPROVAL OF RATES [UNDER CERTAIN
63	63	CIRCUMSTANCES]
64	64	SECTION 8. Section 2251.151, Insurance Code, is amended to
65	65	read as follows:
66	66	Sec. 2251.151. FILING OF [REQUIREMENT TO FILE] RATES FOR
67	67	PRIOR APPROVAL [UNDER CERTAIN CIRCUMSTANCES]. (a) An insurer may
68	68	not use a rate until the rate has been filed with the department in
69	69	accordance with Subchapter C and approved by the commissioner in
70	70	accordance with this subchapter.
71	71	(b) For rates that are exempt from Subsection (a) under
72	72	Section 2251.003(c), the [The] commissioner by order may require an
73	73	insurer to file with the department for the commissioner's approval
74	74	all rates, supplementary rating information, and any supporting
75	75	information in accordance with this subchapter if the commissioner
76	76	determines that:
77	77	(1) the insurer's rates require supervision because of
78	78	the insurer's financial condition or rating practices; or
79	79	(2) a statewide insurance emergency exists.
80	80	(c) [(a-1)] If an insurer subject to an order under
81	81	Subsection (b) files a petition under Subchapter D, Chapter 36, for
82	82	judicial review of an order disapproving a rate under this chapter,
83	83	the insurer must use the rates in effect for the insurer at the time
84	84	the petition is filed and may not file and use any higher rate for
85	85	the same line of insurance subject to this chapter before the matter
86	86	subject to judicial review is finally resolved unless the insurer,
87	87	in accordance with this subchapter, files the new rate with the
88	88	department, along with any applicable supplementary rating
89	89	information and supporting information, and obtains the
90	90	commissioner's approval of the rate.
91	91	(d) [(b)] From the date a [of the filing of the] rate is
92	92	filed with the department under this section to the effective date
93	93	of the new rate, the insurer's previously filed rate that is in
94	94	effect on the date of the filing remains in effect.
95	95	(e) [(c)] The commissioner may require an insurer to file
96	96	the insurer's rates under Subsection (b) [this section] until the
97	97	commissioner determines that the conditions described by that
98	98	subsection [Subsection (a)] no longer exist.
99	99	(f) [(d)] For purposes of this section, a rate is filed with
100	100	the department on the date the department receives the rate filing.
101	101	(g) [(e)] If the commissioner requires an insurer to file
102	102	the insurer's rates under Subsection (b) [this section], the
103	103	commissioner shall issue an order specifying the commissioner's
104	104	reasons for requiring the rate filing. An affected insurer is
105	105	entitled to a hearing on written request made to the commissioner
106	106	not later than the 30th day after the date the order is issued.
107	107	SECTION 9. Section 2251.152, Insurance Code, is amended to
108	108	read as follows:
109	109	Sec. 2251.152. [RATE APPROVAL REQUIRED;] EXCEPTION TO
110	110	CERTAIN RATE APPROVAL REQUIREMENTS. (a) After [An insurer subject
111	111	to this subchapter may not use a rate until the rate has been filed
112	112	with the department and approved by the commissioner in accordance
113	113	with this subchapter.
114	114	[(b) Notwithstanding Subsection (a), after] a rate filing
115	115	required of an insurer under Section 2251.151(b) is approved under
116	116	this subchapter, the [an] insurer, without prior approval of the
117	117	commissioner, may use any rate subsequently filed by the insurer if
118	118	the subsequently filed rate does not exceed the lesser of:
119	119	(1) 107.5 percent of the rate approved by the
120	120	commissioner; or
121	121	(2) 110 percent of any rate used by the insurer in the
122	122	previous 12-month period.
123	123	(b) [(c)] Filed rates under Subsection (a) [(b)] take
124	124	effect on the date specified by the insurer.
125	125	SECTION 10. Section 2251.153(a), Insurance Code, is amended
126	126	to read as follows:
127	127	(a) Not later than the 30th day after the date a rate is
128	128	filed with the department under this subchapter, the commissioner
129	129	shall:
130	130	(1) approve the rate if the commissioner determines
131	131	that the rate complies with the requirements of this chapter and any
132	132	other provision of this code governing the setting of the rate by
133	133	the insurer; or
134	134	(2) disapprove the rate if the commissioner determines
135	135	that the rate does not comply with the requirements of this chapter
136	136	or any other provision of this code governing the setting of the
137	137	rate by the insurer.
138	138	SECTION 11. Section 2251.156, Insurance Code, is amended to
139	139	read as follows:
140	140	Sec. 2251.156. RATE FILING DISAPPROVAL BY COMMISSIONER;
141	141	HEARING. (a) If the commissioner disapproves a rate filing under
142	142	this chapter [Section 2251.153(a)(2)], the commissioner shall
143	143	issue an order specifying in what respects the filing fails to meet
144	144	the requirements of this chapter or another provision of this code
145	145	applicable to the setting of the rate by the insurer [disapproving
146	146	the filing in accordance with Section 2251.103(b)].
147	147	(b) An insurer whose rate filing is disapproved is entitled
148	148	to a hearing on written request made to the commissioner not later
149	149	than the 30th day after the date the order disapproving the rate
150	150	filing takes effect [in accordance with Section 2251.103(c)].
151	151	SECTION 12. Section 2251.104, Insurance Code, is
152	152	transferred to Subchapter D, Chapter 2251, Insurance Code, and
153	153	redesignated as Section 2251.157 to read as follows:
154	154	Sec. 2251.157 [2251.104]. DISAPPROVAL OF RATE IN EFFECT;
155	155	HEARING. (a) The commissioner may disapprove a rate that is in
156	156	effect only after a hearing. The commissioner shall provide the
157	157	filer at least 20 days' written notice.
158	158	(b) The commissioner must issue an order disapproving a rate
159	159	under Subsection (a) not later than the 15th day after the close of
160	160	the hearing. The order must:
161	161	(1) specify in what respects the rate fails to meet the
162	162	requirements of this chapter; and
163	163	(2) state the date on which further use of the rate is
164	164	prohibited, which may not be earlier than the 45th day after the
165	165	close of the hearing under this section.
166	166	SECTION 13. The following provisions of the Insurance Code
167	167	are repealed:
168	168	(1) Section 2251.103;
169	169	(2) Subchapter E, Chapter 2251; and
170	170	(3) Chapter 2254.
171	171	SECTION 14. The commissioner of insurance shall adopt all
172	172	rules necessary to implement this Act on or before December 1, 2009.
173	173	SECTION 15. The change in law made by this Act applies to
174	174	insurance policies delivered, issued for delivery, or renewed on or
175	175	after January 1, 2010, and to rates for those policies. An
176	176	insurance policy delivered, issued for delivery, or renewed before
177	177	January 1, 2010, and rates for the policy are governed by the law as
178	178	it existed immediately before the effective date of this Act, and
179	179	that law is continued in effect for that purpose.
180	180	SECTION 16. This Act takes effect September 1, 2009.