82R8928 TJS-D
By: McClendon H.B. No. 2018
A BILL TO BE ENTITLED
AN ACT
relating to certain automobile insurance loss adjustment and claims
settlement practices and the collection and use of certain data by
insurers regarding automobile loss and damage claims; providing
administrative penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 1953, Insurance Code, is amended by
adding Subchapter D to read as follows:
SUBCHAPTER D. DATA MINING AND PATTERN RECOGNITION
Sec. 1953.151. APPLICABILITY OF SUBCHAPTER. This
subchapter applies to an insurer writing automobile insurance in
this state, including an insurance company, reciprocal or
interinsurance exchange, county mutual insurance company, farm
mutual insurance company, Lloyd's plan, or other insurer.
Sec. 1953.152. COLLECTION OF INFORMATION CONCERNING DATA
MINING AND PATTERN RECOGNITION. (a) The commissioner by rule may
require an insurer to report to the department concerning:
(1) technologies to be used by the insurer to identify
relationships among variables that are used to predict differences
in expected losses of covered persons or applicants for automobile
insurance coverage or are otherwise used in the activities of
regulated entities; and
(2) the manner in which the insurer intends to use the
relationships derived from the technologies described by
Subdivision (1) in:
(A) underwriting and creating and defining risk
classifications;
(B) setting rates and premiums, as applicable;
(C) detecting fraudulent claims;
(D) identifying subrogation opportunities;
(E) improving marketing; or
(F) performing other activities identified by
the commissioner; and
(3) services provided by third party loss-evaluation
services to identify loss statistics and information for the
purpose of evaluating claims, loss-settlement reserves, and losses
paid and the manner in which the insurer uses those services and the
information obtained.
(b) In exercising the commissioner's authority under this
section, the commissioner may require that insurers report with
respect to selected segments of the market and may limit the
reporting to specific uses of relationships derived from the
technologies.
(c) Underwriting guidelines, loss and claims evaluation
data, and related information obtained by the commissioner under
this section are subject to Section 38.003. Other information
obtained under this section is commercial information not subject
to the disclosure requirements of Chapter 552, Government Code.
Sec. 1953.153. ADMINISTRATIVE PENALTIES. If the department
determines that an insurer has violated this chapter or a rule
adopted under this chapter, the department shall assess
administrative penalties against the insurer in the manner provided
by Chapter 84. The amount of an administrative penalty imposed
under this section shall be based on:
(1) the seriousness of the violation, including the
nature, circumstances, extent, or gravity of the violation; and
(2) the economic harm caused by the violation.
Sec. 1953.154. REPORT TO LEGISLATURE. The department shall
include in its biennial report to the legislature under Section
32.022 information concerning the use of relationships derived from
the technologies described by Section 1953.152 by insurers. The
information must include the impact of the use of those
relationships on insurance and other coverage to covered persons
and applicants for coverage in this state. The report must include,
as applicable, recommendations for:
(1) proposed legislation appropriate to regulate the
use of relationships derived from the technologies; and
(2) means to facilitate availability of insurance in
underserved markets and to maintain fair and equitable
loss-evaluation and claims settlement practices in this state.
SECTION 2. This Act takes effect September 1, 2011.