Texas 2011 - 82nd Regular

Texas House Bill HB207 Compare Versions

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Old	New	Differences
1	1	82R16212 TRH-D
2	2	By: McClendon H.B. No. 207
3	3	Substitute the following for H.B. No. 207:
4	4	By: Eiland C.S.H.B. No. 207
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to a mile-based rating plan for personal automobile
10	10	insurance.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Chapter 2251, Insurance Code, is amended by
13	13	adding Subchapter G to read as follows:
14	14	SUBCHAPTER G. MILE-BASED AUTOMOBILE INSURANCE RATING PLANS
15	15	Sec. 2251.301. DEFINITION. In this subchapter, "mile-based
16	16	automobile insurance" means personal automobile insurance that is
17	17	rated using a rating plan for which a unit of exposure is one mile
18	18	driven by the insured.
19	19	Sec. 2251.302. APPLICABILITY OF OTHER LAW. (a)
20	20	Subchapters A, B, C, and D apply to mile-based automobile insurance
21	21	written under this subchapter.
22	22	(b) An insurer shall make separate filings under Subchapter
23	23	C for mile-based automobile insurance written under this subchapter
24	24	and other automobile insurance written in this state.
25	25	Sec. 2251.303. MILE-BASED AUTOMOBILE INSURANCE AUTHORIZED.
26	26	(a) An insurer authorized to write personal automobile insurance
27	27	in this state may write mile-based automobile insurance in this
28	28	state.
29	29	(b) An insurer that writes mile-based automobile insurance
30	30	in this state may also write personal automobile insurance in this
31	31	state using a rating plan for which a unit of exposure is a unit
32	32	other than the number of miles driven by the insured and that
33	33	complies with this chapter.
34	34	(c) An insurer may require a person purchasing personal
35	35	automobile insurance to use the same type of rating plan for all
36	36	vehicles covered under the person's personal automobile insurance
37	37	policy.
38	38	Sec. 2251.304. COMMISSIONER POWERS AND DUTIES; RULES.
39	39	(a) The commissioner shall compile information regarding:
40	40	(1) the number of insurers writing mile-based
41	41	automobile insurance in this state;
42	42	(2) the geographic areas of this state in which
43	43	mile-based automobile insurance is written; and
44	44	(3) the premium rates for mile-based automobile
45	45	insurance compared to personal automobile insurance rated on
46	46	another basis.
47	47	(b) The commissioner shall adopt rules as necessary or
48	48	appropriate to govern the use of mile-based automobile insurance
49	49	under this subchapter, including rules regarding:
50	50	(1) prepayment arrangements;
51	51	(2) proof of financial responsibility; and
52	52	(3) auditing of the odometer of a vehicle for the
53	53	purpose of determining coverage and number of miles driven.
54	54	SECTION 2. Section 1952.054, Insurance Code, is amended to
55	55	read as follows:
56	56	Sec. 1952.054. REQUIRED DISCLOSURES REGARDING SHORT-TERM
57	57	POLICIES. (a) An insurance policy or other document evidencing
58	58	proof of purchase of a personal automobile insurance policy, other
59	59	than a mile-based automobile insurance policy written under
60	60	Subchapter G, Chapter 2251, that is written for a term of less than
61	61	30 days or a mile-based automobile insurance policy written under
62	62	Subchapter G, Chapter 2251, that is written for fewer than 1,000
63	63	miles may not be used to obtain an original or renewal driver's
64	64	license, an automobile registration or license plates, or a motor
65	65	vehicle inspection certificate. An insurance policy or other
66	66	document described by this subsection must contain the following
67	67	statement:
68	68	TEXAS LAW PROHIBITS USE OF THIS DOCUMENT TO OBTAIN A
69	69	MOTOR VEHICLE INSPECTION CERTIFICATE, AN ORIGINAL OR
70	70	RENEWAL DRIVER'S LICENSE, OR AN AUTOMOBILE
71	71	REGISTRATION OR LICENSE PLATES.
72	72	(b) Before accepting any premium or fee for a personal
73	73	automobile insurance policy or binder for a term of less than 30
74	74	days, other than a policy or binder for a mile-based automobile
75	75	insurance policy written under Subchapter G, Chapter 2251, or any
76	76	premium or fee for a mile-based automobile insurance policy written
77	77	under Subchapter G, Chapter 2251, that is written for fewer than
78	78	1,000 miles, an agent or insurer must make the following written
79	79	disclosure to the applicant or insured:
80	80	TEXAS LAW PROHIBITS USE OF THIS POLICY OR BINDER TO
81	81	OBTAIN A MOTOR VEHICLE INSPECTION CERTIFICATE, AN
82	82	ORIGINAL OR RENEWAL DRIVER'S LICENSE, OR AN AUTOMOBILE
83	83	REGISTRATION OR LICENSE PLATES.
84	84	SECTION 3. Section 2251.001, Insurance Code, is amended to
85	85	read as follows:
86	86	Sec. 2251.001. PURPOSE. The purposes of this subchapter
87	87	and Subchapters B, C, D, [and] E, and G are to:
88	88	(1) promote the public welfare by regulating insurance
89	89	rates to prohibit excessive, inadequate, or unfairly
90	90	discriminatory rates;
91	91	(2) promote the availability of insurance;
92	92	(3) promote price competition among insurers to
93	93	provide rates and premiums that are responsive to competitive
94	94	market conditions;
95	95	(4) prohibit price-fixing agreements and other
96	96	anticompetitive behavior by insurers; and
97	97	(5) provide regulatory procedures for the maintenance
98	98	of appropriate information reporting systems.
99	99	SECTION 4. Sections 2251.003(a) and (b), Insurance Code,
100	100	are amended to read as follows:
101	101	(a) This subchapter and Subchapters B, C, D, [and] E, and G
102	102	apply to:
103	103	(1) an insurer to which Article 5.13 applies, other
104	104	than the Texas Windstorm Insurance Association, the FAIR Plan
105	105	Association, and the Texas Automobile Insurance Plan Association;
106	106	and
107	107	(2) except as provided by Subsection (c), a Lloyd's
108	108	plan, reciprocal or interinsurance exchange, and county mutual
109	109	insurance company with respect to the lines of insurance described
110	110	by Subsection (b).
111	111	(b) This subchapter and Subchapters B, C, D, [and] E, and G
112	112	apply to all lines of the following kinds of insurance written under
113	113	an insurance policy or contract issued by an insurer authorized to
114	114	engage in the business of insurance in this state:
115	115	(1) general liability insurance;
116	116	(2) residential and commercial property insurance,
117	117	including farm and ranch insurance and farm and ranch owners
118	118	insurance;
119	119	(3) personal and commercial casualty insurance,
120	120	except as provided by Section 2251.004;
121	121	(4) medical professional liability insurance;
122	122	(5) fidelity, guaranty, and surety bonds other than
123	123	criminal court appearance bonds;
124	124	(6) personal umbrella insurance;
125	125	(7) personal liability insurance;
126	126	(8) guaranteed auto protection (GAP) insurance;
127	127	(9) involuntary unemployment insurance;
128	128	(10) financial guaranty insurance;
129	129	(11) inland marine insurance;
130	130	(12) rain insurance;
131	131	(13) hail insurance on farm crops;
132	132	(14) personal and commercial automobile insurance;
133	133	(15) multi-peril insurance; and
134	134	(16) identity theft insurance issued under Chapter
135	135	706.
136	136	SECTION 5. Section 32.102(a), Insurance Code, is amended to
137	137	read as follows:
138	138	(a) The department, in conjunction with the office of public
139	139	insurance counsel, shall establish and maintain a single Internet
140	140	website that provides information to enable consumers to make
141	141	informed decisions relating to the purchase of residential property
142	142	insurance and personal automobile insurance. The website must
143	143	include:
144	144	(1) a description of each type of residential property
145	145	insurance policy and personal automobile insurance policy issued in
146	146	this state, including a comparison of the coverage, exclusions, and
147	147	restrictions of each policy that allows a side-by-side comparison
148	148	of the features of the policy forms;
149	149	(2) a listing of each insurer writing residential
150	150	property insurance or personal automobile insurance in this state,
151	151	indexed by each county or zip code in which the insurer is actively
152	152	writing that insurance, and a profile of the insurer that includes:
153	153	(A) contact information for the insurer,
154	154	including the insurer's full name, address, and telephone number
155	155	and the insurer's fax number and e-mail address, if available;
156	156	(B) information on rates charged by the insurer,
157	157	including:
158	158	(i) sample rates for different policyholder
159	159	profiles in each county or zip code; and
160	160	(ii) the percentage by which the sample
161	161	rate has fallen or risen due to filings in the previous 12, 24, and
162	162	36 months;
163	163	(C) a list of policy forms, exclusions,
164	164	endorsements, and discounts offered by the insurer;
165	165	(D) an indication of whether the insurer uses
166	166	credit scoring in underwriting, rating, or tiering, and a link to
167	167	the insurer's credit model or a link explaining how to request the
168	168	insurer's credit model;
169	169	(E) the insurer's financial rating determined by
170	170	A. M. Best or similar rating organization and an explanation of the
171	171	meaning and importance of the rating;
172	172	(F) a complaint ratio or similar complaint rating
173	173	system for the insurer for each of the previous three years and an
174	174	explanation of the meaning of the rating system; and
175	175	(G) information, other than information made
176	176	confidential by law, on the insurer's regulatory and administrative
177	177	experience with the department, the office of public insurance
178	178	counsel, and insurance regulatory authorities in other states;
179	179	[and]
180	180	(3) if feasible, as determined by the commissioner and
181	181	the public insurance counsel:
182	182	(A) a side-by-side comparison of credit scoring
183	183	models, including factors, key variables, and weights, of
184	184	residential property insurers in this state; and
185	185	(B) a side-by-side comparison of credit scoring
186	186	models, including factors, key variables, and weights, of private
187	187	passenger automobile insurers in this state; and
188	188	(4) information that is compiled by the commissioner
189	189	under Section 2251.304 concerning mile-based automobile insurance
190	190	policies written under Subchapter G, Chapter 2251, and is not
191	191	otherwise described by this subsection.
192	192	SECTION 6. The change in law made by this Act applies only
193	193	to a personal automobile insurance policy that is delivered, issued
194	194	for delivery, or renewed on or after January 1, 2012. An insurance
195	195	policy that is delivered, issued for delivery, or renewed before
196	196	January 1, 2012, is covered by the law in effect at the time the
197	197	policy was delivered, issued for delivery, or renewed, and that law
198	198	is continued in effect for that purpose.
199	199	SECTION 7. This Act takes effect September 1, 2011.