82R16212 TRH-D
By: McClendon H.B. No. 207
Substitute the following for H.B. No. 207:
By: Eiland C.S.H.B. No. 207
A BILL TO BE ENTITLED
AN ACT
relating to a mile-based rating plan for personal automobile
insurance.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 2251, Insurance Code, is amended by
adding Subchapter G to read as follows:
SUBCHAPTER G. MILE-BASED AUTOMOBILE INSURANCE RATING PLANS
Sec. 2251.301. DEFINITION. In this subchapter, "mile-based
automobile insurance" means personal automobile insurance that is
rated using a rating plan for which a unit of exposure is one mile
driven by the insured.
Sec. 2251.302. APPLICABILITY OF OTHER LAW. (a)
Subchapters A, B, C, and D apply to mile-based automobile insurance
written under this subchapter.
(b) An insurer shall make separate filings under Subchapter
C for mile-based automobile insurance written under this subchapter
and other automobile insurance written in this state.
Sec. 2251.303. MILE-BASED AUTOMOBILE INSURANCE AUTHORIZED.
(a) An insurer authorized to write personal automobile insurance
in this state may write mile-based automobile insurance in this
state.
(b) An insurer that writes mile-based automobile insurance
in this state may also write personal automobile insurance in this
state using a rating plan for which a unit of exposure is a unit
other than the number of miles driven by the insured and that
complies with this chapter.
(c) An insurer may require a person purchasing personal
automobile insurance to use the same type of rating plan for all
vehicles covered under the person's personal automobile insurance
policy.
Sec. 2251.304. COMMISSIONER POWERS AND DUTIES; RULES.
(a) The commissioner shall compile information regarding:
(1) the number of insurers writing mile-based
automobile insurance in this state;
(2) the geographic areas of this state in which
mile-based automobile insurance is written; and
(3) the premium rates for mile-based automobile
insurance compared to personal automobile insurance rated on
another basis.
(b) The commissioner shall adopt rules as necessary or
appropriate to govern the use of mile-based automobile insurance
under this subchapter, including rules regarding:
(1) prepayment arrangements;
(2) proof of financial responsibility; and
(3) auditing of the odometer of a vehicle for the
purpose of determining coverage and number of miles driven.
SECTION 2. Section 1952.054, Insurance Code, is amended to
read as follows:
Sec. 1952.054. REQUIRED DISCLOSURES REGARDING SHORT-TERM
POLICIES. (a) An insurance policy or other document evidencing
proof of purchase of a personal automobile insurance policy, other
than a mile-based automobile insurance policy written under
Subchapter G, Chapter 2251, that is written for a term of less than
30 days or a mile-based automobile insurance policy written under
Subchapter G, Chapter 2251, that is written for fewer than 1,000
miles may not be used to obtain an original or renewal driver's
license, an automobile registration or license plates, or a motor
vehicle inspection certificate. An insurance policy or other
document described by this subsection must contain the following
statement:
TEXAS LAW PROHIBITS USE OF THIS DOCUMENT TO OBTAIN A
MOTOR VEHICLE INSPECTION CERTIFICATE, AN ORIGINAL OR
RENEWAL DRIVER'S LICENSE, OR AN AUTOMOBILE
REGISTRATION OR LICENSE PLATES.
(b) Before accepting any premium or fee for a personal
automobile insurance policy or binder for a term of less than 30
days, other than a policy or binder for a mile-based automobile
insurance policy written under Subchapter G, Chapter 2251, or any
premium or fee for a mile-based automobile insurance policy written
under Subchapter G, Chapter 2251, that is written for fewer than
1,000 miles, an agent or insurer must make the following written
disclosure to the applicant or insured:
TEXAS LAW PROHIBITS USE OF THIS POLICY OR BINDER TO
OBTAIN A MOTOR VEHICLE INSPECTION CERTIFICATE, AN
ORIGINAL OR RENEWAL DRIVER'S LICENSE, OR AN AUTOMOBILE
REGISTRATION OR LICENSE PLATES.
SECTION 3. Section 2251.001, Insurance Code, is amended to
read as follows:
Sec. 2251.001. PURPOSE. The purposes of this subchapter
and Subchapters B, C, D, [and] E, and G are to:
(1) promote the public welfare by regulating insurance
rates to prohibit excessive, inadequate, or unfairly
discriminatory rates;
(2) promote the availability of insurance;
(3) promote price competition among insurers to
provide rates and premiums that are responsive to competitive
market conditions;
(4) prohibit price-fixing agreements and other
anticompetitive behavior by insurers; and
(5) provide regulatory procedures for the maintenance
of appropriate information reporting systems.
SECTION 4. Sections 2251.003(a) and (b), Insurance Code,
are amended to read as follows:
(a) This subchapter and Subchapters B, C, D, [and] E, and G
apply to:
(1) an insurer to which Article 5.13 applies, other
than the Texas Windstorm Insurance Association, the FAIR Plan
Association, and the Texas Automobile Insurance Plan Association;
and
(2) except as provided by Subsection (c), a Lloyd's
plan, reciprocal or interinsurance exchange, and county mutual
insurance company with respect to the lines of insurance described
by Subsection (b).
(b) This subchapter and Subchapters B, C, D, [and] E, and G
apply to all lines of the following kinds of insurance written under
an insurance policy or contract issued by an insurer authorized to
engage in the business of insurance in this state:
(1) general liability insurance;
(2) residential and commercial property insurance,
including farm and ranch insurance and farm and ranch owners
insurance;
(3) personal and commercial casualty insurance,
except as provided by Section 2251.004;
(4) medical professional liability insurance;
(5) fidelity, guaranty, and surety bonds other than
criminal court appearance bonds;
(6) personal umbrella insurance;
(7) personal liability insurance;
(8) guaranteed auto protection (GAP) insurance;
(9) involuntary unemployment insurance;
(10) financial guaranty insurance;
(11) inland marine insurance;
(12) rain insurance;
(13) hail insurance on farm crops;
(14) personal and commercial automobile insurance;
(15) multi-peril insurance; and
(16) identity theft insurance issued under Chapter
706.
SECTION 5. Section 32.102(a), Insurance Code, is amended to
read as follows:
(a) The department, in conjunction with the office of public
insurance counsel, shall establish and maintain a single Internet
website that provides information to enable consumers to make
informed decisions relating to the purchase of residential property
insurance and personal automobile insurance. The website must
include:
(1) a description of each type of residential property
insurance policy and personal automobile insurance policy issued in
this state, including a comparison of the coverage, exclusions, and
restrictions of each policy that allows a side-by-side comparison
of the features of the policy forms;
(2) a listing of each insurer writing residential
property insurance or personal automobile insurance in this state,
indexed by each county or zip code in which the insurer is actively
writing that insurance, and a profile of the insurer that includes:
(A) contact information for the insurer,
including the insurer's full name, address, and telephone number
and the insurer's fax number and e-mail address, if available;
(B) information on rates charged by the insurer,
including:
(i) sample rates for different policyholder
profiles in each county or zip code; and
(ii) the percentage by which the sample
rate has fallen or risen due to filings in the previous 12, 24, and
36 months;
(C) a list of policy forms, exclusions,
endorsements, and discounts offered by the insurer;
(D) an indication of whether the insurer uses
credit scoring in underwriting, rating, or tiering, and a link to
the insurer's credit model or a link explaining how to request the
insurer's credit model;
(E) the insurer's financial rating determined by
A. M. Best or similar rating organization and an explanation of the
meaning and importance of the rating;
(F) a complaint ratio or similar complaint rating
system for the insurer for each of the previous three years and an
explanation of the meaning of the rating system; and
(G) information, other than information made
confidential by law, on the insurer's regulatory and administrative
experience with the department, the office of public insurance
counsel, and insurance regulatory authorities in other states;
[and]
(3) if feasible, as determined by the commissioner and
the public insurance counsel:
(A) a side-by-side comparison of credit scoring
models, including factors, key variables, and weights, of
residential property insurers in this state; and
(B) a side-by-side comparison of credit scoring
models, including factors, key variables, and weights, of private
passenger automobile insurers in this state; and
(4) information that is compiled by the commissioner
under Section 2251.304 concerning mile-based automobile insurance
policies written under Subchapter G, Chapter 2251, and is not
otherwise described by this subsection.
SECTION 6. 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, 2012. An insurance
policy that is delivered, issued for delivery, or renewed before
January 1, 2012, 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 7. This Act takes effect September 1, 2011.