By: Watson S.B. No. 1655
A BILL TO BE ENTITLED
AN ACT
relating to the transparency and propagation of information
regarding personal automobile and residential property insurance
rates, policies, and complaints.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. This Act shall be known as the Texas Insurance
Consumer Awareness and Affordability Act.
SECTION 2. Subchapter B, Chapter 32, Insurance Code, is
amended by adding Sections 32.024 and 32.025 to read as follows:
Sec. 32.024. TEXAS RESIDENTIAL PROPERTY INSURANCE STUDY.
(a) In this section, "residential property insurance" means
insurance against loss to real or tangible personal property at a
fixed location that is provided through a homeowners insurance
policy, residential fire and allied lines insurance policy, or farm
and ranch owners insurance policy.
(b) The department and the office of public insurance
counsel shall study:
(1) residential property insurance rates in this
state;
(2) regulatory changes with the potential to lower
residential property insurance rates;
(3) practices by individual companies that have the
effect of lowering residential property insurance rates or
increasing customer satisfaction;
(4) other states' laws that have the effect of lowering
residential property insurance rates;
(5) the impact of weather events on residential
property insurance rates in this state;
(6) in an effort to identify practices that lower
rates, the similarities and differences between the residential
property insurance market and the commercial property insurance
market in this state;
(7) practices that encourage policyholders to shop the
market;
(8) practices that encourage mid-level and small
carriers to increase their market share;
(9) the role of general economic factors such as
inflation and changes in the costs of certain products and services
in the setting of insurance rates;
(10) the effects of fraud on insurance rates and
strategies to reduce fraud in this state; and
(11) practices that increase efficiency and decrease
administrative costs in the requests for information and data by
the department and the conveyance of information and data by
companies.
(c) Not later than December 1, 2012, the department and the
office of public insurance counsel shall submit to the governor,
the lieutenant governor, the speaker of the house of
representatives, and the appropriate standing committees of the
legislature a report regarding the results of the study conducted
under Subsection (b), together with any recommendations for
legislation. If joint recommendations cannot be made, the
department and the office shall list their recommendations
separately.
(d) This section expires January 1, 2013.
Sec. 32.025. TEXAS PERSONAL AUTOMOBILE INSURANCE STUDY.
(a) In this section, "personal automobile insurance" means motor
vehicle insurance coverage for the ownership, maintenance, or use
of a private passenger, utility, or miscellaneous type motor
vehicle, including a motor home, mobile home, trailer, or
recreational vehicle, that is:
(1) owned or leased by one or more individuals; and
(2) not primarily used for the delivery of goods,
materials, or services, other than for use in farm or ranch
operations.
(b) The department and the office of public insurance
counsel shall study:
(1) personal automobile insurance rates in this state;
(2) regulatory changes with the potential to lower
personal automobile insurance rates;
(3) practices by individual companies that have the
effect of lowering personal automobile insurance rates;
(4) other states' laws that have the effect of lowering
personal automobile insurance rates;
(5) in an effort to identify practices that lower
rates, the similarities and differences between the personal
automobile insurance market and the commercial automobile
insurance market in this state;
(6) practices that encourage policyholders to shop the
market;
(7) practices that encourage mid-level and small
carriers to increase their market share;
(8) the role of general economic factors such as
inflation and changes in the costs of certain products and services
in the setting of personal automobile insurance rates;
(9) the effects of fraud on insurance rates and
strategies to reduce fraud in this state;
(10) the number of uninsured drivers in this state,
the effects they have on personal automobile insurance rates and
strategies for reducing the number of uninsured drivers; and
(11) practices that increase efficiency and decrease
administrative costs in the requests for information and data by
the department and conveyance of information and data by companies.
(c) Not later than December 1, 2012, the department and the
office of public insurance counsel shall submit to the governor,
the lieutenant governor, the speaker of the house of
representatives, and the appropriate standing committees of the
legislature a report regarding the results of the study conducted
under Subsection (b), together with any recommendations for
legislation. If joint recommendations cannot be made, the
department and the office shall list their recommendations
separately.
(d) This section expires January 1, 2013.
SECTION 3. Section 32.102, Insurance Code, is amended by
adding Subsection (d) to read as follows:
(d) The commissioner by rule shall establish procedures for
an insurer to dispute the accuracy of rate information shown for the
insurer on the Internet website established under this section and
to promptly identify and correct inaccurate information disputed
through those procedures.
SECTION 4. Section 32.104, Insurance Code, is amended by
amending Subsection (b) and adding Subsections (c) and (d) to read
as follows:
(b) An insurer shall provide in a conspicuous manner with
each residential property insurance or personal automobile
insurance policy issued in this state and on any correspondence
sent from the insurer to an insured notice of the Internet website
required by this subchapter. The commissioner shall determine the
form and content of the notice.
(c) To the extent possible, an insurance agent who sells a
residential property insurance or personal automobile insurance
policy in person must, before the policy is sold, have the customer
view from the agent's computer the Internet website maintained
under this subchapter and the relevant complaint data related to
residential property insurance and personal automobile insurance
maintained on the department's website.
(d) To the extent possible, an insurance agent who sells a
residential property insurance or personal automobile insurance
policy over the telephone must, before the policy is sold, notify
the customer of the website and give the customer the website
address.
SECTION 5. Section 521.052, Insurance Code, is amended to
read as follows:
Sec. 521.052. INFORMATION PROVIDED. (a) The department
shall provide to the public through the department's toll-free
telephone number only the following information:
(1) information collected or maintained by the
department relating to the number and disposition of complaints
received against an insurer that are justified, verified as
accurate, and documented as valid, expressed as a percentage of the
total number of insurance policies written by the insurer and in
force on December 31 of the preceding year;
(2) the rating of an insurer, if any, as published by a
nationally recognized rating organization;
(3) the kinds of coverage available to a consumer
through any insurer writing insurance in this state;
(4) an insurer's admitted assets-to-liabilities
ratio; and
(5) other appropriate information collected and
maintained by the department.
(b) The department shall make the information described by
Subsection (a)(1) available to the public through the department's
Internet website.
SECTION 6. Subchapter B, Chapter 2301, Insurance Code, is
amended by adding Sections 2301.0535, 2301.0536, and 2301.0537 to
read as follows:
Sec. 2301.0535. REQUIRED INFORMATION IN RENEWAL POLICY.
(a) At the time a residential property insurance policy or a
personal automobile insurance policy is renewed, the insurer shall
provide a copy of the renewal policy to the insured. The policy
must contain on the first page:
(1) a table that clearly lists the premium charged
under the policy before renewal, the new premium charged under the
renewal policy, and the percentage change, if any, between those
amounts; and
(2) an explanation, in plain language, of any changes
in the coverage under the renewal policy.
(b) If there is an increase in the premium or change in the
coverage under the renewal policy, the first page of the renewal
policy must contain a statement advising the consumer of the
department's Internet website that is designated by the department
to help consumers compare premiums and coverages of different
insurers' policies.
(c) The commissioner shall adopt appropriate wording for
notices under this section.
Sec. 2301.0536. UPDATED POLICY REQUIRED. At any time there
is a change in the coverage of a residential property insurance
policy or personal automobile insurance policy, the insurer shall
provide the insured with an updated copy of the policy that marks
the changes.
Sec. 2301.0537. STATEMENT OF DEDUCTIBLE. A residential
property insurance policy, personal automobile insurance policy,
or other document that expresses a deductible as a percentage of the
coverage amount must state the actual dollar amount of the
deductible next to the percentage.
SECTION 7. Chapter 561, Insurance Code, as added by this
Act, and Sections 2301.0535, 2301.0536, and 2301.0537, Insurance
Code, as added by this Act, apply only to an insurance policy or
contract that is delivered, issued for delivery, or renewed on or
after January 1, 2012. An insurance policy or contract delivered,
issued for delivery, or renewed before January 1, 2012, is governed
by the law as it existed immediately before the effective date of
this Act, and that law is continued in effect for that purpose.
SECTION 8. This Act takes effect September 1, 2011.