Texas 2011 - 82nd Regular

Texas Senate Bill SB1655 Compare Versions

The same version is selected twice. Please select two different versions to compare.

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	By: Watson, Lucio, Hegar S.B. No. 1655
2	2	(In the Senate - Filed March 11, 2011; March 23, 2011, read
3	3	first time and referred to Committee on Business and Commerce;
4	4	April 11, 2011, reported adversely, with favorable Committee
5	5	Substitute by the following vote: Yeas 7, Nays 0; April 11, 2011,
6	6	sent to printer.)
7	7	COMMITTEE SUBSTITUTE FOR S.B. No. 1655 By: Watson
8	8
9	9
10	10	A BILL TO BE ENTITLED
11	11	AN ACT
12	12	relating to transparency and propagation of information regarding
13	13	personal automobile and residential property insurance rates,
14	14	policies, and complaints.
15	15	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
16	16	SECTION 1. This Act shall be known as the Texas Insurance
17	17	Consumer Awareness and Affordability Act.
18	18	SECTION 2. Subchapter B, Chapter 32, Insurance Code, is
19	19	amended by adding Sections 32.024 and 32.025 to read as follows:
20	20	Sec. 32.024. TEXAS RESIDENTIAL PROPERTY INSURANCE STUDY.
21	21	(a) In this section, "residential property insurance" means
22	22	insurance against loss to real or tangible personal property at a
23	23	fixed location that is provided through a homeowners insurance
24	24	policy or residential fire and allied lines insurance policy.
25	25	(b) The department and the office of public insurance
26	26	counsel shall study:
27	27	(1) residential property insurance rates in this
28	28	state;
29	29	(2) regulatory changes with the potential to lower
30	30	residential property insurance rates over time in a sustainable
31	31	manner;
32	32	(3) practices by individual companies that have the
33	33	effect of lowering residential property insurance rates or
34	34	increasing customer satisfaction over time in a sustainable manner;
35	35	(4) other states' laws that have the effect of lowering
36	36	residential property insurance rates over time in a sustainable
37	37	manner;
38	38	(5) the impact of weather events on residential
39	39	property insurance rates in this state;
40	40	(6) in an effort to identify practices that lower
41	41	insurance rates, the similarities and differences between the
42	42	residential property insurance market and the commercial property
43	43	insurance market in this state;
44	44	(7) industry practices and regulatory changes that
45	45	encourage policyholders to learn more about the insurance market
46	46	and to actively shop for insurance alternatives, and that overcome
47	47	technological barriers facing certain consumers or groups of
48	48	consumers;
49	49	(8) industry practices and regulatory changes that
50	50	encourage mid-level and small-level carriers to compete for
51	51	increased market share and that attract new carriers to Texas;
52	52	(9) the role of general economic factors such as
53	53	inflation and changes in the costs of certain products and services
54	54	in the setting of insurance rates;
55	55	(10) the effects of fraud on insurance rates and
56	56	strategies to reduce fraud in this state;
57	57	(11) practices that increase efficiency and decrease
58	58	administrative costs in the requests for information and data by
59	59	the department and the conveyance of information and data by
60	60	companies; and
61	61	(12) the effect of the market cycle by which insurance
62	62	costs and underwriting criteria change due to economic factors on
63	63	the affordability and availability of insurance.
64	64	(c) Not later than September 1, 2012, the department and the
65	65	office of public insurance counsel shall submit to the governor,
66	66	the lieutenant governor, the speaker of the house of
67	67	representatives, and the appropriate standing committees of the
68	68	legislature a report regarding the results of the study conducted
69	69	under Subsection (b), together with any recommendations for
70	70	legislation. If joint recommendations cannot be made, the
71	71	department and the office shall list their recommendations
72	72	separately.
73	73	(d) This section expires January 1, 2013.
74	74	Sec. 32.025. TEXAS PERSONAL AUTOMOBILE INSURANCE STUDY.
75	75	(a) In this section, "personal automobile insurance" means motor
76	76	vehicle insurance coverage for the ownership, maintenance, or use
77	77	of a private passenger, utility, or miscellaneous type motor
78	78	vehicle, including a motor home, mobile home, trailer, or
79	79	recreational vehicle, that is:
80	80	(1) owned or leased by one or more individuals; and
81	81	(2) not primarily used for the delivery of goods,
82	82	materials, or services, other than for use in farm or ranch
83	83	operations.
84	84	(b) The department and the office of public insurance
85	85	counsel shall study:
86	86	(1) personal automobile insurance rates in this state;
87	87	(2) regulatory changes with the potential to lower
88	88	personal automobile insurance rates over time in a sustainable
89	89	manner;
90	90	(3) practices by individual companies that have the
91	91	effect of lowering personal automobile insurance rates or
92	92	increasing customer satisfaction over time in a sustainable manner;
93	93	(4) other states' laws that have the effect of lowering
94	94	personal automobile insurance rates over time in a sustainable
95	95	manner;
96	96	(5) in an effort to identify practices that lower
97	97	insurance rates, the similarities and differences between the
98	98	personal automobile insurance market and the commercial automobile
99	99	insurance market in this state;
100	100	(6) industry practices and regulatory changes that
101	101	encourage policyholders to learn more about the insurance market
102	102	and to actively shop for insurance alternatives, and that overcome
103	103	technological barriers facing certain consumers or groups of
104	104	consumers;
105	105	(7) industry practices and regulatory changes that
106	106	encourage mid-level and small-level carriers to compete for
107	107	increased market share and that attract new carriers to Texas;
108	108	(8) the role of general economic factors such as
109	109	inflation and changes in the costs of certain products and services
110	110	in the setting of personal automobile insurance rates;
111	111	(9) the effects of fraud on insurance rates and
112	112	strategies to reduce fraud in this state;
113	113	(10) the number of uninsured drivers in this state,
114	114	the effects they have on personal automobile insurance rates, and
115	115	strategies for reducing the number of uninsured drivers;
116	116	(11) practices that increase efficiency and decrease
117	117	administrative costs in the requests for information and data by
118	118	the department and the conveyance of information and data by
119	119	companies; and
120	120	(12) the effect of the market cycle by which insurance
121	121	costs and underwriting criteria change due to economic factors on
122	122	the affordability and availability of insurance.
123	123	(c) Not later than September 1, 2012, the department and the
124	124	office of public insurance counsel shall submit to the governor,
125	125	the lieutenant governor, the speaker of the house of
126	126	representatives, and the appropriate standing committees of the
127	127	legislature a report regarding the results of the study conducted
128	128	under Subsection (b), together with any recommendations for
129	129	legislation. If joint recommendations cannot be made, the
130	130	department and the office shall list their recommendations
131	131	separately.
132	132	(d) This section expires January 1, 2013.
133	133	SECTION 3. Section 32.103, Insurance Code, is amended to
134	134	read as follows:
135	135	Sec. 32.103. PUBLIC INFORMATION CONCERNING INTERNET
136	136	WEBSITE. The department and the office of public insurance counsel
137	137	shall publicize the existence of the Internet website required by
138	138	this subchapter in a conspicuous manner on any websites,
139	139	correspondence, or publications created by the department or the
140	140	office, as part of the program to facilitate resolution of
141	141	policyholder complaints as provided by Section 521.002.
142	142	SECTION 4. Section 32.104, Insurance Code, is amended by
143	143	amending Subsection (b) and adding Subsections (c) and (d) to read
144	144	as follows:
145	145	(b) An insurer shall provide in a conspicuous manner with
146	146	each residential property insurance or personal automobile
147	147	insurance policy issued in this state, and on any correspondence
148	148	sent from the insurer to an insured, notice of the Internet website
149	149	required by this subchapter. An insurer is not required to provide
150	150	the notice on a separate document if the notice is included on the
151	151	policy or correspondence. The commissioner shall determine the
152	152	form and content of the notice. An insurer that transacts business
153	153	electronically and provides conspicuous notice of the Internet
154	154	website required by this chapter on the insurer's website is not
155	155	required to comply with this subsection.
156	156	(c) To the extent possible, an insurance agent who sells a
157	157	residential property insurance or personal automobile insurance
158	158	policy must, at the time of the initial sale, advise the customer
159	159	verbally, electronically, or in writing of the Internet website
160	160	maintained under this subchapter.
161	161	(d) A renewal of a residential property insurance or
162	162	personal automobile insurance policy must include the location of
163	163	the department's Internet website prominently displayed on the
164	164	declarations page of the renewal policy.
165	165	SECTION 5. Section 521.052, Insurance Code, is amended to
166	166	read as follows:
167	167	Sec. 521.052. INFORMATION PROVIDED. (a) The department
168	168	shall provide to the public through the department's toll-free
169	169	telephone number only the following information:
170	170	(1) information collected or maintained by the
171	171	department relating to the number and disposition of complaints
172	172	received against an insurer that are justified, verified as
173	173	accurate, and documented as valid, expressed as a percentage of the
174	174	total number of insurance policies written by the insurer and in
175	175	force on December 31 of the preceding year;
176	176	(2) the rating of an insurer, if any, as published by a
177	177	nationally recognized rating organization;
178	178	(3) the kinds of coverage available to a consumer
179	179	through any insurer writing insurance in this state;
180	180	(4) an insurer's admitted assets-to-liabilities
181	181	ratio; and
182	182	(5) other appropriate information collected and
183	183	maintained by the department.
184	184	(b) The department shall make the information described by
185	185	Subsection (a)(1) available to the public through the department's
186	186	Internet website.
187	187	SECTION 6. Section 551.054, Insurance Code, is amended by
188	188	adding Subsections (d) and (e) to read as follows:
189	189	(d) An insurer that refuses to renew a residential property
190	190	insurance policy or a personal automobile insurance policy but
191	191	offers a different policy in the place of that policy shall provide
192	192	to the insured:
193	193	(1) a table that clearly lists the premium charged
194	194	under the original policy, the premium charged under the new
195	195	policy, and the percentage change, if any, between those amounts;
196	196	(2) an explanation, in plain language, of any changes
197	197	in the coverage under the new policy; and
198	198	(3) notice of the department's Internet website that
199	199	is designated by the department to help consumers compare premiums
200	200	and coverages of different insurers' policies.
201	201	(e) The commissioner shall adopt appropriate wording for
202	202	notice under Subsection (d).
203	203	SECTION 7. Subchapter B, Chapter 2301, Insurance Code, is
204	204	amended by adding Sections 2301.0535, 2301.0536, and 2301.0537 to
205	205	read as follows:
206	206	Sec. 2301.0535. REQUIRED INFORMATION IN RENEWAL POLICY.
207	207	(a) At the time a residential property insurance policy or a
208	208	personal automobile insurance policy is renewed, the insurer shall
209	209	provide to the insured:
210	210	(1) a table that conspicuously and clearly lists the
211	211	premium charged under the policy before renewal, the new premium
212	212	charged under the renewal policy, and the percentage change, if
213	213	any, between those amounts; and
214	214	(2) notice of the department's Internet website
215	215	designated by the department to help consumers compare premiums and
216	216	coverages of different insurers' policies.
217	217	(b) The commissioner shall adopt appropriate wording for
218	218	notice under this section.
219	219	Sec. 2301.0536. UPDATED POLICY REQUIRED. At any time there
220	220	is a change in the coverage of a residential property insurance
221	221	policy or personal automobile insurance policy, the insurer, on
222	222	request from the consumer, shall provide the consumer with an
223	223	updated declarations page and the policy form that was changed. The
224	224	insurer shall inform the insured of the insured's right to request
225	225	an updated copy of the policy that identifies the changes.
226	226	Sec. 2301.0537. STATEMENT OF DEDUCTIBLE. (a) A
227	227	residential property insurance policy, personal automobile
228	228	insurance policy, or other document that expresses a deductible as
229	229	a percentage of the coverage amount must state the actual dollar
230	230	amount of the deductible next to the percentage.
231	231	(b) If a residential property insurance policy or personal
232	232	automobile insurance policy includes an endorsement or other
233	233	provision that includes a variable deductible or a deductible with
234	234	an escalator clause, the policy or document must explain how the
235	235	deductible will be calculated and provide an example of how the
236	236	deductible will be calculated, stating the actual dollar cost for
237	237	the example.
238	238	SECTION 8. Subsection (d), Section 32.104, Subsection (d),
239	239	Section 551.054, and Sections 2301.0535, 2301.0536, and 2301.0537,
240	240	Insurance Code, as added by this Act, apply only to an insurance
241	241	policy or contract that is delivered, issued for delivery, or
242	242	renewed on or after January 1, 2012. An insurance policy or
243	243	contract delivered, issued for delivery, or renewed before January
244	244	1, 2012, is governed by the law as it existed immediately before the
245	245	effective date of this Act, and that law is continued in effect for
246	246	that purpose.
247	247	SECTION 9. This Act takes effect September 1, 2011.
248	248	* * * * *