By: Hegar S.B. No. 644
(In the Senate - Filed February 14, 2011; March 16, 2011,
read first time and referred to Committee on Government
Organization; March 28, 2011, reported adversely, with favorable
Committee Substitute by the following vote: Yeas 6, Nays 0;
March 28, 2011, sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 644 By: Hegar
A BILL TO BE ENTITLED
AN ACT
relating to the continuation and operation of the Texas Department
of Insurance and the operation of certain insurance programs;
imposing administrative penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. GENERAL PROVISIONS
SECTION 1.001. Section 31.002, Insurance Code, is amended
to read as follows:
Sec. 31.002. DUTIES OF DEPARTMENT. In addition to the other
duties required of the Texas Department of Insurance, the
department shall:
(1) regulate the business of insurance in this state;
(2) administer the workers' compensation system of
this state as provided by Title 5, Labor Code; [and]
(3) ensure that this code and other laws regarding
insurance and insurance companies are executed;
(4) protect and ensure the fair treatment of
consumers; and
(5) ensure fair competition in the insurance industry
in order to foster a competitive market.
SECTION 1.002. Subsection (a), Section 31.004, Insurance
Code, is amended to read as follows:
(a) The Texas Department of Insurance is subject to Chapter
325, Government Code (Texas Sunset Act). Unless continued in
existence as provided by that chapter, the department is abolished
September 1, 2017 [2011].
SECTION 1.003. Subchapter B, Chapter 36, Insurance Code, is
amended by adding Section 36.110 to read as follows:
Sec. 36.110. NEGOTIATED RULEMAKING AND ALTERNATIVE DISPUTE
RESOLUTION POLICY. (a) The commissioner shall develop and
implement a policy to encourage the use of:
(1) negotiated rulemaking procedures under Chapter
2008, Government Code, for the adoption of department rules; and
(2) appropriate alternative dispute resolution
procedures under Chapter 2009, Government Code, to assist in the
resolution of internal and external disputes under the department's
jurisdiction.
(b) The department's procedures relating to alternative
dispute resolution must conform, to the extent possible, to any
model guidelines issued by the State Office of Administrative
Hearings for the use of alternative dispute resolution by state
agencies.
(c) The commissioner shall:
(1) coordinate the implementation of the policy
adopted under Subsection (a);
(2) provide training as needed to implement the
procedures for negotiated rulemaking or alternative dispute
resolution; and
(3) collect data concerning the effectiveness of those
procedures.
ARTICLE 2. CERTAIN ADVISORY BOARDS, COMMITTEES, AND COUNCILS AND
RELATED TECHNICAL CORRECTIONS
SECTION 2.001. Chapter 32, Insurance Code, is amended by
adding Subchapter E to read as follows:
SUBCHAPTER E. RULES REGARDING USE OF ADVISORY COMMITTEES
Sec. 32.151. RULEMAKING AUTHORITY. (a) The commissioner
shall adopt rules, in compliance with Section 39.003 of this code
and Chapter 2110, Government Code, regarding the purpose,
structure, and use of advisory committees by the commissioner, the
state fire marshal, or department staff, including rules governing
an advisory committee's:
(1) purpose, role, responsibility, and goals;
(2) size and quorum requirements;
(3) qualifications for membership, including
experience requirements and geographic representation;
(4) appointment procedures;
(5) terms of service;
(6) training requirements; and
(7) duration.
(b) An advisory committee must be structured and used to
advise the commissioner, the state fire marshal, or department
staff. An advisory committee may not be responsible for rulemaking
or policymaking.
Sec. 32.152. PERIODIC EVALUATION. The commissioner shall
by rule establish a process by which the department shall
periodically evaluate an advisory committee to ensure its continued
necessity. The department may retain or develop committees as
appropriate to meet changing needs.
Sec. 32.153. COMPLIANCE WITH OPEN MEETINGS ACT. A
department advisory committee must comply with Chapter 551,
Government Code.
SECTION 2.002. Section 843.441, Insurance Code, is
transferred to Subchapter L, Chapter 843, Insurance Code,
redesignated as Section 843.410, Insurance Code, and amended to
read as follows:
Sec. 843.410 [843.441]. ASSESSMENTS. (a) To provide
funds for the administrative expenses of the commissioner regarding
rehabilitation, liquidation, supervision, conservatorship, or
seizure [conservation] of a [an impaired] health maintenance
organization in this state that is placed under supervision or in
conservatorship under Chapter 441 or against which a delinquency
proceeding is commenced under Chapter 443 and that is found by the
commissioner to have insufficient funds to pay the total amount of
health care claims and the administrative[, including] expenses
incurred by the commissioner regarding the rehabilitation,
liquidation, supervision, conservatorship, or seizure, the
commissioner [acting as receiver or by a special deputy receiver,
the committee, at the commissioner's direction,] shall assess each
health maintenance organization in the proportion that the gross
premiums of the health maintenance organization that were written
in this state during the preceding calendar year bear to the
aggregate gross premiums that were written in this state by all
health maintenance organizations, as found [provided to the
committee by the commissioner] after review of annual statements
and other reports the commissioner considers necessary.
(b) [(c)] The commissioner may abate or defer an assessment
in whole or in part if, in the opinion of the commissioner, payment
of the assessment would endanger the ability of a health
maintenance organization to fulfill its contractual obligations.
If an assessment is abated or deferred in whole or in part, the
amount of the abatement or deferral may be assessed against the
remaining health maintenance organizations in a manner consistent
with the calculations made by the commissioner under Subsection (a)
[basis for assessments provided by the approved plan of operation].
(c) [(d)] The total of all assessments on a health
maintenance organization may not exceed one-fourth of one percent
of the health maintenance organization's gross premiums in any one
calendar year.
(d) [(e)] Notwithstanding any other provision of this
subchapter, funds derived from an assessment made under this
section may not be used for more than 180 consecutive days for the
expenses of administering the affairs of a [an impaired] health
maintenance organization the surplus of which is impaired and that
is [while] in supervision[, rehabilitation,] or conservatorship
[conservation for more than 150 days]. The commissioner
[committee] may extend the period during which the commissioner
[it] makes assessments for the administrative expenses [of an
impaired health maintenance organization as it considers
appropriate].
SECTION 2.003. Section 1660.004, Insurance Code, is amended
to read as follows:
Sec. 1660.004. GENERAL RULEMAKING. The commissioner may
adopt rules as necessary to implement this chapter[, including
rules requiring the implementation and provision of the technology
recommended by the advisory committee].
SECTION 2.004. Subsection (b), Section 1660.102, Insurance
Code, is amended to read as follows:
(b) The commissioner may consider [the] recommendations [of
the advisory committee] or any other information provided in
response to a department-issued request for information relating to
electronic data exchange, including identification card programs,
before adopting rules regarding:
(1) information to be included on the identification
cards;
(2) technology to be used to implement the
identification card pilot program; and
(3) confidentiality and accuracy of the information
required to be included on the identification cards.
SECTION 2.005. Subsection (a), Section 4001.009, Insurance
Code, is amended to read as follows:
(a) As referenced in Section 4001.003(9), a reference to an
agent in the following laws includes a subagent without regard to
whether a subagent is specifically mentioned:
(1) Chapters 281, 402, 421-423, 441, 444, 461-463,
[523,] 541-556, 558, 559, [702,] 703, 705, 821, 823-825, 827, 828,
844, 963, 1108, 1205-1208 [1205-1209], 1211, 1213, 1214
[1211-1214], 1352, 1353, 1357, 1358, 1360-1363, 1369, 1453-1455,
1503, 1550, 1801, 1803, 2151-2154, 2201-2203, 2205-2213, 3501,
3502, 4007, 4102, and 4201-4203;
(2) Chapter 403, excluding Section 403.002;
(3) Subchapter A, Chapter 491;
(4) Subchapter C, Chapter 521;
(5) Subchapter A, Chapter 557;
(6) Subchapter B, Chapter 805;
(7) Subchapters D, E, and F, Chapter 982;
(8) Subchapter D, Chapter 1103;
(9) Subchapters B, C, D, and E, Chapter 1204,
excluding Sections 1204.153 and 1204.154;
(10) Subchapter B, Chapter 1366;
(11) Subchapters B, C, and D, Chapter 1367, excluding
Section 1367.053(c);
(12) Subchapters A, C, D, E, F, H, and I, Chapter 1451;
(13) Subchapter B, Chapter 1452;
(14) Sections 551.004, 841.303, 982.001, 982.002,
982.004, 982.052, 982.102, 982.103, 982.104, 982.106, 982.107,
982.108, 982.110, 982.111, 982.112, and 1802.001; and
(15) Chapter 107, Occupations Code.
SECTION 2.006. Section 4102.005, Insurance Code, is amended
to read as follows:
Sec. 4102.005. CODE OF ETHICS. The commissioner[, with
guidance from the public insurance adjusters examination advisory
committee,] by rule shall adopt:
(1) a code of ethics for public insurance adjusters
that fosters the education of public insurance adjusters concerning
the ethical, legal, and business principles that should govern
their conduct;
(2) recommendations regarding the solicitation of the
adjustment of losses by public insurance adjusters; and
(3) any other principles of conduct or procedures that
the commissioner considers necessary and reasonable.
SECTION 2.007. Subsection (a), Section 2154.052,
Occupations Code, is amended to read as follows:
(a) The commissioner:
(1) shall administer this chapter through the state
fire marshal; and
(2) may issue rules to administer this chapter [in
compliance with Section 2154.054].
SECTION 2.008. The following laws are repealed:
(1) Subsection (d), Article 3.70-3D, Insurance Code,
as effective on appropriation in accordance with Section 5, Chapter
1457 (H.B. 3021), Acts of the 76th Legislature, Regular Session,
1999;
(2) Chapter 523, Insurance Code;
(3) Section 524.061, Insurance Code;
(4) the heading to Subchapter M, Chapter 843,
Insurance Code;
(5) Sections 843.435, 843.436, 843.437, 843.438,
843.439, and 843.440, Insurance Code;
(6) Chapter 1212, Insurance Code;
(7) Subdivision (2), Section 1660.002, Insurance
Code;
(8) Subchapter B, Chapter 1660, Insurance Code;
(9) Subsection (c), Section 1660.101, Insurance Code;
(10) Sections 4002.004, 4004.002, 4101.006, and
4102.059, Insurance Code;
(11) Subsections (c) and (d), Section 4201.003,
Insurance Code;
(12) Subchapter C, Chapter 6001, Insurance Code;
(13) Subchapter C, Chapter 6002, Insurance Code;
(14) Subchapter C, Chapter 6003, Insurance Code;
(15) Section 2154.054, Occupations Code; and
(16) Subsection (c), Section 2154.055, Occupations
Code.
SECTION 2.009. (a) The following boards, committees,
councils, and task forces are abolished on the effective date of
this Act:
(1) the consumer assistance program for health
maintenance organizations advisory committee;
(2) the executive committee of the market assistance
program for residential property insurance;
(3) the TexLink to Health Coverage Program task force;
(4) the Health Maintenance Organization Solvency
Surveillance Committee;
(5) the technical advisory committee on claims
processing;
(6) the technical advisory committee on electronic
data exchange;
(7) the examination of license applicants advisory
board;
(8) the advisory council on continuing education for
insurance agents;
(9) the insurance adjusters examination advisory
board;
(10) the public insurance adjusters examination
advisory committee;
(11) the utilization review agents advisory
committee;
(12) the fire extinguisher advisory council;
(13) the fire detection and alarm devices advisory
council;
(14) the fire protection advisory council; and
(15) the fireworks advisory council.
(b) All powers, duties, obligations, rights, contracts,
funds, records, and real or personal property of a board,
committee, council, or task force listed under Subsection (a) of
this section shall be transferred to the Texas Department of
Insurance not later than February 28, 2012.
SECTION 2.010. The changes in law made by this Act by
repealing Sections 523.003 and 843.439, Insurance Code, apply only
to a cause of action that accrues on or after the effective date of
this Act. A cause of action that accrues before the effective date
of this Act is governed by the law in effect immediately before that
date, and that law is continued in effect for that purpose.
ARTICLE 3. RATE REGULATION
SECTION 3.001. Section 2251.101, Insurance Code, is amended
to read as follows:
Sec. 2251.101. RATE FILINGS AND SUPPORTING INFORMATION.
(a) Except as provided by Subchapter D, for risks written in this
state, each insurer shall file with the commissioner all rates,
applicable rating manuals, supplementary rating information, and
additional information as required by the commissioner. An insurer
may use a rate filed under this subchapter on and after the date the
rate is filed.
(b) The commissioner by rule shall:
(1) determine the information required to be included
in the filing, including:
(A) [(1)] categories of supporting information
and supplementary rating information;
(B) [(2)] statistics or other information to
support the rates to be used by the insurer, including information
necessary to evidence that the computation of the rate does not
include disallowed expenses; and
(C) [(3)] information concerning policy fees,
service fees, and other fees that are charged or collected by the
insurer under Section 550.001 or 4005.003; and
(2) prescribe the process through which the department
requests supplementary rating information and supporting
information under this section, including:
(A) the number of times the department may make a
request for information; and
(B) the types of information the department may
request when reviewing a rate filing.
SECTION 3.002. Section 2251.103, Insurance Code, is amended
to read as follows:
Sec. 2251.103. COMMISSIONER ACTION CONCERNING [DISAPPROVAL
OF RATE IN] RATE FILING NOT YET IN EFFECT; HEARING AND ANALYSIS.
(a) Not later than the earlier of the date the rate takes effect or
the 30th day after the date a rate is filed with the department
under Section 2251.101, the [The] commissioner shall disapprove the
[a] rate if the commissioner determines that the rate [filing made
under this chapter] does not comply with the requirements of this
chapter [meet the standards established under Subchapter B].
(b) Except as provided by Subsection (c), if a rate has not
been disapproved by the commissioner before the expiration of the
30-day period described by Subsection (a), the rate is not
considered disapproved under this section.
(c) For good cause, the commissioner may, on the expiration
of the 30-day period described by Subsection (a), extend the period
for disapproval of a rate for one additional 30-day period. The
commissioner and the insurer may not by agreement extend the 30-day
period described by Subsection (a) or this subsection.
(d) If the commissioner disapproves a rate under this
section [filing], the commissioner shall issue an order specifying
in what respects the rate [filing] fails to meet the requirements of
this chapter.
(e) An insurer that files a rate that is disapproved under
this section [(c) The filer] is entitled to a hearing on written
request made to the commissioner not later than the 30th day after
the date the order disapproving the rate [filing] takes effect.
(f) The department shall track, compile, and routinely
analyze the factors that contribute to the disapproval of rates
under this section.
SECTION 3.003. Subchapter C, Chapter 2251, Insurance Code,
is amended by adding Section 2251.1031 to read as follows:
Sec. 2251.1031. REQUESTS FOR ADDITIONAL INFORMATION.
(a) If the department determines that the information filed by an
insurer under this subchapter or Subchapter D is incomplete or
otherwise deficient, the department may request additional
information from the insurer.
(b) If the department requests additional information from
the insurer during the 30-day period described by Section
2251.103(a) or 2251.153(a) or under a second 30-day period
described by Section 2251.103(c) or 2251.153(c), as applicable, the
time between the date the department submits the request to the
insurer and the date the department receives the information
requested is not included in the computation of the first 30-day
period or the second 30-day period, as applicable.
(c) For purposes of this section, the date of the
department's submission of a request for additional information is
the earlier of:
(1) the date of the department's electronic mailing or
documented telephone call relating to the request for additional
information; or
(2) the postmarked date on the department's letter
relating to the request for additional information.
(d) The department shall track, compile, and routinely
analyze the volume and content of requests for additional
information made under this section to ensure that all requests for
additional information are fair and reasonable.
SECTION 3.004. The heading to Section 2251.104, Insurance
Code, is amended to read as follows:
Sec. 2251.104. COMMISSIONER DISAPPROVAL OF RATE IN EFFECT;
HEARING.
SECTION 3.005. Section 2251.107, Insurance Code, is amended
to read as follows:
Sec. 2251.107. PUBLIC [INSPECTION OF] INFORMATION.
(a) Each filing made, and any supporting information filed, under
this chapter is open to public inspection as of the date of the
filing.
(b) Each year the department shall make available to the
public information concerning the department's general process and
methodology for rate review under this chapter, including factors
that contribute to the disapproval of a rate. Information provided
under this subsection must be general in nature and may not reveal
proprietary or trade secret information of any insurer.
SECTION 3.006. Section 2251.151, Insurance Code, is amended
by adding Subsections (c-1) and (f) and amending Subsection (e) to
read as follows:
(c-1) If the commissioner requires an insurer to file the
insurer's rates under this section, the commissioner shall
periodically assess whether the conditions described by Subsection
(a) continue to exist. If the commissioner determines that the
conditions no longer exist, the commissioner shall issue an order
excusing the insurer from filing the insurer's rates under this
section.
(e) If the commissioner requires an insurer to file the
insurer's rates under this section, the commissioner shall issue an
order specifying the commissioner's reasons for requiring the rate
filing and explaining any steps the insurer must take and any
conditions the insurer must meet in order to be excused from filing
the insurer's rates under this section. An affected insurer is
entitled to a hearing on written request made to the commissioner
not later than the 30th day after the date the order is issued.
(f) The commissioner by rule shall define:
(1) the financial conditions and rating practices that
may subject an insurer to this section under Subsection (a)(1); and
(2) the process by which the commissioner determines
that a statewide insurance emergency exists under Subsection
(a)(2).
SECTION 3.007. Section 2251.156, Insurance Code, is amended
to read as follows:
Sec. 2251.156. RATE FILING DISAPPROVAL BY COMMISSIONER;
HEARING. (a) If the commissioner disapproves a rate filing under
Section 2251.153(a)(2), the commissioner shall issue an order
disapproving the filing in accordance with Section 2251.103(d)
[2251.103(b)].
(b) An insurer whose rate filing is disapproved is entitled
to a hearing in accordance with Section 2251.103(e) [2251.103(c)].
(c) The department shall track precedents related to
disapprovals of rates under this subchapter to ensure uniform
application of rate standards by the department.
SECTION 3.008. Section 2254.003, Insurance Code, is amended
by amending Subsection (a) and adding Subsections (a-1), (a-2), and
(a-3) to read as follows:
(a) This section applies to a rate for personal automobile
insurance or residential property insurance filed on or after the
effective date of Chapter 206, Acts of the 78th Legislature,
Regular Session, 2003.
(a-1) If the department provides an insurer with formal
written notice that a rate is excessive or unfairly discriminatory,
then the insurer may file a new rate or take other corrective action
to substantially address the department's concerns. The new rate
or other corrective action must be filed on or before the 60th day
following the date of formal written notice. At the commissioner's
discretion, the commissioner may extend the deadline to file by an
additional 30 days. If the department accepts the new rate or other
corrective action, then the insurer shall, according to
commissioner order, refund or issue a premium discount directly to
each affected policyholder on the portion of the premium found to be
excessive or unfairly discriminatory, plus interest on that amount.
The interest rate to be paid on refunds or discounts under this
subsection is the sum of six percent and the prime rate for the
calendar year in which formal written notice is given. For purposes
of this subsection, the prime rate is the prime rate as published in
The Wall Street Journal for the first day of the calendar year that
is not a Saturday, Sunday, or legal holiday.
(a-2) If the insurer does not file or take, or the
department does not accept, a new rate or other corrective action as
provided under Subsection (a-1), and the commissioner issues an
order disapproving the rate as excessive or unfairly discriminatory
under Section 2251.104, then the insurer must refund or issue a
premium discount directly to each affected policyholder on the
portion of the premium found to be excessive or unfairly
discriminatory, plus interest on that amount. The interest rate to
be paid on refunds or discounts under this subsection is 18 percent.
An insurer is not required to pay any interest penalty if the
insurer prevails in an appeal of the commissioner's order under
Subchapter D, Chapter 36.
(a-3) The period for the refund and interest begins on the
date the department first provides the insurer with formal written
notice that the insurer's filed rate is excessive or unfairly
discriminatory, and interest continues to accrue until the refund
or discount is paid or issued.
SECTION 3.009. Section 2251.154, Insurance Code, is
repealed.
SECTION 3.010. Subsection (c), Section 2254.003, Insurance
Code, is repealed.
SECTION 3.011. Section 2251.103, Insurance Code, as amended
by this Act, and Section 2251.1031, Insurance Code, as added by this
Act, apply only to a rate filing made on or after the effective date
of this Act. A rate filing made before the effective date of this
Act is governed by the law in effect at the time the filing was made,
and that law is continued in effect for that purpose.
SECTION 3.012. Subsection (c-1), Section 2251.151,
Insurance Code, as added by this Act, applies to an insurer that is
required to file the insurer's rates for approval under Section
2251.151, Insurance Code, on or after the effective date of this
Act, regardless of when the order requiring the insurer to file the
insurer's rates for approval under that section is first issued.
SECTION 3.013. Subsection (e), Section 2251.151, Insurance
Code, as amended by this Act, applies only to an order issued by the
commissioner of insurance on or after the effective date of this
Act. An order of the commissioner issued before the effective date
of this Act is governed by the law in effect on the date the order
was issued, and that law is continued in effect for that purpose.
ARTICLE 4. STATE FIRE MARSHAL'S OFFICE
SECTION 4.001. Section 417.008, Government Code, is amended
by adding Subsection (f) to read as follows:
(f) The commissioner by rule shall prescribe a reasonable
fee for an inspection performed by the state fire marshal that may
be charged to a property owner or occupant who requests the
inspection, as the commissioner considers appropriate. In
prescribing the fee, the commissioner shall consider the overall
cost to the state fire marshal to perform the inspections,
including the approximate amount of time the staff of the state fire
marshal needs to perform an inspection, travel costs, and other
expenses.
SECTION 4.002. Section 417.0081, Government Code, is
amended to read as follows:
Sec. 417.0081. INSPECTION OF CERTAIN STATE-OWNED OR
STATE-LEASED BUILDINGS. (a) The state fire marshal, at the
commissioner's direction, shall periodically inspect public
buildings under the charge and control of the Texas Facilities
[General Services] Commission and buildings leased for the use of a
state agency by the Texas Facilities Commission.
(b) For the purpose of determining a schedule for conducting
inspections under this section, the commissioner by rule shall
adopt guidelines for assigning potential fire safety risk to
state-owned and state-leased buildings. Rules adopted under this
subsection must provide for the inspection of each state-owned and
state-leased building to which this section applies, regardless of
how low the potential fire safety risk of the building may be.
(c) On or before January 1 of each year, the state fire
marshal shall report to the governor, lieutenant governor, speaker
of the house of representatives, and appropriate standing
committees of the legislature regarding the state fire marshal's
findings in conducting inspections under this section.
SECTION 4.003. Section 417.0082, Government Code, is
amended to read as follows:
Sec. 417.0082. PROTECTION OF CERTAIN STATE-OWNED OR
STATE-LEASED BUILDINGS AGAINST FIRE HAZARDS. (a) The state fire
marshal, under the direction of the commissioner, shall take any
action necessary to protect a public building under the charge and
control of the Texas Facilities [Building and Procurement]
Commission, and the building's occupants, and the occupants of a
building leased for the use of a state agency by the Texas
Facilities Commission, against an existing or threatened fire
hazard. The state fire marshal and the Texas Facilities [Building
and Procurement] Commission shall include the State Office of Risk
Management in all communication concerning fire hazards.
(b) The commissioner, the Texas Facilities [Building and
Procurement] Commission, and the risk management board shall make
and each adopt by rule a memorandum of understanding that
coordinates the agency's duties under this section.
SECTION 4.004. Section 417.010, Government Code, is amended
to read as follows:
Sec. 417.010. DISCIPLINARY AND ENFORCEMENT ACTIONS;
ADMINISTRATIVE PENALTIES [ALTERNATE REMEDIES]. (a) This section
applies to each person and firm licensed, registered, or otherwise
regulated by the department through the state fire marshal,
including:
(1) a person regulated under Title 20, Insurance Code;
and
(2) a person licensed under Chapter 2154, Occupations
Code.
(b) The commissioner by rule shall delegate to the state
fire marshal the authority to take disciplinary and enforcement
actions, including the imposition of administrative penalties in
accordance with this section on a person regulated under a law
listed under Subsection (a) who violates that law or a rule or order
adopted under that law. In the rules adopted under this subsection,
the commissioner shall:
(1) specify which types of disciplinary and
enforcement actions are delegated to the state fire marshal; and
(2) outline the process through which the state fire
marshal may, subject to Subsection (e), impose administrative
penalties or take other disciplinary and enforcement actions.
(c) The commissioner by rule shall adopt a schedule of
administrative penalties for violations subject to a penalty under
this section to ensure that the amount of an administrative penalty
imposed is appropriate to the violation. The department shall
provide the administrative penalty schedule to the public on
request. The amount of an administrative penalty imposed under
this section must be based on:
(1) the seriousness of the violation, including:
(A) the nature, circumstances, extent, and
gravity of the violation; and
(B) the hazard or potential hazard created to the
health, safety, or economic welfare of the public;
(2) the economic harm to the public interest or public
confidence caused by the violation;
(3) the history of previous violations;
(4) the amount necessary to deter a future violation;
(5) efforts to correct the violation;
(6) whether the violation was intentional; and
(7) any other matter that justice may require.
(d) In [The state fire marshal, in] the enforcement of a law
that is enforced by or through the state fire marshal, the state
fire marshal may, in lieu of cancelling, revoking, or suspending a
license or certificate of registration, impose on the holder of the
license or certificate of registration an order directing the
holder to do one or more of the following:
(1) cease and desist from a specified activity;
(2) pay an administrative penalty imposed under this
section [remit to the commissioner within a specified time a
monetary forfeiture not to exceed $10,000 for each violation of an
applicable law or rule]; or [and]
(3) make restitution to a person harmed by the holder's
violation of an applicable law or rule.
(e) The state fire marshal shall impose an administrative
penalty under this section in the manner prescribed for imposition
of an administrative penalty under Subchapter B, Chapter 84,
Insurance Code. The state fire marshal may impose an
administrative penalty under this section without referring the
violation to the department for commissioner action.
(f) An affected person may dispute the imposition of the
penalty or the amount of the penalty imposed in the manner
prescribed by Subchapter C, Chapter 84, Insurance Code. Failure to
pay an administrative penalty imposed under this section is subject
to enforcement by the department.
ARTICLE 5. TITLE INSURANCE
SECTION 5.001. Subsection (c), Section 2703.153, Insurance
Code, is amended to read as follows:
(c) Not less frequently than once every five years, the
commissioner shall evaluate the information required under this
section to determine whether the department needs additional or
different information or no longer needs certain information to
promulgate rates. If the department requires a title insurance
company or title insurance agent to include new or different
information in the statistical report, that information may be
considered by the commissioner in fixing premium rates if the
information collected is reasonably credible for the purposes for
which the information is to be used.
ARTICLE 6. ELECTRONIC TRANSACTIONS
SECTION 6.001. Subtitle A, Title 2, Insurance Code, is
amended by adding Chapter 35 to read as follows:
CHAPTER 35. ELECTRONIC TRANSACTIONS
Sec. 35.001. DEFINITIONS. In this chapter:
(1) "Conduct business" includes engaging in or
transacting any business in which a regulated entity is authorized
to engage or is authorized to transact under the law of this state.
(2) "Regulated entity" means each insurer or other
organization regulated by the department, including:
(A) a domestic or foreign, stock or mutual, life,
health, or accident insurance company;
(B) a domestic or foreign, stock or mutual, fire
or casualty insurance company;
(C) a Mexican casualty company;
(D) a domestic or foreign Lloyd's plan;
(E) a domestic or foreign reciprocal or
interinsurance exchange;
(F) a domestic or foreign fraternal benefit
society;
(G) a domestic or foreign title insurance
company;
(H) an attorney's title insurance company;
(I) a stipulated premium company;
(J) a nonprofit legal service corporation;
(K) a health maintenance organization;
(L) a statewide mutual assessment company;
(M) a local mutual aid association;
(N) a local mutual burial association;
(O) an association exempt under Section 887.102;
(P) a nonprofit hospital, medical, or dental
service corporation, including a company subject to Chapter 842;
(Q) a county mutual insurance company; and
(R) a farm mutual insurance company.
Sec. 35.002. CONSTRUCTION WITH OTHER LAW.
(a) Notwithstanding any other provision of this code, a regulated
entity may conduct business electronically in accordance with this
chapter and the rules adopted under Section 35.004.
(b) To the extent of any conflict between another provision
of this code and a provision of this chapter, the provision of this
chapter controls.
Sec. 35.003. ELECTRONIC TRANSACTIONS AUTHORIZED. A
regulated entity may conduct business electronically to the same
extent that the entity is authorized to conduct business otherwise
if before the conduct of business each party to the business agrees
to conduct the business electronically.
Sec. 35.004. RULES. (a) The commissioner shall adopt
rules necessary to implement and enforce this chapter.
(b) The rules adopted by the commissioner under this section
must include rules that establish minimum standards with which a
regulated entity must comply in the entity's electronic conduct of
business with other regulated entities and consumers.
SECTION 6.002. Chapter 35, Insurance Code, as added by this
Act, applies only to business conducted on or after the effective
date of this Act. Business conducted before the effective date of
this Act is governed by the law in effect on the date the business
was conducted, and that law is continued in effect for that purpose.
ARTICLE 7. DATA COLLECTION
SECTION 7.001. Chapter 38, Insurance Code, is amended by
adding Subchapter I to read as follows:
SUBCHAPTER I. DATA COLLECTION RELATING TO
CERTAIN PERSONAL LINES OF INSURANCE
Sec. 38.401. APPLICABILITY OF SUBCHAPTER. This subchapter
applies only to an insurer who writes personal automobile insurance
or residential property insurance in this state.
Sec. 38.402. FILING OF CERTAIN CLAIMS INFORMATION.
(a) The commissioner shall require each insurer described by
Section 38.401 to file with the commissioner aggregate personal
automobile insurance and residential property insurance claims
information for the period covered by the filing, including the
number of claims:
(1) filed during the reporting period;
(2) pending on the last day of the reporting period,
including pending litigation;
(3) closed with payment during the reporting period;
(4) closed without payment during the reporting
period; and
(5) carrying over from the reporting period
immediately preceding the current reporting period.
(b) An insurer described by Section 38.401 must file the
information described by Subsection (a) on an annual basis. The
information filed must be broken down by quarter.
Sec. 38.403. PUBLIC INFORMATION. (a) The department shall
post the data contained in claims information filings under Section
38.402 on the department's Internet website. The commissioner by
rule may establish a procedure for posting data under this
subsection that includes a description of the data that must be
posted and the manner in which the data must be posted.
(b) Information provided under this section must be
aggregate data by line of insurance for each insurer and may not
reveal proprietary or trade secret information of any insurer.
Sec. 38.404. RULES. The commissioner may adopt rules
necessary to implement this subchapter.
ARTICLE 8. STUDY ON RATE FILING AND APPROVAL
REQUIREMENTS FOR CERTAIN INSURERS WRITING IN
UNDERSERVED AREAS; UNDERSERVED AREA DESIGNATION
SECTION 8.001. Section 2004.002, Insurance Code, is amended
by amending Subsection (b) and adding Subsections (c) and (d) to
read as follows:
(b) In determining which areas to designate as underserved,
the commissioner shall consider:
(1) whether residential property insurance is not
reasonably available to a substantial number of owners of insurable
property in the area; [and]
(2) whether access to the full range of coverages and
policy forms for residential property insurance does not reasonably
exist; and
(3) any other relevant factor as determined by the
commissioner.
(c) The commissioner shall determine which areas to
designate as underserved under this section not less than once
every six years.
(d) The commissioner shall conduct a study concerning the
accuracy of current designations of underserved areas under this
section for the purpose of increasing and improving access to
insurance in those areas not less than once every six years.
SECTION 8.002. Subchapter F, Chapter 2251, Insurance Code,
is amended by adding Section 2251.253 to read as follows:
Sec. 2251.253. REPORT. (a) The commissioner shall conduct
a study concerning the impact of increasing the percentage of the
total amount of premiums collected by insurers for residential
property insurance under Section 2251.252.
(b) The commissioner shall report the results of the study
in the biennial report required under Section 32.022.
(c) This section expires September 1, 2013.
ARTICLE 9. TRANSITION; EFFECTIVE DATE
SECTION 9.001. Except as otherwise provided by this Act,
this Act applies only to an insurance policy, contract, or evidence
of coverage that is delivered, issued for delivery, or renewed on or
after January 1, 2012. A policy, contract, or evidence of coverage
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 9.002. This Act takes effect September 1, 2011.
* * * * *