82R690 KCR-D
By: Lucio S.B. No. 96
A BILL TO BE ENTITLED
AN ACT
relating to withdrawal and restriction plans for certain insurers.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 827.001, Insurance Code, is amended by
amending Subdivision (1) and adding Subdivision (3) to read as
follows:
(1) "Insurer" means an insurance company or other
legal entity authorized to engage in the business of insurance in
this state, including a fraternal benefit society, a reciprocal or
interinsurance exchange, a Lloyd's plan, a farm mutual insurance
company, and a county mutual insurance company. The term includes
an affiliate. The term does not include [a farm mutual insurance
company or] an eligible surplus lines insurer regulated under
Chapter 981.
(3) "Residential property insurance" and "personal
automobile insurance" have the meanings assigned by Section
2254.001.
SECTION 2. Section 827.006, Insurance Code, is amended to
read as follows:
Sec. 827.006. [RESUMPTION OF] WRITING INSURANCE AFTER
COMPLETE WITHDRAWAL. An insurer that withdraws from writing
residential property insurance or personal automobile [all lines
of] insurance in this state may not, without the approval of the
commissioner, write any line of [resume writing] insurance in this
state before the fifth anniversary of the date of withdrawal.
SECTION 3. Section 827.007, Insurance Code, is amended to
read as follows:
Sec. 827.007. PENALTIES. The commissioner may impose
sanctions [the civil penalties] under Chapter 82 on an insurer that
fails to comply in any manner with this chapter [obtain the
commissioner's approval before the insurer:
[(1) withdraws from writing a line of insurance in
this state; or
[(2) reduces the insurer's total annual premium volume
by 75 percent or more in any year].
SECTION 4. Sections 827.008(a) and (b), Insurance Code, are
amended to read as follows:
(a) Before an insurer[, in response to a catastrophic
natural event that occurred during the preceding six months,] may
restrict writing new residential property insurance or personal
automobile insurance business in this state or a rating territory
[in a line of personal automobile or residential property
insurance], the insurer must file a proposed restriction plan with
the commissioner for the commissioner's review and approval. The
commissioner may not approve a restriction plan in which the
insurer proposes to increase the relative number of residential
property insurance policies issued by the insurer that offer
substantially less coverage than the average residential property
insurance policy previously issued by the insurer.
(b) The commissioner may modify, restrict, or limit a
restriction plan under this section as necessary if the
commissioner finds that a line of insurance subject to the
restriction plan is not offered in this state in a quantity or
manner to adequately cover the risks in this state or to adequately
protect the residents of this state and policyholders in this state
[in light of the impact of the catastrophic natural event]. The
commissioner may by order set the date on which the insurer's
restriction begins.
SECTION 5. Section 827.008(c), Insurance Code, is repealed.
SECTION 6. The change in law made by this Act applies only
to a withdrawal or restriction plan filed with the Texas Department
of Insurance on or after the effective date of this Act. A
withdrawal or restriction plan filed with the Texas Department of
Insurance before the effective date of this Act is covered by the
law in effect at the time the withdrawal or restriction plan was
filed, and that law is continued in effect for that purpose.
SECTION 7. This Act takes effect September 1, 2011.