Texas 2013 - 83rd Regular

Texas House Bill HB1731 Compare Versions

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1	1	83R6627 KKR-D
2	2	By: McClendon H.B. No. 1731
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to a mile-based rating plan for personal automobile
8	8	insurance.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Chapter 2251, Insurance Code, is amended by
11	11	adding Subchapter H to read as follows:
12	12	SUBCHAPTER H. MILE-BASED AUTOMOBILE INSURANCE RATING PLANS
13	13	Sec. 2251.351. DEFINITION. In this subchapter, "mile-based
14	14	automobile insurance" means personal automobile insurance that is
15	15	rated using a rating plan for which a unit of exposure is one mile
16	16	driven by the insured.
17	17	Sec. 2251.352. APPLICABILITY OF OTHER LAW. (a)
18	18	Subchapters A, B, C, and D apply to mile-based automobile insurance
19	19	written under this subchapter.
20	20	(b) An insurer shall make separate filings under Subchapter
21	21	C for mile-based automobile insurance written under this subchapter
22	22	and other automobile insurance written in this state.
23	23	Sec. 2251.353. MILE-BASED AUTOMOBILE INSURANCE AUTHORIZED.
24	24	(a) An insurer authorized to write personal automobile insurance
25	25	in this state may write mile-based automobile insurance in this
26	26	state.
27	27	(b) An insurer that writes mile-based automobile insurance
28	28	in this state may also write personal automobile insurance in this
29	29	state using a rating plan for which a unit of exposure is a unit
30	30	other than the number of miles driven by the insured and that
31	31	complies with this chapter.
32	32	(c) An insurer may require a person purchasing personal
33	33	automobile insurance to use the same type of rating plan for all
34	34	vehicles covered under the person's personal automobile insurance
35	35	policy.
36	36	Sec. 2251.354. COMMISSIONER POWERS AND DUTIES; RULES.
37	37	(a) The commissioner shall compile information regarding:
38	38	(1) the number of insurers writing mile-based
39	39	automobile insurance in this state;
40	40	(2) the geographic areas of this state in which
41	41	mile-based automobile insurance is written; and
42	42	(3) the premium rates for mile-based automobile
43	43	insurance compared to personal automobile insurance rated on
44	44	another basis.
45	45	(b) The commissioner shall adopt rules as necessary or
46	46	appropriate to govern the use of mile-based automobile insurance
47	47	under this subchapter, including rules regarding:
48	48	(1) prepayment arrangements;
49	49	(2) proof of financial responsibility; and
50	50	(3) auditing of the odometer of a vehicle for the
51	51	purpose of determining coverage and number of miles driven.
52	52	SECTION 2. Section 1952.054, Insurance Code, is amended to
53	53	read as follows:
54	54	Sec. 1952.054. REQUIRED DISCLOSURES REGARDING SHORT-TERM
55	55	POLICIES. (a) An insurance policy or other document evidencing
56	56	proof of purchase of a personal automobile insurance policy, other
57	57	than a mile-based automobile insurance policy written under
58	58	Subchapter H, Chapter 2251, that is written for a term of less than
59	59	30 days or a mile-based automobile insurance policy written under
60	60	Subchapter H, Chapter 2251, that is written for fewer than 1,000
61	61	miles may not be used to obtain an original or renewal driver's
62	62	license, an automobile registration or license plates, or a motor
63	63	vehicle inspection certificate. An insurance policy or other
64	64	document described by this subsection must contain the following
65	65	statement:
66	66	TEXAS LAW PROHIBITS USE OF THIS DOCUMENT TO OBTAIN A
67	67	MOTOR VEHICLE INSPECTION CERTIFICATE, AN ORIGINAL OR
68	68	RENEWAL DRIVER'S LICENSE, OR AN AUTOMOBILE
69	69	REGISTRATION OR LICENSE PLATES.
70	70	(b) Before accepting any premium or fee for a personal
71	71	automobile insurance policy or binder for a term of less than 30
72	72	days, other than a policy or binder for a mile-based automobile
73	73	insurance policy written under Subchapter H, Chapter 2251, or any
74	74	premium or fee for a mile-based automobile insurance policy written
75	75	under Subchapter H, Chapter 2251, that is written for fewer than
76	76	1,000 miles, an agent or insurer must make the following written
77	77	disclosure to the applicant or insured:
78	78	TEXAS LAW PROHIBITS USE OF THIS POLICY OR BINDER TO
79	79	OBTAIN A MOTOR VEHICLE INSPECTION CERTIFICATE, AN
80	80	ORIGINAL OR RENEWAL DRIVER'S LICENSE, OR AN AUTOMOBILE
81	81	REGISTRATION OR LICENSE PLATES.
82	82	SECTION 3. Section 2251.001, Insurance Code, is amended to
83	83	read as follows:
84	84	Sec. 2251.001. PURPOSE. The purposes of this subchapter
85	85	and Subchapters B, C, D, [and] E, and H are to:
86	86	(1) promote the public welfare by regulating insurance
87	87	rates to prohibit excessive, inadequate, or unfairly
88	88	discriminatory rates;
89	89	(2) promote the availability of insurance;
90	90	(3) promote price competition among insurers to
91	91	provide rates and premiums that are responsive to competitive
92	92	market conditions;
93	93	(4) prohibit price-fixing agreements and other
94	94	anticompetitive behavior by insurers; and
95	95	(5) provide regulatory procedures for the maintenance
96	96	of appropriate information reporting systems.
97	97	SECTION 4. Sections 2251.003(a) and (b), Insurance Code,
98	98	are amended to read as follows:
99	99	(a) This subchapter and Subchapters B, C, D, [and] E, and H
100	100	apply to:
101	101	(1) an insurer to which Article 5.13 applies, other
102	102	than the Texas Windstorm Insurance Association, the FAIR Plan
103	103	Association, and the Texas Automobile Insurance Plan Association;
104	104	and
105	105	(2) except as provided by Subsection (c), a Lloyd's
106	106	plan, reciprocal or interinsurance exchange, and county mutual
107	107	insurance company with respect to the lines of insurance described
108	108	by Subsection (b).
109	109	(b) This subchapter and Subchapters B, C, D, [and] E, and H
110	110	apply to all lines of the following kinds of insurance written under
111	111	an insurance policy or contract issued by an insurer authorized to
112	112	engage in the business of insurance in this state:
113	113	(1) general liability insurance;
114	114	(2) residential and commercial property insurance,
115	115	including farm and ranch insurance and farm and ranch owners
116	116	insurance;
117	117	(3) personal and commercial casualty insurance,
118	118	except as provided by Section 2251.004;
119	119	(4) medical professional liability insurance;
120	120	(5) fidelity, guaranty, and surety bonds other than
121	121	criminal court appearance bonds;
122	122	(6) personal umbrella insurance;
123	123	(7) personal liability insurance;
124	124	(8) guaranteed auto protection (GAP) insurance;
125	125	(9) involuntary unemployment insurance;
126	126	(10) financial guaranty insurance;
127	127	(11) inland marine insurance;
128	128	(12) rain insurance;
129	129	(13) hail insurance on farm crops;
130	130	(14) personal and commercial automobile insurance;
131	131	(15) multi-peril insurance; and
132	132	(16) identity theft insurance issued under Chapter
133	133	706.
134	134	SECTION 5. Section 32.102(a), Insurance Code, is amended to
135	135	read as follows:
136	136	(a) The department, in conjunction with the office of public
137	137	insurance counsel, shall establish and maintain a single Internet
138	138	website that provides information to enable consumers to make
139	139	informed decisions relating to the purchase of residential property
140	140	insurance and personal automobile insurance. The website must
141	141	include:
142	142	(1) a description of each type of residential property
143	143	insurance policy and personal automobile insurance policy issued in
144	144	this state, including a comparison of the coverage, exclusions, and
145	145	restrictions of each policy that allows a side-by-side comparison
146	146	of the features of the policy forms;
147	147	(2) a listing of each insurer writing residential
148	148	property insurance or personal automobile insurance in this state,
149	149	indexed by each county or zip code in which the insurer is actively
150	150	writing that insurance, and a profile of the insurer that includes:
151	151	(A) contact information for the insurer,
152	152	including the insurer's full name, address, and telephone number
153	153	and the insurer's fax number and e-mail address, if available;
154	154	(B) information on rates charged by the insurer,
155	155	including:
156	156	(i) sample rates for different policyholder
157	157	profiles in each county or zip code; and
158	158	(ii) the percentage by which the sample
159	159	rate has fallen or risen due to filings in the previous 12, 24, and
160	160	36 months;
161	161	(C) a list of policy forms, exclusions,
162	162	endorsements, and discounts offered by the insurer;
163	163	(D) an indication of whether the insurer uses
164	164	credit scoring in underwriting, rating, or tiering, and a link to
165	165	the insurer's credit model or a link explaining how to request the
166	166	insurer's credit model;
167	167	(E) the insurer's financial rating determined by
168	168	A. M. Best or similar rating organization and an explanation of the
169	169	meaning and importance of the rating;
170	170	(F) a complaint ratio or similar complaint rating
171	171	system for the insurer for each of the previous three years and an
172	172	explanation of the meaning of the rating system; and
173	173	(G) information, other than information made
174	174	confidential by law, on the insurer's regulatory and administrative
175	175	experience with the department, the office of public insurance
176	176	counsel, and insurance regulatory authorities in other states;
177	177	[and]
178	178	(3) if feasible, as determined by the commissioner and
179	179	the public insurance counsel:
180	180	(A) a side-by-side comparison of credit scoring
181	181	models, including factors, key variables, and weights, of
182	182	residential property insurers in this state; and
183	183	(B) a side-by-side comparison of credit scoring
184	184	models, including factors, key variables, and weights, of private
185	185	passenger automobile insurers in this state; and
186	186	(4) information that is compiled by the commissioner
187	187	under Section 2251.354 concerning mile-based automobile insurance
188	188	policies written under Subchapter H, Chapter 2251, and is not
189	189	otherwise described by this subsection.
190	190	SECTION 6. The change in law made by this Act applies only
191	191	to a personal automobile insurance policy that is delivered, issued
192	192	for delivery, or renewed on or after January 1, 2014. An insurance
193	193	policy that is delivered, issued for delivery, or renewed before
194	194	January 1, 2014, is covered by the law in effect at the time the
195	195	policy was delivered, issued for delivery, or renewed, and that law
196	196	is continued in effect for that purpose.
197	197	SECTION 7. This Act takes effect September 1, 2013.