84R566 PMO-D
By: Hunter H.B. No. 2175
A BILL TO BE ENTITLED
AN ACT
relating to the operation of the Texas Department of Insurance.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 31.004, Insurance Code, is amended by
amending Subsection (a) and adding Subsection (a-1) 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, 2019 [2023].
(a-1) Notwithstanding Section 325.015, Government Code, the
legislature may not continue the department in existence for a
period that exceeds four years. The department is abolished on
September 1 of the fourth calendar year after the year in which the
department was last continued in existence by law as provided by
Chapter 325, Government Code.
SECTION 2. Subchapter C, Chapter 31, Insurance Code, is
amended by adding Section 31.040 to read as follows:
Sec. 31.040. DEFINITION. In this subchapter, "employ"
includes any arrangement under which an individual renders or
performs a service or labor for compensation, including an
individual hired on a part-time or temporary basis or a full-time or
permanent basis.
SECTION 3. Section 31.041, Insurance Code, is amended by
amending Subsections (a) and (b) and adding Subsections (d) and (e)
to read as follows:
(a) Subject to the General Appropriations Act or other law,
the commissioner shall appoint or employ deputies, assistants, and
other personnel as necessary to carry out the powers and duties of
the commissioner and the department under this code, other
insurance laws of this state, and other laws granting jurisdiction
or applicable to the department or the commissioner.
(b) A person appointed or employed under this section must
have the professional, administrative, and insurance experience
necessary to qualify the person for the position to which the person
is appointed or employed.
(d) The commissioner shall comply with Section 31.046
before appointing or employing an individual.
(e) The commissioner shall appoint or employ an individual
based primarily on criteria established by this section.
SECTION 4. Subchapter C, Chapter 31, Insurance Code, is
amended by adding Section 31.046 to read as follows:
Sec. 31.046. JUSTIFICATION FOR APPOINTMENTS AND
EMPLOYMENT. (a) The commissioner shall justify in writing the
appointment or employment of an individual as an officer or
employee of the department.
(b) The written justification described by Subsection (a)
must:
(1) demonstrate that the appointment or employment of
the individual complies with Sections 31.041 and 31.043; and
(2) disclose the departmental workload that
necessitates the creation or continuation of the position filled by
the individual.
SECTION 5. Subchapter A, Chapter 32, Insurance Code, is
amended by adding Section 32.005 to read as follows:
Sec. 32.005. RECORD OF EXPENDITURES. (a) The department
shall conspicuously post on the department's Internet website a
link to the searchable state expenditure database established by
Section 403.024, Government Code, as it relates to expenditures by
the department.
(b) The department shall conspicuously post on the
department's Internet website with respect to an expenditure listed
in the database described by Subsection (a):
(1) a copy of the contract for the expenditure; and
(2) a copy of the payee's financial statement prepared
by a certified public accountant and current at the time the
contract is executed.
SECTION 6. Section 32.102(a), Insurance Code, is amended to
read as follows:
(a) The department, in conjunction with the office of public
insurance counsel, shall establish and maintain a single Internet
website that provides information to enable consumers to make
informed decisions relating to the purchase of residential property
insurance and personal automobile insurance. The website must
include:
(1) a description of each type of residential property
insurance policy and personal automobile insurance policy issued in
this state, including a comparison of the coverage, exclusions, and
restrictions of each policy that allows a side-by-side comparison
of the features of the policy forms;
(2) a listing of each insurer writing residential
property insurance or personal automobile insurance in this state,
indexed by each county or zip code in which the insurer is actively
writing that insurance, and a profile of the insurer that includes:
(A) contact information for the insurer,
including the insurer's full name, address, and telephone number
and the insurer's fax number and e-mail address, if available;
(B) information on rates charged by the insurer,
including:
(i) sample rates for different policyholder
profiles in each county or zip code; and
(ii) the percentage by which the sample
rate has fallen or risen due to filings in the previous 12, 24, and
36 months;
(C) a list of policy forms, exclusions,
endorsements, and discounts offered by the insurer;
(D) an indication of whether the insurer uses
credit scoring in underwriting, rating, or tiering, and a link to
the insurer's credit model or a link explaining how to request the
insurer's credit model;
(E) the insurer's financial rating determined by
A. M. Best or similar rating organization and an explanation of the
meaning and importance of the rating;
(F) a complaint ratio or similar complaint rating
system for the insurer for each of the previous three years and an
explanation of the meaning of the rating system; [and]
(G) information, other than information made
confidential by law, on the insurer's regulatory and administrative
experience with the department, the office of public insurance
counsel, and insurance regulatory authorities in other states; and
(H) a list of all names under which the insurer is
doing business under the insurer's certificate of authority; and
(3) if feasible, as determined by the commissioner and
the public insurance counsel:
(A) a side-by-side comparison of credit scoring
models, including factors, key variables, and weights, of
residential property insurers in this state; and
(B) a side-by-side comparison of credit scoring
models, including factors, key variables, and weights, of private
passenger automobile insurers in this state.
SECTION 7. Chapter 32, Insurance Code, is amended by adding
Subchapter F to read as follows:
SUBCHAPTER F. TRANSPARENCY
Sec. 32.201. APPLICABILITY OF SUBCHAPTER. This subchapter
applies to residential property insurance or personal automobile
insurance policies in this state, including policies issued by a
Lloyd's plan, a reciprocal or interinsurance exchange, a county
mutual insurance company, a farm mutual insurance company, the
Texas Windstorm Insurance Association, the FAIR Plan Association,
and the Texas Automobile Insurance Plan Association.
Sec. 32.202. DEFINITIONS. In this subchapter:
(1) "Contact" means an incident of oral communication
in person, through electronic means, by telephone, or otherwise.
(2) "Individual" means a natural person, acting in an
individual capacity or representing another person or a legal
entity, including a department, agency, or officer of a state or the
federal government, a corporation, a trust, a partnership, an
interest group, or an association.
Sec. 32.203. DISCLOSURE OF CONTACT WITH COMMISSIONER. (a)
The commissioner shall, substantially contemporaneously with the
contact, conspicuously post and maintain on the department's
Internet website a written disclosure of any contact between an
individual and the commissioner if the contact:
(1) occurs while the commissioner is acting within the
course and scope of the commissioner's office as it relates to
residential property insurance or personal automobile insurance;
(2) relates to the business of residential property
insurance or personal automobile insurance; or
(3) involves an individual engaged in the business of
residential property insurance or personal automobile insurance.
(b) The disclosure required by Subsection (a) must include:
(1) the identity of each individual involved in the
contact with the commissioner, and, if acting in a representative
capacity, the identity of each person or entity represented;
(2) the date and time of the contact; and
(3) the subject matter of the contact, if known when
the contact is initiated.
(c) On conclusion of the contact, the commissioner shall
supplement the written disclosure required by Subsection (a) with a
statement of:
(1) the duration of the contact;
(2) the actual subject matter of the contact; and
(3) in detail, all information exchanged during the
contact.
(d) In disclosing the subject matter of the contact, the
commissioner shall specifically identify the order, rule, proposed
rule, bulletin, publication, rate, or procedure, or decision or
proposed decision of or action or proposed action by the
commissioner or the department, if any, that is the subject matter
of the contact.
Sec. 32.204. DISCLOSURE OF CERTAIN CONTACT WITH DEPARTMENT.
(a) With regard to a contact other than a contact described by
Section 32.203 between the department and an individual relating to
a bulletin or a proposed or adopted rule related to an insurance
policy to which this subchapter applies, the department shall,
substantially contemporaneously with the contact, conspicuously
post and maintain on the department's Internet website a written
disclosure of:
(1) the identity of each person representing the
department involved in the contact;
(2) the identity of each other individual involved in
the contact and, if acting in a representative capacity, the
identity of each person or entity represented;
(3) the date and time of the contact; and
(4) each bulletin or proposed or adopted rule that is
the subject matter of the contact, if known at the time contact is
initiated.
(b) On conclusion of the contact, the department shall
supplement the written disclosure required by Subsection (a) with a
statement of:
(1) the duration of the contact;
(2) the identification of each bulletin or proposed or
adopted rule that was the subject matter of the contact; and
(3) in detail, all information exchanged during the
contact.
Sec. 32.205. DISCLOSURE RELATING TO RULEMAKING. With
regard to a rule related to an insurance policy to which this
subchapter applies proposed or adopted by the commissioner, the
department shall include in the notice required under Section
2001.023 or 2008.053, Government Code, and any order adopting the
rule described by Section 2001.033, Government Code:
(1) all information related to the rule disclosed
under Sections 32.203 and 32.204 as of the date of the notice or
order; and
(2) a link to the department's Internet website to
provide public access to the supplemental information related to
the rule required under Sections 32.203(c) and 32.204(b).
Sec. 32.206. DISCLOSURE RELATING TO BULLETINS. The
department shall include in any bulletin related to an insurance
policy to which this subchapter applies issued by the department or
the commissioner:
(1) all information related to the bulletin disclosed
under Sections 32.203 and 32.204 as of the date of the bulletin; and
(2) a link to the department's Internet website to
provide public access to the supplemental information related to
the bulletin required under Sections 32.203(c) and 32.204(b).
Sec. 32.207. DEPARTMENT DISCLOSURES TO INSURED. (a) The
department shall prepare a written notice of a rate change for or
imposition of a surcharge on an insurance policy to which this
subchapter applies.
(b) The notice required by Subsection (a) must include:
(1) an explanation of the rate change or surcharge;
(2) a justification for the rate change or surcharge;
and
(3) an estimate of the annual change in cost to the
insured as a result of the rate change or surcharge.
(c) The department shall notify the insureds affected by the
rate change or surcharge by:
(1) having the notice prepared under Subsection (a)
published in a newspaper of general circulation in each county in
this state in which the last known address of any affected insured
is located; and
(2) mailing by first class prepaid mail the notice
prepared under Subsection (a) to each affected insured at the
insured's last known address provided by the insurer.
Sec. 32.208. PUBLIC DISCLOSURE BY DEPARTMENT. (a) The
department shall conspicuously post and maintain on the
department's Internet website a concise summary of any rate change
for or imposition of a surcharge on an insurance policy to which
this subchapter applies. The summary must disclose:
(1) the geographic or rating area affected by the
filing;
(2) the coverage and, if applicable, the change in
coverage to which the rate filing and supporting information apply;
and
(3) whether the rate filing results in an increase or
decrease of the overall rates for coverage in a specific geographic
or rating area.
(b) The department must post on the department's Internet
website the summary required by Subsection (a) not later than the
10th day after the date the rate change is effective or the
surcharge is imposed, as applicable.
Sec. 32.209. DUTIES OF INSURER. On the request of the
department, an insurer shall provide to the department any
information the department determines is reasonable or necessary to
fulfill the department's duties under this subchapter.
SECTION 8. Chapter 81, Insurance Code, is amended by adding
Section 81.005 to read as follows:
Sec. 81.005. PUBLIC DISCLOSURE BY DEPARTMENT. (a) The
department shall conspicuously post on the department's Internet
website a summary of each action imposing a sanction, penalty, or
fine, including an administrative penalty, against an insurer,
agent, or license holder. Unless the information is made
confidential by other law, the summary must disclose:
(1) the identity of the insurer, agent, or license
holder subject to the sanction, penalty, or fine;
(2) the statutory authority for the imposition of the
sanction, penalty, or fine;
(3) the grounds for the imposition of the sanction,
penalty, or fine;
(4) the amount, duration, extent, or other measure of
the sanction, penalty, or fine imposed; and
(5) whether an appeal of the sanction, penalty, or
fine has been filed.
(b) The department shall post the summary required by
Subsection (a) not later than the 10th day after the date the
sanction, penalty, or fine is imposed.
SECTION 9. (a) This Act applies to an appointment or
employment of an individual commencing on or after the effective
date of this Act. An appointment or employment commencing before
the effective date of this Act 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.
(b) This Act applies to a contract for an expenditure
entered into on or after the effective date of this Act. A contract
entered into before the effective date of this Act 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.
(c) This Act applies to a rate filing made or surcharge
imposed on or after the effective date of this Act. A rate filing
made or surcharge imposed before the effective date of this Act 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 10. This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2015.