84R11367 MEW-D
By: Vo H.B. No. 2414
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) "Personal automobile insurance" and "residential
property 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 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. Section 827.008(a), Insurance Code, is 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 personal automobile insurance or residential
property 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.
SECTION 5. Sections 827.010(a) and (d), Insurance Code, are
amended to read as follows:
(a) The commissioner may impose a moratorium of not longer
than two years on the approval of:
(1) [the approval of] withdrawal plans; or
(2) [the implementation of] plans to restrict the
writing of new business described by Section 827.008.
(d) To impose or renew a moratorium under this section, the
commissioner must determine, after notice and hearing, that [a
catastrophic event has occurred and that as a result of that event]
a particular line of insurance is not reasonably expected to be
available at an affordable premium to a substantial number of
policyholders or potential policyholders in this state or, in the
case of lines of personal automobile or residential property
insurance, in a rating territory.
SECTION 6. Section 827.008(c), Insurance Code, is repealed.
SECTION 7. 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 governed by the
law as it existed at the time the withdrawal or restriction plan was
filed, and that law is continued in effect for that purpose.
SECTION 8. This Act takes effect September 1, 2015.