By: Eltife S.B. No. 654
(In the Senate - Filed February 19, 2015; February 24, 2015,
read first time and referred to Committee on Business and Commerce;
April 22, 2015, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 7, Nays 0; April 22, 2015,
sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR S.B. No. 654 By: Eltife
A BILL TO BE ENTITLED
AN ACT
relating to regulation of rates and policy forms for certain
commercial lines of insurance.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2251.002, Insurance Code, is amended by
amending Subdivision (1) and adding Subdivision (1-a) to read as
follows:
(1) "Commercial property insurance" means insurance
coverage against loss caused by or resulting from loss, damage, or
destruction of real or personal property provided through a
commercial property insurance policy. The term includes any
combination of:
(A) fire, allied lines, or other lines of first
party property insurance;
(B) inland marine insurance;
(C) crime coverage;
(D) boiler and machinery insurance other than
explosion;
(E) glass insurance provided as part of other
coverage; and
(F) insurance covering other perils or providing
other coverages as authorized by commissioner rule.
(1-a) "Disallowed expenses" includes:
(A) administrative expenses, other than
acquisition, loss control, and safety engineering expenses, that
exceed 110 percent of the industry median for those expenses;
(B) lobbying expenses;
(C) advertising expenses, other than for
advertising:
(i) directly related to the services or
products provided by the insurer; or
(ii) designed and directed at loss
prevention;
(D) amounts paid by an insurer:
(i) as damages in an action brought against
the insurer for bad faith, fraud, or any matters other than payment
under the insurance contract; or
(ii) as fees, fines, penalties, or
exemplary damages for a civil or criminal violation of law;
(E) contributions to:
(i) social, religious, political, or
fraternal organizations; or
(ii) organizations engaged in legislative
advocacy;
(F) except as authorized by commissioner rule,
fees and assessments paid to advisory organizations;
(G) any amount determined by the commissioner to
be excess premiums charged by the insurer; and
(H) any unreasonably incurred expenses, as
determined by the commissioner after notice and hearing.
SECTION 2. Section 2301.002, Insurance Code, is amended by
amending Subdivision (1) and adding Subdivision (1-a) to read as
follows:
(1) "Commercial property insurance" means insurance
coverage against loss caused by or resulting from loss, damage, or
destruction of real or personal property provided through a
commercial property insurance policy. The term includes any
combination of:
(A) fire, allied lines, or other lines of first
party property insurance;
(B) inland marine insurance;
(C) crime coverage;
(D) boiler and machinery insurance other than
explosion;
(E) glass insurance provided as part of other
coverage; and
(F) insurance covering other perils or providing
other coverages as authorized by commissioner rule.
(1-a) "Form" means an insurance policy form or a
printed endorsement form.
SECTION 3. Section 2301.005, Insurance Code, is amended to
read as follows:
Sec. 2301.005. REGULATION OF INLAND MARINE AND COMMERCIAL
FORMS. (a) The commissioner shall adopt rules governing the
manner in which forms for the various classifications of risks
insured under inland marine insurance, as determined by the
commissioner, are regulated.
(b) The commissioner may adopt rules to exempt or limit the
review of forms for commercial lines of insurance subject to this
chapter.
SECTION 4. 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.
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