Relating to the use of certain loss and expense experience in insurance rates.
Impact
The enactment of HB2147 would amend Chapter 560 of the Insurance Code, adding Section 560.003, which expressly prohibits insurers from utilizing non-insurance related business experiences when setting premium rates. This legislative change is intended to simplify the rate-setting process and eliminate potential manipulations that could arise from considering external business expenses, ultimately aiming to create a fairer insurance market in Texas. The bill takes effect on September 1, 2017, and applies to all premium rates used or rate filings made after January 1, 2018.
Summary
House Bill 2147 addresses the parameters under which insurers may set premium rates by specifically prohibiting the use of loss and expense experience from any business outside of the insurance sector. This bill aims to ensure that the premium rates reflect only the actual insurance-related experiences, thereby making the pricing of insurance more transparent and accountable. By focusing solely on insurance-related data, the bill seeks to protect consumers from unnecessary rate increases that might occur if insurers were allowed to factor in unrelated business costs.
Contention
Notable points of contention surrounding HB2147 stem from discussions regarding the implementation of this regulatory framework. Critics may argue that there could be unintended consequences, such as reduced risk assessment flexibility for insurers, which may eventually lead to higher premiums if insurers are unable to adapt to market changes. On the other hand, supporters contend that this restriction will bolster consumer protections and ensure that prices reflect genuine risk rather than extraneous factors, thereby fostering a healthier competitive environment within the insurance industry.
Relating to funding of excess losses and operating expenses of the Texas Windstorm Insurance Association; authorizing an assessment; authorizing a surcharge.
Relating to funding of excess losses and operating expenses of the Texas Windstorm Insurance Association; authorizing an assessment, a surcharge, and an infrastructure grant.
Relating to consideration by insurers of certain prohibited criteria for ratemaking and coverage decisions and the use of disparate impact analysis regarding certain insurance practices.
Relating to limitations on the use of workers' compensation insurance experience modifier values in soliciting and awarding public construction contracts.