85R10843 PMO-F
By: Schaefer H.B. No. 4141
A BILL TO BE ENTITLED
AN ACT
relating to commercial insurance rates and forms.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2251.003(b), Insurance Code, is amended
to read as follows:
(b) Except as provided by Section 2251.0031, this [This]
subchapter and Subchapters B, C, and D apply to all lines of the
following kinds of insurance written under an insurance policy or
contract issued by an insurer authorized to engage in the business
of insurance in this state:
(1) general liability insurance;
(2) residential and commercial property insurance,
including farm and ranch insurance and farm and ranch owners
insurance;
(3) personal and commercial casualty insurance,
except as provided by Section 2251.004;
(4) medical professional liability insurance;
(5) fidelity, guaranty, and surety bonds other than
criminal court appearance bonds;
(6) personal umbrella insurance;
(7) personal liability insurance;
(8) guaranteed auto protection (GAP) insurance;
(9) involuntary unemployment insurance;
(10) financial guaranty insurance;
(11) inland marine insurance;
(12) rain insurance;
(13) hail insurance on farm crops;
(14) personal and commercial automobile insurance;
(15) multi-peril insurance; and
(16) identity theft insurance issued under Chapter
706.
SECTION 2. Subchapter A, Chapter 2251, Insurance Code, is
amended by adding Section 2251.0031 to read as follows:
Sec. 2251.0031. EXCEPTIONS FOR CERTAIN LINES. (a) Except
as provided by Subsection (c), Subchapter C does not apply to any
line of the following kinds of insurance written under an insurance
policy or contract issued by an insurer authorized to engage in the
business of insurance in this state:
(1) aircraft liability and hull;
(2) surety bonds;
(3) fidelity bonds;
(4) commercial inland marine;
(5) boiler and machinery;
(6) environmental impairment or pollution liability;
(7) kidnap and ransom;
(8) political risk or expropriation;
(9) commercial excess liability or umbrella
liability;
(10) directors' and officers' liability;
(11) fiduciary liability;
(12) employment practices liability;
(13) errors and omission and professional liability
other than medical malpractice;
(14) media liability;
(15) product liability, product recall, or completed
operations;
(16) cybersecurity, including first and third party
commercial lines coverage for losses arising out of or relating to
data privacy breaches, network security, computer viruses, and
similar exposures;
(17) highly protected commercial property; or
(18) commercial flood insurance not provided through
the National Flood Insurance Program.
(b) The commissioner by rule may exempt a commercial line of
insurance or commercial risk not listed in Subsection (a) from the
rate filing requirements of Subchapter C to promote enhanced
competition or more effectively use the resources of the department
that might otherwise be used to review commercial lines filings.
(c) Notwithstanding Subsection (a), the commissioner may
require rate filings under Subchapter C for a specific kind of
insurance listed in Subsection (a) for a period of not longer than
one year if, after notice and hearing, the commissioner issues an
order that:
(1) includes a finding that a reasonable degree of
competition does not exist for that specific kind of insurance; and
(2) specifies the relevant tests and test results used
to determine the degree of competition for that kind of insurance.
(d) In the absence of a finding described by Subsection (c)
with respect to a specific kind of insurance, a competitive market
is presumed to exist for that kind of insurance.
SECTION 3. Section 2251.004, Insurance Code, is amended to
read as follows:
Sec. 2251.004. REGULATION OF INLAND MARINE RATES. The
commissioner shall adopt rules governing the manner in which rates
for the various classifications of risks insured under personal
lines inland marine insurance, as determined by the commissioner,
are regulated.
SECTION 4. Section 2301.003(b), Insurance Code, is amended
to read as follows:
(b) Except as provided by Section 2301.0031, this [This]
subchapter applies to all lines of the following kinds of insurance
written under an insurance policy or contract issued by an insurer
authorized to engage in the business of insurance in this state:
(1) general liability insurance;
(2) residential and commercial property insurance,
including farm and ranch insurance and farm and ranch owners
insurance;
(3) personal and commercial casualty insurance,
except as provided by Section 2301.005;
(4) medical professional liability insurance;
(5) fidelity, guaranty, and surety bonds other than
criminal court appearance bonds;
(6) personal umbrella insurance;
(7) personal liability insurance;
(8) guaranteed auto protection (GAP) insurance;
(9) involuntary unemployment insurance;
(10) financial guaranty insurance;
(11) inland marine insurance;
(12) rain insurance;
(13) hail insurance on farm crops;
(14) personal and commercial automobile insurance;
(15) multi-peril insurance; and
(16) identity theft insurance issued under Chapter
706.
SECTION 5. Subchapter A, Chapter 2301, Insurance Code, is
amended by adding Section 2301.0031 to read as follows:
Sec. 2301.0031. EXCEPTIONS FOR CERTAIN LINES. (a) Except
as provided by Subsection (c), Sections 2301.006, 2301.007(a) and
(b), and 2301.008 do not apply to any line of the following kinds of
insurance written under an insurance policy or contract issued by
an insurer authorized to engage in the business of insurance in this
state:
(1) aircraft liability and hull;
(2) surety bonds;
(3) fidelity bonds;
(4) commercial inland marine;
(5) boiler and machinery;
(6) environmental impairment or pollution liability;
(7) kidnap and ransom;
(8) political risk or expropriation;
(9) commercial excess liability or umbrella
liability;
(10) directors' and officers' liability;
(11) fiduciary liability;
(12) employment practices liability;
(13) errors and omission and professional liability
other than medical malpractice;
(14) media liability;
(15) product liability, product recall, or completed
operations;
(16) cybersecurity, including first and third party
commercial lines coverage for losses arising out of or relating to
data privacy breaches, network security, computer viruses, and
similar exposures;
(17) highly protected commercial property; or
(18) commercial flood insurance not provided through
the National Flood Insurance Program.
(b) The commissioner by rule may exempt a commercial line of
insurance or commercial risk not listed in Subsection (a) from the
form filing requirements of this subchapter to promote enhanced
competition or more effectively use the resources of the department
that might otherwise be used to review commercial lines filings.
(c) Notwithstanding Subsection (a), the commissioner may
require form filings under this subchapter for a specific kind of
insurance listed in Subsection (a) for a period of not longer than
one year if, after notice and hearing, the commissioner issues an
order that:
(1) includes a finding that a reasonable degree of
competition does not exist for that specific kind of insurance; and
(2) specifies the relevant tests and test results used
to determine the degree of competition for that kind of insurance.
(d) In the absence of a finding described by Subsection (c)
with respect to a specific kind of insurance, a competitive market
is presumed to exist for that kind of insurance.
SECTION 6. Section 2301.005, Insurance Code, is amended to
read as follows:
Sec. 2301.005. REGULATION OF INLAND MARINE FORMS. The
commissioner shall adopt rules governing the manner in which forms
for the various classifications of risks insured under personal
lines inland marine insurance, as determined by the commissioner,
are regulated.
SECTION 7. The changes in law made by this Act apply only to
an insurance policy that is delivered, issued for delivery, or
renewed on or after January 1, 2018. An insurance policy
delivered, issued for delivery, or renewed before January 1, 2018,
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 8. This Act takes effect September 1, 2017.