Texas 2017 - 85th Regular

Texas Senate Bill SB372 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	85R3369 SMT-F
2	2	By: Hall S.B. No. 372
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to regulation of title insurance.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	ARTICLE 1. TITLE INSURANCE PREMIUMS AND OTHER TITLE INSURANCE
10	10	REGULATION
11	11	SECTION 1.01. Section 2251.002, Insurance Code, is amended
12	12	by adding Subdivision (9) to read as follows:
13	13	(9) "Title insurance" has the meaning assigned by
14	14	Section 2501.003.
15	15	SECTION 1.02. Sections 2251.003(a) and (b), Insurance Code,
16	16	are amended to read as follows:
17	17	(a) This subchapter and Subchapters B, C, and D apply to:
18	18	(1) an insurer to which Article 5.13 applies, other
19	19	than the Texas Windstorm Insurance Association, the FAIR Plan
20	20	Association, and the Texas Automobile Insurance Plan Association;
21	21	[and]
22	22	(2) except as provided by Subsection (c), a Lloyd's
23	23	plan, reciprocal or interinsurance exchange, and county mutual
24	24	insurance company with respect to the lines of insurance described
25	25	by Subsection (b); and
26	26	(3) a title insurance company.
27	27	(b) This subchapter and Subchapters B, C, and D apply to all
28	28	lines of the following kinds of insurance written under an
29	29	insurance policy or contract issued by an insurer authorized to
30	30	engage in the business of insurance in this state:
31	31	(1) general liability insurance;
32	32	(2) residential and commercial property insurance,
33	33	including farm and ranch insurance and farm and ranch owners
34	34	insurance;
35	35	(3) personal and commercial casualty insurance,
36	36	except as provided by Section 2251.004;
37	37	(4) medical professional liability insurance;
38	38	(5) fidelity, guaranty, and surety bonds other than
39	39	criminal court appearance bonds;
40	40	(6) personal umbrella insurance;
41	41	(7) personal liability insurance;
42	42	(8) guaranteed auto protection (GAP) insurance;
43	43	(9) involuntary unemployment insurance;
44	44	(10) financial guaranty insurance;
45	45	(11) inland marine insurance;
46	46	(12) rain insurance;
47	47	(13) hail insurance on farm crops;
48	48	(14) personal and commercial automobile insurance;
49	49	(15) multi-peril insurance; [and]
50	50	(16) identity theft insurance issued under Chapter
51	51	706; and
52	52	(17) title insurance.
53	53	SECTION 1.03. Section 2251.052, Insurance Code, is amended
54	54	by adding Subsection (f) to read as follows:
55	55	(f) In setting rates for title insurance, an insurer shall
56	56	also consider all relevant income and expenses of title insurance
57	57	agents attributable to engaging in the business of title insurance
58	58	in this state.
59	59	SECTION 1.04. Section 2703.003, Insurance Code, is amended
60	60	to read as follows:
61	61	Sec. 2703.003. PAYMENT OF PREMIUMS; DIVISION OF PREMIUM.
62	62	(a) The premium for a title insurance policy or for another form
63	63	prescribed or approved by the commissioner shall be paid in the due
64	64	and ordinary course of business.
65	65	(b) Notwithstanding any other law, the commissioner may not
66	66	regulate the division of premium between a title insurance company
67	67	and a title insurance agent.
68	68	SECTION 1.05. The heading to Subchapter D, Chapter 2703,
69	69	Insurance Code, is amended to read as follows:
70	70	SUBCHAPTER D. [FIXING AND PROMULGATING] PREMIUM RATES; DATA
71	71	REPORTING
72	72	SECTION 1.06. Section 2703.151, Insurance Code, is amended
73	73	to read as follows:
74	74	Sec. 2703.151. [FIXING AND PROMULGATING] PREMIUM RATES.
75	75	(a) Except as provided by Subsection (b), [the commissioner shall
76	76	fix and promulgate the] premium rates [to be charged by a title
77	77	insurance company or by a title insurance agent] for title
78	78	insurance policies are governed by Subchapters A, B, C, and D,
79	79	Chapter 2251 [or for other forms prescribed or approved by the
80	80	commissioner].
81	81	(b) A title insurance company is not required to file [The
82	82	commissioner may not fix or promulgate] the premium rates for
83	83	reinsurance between title insurance companies. Title insurance
84	84	companies may establish the premium rates in amounts to which the
85	85	companies agree.
86	86	(c) Except for a premium charged for reinsurance, a premium
87	87	may not be charged for a title insurance policy or for another
88	88	prescribed or approved form at a rate different than the rate filed
89	89	with [fixed and promulgated by] the commissioner under Chapter
90	90	2251.
91	91	SECTION 1.07. The heading to Section 2703.153, Insurance
92	92	Code, is amended to read as follows:
93	93	Sec. 2703.153. DATA COLLECTION [OF DATA FOR FIXING PREMIUM
94	94	RATES]; ANNUAL STATISTICAL REPORT.
95	95	SECTION 1.08. Sections 2703.153(a), (c), and (d), Insurance
96	96	Code, are amended to read as follows:
97	97	(a) Each title insurance company and title insurance agent
98	98	engaged in the business of title insurance in this state shall
99	99	annually submit to the department, as required by the department
100	100	[to collect data to use to fix premium rates], a statistical report
101	101	containing information relating to:
102	102	(1) loss experience;
103	103	(2) expense of operation; and
104	104	(3) other material matters.
105	105	(c) Not less frequently than once every five years, the
106	106	commissioner shall evaluate the information required under this
107	107	section to determine whether the department needs additional or
108	108	different information or no longer needs certain information [to
109	109	promulgate rates. If the department requires a title insurance
110	110	company or title insurance agent to include new or different
111	111	information in the statistical report, that information may be
112	112	considered by the commissioner in fixing premium rates if the
113	113	information collected is reasonably credible for the purposes for
114	114	which the information is to be used].
115	115	(d) A title insurance company or a title insurance agent
116	116	aggrieved by a department requirement concerning the submission of
117	117	information may bring a suit in a district court in Travis County
118	118	alleging that the request for information:
119	119	(1) is unduly burdensome; or
120	120	(2) is not a request for information material to a
121	121	[fixing and promulgating premium rates or another] matter that may
122	122	be the subject of the periodic hearing and is not a request
123	123	reasonably designed to lead to the discovery of that information.
124	124	SECTION 1.09. The heading to Section 2751.051, Insurance
125	125	Code, is amended to read as follows:
126	126	Sec. 2751.051. [FIXING AND PROMULGATING] PREMIUM RATES AND
127	127	FORMS.
128	128	SECTION 1.10. Section 2751.051, Insurance Code, is amended
129	129	by amending Subsections (a) and (b) and adding Subsection (a-1) to
130	130	read as follows:
131	131	(a) The commissioner shall, in the manner prescribed by this
132	132	subchapter, [:
133	133	[(1) fix and promulgate the premium rates to be
134	134	charged by a title insurance company or by a title insurance agent
135	135	for personal property title insurance policies under this chapter;
136	136	and
137	137	[(2)] prescribe the policies and forms to be used for
138	138	personal property title insurance [in connection with those
139	139	policies].
140	140	(a-1) Premium rates for personal property title insurance
141	141	are governed by Subchapters A, B, C, and D, Chapter 2251.
142	142	(b) A premium may not be charged for a personal property
143	143	title insurance policy or for another prescribed or approved form
144	144	at a rate different than the rate filed with [fixed and promulgated
145	145	by] the commissioner under Chapter 2251.
146	146	ARTICLE 2. CONFORMING AMENDMENTS
147	147	SECTION 2.01. Section 2501.003(8), Insurance Code, is
148	148	amended to read as follows:
149	149	(8) "Premium" means the premium rates charged for a
150	150	title insurance policy or other form prescribed or approved
151	151	[promulgated] by the commissioner [under Subchapters D and E,
152	152	Chapter 2703,] and includes a charge for:
153	153	(A) title examination and closing the
154	154	transaction, regardless of whether the examination or closing is
155	155	performed by an attorney; and
156	156	(B) issuing the policy or form.
157	157	SECTION 2.02. Section 2551.204(d), Insurance Code, is
158	158	amended to read as follows:
159	159	(d) The amount, handling, and distribution of any reserves
160	160	required under Subsection (c)(2) are subject to the control and
161	161	discretion of the department and are reviewable in judicial
162	162	proceedings governed by rules applicable to review of rates under
163	163	Section 2703.202, as it existed before its repeal by the 85th
164	164	Legislature, Regular Session, 2017 [Subchapters D and E, Chapter
165	165	2703].
166	166	SECTION 2.03. Section 2551.351(a), Insurance Code, is
167	167	amended to read as follows:
168	168	(a) A foreign or domestic corporation forfeits any right to
169	169	engage in business in this state if the corporation:
170	170	(1) issues any form of title insurance policy, or any
171	171	other adopted or approved form, on real property in this state other
172	172	than a form prescribed by the department;
173	173	(2) charges any premium rate on an owner, mortgagee,
174	174	or other title insurance policy, or on any other adopted or approved
175	175	form, on real property in this state other than a premium rate filed
176	176	under Chapter 2251 [prescribed by the commissioner]; or
177	177	(3) otherwise engages in the business of title
178	178	insurance in relation to real property in this state on a form [or
179	179	for a premium rate] not prescribed by the department or
180	180	commissioner or for a premium rate not filed under Chapter 2251.
181	181	SECTION 2.04. Section 2552.007, Insurance Code, is amended
182	182	to read as follows:
183	183	Sec. 2552.007. OTHER PREMIUM OR FEE PROHIBITED. Attorney's
184	184	title insurance may not be issued for any premium or fee other than
185	185	the applicable [prescribed] premium charged at the rate filed with
186	186	the commissioner under Chapter 2251 [as provided by Subchapters D
187	187	and E, Chapter 2703].
188	188	SECTION 2.05. Section 2602.210(a), Insurance Code, is
189	189	amended to read as follows:
190	190	(a) A title insurance company is entitled to recover in its
191	191	rates for the succeeding calendar year amounts paid in assessments
192	192	not to exceed one percent of the company's net direct written
193	193	premiums and may include those amounts, less any refund, as an
194	194	expense of operation in a rate filing made under Chapter 2251. [In
195	195	promulgating or establishing rates the commissioner shall consider
196	196	assessments and refunds of assessments and shall adjust the rates
197	197	to allow for recovery under this subsection.]
198	198	SECTION 2.06. Section 2651.012(b), Insurance Code, is
199	199	amended to read as follows:
200	200	(b) The unencumbered assets required under this section are
201	201	reserves for contingencies. The reserves must be deducted from
202	202	premiums for purposes of proceedings conducted with respect to
203	203	premium rates [under Subchapter D, Chapter 2703]. The reserves may
204	204	only be spent or released:
205	205	(1) as permitted by the commissioner if the agent is
206	206	declared impaired;
207	207	(2) if the agent merges or consolidates with another
208	208	agent who maintains the amount of unencumbered assets that would be
209	209	required for the survivor of the merger or consolidation;
210	210	(3) if the agent surrenders the agent's license under
211	211	Section 2651.201;
212	212	(4) if the agent is liquidated; or
213	213	(5) if the agent's license is revoked.
214	214	SECTION 2.07. The heading to Subchapter E, Chapter 2703,
215	215	Insurance Code, is amended to read as follows:
216	216	SUBCHAPTER E. PROCEDURES REGARDING [PREMIUM RATES,] POLICY
217	217	FORMS[,] AND OTHER RELATED MATTERS
218	218	SECTION 2.08. Section 2703.203, Insurance Code, is amended
219	219	to read as follows:
220	220	Sec. 2703.203. PERIODIC HEARING. The commissioner shall
221	221	hold a public hearing not earlier than July 1 after the fifth
222	222	anniversary of the closing of a hearing held under this chapter to
223	223	consider [adoption of premium rates and other] matters relating to
224	224	regulating the business of title insurance that an association,
225	225	title insurance company, or title insurance agent[, or member of
226	226	the public admitted as a party under Section 2703.204] requests to
227	227	be considered or that the commissioner determines necessary to
228	228	consider.
229	229	SECTION 2.09. Section 2703.206, Insurance Code, is amended
230	230	to read as follows:
231	231	Sec. 2703.206. COMMISSIONER AUTHORITY TO HOLD HEARINGS AS
232	232	NECESSARY. At any time, the commissioner may order a public hearing
233	233	to consider [adoption of premium rates and other] matters relating
234	234	to regulating the business of title insurance as the commissioner
235	235	determines necessary or proper.
236	236	SECTION 2.10. Section 2703.207, Insurance Code, is amended
237	237	to read as follows:
238	238	Sec. 2703.207. NOTICE OF CERTAIN HEARINGS. Not later than
239	239	the 60th day before the date of a hearing under Section [2703.202,]
240	240	2703.203[,] or 2703.206, notice of the hearing and of each item to
241	241	be considered at the hearing shall be:
242	242	(1) sent directly to all parties to the previous
243	243	hearing conducted under Section [2703.202,] 2703.203[,] or
244	244	2703.206, if the hearing was conducted as a contested case hearing;
245	245	and
246	246	(2) published in the Texas Register and on the
247	247	department's Internet website.
248	248	SECTION 2.11. Section 2703.208(a), Insurance Code, is
249	249	amended to read as follows:
250	250	(a) An addition or amendment to the Basic Manual of Rules,
251	251	Rates[,] and Forms for the Writing of Title Insurance in the State
252	252	of Texas may be proposed and adopted by reference by publishing
253	253	notice of the proposal or adoption by reference in the Texas
254	254	Register.
255	255	SECTION 2.12. Section 2751.053(a), Insurance Code, is
256	256	amended to read as follows:
257	257	(a) Before the commissioner may adopt [a premium rate may be
258	258	fixed and] forms [adopted] for personal property title insurance
259	259	under this chapter, the department must provide reasonable notice
260	260	and a hearing must be afforded to title insurance companies, title
261	261	insurance agents, and the public.
262	262	SECTION 2.13. Section 2751.054, Insurance Code, is amended
263	263	to read as follows:
264	264	Sec. 2751.054. COMMISSIONER ORDER. [(a)] Not later than
265	265	the 90th day after the date of a hearing under Section 2751.053, the
266	266	commissioner shall issue an order prescribing the [rates and] forms
267	267	to be used in connection with personal property title insurance
268	268	policies under this chapter.
269	269	[(b) The commissioner's order promulgating rates must be
270	270	based on the evidence adduced at the hearing.]
271	271	SECTION 2.14. The heading to Section 2751.055, Insurance
272	272	Code, is amended to read as follows:
273	273	Sec. 2751.055. REVISIONS TO [RATES AND] FORMS; HEARING.
274	274	SECTION 2.15. Section 2751.055(a), Insurance Code, is
275	275	amended to read as follows:
276	276	(a) A title insurance company may apply to the department in
277	277	the manner prescribed by the commissioner for approval of a new or
278	278	revised personal property title insurance form [or a change in a
279	279	rate associated with such a form]. The commissioner may approve or
280	280	disapprove an application after a hearing conducted in the manner
281	281	prescribed by Section 2751.053.
282	282	ARTICLE 3. REPEALER
283	283	SECTION 3.01. Sections 2703.152, 2703.201, 2703.202,
284	284	2703.204, and 2751.052, Insurance Code, are repealed.
285	285	ARTICLE 4. TRANSITION; EFFECTIVE DATE
286	286	SECTION 4.01. The changes in law made by this Act affecting
287	287	premium rates for title insurance apply only to a premium rate in
288	288	effect on and after January 1, 2018. A premium rate in effect
289	289	before January 1, 2018, is governed by the law as it existed
290	290	immediately before the effective date of this Act, and that law is
291	291	continued in effect for that purpose.
292	292	SECTION 4.02. This Act takes effect September 1, 2017.