By: Zaffirini S.B. No. 1336
A BILL TO BE ENTITLED
AN ACT
relating to the workers' compensation classification system and
rate filings.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2051.157, Insurance Code, is amended to
read as follows:
Sec. 2051.157. PENALTY FOR CERTAIN VIOLATIONS. An officer
or other representative of an insurance company is subject to a fine
of not less than $100 or more than $500 if the officer or other
representative violates any provision of the following relating to
the company's business:
(1) Subchapter A or B;
(2) Section 2051.156 or 2051.201;
(3) Chapter 426 or 2052;
(4) Subchapter A, C, or D, Chapter 2053; or
(5) Section 2053.051, 2053.052, [2053.053,] or
2053.055.
SECTION 2. Section 2053.001(5), Insurance Code, is amended
to read as follows:
(5) "Supplementary rating information" means any
manual, rating plan or schedule, plan of rules, rating rule,
classification system, territory code or description, or other
similar information required to determine the applicable premium
for an insured. The term includes increased limits factors,
[classification relativities,] deductible relativities, and other
similar factors and relativities.
SECTION 3. Section 2053.051, Insurance Code, is amended to
read as follows:
Sec. 2053.051. HAZARD CLASSIFICATION SYSTEM. (a) For
workers' compensation insurance, the department shall:
(1) determine hazards by class; and
(2) [establish classification relativities applicable
to an employer's payroll in each of the classes at levels adequate
to the risks to which the relativities apply.
[(b) The classification relativities established under
Subsection (a)(2):
[(1) must be designed to encourage safety;
[(2) may be territorially based; and
[(3) may reflect a difference in losses between
employers of high wage earners and employers of low wage earners
within the same class.
[(c) The department shall] revise the classification system
as necessary to carry out the purposes of this chapter [at least
once every five years].
(b) A stock company, mutual insurance company, reciprocal
or interinsurance exchange, or Lloyd's plan authorized to engage in
the business of workers' compensation insurance in this state may
not use hazard classifications other than the classifications
established by the department.
SECTION 4. Section 2053.056(c), Insurance Code, is amended
to read as follows:
(c) The commissioner shall review the information submitted
under Subsection (b) to determine the positive or negative impact
of the enactment of workers' compensation reform legislation
enacted by the 79th Legislature, Regular Session, 2005, on workers'
compensation rates and premiums. The commissioner may consider
other factors[, including relativities under Section 2053.051,] in
determining whether a change in rates has impacted the premium
charged to policyholders.
SECTION 5. Sections 407A.351(a) and (b), Labor Code, are
amended to read as follows:
(a) Except as provided by Subsection (b), each group shall
use the uniform classification system and[,] experience rating
plan[, and rate relativities] of the department.
(b) A group may [:
[(1) use the relativities promulgated by the
department modified to produce rates in accordance with the group's
historical experience; or
[(2)] file [its own] rates with the department,
including any reasonable and supporting information required by the
commissioner.
SECTION 6. Effective July 1, 2020, Sections 2053.053 and
2054.354(b), Insurance Code, are repealed.
SECTION 7. Sections 2051.157, 2053.001(5), 2053.051, and
2053.056(c), Insurance Code, as amended by this Act, and Sections
407A.351(a) and (b), Labor Code, as amended by this Act, apply only
to an insurance policy that is delivered, issued for delivery, or
renewed on or after July 1, 2020. A policy delivered, issued for
delivery, or renewed before July 1, 2020, 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, 2019.