Texas 2021 - 87th Regular

Texas Senate Bill SB1367 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	S.B. No. 1367
	1	+	By: Creighton S.B. No. 1367
	2	+	(Oliverson)
2	3
3	4
	5	+	A BILL TO BE ENTITLED
4	6		AN ACT
5	7		relating to the regulation of commercial property and casualty
6	8		insurance and insurance for certain large risks.
7	9		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
8	10		SECTION 1. Section 981.004, Insurance Code, is amended by
9	11		adding Subsection (g) to read as follows:
10	12		(g) Except with respect to a line of insurance for which the
11	13		commissioner has temporarily reinstated the requirements for rate
12	14		and form filings under Section 2251.0031(d) or 2301.0031(d),
13	15		Subsections (a)(1) and (b) do not apply to an insurance policy
14	16		issued by an eligible surplus lines insurer for any line of the
15	17		kinds of insurance described by Sections 2251.0031(a) and
16	18		2301.0031(a) or exempted under Section 2251.0031(c) or
17	19		2301.0031(c).
18	20		SECTION 2. Section 2251.003(b), Insurance Code, is amended
19	21		to read as follows:
20	22		(b) Except as provided by Section 2251.0031, this [This]
21	23		subchapter and Subchapters B, C, and D apply to all lines of the
22	24		following kinds of insurance written under an insurance policy or
23	25		contract issued by an insurer authorized to engage in the business
24	26		of insurance in this state:
25	27		(1) general liability insurance;
26	28		(2) residential and commercial property insurance,
27	29		including farm and ranch insurance and farm and ranch owners
28	30		insurance;
29	31		(3) personal and commercial casualty insurance,
30	32		except as provided by Section 2251.004;
31	33		(4) medical professional liability insurance;
32	34		(5) fidelity, guaranty, and surety bonds other than
33	35		criminal court appearance bonds;
34	36		(6) personal umbrella insurance;
35	37		(7) personal liability insurance;
36	38		(8) guaranteed auto protection (GAP) insurance;
37	39		(9) involuntary unemployment insurance;
38	40		(10) financial guaranty insurance;
39	41		(11) inland marine insurance;
40	42		(12) rain insurance;
41	43		(13) hail insurance on farm crops;
42	44		(14) personal and commercial automobile insurance;
43	45		(15) multi-peril insurance; and
44	46		(16) identity theft insurance issued under Chapter
45	47		706.
46	48		SECTION 3. Subchapter A, Chapter 2251, Insurance Code, is
47	49		amended by adding Section 2251.0031 to read as follows:
48	50		Sec. 2251.0031. EXCEPTIONS FOR CERTAIN LINES. (a) Except
49	51		as provided by Subsection (d), Subchapter C does not apply to any
50	52		line of the following kinds of insurance written under a commercial
51	53		insurance policy or contract issued by an insurer authorized to
52	54		engage in the business of insurance in this state:
53	55		(1) surety bonds;
54	56		(2) fidelity bonds;
55	57		(3) commercial inland marine;
56	58		(4) boiler and machinery;
57	59		(5) environmental impairment or pollution liability;
58	60		(6) kidnap and ransom;
59	61		(7) political risk or expropriation;
60	62		(8) commercial excess liability or umbrella
61	63		liability;
62	64		(9) directors' and officers' liability;
63	65		(10) fiduciary liability;
64	66		(11) employment practices liability;
65	67		(12) errors and omission and professional liability
66	68		other than medical professional liability;
67	69		(13) media liability;
68	70		(14) product liability, product recall, or completed
69	71		operations;
70	72		(15) commercial cybersecurity, including first- and
71	73		third-party commercial lines coverage for losses arising out of or
72	74		relating to data privacy breaches, network security, computer
73	75		viruses, and similar exposures;
74	76		(16) highly protected commercial property;
75	77		(17) commercial flood insurance not provided through
76	78		the National Flood Insurance Program; or
77	79		(18) any combination of only the kinds of insurance
78	80		listed in this subsection or exempted under Subsection (c).
79	81		(b) For purposes of Subsection (a), "highly protected
80	82		commercial property" is commercial property that is subject to a
81	83		much lower than normal probability of loss due to low-hazard
82	84		occupancy or property type, superior construction, special fire
83	85		protection equipment and procedures, and management commitment to
84	86		loss prevention.
85	87		(c) The commissioner by rule may exempt a commercial line of
86	88		insurance or commercial risk not listed in Subsection (a) from the
87	89		rate filing requirements of Subchapter C to promote enhanced
88	90		competition or more effectively use the resources of the department
89	91		that might otherwise be used to review commercial lines filings.
90	92		(d) Notwithstanding Subsection (a), the commissioner may
91	93		temporarily require rate filings under Subchapter C for a specific
92	94		kind of insurance listed in Subsection (a) for a period of not
93	95		longer than one year if, after notice and hearing, the commissioner
94	96		issues an order that:
95	97		(1) includes a finding that a reasonable degree of
96	98		competition does not exist for that specific kind of insurance; and
97	99		(2) specifies the relevant tests and test results used
98	100		to determine the degree of competition for that kind of insurance.
99	101		(e) In the absence of a finding described by Subsection (d)
100	102		with respect to a specific kind of insurance, a competitive market
101	103		is presumed to exist for that kind of insurance.
102	104		(f) The commissioner may adopt reasonable and necessary
103	105		rules to implement this section.
104	106		SECTION 4. Section 2251.101, Insurance Code, is amended by
105	107		adding Subsection (c) to read as follows:
106	108		(c) This section does not apply to rates for use with an
107	109		insured that has:
108	110		(1) total insured property values of $5 million or
109	111		more;
110	112		(2) total annual gross revenues of $10 million or
111	113		more; or
112	114		(3) a total premium of $25,000 or more for property
113	115		insurance, $25,000 or more for general liability insurance, or
114	116		$50,000 or more for multi-peril insurance.
115	117		SECTION 5. Section 2301.003(b), Insurance Code, is amended
116	118		to read as follows:
117	119		(b) Except as provided by Section 2301.0031, this [This]
118	120		subchapter applies to all lines of the following kinds of insurance
119	121		written under an insurance policy or contract issued by an insurer
120	122		authorized to engage in the business of insurance in this state:
121	123		(1) general liability insurance;
122	124		(2) residential and commercial property insurance,
123	125		including farm and ranch insurance and farm and ranch owners
124	126		insurance;
125	127		(3) personal and commercial casualty insurance,
126	128		except as provided by Section 2301.005;
127	129		(4) medical professional liability insurance;
128	130		(5) fidelity, guaranty, and surety bonds other than
129	131		criminal court appearance bonds;
130	132		(6) personal umbrella insurance;
131	133		(7) personal liability insurance;
132	134		(8) guaranteed auto protection (GAP) insurance;
133	135		(9) involuntary unemployment insurance;
134	136		(10) financial guaranty insurance;
135	137		(11) inland marine insurance;
136	138		(12) rain insurance;
137	139		(13) hail insurance on farm crops;
138	140		(14) personal and commercial automobile insurance;
139	141		(15) multi-peril insurance; and
140	142		(16) identity theft insurance issued under Chapter
141	143		706.
142	144		SECTION 6. Subchapter A, Chapter 2301, Insurance Code, is
143	145		amended by adding Section 2301.0031 to read as follows:
144	146		Sec. 2301.0031. EXCEPTIONS FOR CERTAIN LINES. (a) Except
145	147		as provided by Subsection (d), Sections 2301.006, 2301.007(a) and
146	148		(b), and 2301.008 do not apply to any line of the following kinds of
147	149		insurance written under a commercial insurance policy or contract
148	150		issued by an insurer authorized to engage in the business of
149	151		insurance in this state:
150	152		(1) surety bonds;
151	153		(2) fidelity bonds;
152	154		(3) commercial inland marine;
153	155		(4) boiler and machinery;
154	156		(5) environmental impairment or pollution liability;
155	157		(6) kidnap and ransom;
156	158		(7) political risk or expropriation;
157	159		(8) commercial excess liability or umbrella
158	160		liability;
159	161		(9) directors' and officers' liability;
160	162		(10) fiduciary liability;
161	163		(11) employment practices liability;
162	164		(12) errors and omission and professional liability
163	165		other than medical professional liability;
164	166		(13) media liability;
165	167		(14) product liability, product recall, or completed
166	168		operations;
167	169		(15) commercial cybersecurity, including first- and
168	170		third-party commercial lines coverage for losses arising out of or
169	171		relating to data privacy breaches, network security, computer
170	172		viruses, and similar exposures;
171	173		(16) highly protected commercial property;
172	174		(17) commercial flood insurance not provided through
173	175		the National Flood Insurance Program; or
174	176		(18) any combination of only the kinds of insurance
175	177		listed in this subsection or exempted under Subsection (c).
176	178		(b) For purposes of Subsection (a), "highly protected
177	179		commercial property" is commercial property that is subject to a
178	180		much lower than normal probability of loss due to low-hazard
179	181		occupancy or property type, superior construction, special fire
180	182		protection equipment and procedures, and management commitment to
181	183		loss prevention.
182	184		(c) The commissioner by rule may exempt a commercial line of
183	185		insurance or commercial risk not listed in Subsection (a) from the
184	186		form filing requirements of this subchapter to promote enhanced
185	187		competition or more effectively use the resources of the department
186	188		that might otherwise be used to review commercial lines filings.
187	189		(d) Notwithstanding Subsection (a), the commissioner may
188	190		temporarily impose the requirements of Sections 2301.006,
189	191		2301.007(a) and (b), and 2301.008 for a specific kind of insurance
190	192		listed in Subsection (a) for a period of not longer than one year
191	193		if, after notice and hearing, the commissioner issues an order
192	194		that:
193	195		(1) includes a finding that a reasonable degree of
194	196		competition does not exist for that specific kind of insurance; and
195	197		(2) specifies the relevant tests and test results used
196	198		to determine the degree of competition for that kind of insurance.
197	199		(e) In the absence of a finding described by Subsection (d)
198	200		with respect to a specific kind of insurance, a competitive market
199	201		is presumed to exist for that kind of insurance.
200	202		(f) The commissioner may adopt reasonable and necessary
201	203		rules to implement this section.
202	204		SECTION 7. The changes in law made by this Act apply only to
203	205		an insurance policy that is delivered, issued for delivery, or
204	206		renewed on or after September 1, 2021. An insurance policy
205	207		delivered, issued for delivery, or renewed before September 1,
206	208		2021, is governed by the law as it existed immediately before the
207	209		effective date of this Act, and that law is continued in effect for
208	210		that purpose.
209	211		SECTION 8. This Act takes effect September 1, 2021.
210		-	______________________________ ______________________________
211		-	President of the Senate Speaker of the House
212		-	I hereby certify that S.B. No. 1367 passed the Senate on
213		-	April 19, 2021, by the following vote: Yeas 31, Nays 0.
214		-	______________________________
215		-	Secretary of the Senate
216		-	I hereby certify that S.B. No. 1367 passed the House on
217		-	April 30, 2021, by the following vote: Yeas 138, Nays 3, two
218		-	present not voting.
219		-	______________________________
220		-	Chief Clerk of the House
221		-	Approved:
222		-	______________________________
223		-	Date
224		-	______________________________
225		-	Governor