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A BILL TO BE ENTITLED
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AN ACT
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relating to the regulation of commercial property and casualty |
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insurance and insurance for certain large risks. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 981.004, Insurance Code, is amended by |
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adding Subsection (g) to read as follows: |
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(g) Except with respect to a line of insurance for which the |
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commissioner has temporarily reinstated the requirements for rate |
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and form filings under Section 2251.0031(d) or 2301.0031(d), |
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Subsections (a)(1) and (b) do not apply to an insurance policy |
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issued by an eligible surplus lines insurer for any line of the |
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kinds of insurance described by Sections 2251.0031(a) and |
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2301.0031(a) or exempted under Section 2251.0031(c) or |
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2301.0031(c). |
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SECTION 2. Section 2251.003(b), Insurance Code, is amended |
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to read as follows: |
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(b) Except as provided by Section 2251.0031, this [This] |
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subchapter and Subchapters B, C, and D apply to all lines of the |
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following kinds of insurance written under an insurance policy or |
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contract issued by an insurer authorized to engage in the business |
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of insurance in this state: |
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(1) general liability insurance; |
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(2) residential and commercial property insurance, |
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including farm and ranch insurance and farm and ranch owners |
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insurance; |
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(3) personal and commercial casualty insurance, |
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except as provided by Section 2251.004; |
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(4) medical professional liability insurance; |
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(5) fidelity, guaranty, and surety bonds other than |
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criminal court appearance bonds; |
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(6) personal umbrella insurance; |
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(7) personal liability insurance; |
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(8) guaranteed auto protection (GAP) insurance; |
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(9) involuntary unemployment insurance; |
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(10) financial guaranty insurance; |
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(11) inland marine insurance; |
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(12) rain insurance; |
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(13) hail insurance on farm crops; |
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(14) personal and commercial automobile insurance; |
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(15) multi-peril insurance; and |
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(16) identity theft insurance issued under Chapter |
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706. |
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SECTION 3. Subchapter A, Chapter 2251, Insurance Code, is |
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amended by adding Section 2251.0031 to read as follows: |
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Sec. 2251.0031. EXCEPTIONS FOR CERTAIN LINES. (a) Except |
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as provided by Subsection (d), Subchapter C does not apply to any |
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line of the following kinds of insurance written under a commercial |
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insurance policy or contract issued by an insurer authorized to |
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engage in the business of insurance in this state: |
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(1) surety bonds; |
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(2) fidelity bonds; |
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(3) commercial inland marine; |
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(4) boiler and machinery; |
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(5) environmental impairment or pollution liability; |
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(6) kidnap and ransom; |
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(7) political risk or expropriation; |
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(8) commercial excess liability or umbrella |
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liability; |
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(9) directors' and officers' liability; |
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(10) fiduciary liability; |
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(11) employment practices liability; |
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(12) errors and omission and professional liability |
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other than medical professional liability; |
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(13) media liability; |
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(14) product liability, product recall, or completed |
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operations; |
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(15) commercial cybersecurity, including first- and |
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third-party commercial lines coverage for losses arising out of or |
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relating to data privacy breaches, network security, computer |
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viruses, and similar exposures; |
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(16) highly protected commercial property; |
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(17) commercial flood insurance not provided through |
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the National Flood Insurance Program; or |
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(18) any combination of only the kinds of insurance |
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listed in this subsection or exempted under Subsection (c). |
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(b) For purposes of Subsection (a), "highly protected |
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commercial property" is commercial property that is subject to a |
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much lower than normal probability of loss due to low-hazard |
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occupancy or property type, superior construction, special fire |
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protection equipment and procedures, and management commitment to |
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loss prevention. |
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(c) The commissioner by rule may exempt a commercial line of |
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insurance or commercial risk not listed in Subsection (a) from the |
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rate filing requirements of Subchapter C to promote enhanced |
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competition or more effectively use the resources of the department |
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that might otherwise be used to review commercial lines filings. |
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(d) Notwithstanding Subsection (a), the commissioner may |
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temporarily require rate filings under Subchapter C for a specific |
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kind of insurance listed in Subsection (a) for a period of not |
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longer than one year if, after notice and hearing, the commissioner |
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issues an order that: |
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(1) includes a finding that a reasonable degree of |
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competition does not exist for that specific kind of insurance; and |
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(2) specifies the relevant tests and test results used |
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to determine the degree of competition for that kind of insurance. |
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(e) In the absence of a finding described by Subsection (d) |
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with respect to a specific kind of insurance, a competitive market |
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is presumed to exist for that kind of insurance. |
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(f) The commissioner may adopt reasonable and necessary |
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rules to implement this section. |
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SECTION 4. Section 2251.101, Insurance Code, is amended by |
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adding Subsection (c) to read as follows: |
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(c) This section does not apply to rates for use with an |
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insured that has: |
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(1) total insured property values of $5 million or |
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more; |
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(2) total annual gross revenues of $10 million or |
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more; or |
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(3) a total premium of $25,000 or more for property |
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insurance, $25,000 or more for general liability insurance, or |
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$50,000 or more for multi-peril insurance. |
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SECTION 5. Section 2301.003(b), Insurance Code, is amended |
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to read as follows: |
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(b) Except as provided by Section 2301.0031, this [This] |
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subchapter applies to all lines of the following kinds of insurance |
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written under an insurance policy or contract issued by an insurer |
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authorized to engage in the business of insurance in this state: |
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(1) general liability insurance; |
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(2) residential and commercial property insurance, |
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including farm and ranch insurance and farm and ranch owners |
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insurance; |
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(3) personal and commercial casualty insurance, |
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except as provided by Section 2301.005; |
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(4) medical professional liability insurance; |
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(5) fidelity, guaranty, and surety bonds other than |
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criminal court appearance bonds; |
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(6) personal umbrella insurance; |
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(7) personal liability insurance; |
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(8) guaranteed auto protection (GAP) insurance; |
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(9) involuntary unemployment insurance; |
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(10) financial guaranty insurance; |
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(11) inland marine insurance; |
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(12) rain insurance; |
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(13) hail insurance on farm crops; |
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(14) personal and commercial automobile insurance; |
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(15) multi-peril insurance; and |
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(16) identity theft insurance issued under Chapter |
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706. |
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SECTION 6. Subchapter A, Chapter 2301, Insurance Code, is |
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amended by adding Section 2301.0031 to read as follows: |
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Sec. 2301.0031. EXCEPTIONS FOR CERTAIN LINES. (a) Except |
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as provided by Subsection (d), Sections 2301.006, 2301.007(a) and |
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(b), and 2301.008 do not apply to any line of the following kinds of |
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insurance written under a commercial insurance policy or contract |
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issued by an insurer authorized to engage in the business of |
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|
insurance in this state: |
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(1) surety bonds; |
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(2) fidelity bonds; |
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(3) commercial inland marine; |
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(4) boiler and machinery; |
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(5) environmental impairment or pollution liability; |
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(6) kidnap and ransom; |
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(7) political risk or expropriation; |
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(8) commercial excess liability or umbrella |
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|
liability; |
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(9) directors' and officers' liability; |
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(10) fiduciary liability; |
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(11) employment practices liability; |
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(12) errors and omission and professional liability |
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other than medical professional liability; |
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(13) media liability; |
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(14) product liability, product recall, or completed |
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|
operations; |
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(15) commercial cybersecurity, including first- and |
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|
third-party commercial lines coverage for losses arising out of or |
|
|
relating to data privacy breaches, network security, computer |
|
|
viruses, and similar exposures; |
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|
(16) highly protected commercial property; |
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(17) commercial flood insurance not provided through |
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the National Flood Insurance Program; or |
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(18) any combination of only the kinds of insurance |
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listed in this subsection or exempted under Subsection (c). |
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(b) For purposes of Subsection (a), "highly protected |
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commercial property" is commercial property that is subject to a |
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much lower than normal probability of loss due to low-hazard |
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occupancy or property type, superior construction, special fire |
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protection equipment and procedures, and management commitment to |
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loss prevention. |
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(c) The commissioner by rule may exempt a commercial line of |
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insurance or commercial risk not listed in Subsection (a) from the |
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form filing requirements of this subchapter to promote enhanced |
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competition or more effectively use the resources of the department |
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that might otherwise be used to review commercial lines filings. |
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(d) Notwithstanding Subsection (a), the commissioner may |
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temporarily impose the requirements of Sections 2301.006, |
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2301.007(a) and (b), and 2301.008 for a specific kind of insurance |
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listed in Subsection (a) for a period of not longer than one year |
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if, after notice and hearing, the commissioner issues an order |
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that: |
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(1) includes a finding that a reasonable degree of |
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competition does not exist for that specific kind of insurance; and |
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(2) specifies the relevant tests and test results used |
|
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to determine the degree of competition for that kind of insurance. |
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(e) In the absence of a finding described by Subsection (d) |
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with respect to a specific kind of insurance, a competitive market |
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is presumed to exist for that kind of insurance. |
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(f) The commissioner may adopt reasonable and necessary |
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rules to implement this section. |
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SECTION 7. The changes in law made by this Act apply only to |
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an insurance policy that is delivered, issued for delivery, or |
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renewed on or after September 1, 2021. An insurance policy |
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delivered, issued for delivery, or renewed before September 1, |
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2021, is governed by the law as it existed immediately before the |
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effective date of this Act, and that law is continued in effect for |
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that purpose. |
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SECTION 8. This Act takes effect September 1, 2021. |