BILL ANALYSIS
Insurance Committee
C.S.H.B. 2593
By: Eiland
04-27-95
Committee Report (Substituted)
BACKGROUND
Under current law, the Commissioner of Insurance has the duty
to promulgate the manual rate for commercial risks and classes of
risks written by the Texas Catastrophic Property Insurance
Association (CATPOOL) and the association is foreclosed from taking
advantage of the more expeditious and less expensive file and use
system which is available to other commercial property insurers who
compete in the marketplace. Additionally, the rates for commercial
windstorm and hail insurance written by the association must be 90
percent of the manual rates for extended coverage promulgated by
the Commissioner of Insurance for commercial risks. The current
rate system has been successful because it maintains a creditable
rate for a non-competitive carrier.
PURPOSE
As substituted, House Bill 2593 would retain the current
standards for ratemaking, but would provide an annual, more
expeditious and less expensive process, while adding safeguards
including public notices, meetings and public input to the
commissioner.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not grant
any additional rulemaking authority to any state officer, agency,
or institution.
SECTION BY SECTION ANALYSIS
SECTION 1.
Amends Section 8(h), Article 21.49 of the Insurance Code, by
conforming provisions relating to rates for non-commercial
windstorm and hail insurance written by CATPOOL. Deletes the
reference to the "Board" and substitutes "Commissioner". Allows
for the CATPOOL to file for approval by the Texas Commissioner of
Insurance of a manual of rates for commercial risks and classes of
risks written by CATPOOL. Limits rate filings by the CATPOOL to
not more than one in any 12-month period. Provides for an open
meeting on a rate filing for interested persons, and notice
thereof. Requires the Texas Department of Insurance to publish in
the Texas Register notice of CATPOOL rate filings. Provides for
the commissioner to approve, disapprove or modify the filing by
November 1. Provides criteria and requirements to be followed by
the CATPOOL if the commissioner disapproves a filing. Provides for
notice, an open meeting, written or oral comments, and approval,
modification or disapproval by the commission of rate filings.
Provides for a procedure for request by any interested person for
additional supporting information. Limits the increase in
commercial rates to maximum of 15 percent in any one year.
SECTION 2. Effective date.
SECTION 3. Emergency clause.
COMPARISON OF ORIGINAL TO SUBSTITUTE
As filed, House Bill 2593 deleted the Sunset provisions for
setting CATPOOL rates for noncommercial property. As substituted,
House Bill 2593 omits Section 1 of the filed bill and amends
Section 8(h), Texas Catastrophic Property Insurance Pool Act
(Article 21.49, Insurance Code) by conforming provisions relating
to rates for non-commercial windstorm and hail insurance written by
CATPOOL. The substitute allows the CATPOOL to file for approval by
the Texas Commissioner of Insurance of a manual of rates for
commercial risks and classes of risks written by CATPOOL.
Additionally, the substitute limits the rate filings by the
CATPOOL to not more than one in any 12-month period and provides
for an open meeting on a rate filing for interested persons. The
substitute requires the Texas Department of Insurance to publish in
the Texas Register notice of CATPOOL rate filings and provides for
the commissioner to approve, disapprove or modify the filing by
November 1.
The substitute establishes the criteria and requirements to be
followed by the CATPOOL if the commissioner disapproves a filing
and provides for notice of an open meeting request and allows for
written or oral comments to be submitted. The substitute outlines
the procedure for a request by any interested person for additional
supporting information and limits the increase in commercial rates
to maximum of 15 percent in any one year.
SUMMARY OF COMMITTEE ACTION
In accordance with House rules, H.B. 2593 was scheduled for a
public hearing on
March 22, 1995, but was withdrawn from consideration by the author
and left as pending business before the Committee.
On April 26, 1995, the Chair laid out H.B. 2593 as pending
business before the Committee and recognized Representative Eiland
to explain the bill. The Chair recognized the following person to
testify in support of H.B. 2593: Lee Otis Zapp, Jr.; Galveston
Windstorm Action Committee, Inc. The Chair left H.B. 2593 as
pending business before the Committee.
Pursuant to an announcement filed with the Journal Clerk and
read by the Reading Clerk, the House Committee on Insurance met in
a formal meeting on April 27, 1995 on the House Floor and was
called to order by the Chair, Representative John Smithee.
The Chair laid out H.B. 2593 and a substitute to H.B. 2593 and
recognized Representative Counts who moved the Committee adopt the
substitute to H.B. 2593. The Chair heard no objections and the
substitute to H.B. 2593 was adopted.
The Chair requested the record reflect the substitute to H.B.
2593 contained the following hand written alteration: "or modify"
on page 3, Line 23.
The Chair recognized Representative Counts who moved the
Committee report H.B. 2593 as substituted to the full House with
the recommendation that it do pass and be printed. Representative
Shields seconded the motion and the motion prevailed by the
following vote:
AYES (8); NAYES (0); ABSENT (1); PNV (0).