By Dutton, De La Garza, Duncan                        H.B. No. 1367
       74R5859 MWV-D
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to discrimination in the availability of insurance
    1-3  coverage.
    1-4        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-5        SECTION 1.  Article 21.21-5, Insurance Code, is amended to
    1-6  read as follows:
    1-7        Art. 21.21-5.  DISCRIMINATION IN AVAILABILITY, RATES, OR
    1-8  RENEWAL.  (a)  This article applies to any insurer, agent, or other
    1-9  person authorized to engage in the <do> business of <as an
   1-10  insurance company or to provide> insurance in this state,
   1-11  including:
   1-12              (1)  a capital stock company;
   1-13              (2)  a mutual company;
   1-14              (3)  a title insurance company;
   1-15              (4)  a fraternal benefit society;
   1-16              (5)  a local mutual aid association;
   1-17              (6)  a statewide mutual assessment company;
   1-18              (7)  a county mutual insurance company;
   1-19              (8)  a Lloyd's plan company;
   1-20              (9)  a reciprocal or interinsurance exchange;
   1-21              (10)  a stipulated premium insurance company;
   1-22              (11)  a group hospital service company;
   1-23              (12)  a health maintenance organization;
   1-24              (13)  a farm mutual insurance company;
    2-1              (14)  a risk retention group; and
    2-2              (15)  a surplus lines carrier.
    2-3        (b)  An insurer, agent, or other person engaged in the
    2-4  business of insurance may not discriminate on the basis of race,
    2-5  color, religion, <or> national origin, or familial status and, to
    2-6  the extent not shown by the insurer to be justified by sound
    2-7  actuarial principles, on the basis of geographical location,
    2-8  disability, sex, or age, in making a decision to price, cancel,
    2-9  nonrenew, or refuse to offer a policy or certificate of
   2-10  insurance <the setting or use of rates or rating manuals and in the
   2-11  nonrenewal of policies>.
   2-12        (c)  A distinction or discrimination based on a specific
   2-13  characteristic of an individual is based on sound actuarial
   2-14  principles only if the characteristic is:
   2-15              (1)  within the control of the individual;
   2-16              (2)  not based in purpose or effect on the race, color,
   2-17  religion, national origin, or familial status of the individual;
   2-18              (3)  causally related to the risk of the individual;
   2-19  and
   2-20              (4)  shown, all other relevant factors being equal, to
   2-21  be statistically significant as an indicator of the risk of the
   2-22  individual or the expense of providing service to the individual.
   2-23        (d)  Use of a surrogate class is not a sound actuarial
   2-24  principle and may not be used in making a decision to price,
   2-25  cancel, nonrenew, or refuse to offer a policy or certificate of
   2-26  insurance.
   2-27        (e)  In this section, "surrogate class" means a class that is
    3-1  not risk-related but captures part of the risk factor.
    3-2        (f)  A violation of this article is an unfair and deceptive
    3-3  practice in the business of insurance under Article 21.21 of this
    3-4  code.  Compliance with this article does not create an exemption
    3-5  from Article 21.49-2B of this code or other requirements.
    3-6        SECTION 2.  The importance of this legislation and the
    3-7  crowded condition of the calendars in both houses create an
    3-8  emergency and an imperative public necessity that the
    3-9  constitutional rule requiring bills to be read on three several
   3-10  days in each house be suspended, and this rule is hereby suspended,
   3-11  and that this Act take effect and be in force from and after its
   3-12  passage, and it is so enacted.