74R9867 DLF-F
By Duncan H.B. No. 1988
Substitute the following for H.B. No. 1988:
By Duncan C.S.H.B. No. 1988
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the insurance rates and policy forms for certain lines
1-3 of insurance and to certain administrative hearings conducted
1-4 regarding those rates.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Article 5.101, Insurance Code, is amended to read
1-7 as follows:
1-8 Art. 5.101. FLEXIBLE RATING PROGRAM FOR CERTAIN INSURANCE
1-9 LINES.
1-10 Sec. 1. PURPOSE<; EXPIRATION DATE>. <(a)> The <pilot>
1-11 program on flexible rating is designed <created> to help stabilize
1-12 the rates charged for insurance in <all> lines of property and
1-13 casualty insurance covered by Subchapters A and C <through L> of
1-14 this chapter. This article does not apply to: <, except>
1-15 (1) ocean marine insurance; <,>
1-16 (2) inland marine insurance; <,>
1-17 (3) fidelity, surety and guaranty bond insurance; <,>
1-18 (4) errors and omissions insurance; <,>
1-19 (5) directors' and officers' liability insurance; <,>
1-20 (6) general liability insurance; <,>
1-21 (7) commercial property insurance; <,>
1-22 (8) workers' compensation insurance; <,>
1-23 (9) professional liability insurance for physicians
2-1 and health care providers as defined in Article 5.15-1 of this
2-2 code; or <, and>
2-3 (10) attorney's professional liability insurance.
2-4 <(b) This article expires December 31, 1995.>
2-5 Sec. 2. DEFINITIONS. In this article:
2-6 (1) "Benchmark rate" means the rate set annually by
2-7 the commissioner <board> by line, relative to which the flexibility
2-8 bands and statutory rate limitations apply.
2-9 (2) "Classification" means a generic application to
2-10 similar risks within the same line.
2-11 (3) "Flexibility band" means the <a> range of rates
2-12 from 30 percent below to 30 percent above, inclusive, <relative to>
2-13 the benchmark rates set by the commissioner <board> by line, within
2-14 which an insurer, during a set period relative to a particular
2-15 line, may increase or decrease rate levels by classification
2-16 without prior approval by the commissioner <board>. <The board
2-17 shall set the flexibility band as a percentage above and below the
2-18 benchmark rate, which percentage need not be equal above and below
2-19 that benchmark rate.>
2-20 (4) "Line" means each type of insurance made subject
2-21 to this subchapter, other than fidelity, surety, or guaranty bonds.
2-22 (5) "Rate" or "rating plan" means the charge for a
2-23 particular line for each unit of exposure.
2-24 <(6) "Statutory rate limitation" means a minimum and
2-25 maximum boundary on insurance rates that is based on a benchmark
3-1 rate set by line by the board.>
3-2 Sec. 3. OPERATION OF FLEXIBLE RATING PROGRAM <PLAN>. (a)
3-3 Under the flexible rating program <plan> prescribed by this
3-4 article, rates used by insurers in writing property or casualty
3-5 insurance for lines subject to this article are determined through
3-6 the application of flexibility bands to a benchmark rate and are
3-7 implemented on a file and use basis.
3-8 (b) The commissioner <board> shall promulgate a benchmark
3-9 rate <and a flexibility band> for each line subject to this article
3-10 after notice and hearing under Chapter 2001, Government Code
3-11 (<pursuant to> the Administrative Procedure <and Texas Register>
3-12 Act <(Article 6252-13a, Vernon's Texas Civil Statutes>). The
3-13 commissioner shall <board must> set the benchmark rate to produce
3-14 <and the flexibility band in> a range that:
3-15 (1) promotes stability in that line; and
3-16 (2) produces <that will produce> rates that are just,
3-17 reasonable, adequate and not excessive for the risks to which they
3-18 apply, and not confiscatory.
3-19 (c) In promulgating the benchmark rate <and the flexibility
3-20 band>, the commissioner <board> may give due consideration to:
3-21 (1) past and prospective loss experience within the
3-22 state and outside the state if the state data are not credible;
3-23 (2) the peculiar hazards and experience of individual
3-24 risks, past and prospective, within and outside the state;
3-25 (3) a reasonable margin for profit;
4-1 (4) expenses of operation, which may not include
4-2 disallowed expenses under Subsection (o) <(h)> of this section;
4-3 (5) the extent and nature of competition in that
4-4 market;
4-5 (6) the availability or lack of availability in that
4-6 market;
4-7 (7) the level and range of rates and rate changes
4-8 among insurers;
4-9 (8) investment and underwriting experience of
4-10 insurers;
4-11 (9) reinsurance availability;
4-12 (10) consumer complaints;
4-13 (11) extent of denials and restrictions of coverage;
4-14 (12) the volume of cancellations and nonrenewals; and
4-15 (13) any other factor considered appropriate by the
4-16 commissioner <board>.
4-17 (d) <(c)> Each <initial> flexibility band is based on a
4-18 benchmark rate promulgated by the commissioner <board>. The
4-19 commissioner <On or before January 1, 1992, and annually
4-20 thereafter, the board> shall conduct hearings to determine the
4-21 benchmark rates <and flexibility bands> by line on or before
4-22 September 1 of each year. The determination of the rate shall not
4-23 include disallowed expenses under Subsection (o) <(h)> of this
4-24 section. An insurer, the public insurance counsel, and any other
4-25 interested person may present testimony at the hearing and may file
5-1 information for consideration by the commissioner <board>. An
5-2 advisory organization which collects ratemaking data shall not be a
5-3 party to the hearing. A trade association that does not collect
5-4 historical data and that does not provide statistical plans,
5-5 prospective loss costs, or supplementary rating information to its
5-6 members may, on behalf of its members that are small or
5-7 medium-sized insurers, as defined by the commissioner, present rate
5-8 making data and make recommendations to the commissioner <board> at
5-9 the hearing. There is no immunity from antitrust liability for a
5-10 trade association that presents rate making data or makes
5-11 recommendations to the commissioner <board> at the hearing. The
5-12 definition of "small and medium-sized insurers" shall be a
5-13 limitation upon the scope of the presentation to be made by a trade
5-14 association, but may not limit the participation of a trade
5-15 association because its membership includes other sized insurers.
5-16 An insurer shall use that benchmark rate and the flexibility band
5-17 to develop rates used for the line for the year following the
5-18 setting of the benchmark rate <and the flexibility band>.
5-19 (e) <(d)> An insurer may use any rate by classification
5-20 within the <applicable> flexibility band without prior <board>
5-21 approval by the commissioner. The rate may not include expenses
5-22 disallowed under Subsection (o) <(h)> of this section. Within 30
5-23 days of the effective date of the benchmark rate for a particular
5-24 line, each insurer which proposes to write that line of insurance
5-25 in this <the> state during the effective period of the benchmark
6-1 rate shall file with the commissioner <board> its proposed rate by
6-2 line, and by classification and territory under the
6-3 <board-promulgated> rating manual promulgated by the commissioner,
6-4 unless the insurer has obtained approval from the commissioner
6-5 <board> under Subsection (l) <(g)(2)> of this section to use its
6-6 own rating manual. The insurer shall include in the filing any
6-7 statistics to support the rates to be used by the insurer as
6-8 required by <board> rule of the commissioner, including information
6-9 necessary to evidence that the calculation of the rate does not
6-10 include disallowed expenses. Rates proposed in filings made under
6-11 this subsection must be just, reasonable, adequate and not
6-12 excessive for the risks to which they apply. The rate takes effect
6-13 on the date specified by the insurer, but not later than the 60th
6-14 day after the date of filing of the rate with the commissioner
6-15 <board>. For the purpose of this section, the date the rate is
6-16 received by the commissioner <board> is the date of filing. From
6-17 and after the effective date of the benchmark rate and prior to the
6-18 insurer's specified effective date <filing> of a new rate, the
6-19 insurer's previously filed rate shall remain in effect.
6-20 (f) Filed rates within the flexibility band are effective as
6-21 provided in Subsection (e) of this section and are presumed to be
6-22 valid and in compliance with the requirements of that subsection.
6-23 However, if, after a hearing, the commissioner finds that the
6-24 filing of an insurer under Subsection (e) of this section does not
6-25 meet the requirements of this article, the commissioner shall issue
7-1 an order that specifies how the filing fails to meet the
7-2 requirements of this article and states the date on which, within a
7-3 reasonable period after the order date, the insurer's filing is no
7-4 longer in effect.
7-5 (g) <(e)(1)> An insurer may not use a rate outside the upper
7-6 and lower limits of the flexibility band without the prior approval
7-7 of the commissioner <board>. A filing made by an insurer subject
7-8 to the <board> approval of the commissioner is considered approved
7-9 by the commissioner <board> unless the commissioner <board>
7-10 disapproves the filing not later than the 60th day after the date
7-11 of the filing. Any such filing must produce rates which are just,
7-12 reasonable, adequate and not excessive for the risks to which they
7-13 apply, or the commissioner <board> shall disapprove the filing. If
7-14 the commissioner <board> requests additional information regarding
7-15 the filing, the commissioner <it> shall act within 60 days after
7-16 the response to that request. <The rate may not include expenses
7-17 disallowed under this section. The rate takes effect on the
7-18 expiration of that time period or on the date the board
7-19 affirmatively approves the rate.>
7-20 (h) <(2)> An insurer, the public insurance counsel, and any
7-21 other interested person may request, within 30 days of the filing,
7-22 that the commissioner <board> hold a hearing on an insurer's prior
7-23 approval filing. Upon such request, the commissioner <board> shall
7-24 conduct a hearing under Chapter 2001, Government Code (<pursuant
7-25 to> the Administrative Procedure <and Texas Register> Act <(Article
8-1 6252-13a, Vernon's Texas Civil Statutes>), after which hearing, the
8-2 commissioner <board> shall have 60 days to disapprove the filing,
8-3 or it is deemed approved.
8-4 (i) <(f) For the purposes of this article, the statutory
8-5 rate limitations are plus or minus 30 percent of the benchmark
8-6 rate. Rates used under this subchapter, including rates used under
8-7 flexibility bands, may not exceed or be lower than the statutory
8-8 rate limitations unless those rates are approved by the board,
8-9 after notice and hearing pursuant to the Administrative Procedure
8-10 and Texas Register Act (Article 6252-13a, Vernon's Texas Civil
8-11 Statutes), before implementation.> The rate filed under Subsection
8-12 (g) of this section may not include expenses disallowed under
8-13 Subsection (o) <(h)> of this section. In approving an insurer's
8-14 filing for a rate <rates> outside the flexibility <statutory> band,
8-15 the burden of proof is on the insurer making the filing to show, by
8-16 clear and convincing evidence, that, if the rate proposed by the
8-17 insurer is <failure to approve the filing will>:
8-18 (1) more than 30 percent above the benchmark rate, the
8-19 rates available within the flexibility band to the relevant market
8-20 are inadequate for the risks insured and that failure to approve
8-21 the filing will cause a lack of availability in the relevant market
8-22 <the marketplace to be inadequately served>; or
8-23 (2) more than 30 percent below the benchmark rate,
8-24 approval of the filing will not adversely affect the financial
8-25 condition of <cause a lack of availability in the line or lines
9-1 that are the subject of the filing; and>
9-2 <(3) be confiscatory to> the insurer <making the
9-3 filing>.
9-4 (j) An approved rate outside the flexibility band takes
9-5 effect, after approval, on the date specified by the insurer, but
9-6 not later than the 60th day after the date of the approval.
9-7 (k) <(g)(1)> The commissioner <board>, by rule, shall adopt
9-8 a rating manual of classifications and territories for each line
9-9 subject to this subchapter and shall spread the benchmark rate
9-10 among those classifications and territories. The
9-11 <board-promulgated> rating manual promulgated by the commissioner
9-12 shall be used by all insurers unless they receive approval to use
9-13 their own manual under Subsection (l) <Subdivision (2)> of this
9-14 section <subsection>.
9-15 (l) <(2)> Following written application and <board> approval
9-16 of the commissioner, an insurer may use a rating manual relative to
9-17 classifications and territories of risks, different from that
9-18 promulgated by the commissioner <board>, to calculate the rate used
9-19 by that insurer for an individual risk. The calculation of the
9-20 rate may not include disallowed expenses under Subsection (o) <(h)>
9-21 of this section. The commissioner <board> shall approve the use of
9-22 only such additions or refinements in its classification plan as
9-23 will produce subclassifications, which, when combined, will enable
9-24 consideration of the insurer's experience under both the
9-25 commissioner's <board> rating manual and its own rating manual.
10-1 Such application shall be approved by the commissioner <board>,
10-2 after notice and hearing under Chapter 2001, Government Code
10-3 (<pursuant to> the Administrative Procedure <and Texas Register>
10-4 Act <(Article 6252-13a, Vernon's Texas Civil Statutes>), in whole
10-5 or in part, provided the commissioner <board> finds that the
10-6 resulting premiums will be just, adequate, reasonable, not
10-7 excessive, and not unfairly discriminatory, taking into
10-8 consideration the following:
10-9 (1) <(A)> the financial condition of the insurer;
10-10 (2) <(B)> the method of operation and expenses of such
10-11 insurer;
10-12 (3) <(C)> the actual paid and incurred loss experience
10-13 of the insurer;
10-14 (4) <(D)> investment income of the insurer; and
10-15 (5) <(E)> that the application meets the reasonable
10-16 conditions, limitations, and restrictions deemed necessary by the
10-17 commissioner <board>.
10-18 (m) <(3)> In considering all matters set forth in such
10-19 application, the commissioner <board> shall give consideration to
10-20 the composite effect of Subdivisions (2)-(4)<(B), (C), and (D)> of
10-21 this subsection and the commissioner <board> shall deny the
10-22 application if the commissioner <it> finds that the resulting
10-23 premiums would be inadequate, excessive, or unfairly
10-24 discriminatory.
10-25 (n) <(4)> The effect on the rate charged an individual risk
11-1 through surcharges and discounts under any such approved rating
11-2 manual shall not be greater than plus or minus 15 <10> percent, as
11-3 a deviation from the insurer's filed rate within the flexibility
11-4 band or approved rate outside the flexibility band.
11-5 (o) <(h)> For the purposes of <Subsections (b), (c), (d),
11-6 (e), (f), and (g) of> this section, "disallowed expenses" include:
11-7 (1) administrative expenses, not including acquisition
11-8 expenses, not including acquisition, loss control and safety
11-9 engineering expenses, that exceed 110 percent of the industry
11-10 median for those expenses;
11-11 (2) lobbying expenses;
11-12 (3) advertising expenses, other than advertising that
11-13 is directly related to the services or products provided by the
11-14 insurer, advertising designed and directed at loss prevention, or
11-15 advertising the promotion of organizations exempt from federal
11-16 taxation under Section 501(c)(3) of the Internal Revenue Code;
11-17 (4) amounts paid by an insurer as damages in a suit
11-18 against the insurer for bad faith or as fines or penalties for
11-19 violation of law;
11-20 (5) contributions to organizations engaged in
11-21 legislative advocacy;
11-22 (6) fees and penalties imposed on the insurer for
11-23 civil or criminal violations of law;
11-24 (7) contributions to social, religious, political, or
11-25 fraternal organizations;
12-1 (8) fees and assessments paid to advisory
12-2 organizations; and
12-3 (9) any unreasonably incurred expenses, as determined
12-4 by the commissioner <board>.
12-5 (p) <(i)> An insurer may change a rate adopted under
12-6 Subsection (e) <(d)> of this section on a file and use basis not
12-7 more than twice during a 12-month period. Additional changes
12-8 require the prior approval of the commissioner <board>.
12-9 (q) <(j)> An insurer who writes insurance in any line
12-10 subject to this article <subchapter> is required to make rate
12-11 filings under Subsection <(d),> (e), <(f), or> (g), (h), (i), (k),
12-12 (l), (m), or (n) of this section, using its own historical premium
12-13 and loss data, as well as its own data for expenses and for profit
12-14 and contingency factors. The commissioner <board> may require an
12-15 audit of the insurer's historical premium and loss data. The
12-16 insurer may separately supplement its own historical premium and
12-17 loss data with historical premium and loss data as necessary. The
12-18 commissioner <board> may, by rule, establish requirements for
12-19 reporting historical premium and loss data under this subsection.
12-20 Sec. 4. EFFECT OF ENDORSEMENTS. An insurer that provides
12-21 additional coverage through an endorsement to a policy subject to
12-22 this article may assess an additional charge for coverage under the
12-23 endorsement only with the prior approval of the commissioner
12-24 <board>.
12-25 Sec. 5. <BOARD POWERS AND DUTIES. If the board determines
13-1 at any time that the implementation of this subchapter or any part
13-2 thereof is contrary to the public interest, and has resulted or may
13-3 result in imminent peril to the insurance consumers of this state,
13-4 the board may issue an order stating the harm to the public and
13-5 shall thereafter rely upon Subchapters A through L of this chapter,
13-6 or parts thereof, in regulation of property and casualty insurance.>
13-7 <Sec. 6.> ADMINISTRATIVE PROCEDURE <AND TEXAS REGISTER> ACT
13-8 APPLICABLE; BENCHMARK RATE HEARINGS. (a) Chapter 2001, Government
13-9 Code (<The provisions of> the Administrative Procedure <and Texas
13-10 Register> Act <(Article 6252-13a, Vernon's Texas Civil Statutes>),
13-11 applies <apply> to all rate hearings conducted under this article,
13-12 subject to Article 1.33B of this code and Subsections (b)-(d) of
13-13 this section.
13-14 (b) In a hearing on benchmark rates conducted under this
13-15 article, discovery directed to any party to the proceeding
13-16 concerning that party's premium, loss, expense, profit, or rate of
13-17 return experience or its operations is prohibited, except to the
13-18 extent that the party presents evidence, relies on, or provides to
13-19 another party its own individual insurer data in the benchmark rate
13-20 hearing. This subsection does not deny or restrict any party's
13-21 right to produce or rely on relevant information concerning an
13-22 individual insurer as evidence in a benchmark rate hearing.
13-23 (c) As part of a benchmark rate hearing, any party may
13-24 present evidence regarding, and the administrative law judge shall
13-25 make proposed findings concerning, any adjustments or amendments
14-1 that should be made to the statistical reporting rules and
14-2 statistical plans to aid in presenting a case at future benchmark
14-3 rate hearings.
14-4 (d) If the record indicates evidence under Subsection (c) of
14-5 this section, the commissioner may initiate a proceeding under
14-6 Article 5.96 of this code to determine and make adjustments and
14-7 amendments to the rules and statistical plans as necessary to
14-8 further aid in determining whether rates and rating systems in use
14-9 under this article comply with the regulatory standards imposed
14-10 under this article. The commissioner shall consider the evidence
14-11 taken at the benchmark rate hearings under Subsection (c) of this
14-12 section, and shall address that evidence in any order or action
14-13 taken as a result of the proceeding.
14-14 SECTION 2. Article 5.01(f), Insurance Code, is amended to
14-15 read as follows:
14-16 (f) Notwithstanding Subsections (a) through (d) of this
14-17 article, on and after March 1, 1992, rates for motor vehicle
14-18 insurance in this state are determined as provided by the flexible
14-19 rating program adopted under Subchapter M of this chapter. <This
14-20 subsection expires December 31, 1995.>
14-21 SECTION 3. Article 5.01-2(b), Insurance Code, is amended to
14-22 read as follows:
14-23 (b) On and after March 1, 1992, rates for motor vehicle
14-24 insurance written by a Lloyd's plan insurer or a reciprocal or
14-25 interinsurance exchange are determined as provided by the flexible
15-1 rating program adopted under Subchapter M of this chapter. <This
15-2 subsection expires December 31, 1995.>
15-3 SECTION 4. Article 5.03(g), Insurance Code, is amended to
15-4 read as follows:
15-5 (g) Notwithstanding Sections (a) through (e) of this
15-6 article, on and after March 1, 1992, rates for motor vehicles are
15-7 determined as provided by Subchapter M of this chapter. <This
15-8 subsection expires December 31, 1995.>
15-9 SECTION 5. Article 5.04(c), Insurance Code, is amended to
15-10 read as follows:
15-11 (c) Notwithstanding Subsections (a) and (b) of this article,
15-12 on and after March 1, 1992, rates for motor vehicles are determined
15-13 as provided by Subchapter M of this chapter. <This subsection
15-14 expires December 31, 1995.>
15-15 SECTION 6. Article 5.09, Insurance Code, is amended to read
15-16 as follows:
15-17 Art. 5.09. DISCRIMINATIONS OR DISTINCTIONS. (a) Except as
15-18 provided by Subsection (b) of this article, no insurer coming
15-19 within the terms of this subchapter shall, in its business in this
15-20 State, make or permit any distinction or discrimination in favor of
15-21 the insured having a like hazard, in the matter of the charge of
15-22 premiums for insurance, or in dividends or other benefits payable
15-23 under any policy, nor shall any such insurer or agent make any
15-24 contract of insurance, or agreement as to such insurance, other
15-25 than expressed in the policy, nor shall any such insurer or its
16-1 agents or representatives pay, allow or give, or offer to pay,
16-2 allow or give, directly or indirectly, as an inducement to insured,
16-3 any rebate payable upon the policy or any special favor or
16-4 advantage in dividends or other benefits to accrue, or anything of
16-5 value whatsoever, not specified in the policy; provided that
16-6 nothing in this subchapter shall be construed to prohibit the
16-7 modification of rates by rating plans designed to encourage the
16-8 prevention of accidents, and to take account of the peculiar
16-9 hazards and experience of individual risks, past and prospective,
16-10 within and outside the State, and of all other relevant factors,
16-11 within and outside the State, provided such plan shall have been
16-12 approved by the Board.
16-13 (b) This article does not prohibit an insurer, on approval
16-14 by the Board, from distributing to policyholders who are on active
16-15 duty in the United States Armed Forces any estimated profits
16-16 resulting from service by those policyholders in any foreign
16-17 country in a combat theater of operations at any time after January
16-18 1, 1990. An insurer that elects to make such distributions shall
16-19 file a written description of its distribution program with the
16-20 Board for approval by the Board and shall notify the Board in
16-21 writing of each distribution made under the program. The insurer
16-22 may distribute the estimated profits among those policyholders
16-23 based on the length of time served by a policyholder in a combat
16-24 theater of operations, the location of the military service, the
16-25 duration of the applicable insurance policy, or any other
17-1 reasonable basis. The Board shall act on the insurer's
17-2 distribution program within five business days of receipt of the
17-3 insurer's distribution program, otherwise the distribution program
17-4 shall be deemed approved.
17-5 (c) <(b)> Notwithstanding Subsection (a) of this article, on
17-6 and after March 1, 1992, rates for motor vehicles are determined as
17-7 provided by Subchapter M of this chapter. <This subsection expires
17-8 December 31, 1995.>
17-9 SECTION 7. Article 5.11(c), Insurance Code, is amended to
17-10 read as follows:
17-11 (c) Notwithstanding Subsections (a) and (b) of this article,
17-12 on and after March 1, 1992, rates for motor vehicles are determined
17-13 as provided by Subchapter M of this chapter. <This subsection
17-14 expires December 31, 1995.>
17-15 SECTION 8. Section 1, Article 5.13-2, Insurance Code, is
17-16 amended to read as follows:
17-17 Sec. 1. PURPOSE. <(a)> This article governs the regulation
17-18 of general liability, commercial property, all commercial casualty,
17-19 and medical professional liability insurance rates and forms. It
17-20 does not govern automobile, fidelity, surety, or guaranty bonds.
17-21 The purposes of this article are to:
17-22 (1) promote the public welfare by regulating insurance
17-23 rates to prohibit excessive, inadequate, or unfairly discriminatory
17-24 rates;
17-25 (2) promote availability of insurance;
18-1 (3) promote price competition among insurers to
18-2 provide rates and premiums that are responsive to competitive
18-3 market conditions;
18-4 (4) prohibit price-fixing agreements and other
18-5 anticompetitive behavior by insurers;
18-6 (5) regulate the insurance forms used for lines of
18-7 insurance subject to this article to ensure that they are not
18-8 unjust, unfair, inequitable, misleading, or deceptive; and
18-9 (6) provide regulatory procedures for the maintenance
18-10 of appropriate information reporting systems.
18-11 <(b) This article expires December 31, 1995.>
18-12 SECTION 9. Section 3(2), Article 5.13-2, Insurance Code, is
18-13 amended to read as follows:
18-14 (2) "Insurer" means an insurer to which Article 5.13
18-15 of this code applies, but does not include the Texas Catastrophe
18-16 Property Insurance Association. However, the provisions of
18-17 Sections 4, 5, 6, and 7 of this article shall not apply to Lloyd's
18-18 or reciprocals with respect to commercial property insurance.
18-19 SECTION 10. Section 10, Article 5.13-2, Insurance Code, is
18-20 amended to read as follows:
18-21 Sec. 10. ADMINISTRATIVE PROCEDURE <AND TEXAS REGISTER> ACT
18-22 APPLICABLE. Chapter 2001, Government Code (<The provisions of> the
18-23 Administrative Procedure <and Texas Register> Act <(Article
18-24 6252-13a, Vernon's Texas Civil Statutes>), applies <apply> to all
18-25 rate hearings conducted under this article.
19-1 SECTION 11. Article 5.14(b), Insurance Code, is amended to
19-2 read as follows:
19-3 (b) Notwithstanding Subsection (a) of this article, on and
19-4 after October 1, 1991, rates and forms for general liability and
19-5 commercial property insurance coverage subject to this subchapter
19-6 are determined as provided by Article 5.13-2 of this code. <This
19-7 subsection expires December 31, 1995.>
19-8 SECTION 12. Article 5.15(h), Insurance Code, is amended to
19-9 read as follows:
19-10 (h) Notwithstanding Subsections (a)-(g) of this article,
19-11 rates for general liability, commercial property, and all
19-12 commercial casualty insurance coverage under this article are
19-13 determined, and hearings related to those rates are conducted, as
19-14 provided by Article 5.13-2 of this code. <This subsection expires
19-15 December 31, 1995.>
19-16 SECTION 13. Article 5.25(b), Insurance Code, is amended to
19-17 read as follows:
19-18 (b) Notwithstanding Subsection (a) of this article, on and
19-19 after March 1, 1992, rates for homeowners and farm and ranch
19-20 owner's residential fire and residential allied lines insurance
19-21 coverage under this subchapter are determined as provided by
19-22 Subchapter M of this chapter, and rates for other lines of
19-23 insurance subject to this subchapter are determined as provided by
19-24 Article 5.13-2 of this code. This subsection does not affect the
19-25 requirement for the commissioner <Board> to conduct inspections of
20-1 commercial property and prescribe a manual of rules and rating
20-2 schedules for commercial property under this subchapter. <This
20-3 subsection expires December 31, 1995.>
20-4 SECTION 14. Article 5.25A(b), Insurance Code, is amended to
20-5 read as follows:
20-6 (b) Notwithstanding Subsection (a) of this article, on and
20-7 after March 1, 1992, rates for homeowners and farm and ranch
20-8 owner's residential fire and residential allied lines insurance
20-9 coverage under this subchapter are determined as provided by
20-10 Subchapter M of this chapter, and rates for other lines of
20-11 insurance subject to this subchapter are determined as provided by
20-12 Article 5.13-2 of this code. <This subsection expires December 31,
20-13 1995.>
20-14 SECTION 15. Article 5.26(i), Insurance Code, is amended to
20-15 read as follows:
20-16 (i) Notwithstanding Subsections (a)-(h) of this article, on
20-17 and after March 1, 1992, rates for homeowners and farm and ranch
20-18 owner's residential fire and residential allied lines insurance
20-19 coverage under this subchapter are determined as provided by
20-20 Subchapter M of this chapter, and rates for other lines of
20-21 insurance subject to this subchapter are determined as provided by
20-22 Article 5.13-2 of this code. <This subsection expires December 31,
20-23 1995.>
20-24 SECTION 16. Article 5.28(d), Insurance Code, is amended to
20-25 read as follows:
21-1 (d) Notwithstanding Subsection (a) of this article, on and
21-2 after March 1, 1992, rates for homeowners and farm and ranch
21-3 owner's residential fire and residential allied lines insurance
21-4 coverage under this subchapter are determined as provided by
21-5 Subchapter M of this chapter, and rates for other lines of
21-6 insurance subject to this subchapter are determined as provided by
21-7 Article 5.13-2 of this code. <This subsection expires December 31,
21-8 1995.>
21-9 SECTION 17. Article 5.29(b), Insurance Code, is amended to
21-10 read as follows:
21-11 (b) Notwithstanding Subsection (a) of this article, on and
21-12 after March 1, 1992, rates for homeowners and farm and ranch
21-13 owner's residential fire and residential allied lines insurance
21-14 coverage under this subchapter are determined as provided by
21-15 Subchapter M of this chapter, and rates for other lines of
21-16 insurance subject to this subchapter are determined as provided by
21-17 Article 5.13-2 of this code. <This subsection expires December 31,
21-18 1995.>
21-19 SECTION 18. Article 5.30(b), Insurance Code, is amended to
21-20 read as follows:
21-21 (b) Notwithstanding Subsection (a) of this article, on and
21-22 after March 1, 1992, rates for homeowners and farm and ranch
21-23 owner's residential fire and residential allied lines insurance
21-24 coverage under this subchapter are determined as provided by
21-25 Subchapter M of this chapter, and rates for other lines of
22-1 insurance subject to this subchapter are determined as provided by
22-2 Article 5.13-2 of this code. <This subsection expires December 31,
22-3 1995.>
22-4 SECTION 19. Article 5.31(b), Insurance Code, is amended to
22-5 read as follows:
22-6 (b) Notwithstanding Subsection (a) of this article, on and
22-7 after March 1, 1992, rates for homeowners and farm and ranch
22-8 owner's residential fire and residential allied lines insurance
22-9 coverage under this subchapter are determined as provided by
22-10 Subchapter M of this chapter, and rates for other lines of
22-11 insurance subject to this subchapter are determined as provided by
22-12 Article 5.13-2 of this code. <This subsection expires December 31,
22-13 1995.>
22-14 SECTION 20. Article 5.32(b), Insurance Code, is amended to
22-15 read as follows:
22-16 (b) Notwithstanding Subsection (a) of this article, on and
22-17 after March 1, 1992, rates for homeowners and farm and ranch
22-18 owner's residential fire and residential allied lines insurance
22-19 coverage under this subchapter are determined as provided by
22-20 Subchapter M of this chapter, and rates for other lines of
22-21 insurance subject to this subchapter are determined as provided by
22-22 Article 5.13-2 of this code. <This subsection expires December 31,
22-23 1995.>
22-24 SECTION 21. Article 5.34(b), Insurance Code, is amended to
22-25 read as follows:
23-1 (b) Notwithstanding Subsection (a) of this article, on and
23-2 after March 1, 1992, rates for homeowners and farm and ranch
23-3 owner's residential fire and residential allied lines insurance
23-4 coverage under this subchapter are determined as provided by
23-5 Subchapter M of this chapter, and rates for other lines of
23-6 insurance subject to this subchapter are determined as provided by
23-7 Article 5.13-2 of this code. <This subsection expires December 31,
23-8 1995.>
23-9 SECTION 22. Article 5.39(b), Insurance Code, is amended to
23-10 read as follows:
23-11 (b) Notwithstanding Subsection (a) of this article, on and
23-12 after March 1, 1992, rates for homeowners and farm and ranch
23-13 owner's residential fire and residential allied lines insurance
23-14 coverage under this subchapter are determined, and hearings related
23-15 to those rates are conducted, as provided by Subchapter M of this
23-16 chapter, and rates for other lines of insurance subject to this
23-17 subchapter are determined as provided by Article 5.13-2 of this
23-18 code. <This subsection expires December 31, 1995.>
23-19 SECTION 23. Article 5.40(d), Insurance Code, is amended to
23-20 read as follows:
23-21 (d) Notwithstanding Subsections (a)-(c) of this article, on
23-22 and after March 1, 1992, rates for homeowners and farm and ranch
23-23 owner's residential fire and residential allied lines insurance
23-24 coverage under this subchapter are determined, and hearings related
23-25 to those rates are conducted, as provided by Subchapter M of this
24-1 chapter, and rates for other lines of insurance subject to this
24-2 subchapter are determined as provided by Article 5.13-2 of this
24-3 code. <This subsection expires December 31, 1995.>
24-4 SECTION 24. Article 5.41(b), Insurance Code, is amended to
24-5 read as follows:
24-6 (b) Notwithstanding Subsection (a) of this article, on and
24-7 after March 1, 1992, rates for homeowners and farm and ranch
24-8 owner's residential fire and residential allied lines insurance
24-9 coverage under this subchapter are determined as provided by
24-10 Subchapter M of this chapter, and rates for other lines of
24-11 insurance subject to this subchapter are determined as provided by
24-12 Article 5.13-2 of this code. <This subsection expires December 31,
24-13 1995.>
24-14 SECTION 25. Article 5.96(a-1), Insurance Code, is amended to
24-15 read as follows:
24-16 (a-1) Except as provided by Section 5(d), Article 5.101, of
24-17 this code, this <This> article does not apply to the setting of
24-18 <flexibility bands and> benchmark rates for motor vehicle insurance
24-19 and fire and allied lines insurance under Subchapter M of this
24-20 chapter. <This subsection expires December 31, 1995.>
24-21 SECTION 26. Article 5.96A(d), Insurance Code, is amended to
24-22 read as follows:
24-23 (d) Notwithstanding Subsections (a) through (c) of this
24-24 article, on or after September 1, 1992, policy or endorsement forms
24-25 for commercial motor vehicle insurance are adopted as provided by
25-1 Article 5.06 of this code. <This subsection expires December 31,
25-2 1995.>
25-3 SECTION 27. Article 5.97(n), Insurance Code, is amended to
25-4 read as follows:
25-5 (n) Notwithstanding Subsections (a) through (l) of this
25-6 article, this article does not apply to a line of insurance subject
25-7 to Article 5.13-2 of this code. <This subsection expires December
25-8 31, 1995.>
25-9 SECTION 28. Article 17.22(b), Insurance Code, is amended to
25-10 read as follows:
25-11 (b) The flexible rating program created under Subchapter M,
25-12 Chapter 5, of this code does not apply to county mutual insurance
25-13 companies. <This subsection expires December 31, 1995.>
25-14 SECTION 29. The commissioner of insurance shall conduct
25-15 hearings on the benchmark rate under Section 3(d), Article 5.101,
25-16 Insurance Code, as amended by this Act, to be used by insurers in
25-17 calendar year 1996, not later than October 1, 1995.
25-18 SECTION 30. This Act takes effect September 1, 1995.
25-19 SECTION 31. The importance of this legislation and the
25-20 crowded condition of the calendars in both houses create an
25-21 emergency and an imperative public necessity that the
25-22 constitutional rule requiring bills to be read on three several
25-23 days in each house be suspended, and this rule is hereby suspended.