By Ellis S.B. No. 333
74R4132 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, sexual orientation, or
2-6 familial status and, to the extent not shown by the insurer to be
2-7 justified by sound actuarial principles, on the basis of
2-8 geographical location, disability, sex, or age, in making a
2-9 decision to price, cancel, nonrenew, or refuse to offer a policy or
2-10 certificate of insurance <the setting or use of rates or rating
2-11 manuals and in the 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, sexual orientation, or familial status
2-18 of the individual;
2-19 (3) causally related to the risk of the individual;
2-20 and
2-21 (4) shown, all other relevant factors being equal, to
2-22 be statistically significant as an indicator of the risk of the
2-23 individual or the expense of providing service to the individual.
2-24 (d) Use of a surrogate class is not a sound actuarial
2-25 principle and may not be used in making a decision to price,
2-26 cancel, nonrenew, or refuse to offer a policy or certificate of
2-27 insurance.
3-1 (e) In this section, "surrogate class" means a class that is
3-2 not risk-related but captures part of the risk factor.
3-3 (f) A violation of this article is an unfair and deceptive
3-4 practice in the business of insurance under Article 21.21 of this
3-5 code. Compliance with this article does not create an exemption
3-6 from Article 21.49-2B of this code or other requirements.
3-7 SECTION 2. The importance of this legislation and the
3-8 crowded condition of the calendars in both houses create an
3-9 emergency and an imperative public necessity that the
3-10 constitutional rule requiring bills to be read on three several
3-11 days in each house be suspended, and this rule is hereby suspended,
3-12 and that this Act take effect and be in force from and after its
3-13 passage, and it is so enacted.