1-1     By:  Counts (Senate Sponsor - Sibley)                 H.B. No. 1662

 1-2           (In the Senate - Received from the House May 14, 1997;

 1-3     May 15, 1997, read first time and referred to Committee on Economic

 1-4     Development; May 18, 1997, reported favorably by the following

 1-5     vote:  Yeas 8, Nays 3; May 18, 1997, sent to printer.)

 1-6                            A BILL TO BE ENTITLED

 1-7                                   AN ACT

 1-8     relating to rates for certain lines of insurance.


1-10           SECTION 1.  Section 3, Article 5.101, Insurance Code, is

1-11     amended by adding Subsection (r) to read as follows:

1-12           (r)  In order to avoid the circumvention of the flexible

1-13     rating program, and notwithstanding any other provision of this

1-14     article, a county mutual insurance company may not use a rate for

1-15     an insured on private passenger automobile insurance, other than

1-16     insurance on mobile homes and single interest insurance, that,

1-17     after the application of all discounts and policy fees, is lower

1-18     than the highest rate allowed under the flexibility band for that

1-19     line, if the county mutual insurance company is directly or

1-20     indirectly controlled by a holding company, as that term is defined

1-21     by Article 21.49-1 of this code, that also directly or indirectly

1-22     controls another insurance company, including a Lloyds or

1-23     reciprocal exchange, which writes private passenger automobile

1-24     insurance in Texas.

1-25           SECTION 2.  This Act applies only to a rate applicable to an

1-26     insurance policy that is delivered, issued for delivery, or renewed

1-27     on or after September 1, 1997.  A rate applicable to an insurance

1-28     policy that is delivered, issued for delivery, or renewed before

1-29     September 1, 1997, is governed by the law as it existed immediately

1-30     before the effective date of this Act, and that law is continued in

1-31     effect for this purpose.

1-32           SECTION 3.  This Act takes effect September 1, 1997.

1-33           SECTION 4.  The importance of this legislation and the

1-34     crowded condition of the calendars in both houses create an

1-35     emergency and an imperative public necessity that the

1-36     constitutional rule requiring bills to be read on three several

1-37     days in each house be suspended, and this rule is hereby suspended.

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