By McCall H.B. No. 2941
75R7656 DLF-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to rates and forms for certain commercial lines of
1-3 insurance.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Sections 1 and 2, Article 5.13-2, Insurance Code,
1-6 are amended to read as follows:
1-7 Sec. 1. PURPOSE. (a) This article governs the regulation
1-8 of general liability, commercial automobile, commercial property,
1-9 all commercial casualty, and medical professional liability
1-10 insurance rates and forms. It does not govern personal automobile
1-11 insurance, fidelity, surety, or guaranty bonds.
1-12 (b) The purposes of this article are to:
1-13 (1) promote the public welfare by regulating insurance
1-14 rates to prohibit excessive, inadequate, or unfairly discriminatory
1-15 rates;
1-16 (2) promote availability of insurance;
1-17 (3) promote price competition among insurers to
1-18 provide rates and premiums that are responsive to competitive
1-19 market conditions;
1-20 (4) prohibit price-fixing agreements and other
1-21 anticompetitive behavior by insurers;
1-22 (5) regulate the insurance forms used for lines of
1-23 insurance subject to this article to ensure that they are not
1-24 unjust, unfair, inequitable, misleading, or deceptive; and
2-1 (6) provide regulatory procedures for the maintenance
2-2 of appropriate information reporting systems.
2-3 Sec. 2. SCOPE. This article applies to all lines of general
2-4 liability, commercial property, commercial automobile, all
2-5 commercial casualty, and medical professional liability insurance
2-6 written under policies or contracts of insurance issued by a
2-7 licensed insurer, other than a fidelity, surety, or guaranty bond
2-8 [or an automobile insurance policy].
2-9 SECTION 2. Section 8(e), Article 5.13-2, Insurance Code, is
2-10 amended to read as follows:
2-11 (e) The commissioner may promulgate standard insurance
2-12 policy forms, endorsements, and other related forms that may be
2-13 used, at the discretion of the insurer, by an insurer instead of
2-14 the insurer's own forms in writing insurance subject to this
2-15 article. [Forms submitted by insurers for approval under this
2-16 section must provide coverage equivalent to that provided in the
2-17 policy forms used for these lines of coverage on the effective date
2-18 of this article. An endorsement may not reduce coverage provided
2-19 under the approved policy form.]
2-20 SECTION 3. Article 5.01(f), Insurance Code, is amended to
2-21 read as follows:
2-22 (f) Notwithstanding Subsections (a) through (d) of this
2-23 article, [on and after March 1, 1992,] rates for motor vehicle
2-24 insurance in this state are determined as provided by Article
2-25 5.13-2 of this code or by the flexible rating program adopted under
2-26 Subchapter M of this chapter, as applicable.
2-27 SECTION 4. Article 5.01-2(b), Insurance Code, is amended to
3-1 read as follows:
3-2 (b) Rates [On and after March 1, 1992, rates] for motor
3-3 vehicle insurance written by a Lloyd's plan insurer or a reciprocal
3-4 or interinsurance exchange are determined as provided by Article
3-5 5.13-2 of this code or by the flexible rating program adopted under
3-6 Subchapter M of this chapter, as applicable.
3-7 SECTION 5. Article 5.03(g), Insurance Code, is amended to
3-8 read as follows:
3-9 (g) Notwithstanding Sections (a) through (e) of this
3-10 article, [on and after March 1, 1992,] rates for motor vehicles are
3-11 determined as provided by Article 5.13-2 of this code or by
3-12 Subchapter M of this chapter, as applicable.
3-13 SECTION 6. Article 5.04(c), Insurance Code, is amended to
3-14 read as follows:
3-15 (c) Notwithstanding Subsections (a) and (b) of this article,
3-16 [on and after March 1, 1992,] rates for motor vehicles are
3-17 determined as provided by Article 5.13-2 of this code or by
3-18 Subchapter M of this chapter, as applicable.
3-19 SECTION 7. Article 5.06, Insurance Code, is amended by
3-20 adding Subsection (11) to read as follows:
3-21 (11) This article does not apply to forms used by insurers
3-22 for commercial automobile insurance.
3-23 SECTION 8. Article 5.09(c), Insurance Code, is amended to
3-24 read as follows:
3-25 (c) Notwithstanding Subsection (a) of this article, [on and
3-26 after March 1, 1992,] rates for motor vehicles are determined as
3-27 provided by Article 5.13-2 of this code or by Subchapter M of this
4-1 chapter, as applicable.
4-2 SECTION 9. Article 5.11(c), Insurance Code, is amended to
4-3 read as follows:
4-4 (c) Notwithstanding Subsections (a) and (b) of this article,
4-5 [on and after March 1, 1992,] rates for motor vehicles are
4-6 determined as provided by Article 5.13-2 of this code or by
4-7 Subchapter M of this chapter, as applicable.
4-8 SECTION 10. Article 5.12(a), Insurance Code, is amended to
4-9 read as follows:
4-10 (a) The State of Texas by and through the commissioner shall
4-11 annually determine the rate of assessment of a maintenance tax to
4-12 be paid on an annual or semiannual basis, as determined by the
4-13 comptroller. The rate of assessment may not exceed one-fifth of
4-14 one percent of the correctly reported gross motor vehicle insurance
4-15 premiums of all authorized insurers writing motor vehicle
4-16 insurance, other than commercial automobile insurance, in this
4-17 state. The comptroller shall collect the maintenance tax.
4-18 SECTION 11. Article 5.14(b), Insurance Code, is amended to
4-19 read as follows:
4-20 (b) Notwithstanding Subsection (a) of this article, [on and
4-21 after October 1, 1991,] rates and forms for general liability,
4-22 commercial automobile, and commercial property insurance coverage
4-23 subject to this subchapter are determined as provided by Article
4-24 5.13-2 of this code.
4-25 SECTION 12. Article 5.15(h), Insurance Code, is amended to
4-26 read as follows:
4-27 (h) Notwithstanding Subsections (a)-(g) of this article,
5-1 rates for general liability, commercial automobile, commercial
5-2 property, and all commercial casualty insurance coverage under
5-3 this article are determined, and hearings related to those rates
5-4 are conducted, as provided by Article 5.13-2 of this code.
5-5 SECTION 13. Article 5.24(a), Insurance Code, is amended to
5-6 read as follows:
5-7 (a) The State of Texas by and through the commissioner shall
5-8 annually determine the rate of assessment of a maintenance tax to
5-9 be paid on an annual or semiannual basis, as determined by the
5-10 comptroller. The rate of assessment may not exceed two-fifths of
5-11 one percent of the correctly reported gross premiums of all classes
5-12 of insurance covered by this subchapter, other than commercial
5-13 automobile insurance, of all authorized insurers writing those
5-14 classes of insurance in this state. The rate of assessment may
5-15 not exceed one-fifth of one percent of the correctly reported gross
5-16 premiums of all insurers writing commercial automobile insurance in
5-17 this state. The comptroller shall collect the maintenance tax.
5-18 SECTION 14. Article 5.96(a-1), Insurance Code, is amended to
5-19 read as follows:
5-20 (a-1) This article does not apply to commercial automobile
5-21 insurance. Except as provided by Section 5(d), Article 5.101, of
5-22 this code, this article does not apply to the setting of benchmark
5-23 rates for motor vehicle insurance and fire and allied lines
5-24 insurance under Subchapter M of this chapter.
5-25 SECTION 15. Section 1, Article 5.101, Insurance Code, is
5-26 amended to read as follows:
5-27 Sec. 1. PURPOSE. (a) The program on flexible rating is
6-1 designed to help stabilize the rates charged for insurance in lines
6-2 of property and casualty insurance covered by Subchapters A and C
6-3 of this chapter.
6-4 (b) This article does not apply to:
6-5 (1) ocean marine insurance;
6-6 (2) inland marine insurance;
6-7 (3) fidelity, surety and guaranty bond insurance;
6-8 (4) errors and omissions insurance;
6-9 (5) directors' and officers' liability insurance;
6-10 (6) general liability insurance;
6-11 (7) commercial property insurance or commercial
6-12 automobile insurance;
6-13 (8) workers' compensation insurance;
6-14 (9) professional liability insurance for physicians
6-15 and health care providers as defined in Article 5.15-1 of this
6-16 code; or
6-17 (10) attorney's professional liability insurance.
6-18 SECTION 16. Section 5.01B, Insurance Code, is repealed.
6-19 SECTION 17. This Act takes effect September 1, 1997, and
6-20 applies only to an insurance policy that is delivered, issued for
6-21 delivery, or renewed on or after January 1, 1998. A policy that is
6-22 delivered, issued for delivery, or renewed before January 1, 1998,
6-23 is governed by the law as it existed immediately before the
6-24 effective date of this Act, and that law is continued in effect for
6-25 this purpose.
6-26 SECTION 18. The importance of this legislation and the
6-27 crowded condition of the calendars in both houses create an
7-1 emergency and an imperative public necessity that the
7-2 constitutional rule requiring bills to be read on three several
7-3 days in each house be suspended, and this rule is hereby suspended.