AN ACT

 1-1     relating to rate filings for certain lines of insurance.

 1-2           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-3           SECTION 1.  Subsection (e), Section 3, Article 5.101,

 1-4     Insurance Code, is amended to read as follows:

 1-5           (e)  An insurer may use any rate by classification within the

 1-6     flexibility band without prior approval by the commissioner.  The

 1-7     rate may not include expenses disallowed under Subsection (o) of

 1-8     this section.  Within 30 days of the effective date of the

 1-9     benchmark rate for a particular line, each insurer which proposes

1-10     to write that line of insurance in this state during the effective

1-11     period of the benchmark rate shall file with the commissioner its

1-12     proposed rate by line, and by classification and territory under

1-13     the rating manual promulgated by the commissioner, unless the

1-14     insurer has obtained approval from the commissioner under

1-15     Subsection (l) of this section to use its own rating manual.  The

1-16     insurer shall include in the filing any statistics to support the

1-17     rates to be used by the insurer as required by rule of the

1-18     commissioner, including information necessary to evidence that the

1-19     calculation of the rate does not include disallowed expenses.

1-20     Rates proposed in filings made under this subsection must be just,

1-21     reasonable, adequate and not excessive for the risks to which they

1-22     apply.  The rate takes effect on the date specified by the insurer,

1-23     but not later than the 60th day after the date of filing of the

 2-1     rate with the commissioner.  For the purpose of this section, the

 2-2     date the rate is received by the commissioner is the date of

 2-3     filing.  From and after the effective date of the benchmark rate

 2-4     and prior to the insurer's specified effective date of a new rate,

 2-5     the insurer's previously filed rate shall remain in effect.

 2-6     Subject to the limitations contained in Subsection (p) of this

 2-7     section, an insurer may continue its previously filed rates or make

 2-8     additional rate filings based on the previous benchmark rate for

 2-9     new policies or policies renewing prior to the specified effective

2-10     date of its new rate.

2-11           SECTION 2.  This Act takes effect September 1, 1997, and

2-12     applies only to an insurance policy that is delivered, issued for

2-13     delivery, or renewed on or after January 1, 1998.  A policy that is

2-14     delivered, issued for delivery, or renewed before January 1, 1998,

2-15     is governed by the law as it existed immediately before the

2-16     effective date of this Act, and that law is continued in effect for

2-17     that purpose.

2-18           SECTION 3.  The importance of this legislation and the

2-19     crowded condition of the calendars in both houses create an

2-20     emergency and an imperative public necessity that the

2-21     constitutional rule requiring bills to be read on three several

2-22     days in each house be suspended, and this rule is hereby suspended.

         _______________________________     _______________________________

             President of the Senate              Speaker of the House

               I hereby certify that S.B. No. 1498 passed the Senate on

         April 10, 1997, by a viva-voce vote.

                                             _______________________________

                                                 Secretary of the Senate

               I hereby certify that S.B. No. 1498 passed the House on

         May 25, 1997, by a non-record vote.

                                             _______________________________

                                                 Chief Clerk of the House

         Approved:

         _______________________________

                     Date

         _______________________________

                   Governor