1-1     By:  Sibley                                           S.B. No. 1498

 1-2           (In the Senate - Filed March 13, 1997; March 20, 1997, read

 1-3     first time and referred to Committee on Economic Development;

 1-4     April 4, 1997, reported favorably by the following vote:  Yeas 9,

 1-5     Nays 0; April 4, 1997, sent to printer.)

 1-6                            A BILL TO BE ENTITLED

 1-7                                   AN ACT

 1-8     relating to rate filings for certain lines of insurance.

 1-9           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-10           SECTION 1.  Subsection (e), Section 3, Article 5.101,

1-11     Insurance Code, is amended to read as follows:

1-12           (e)  An insurer may use any rate by classification within the

1-13     flexibility band without prior approval by the commissioner.  The

1-14     rate may not include expenses disallowed under Subsection (o) of

1-15     this section.  Within 30 days of the effective date of the

1-16     benchmark rate for a particular line, each insurer which proposes

1-17     to write that line of insurance in this state during the effective

1-18     period of the benchmark rate shall file with the commissioner its

1-19     proposed rate by line, and by classification and territory under

1-20     the rating manual promulgated by the commissioner, unless the

1-21     insurer has obtained approval from the commissioner under

1-22     Subsection (l) of this section to use its own rating manual.  The

1-23     insurer shall include in the filing any statistics to support the

1-24     rates to be used by the insurer as required by rule of the

1-25     commissioner, including information necessary to evidence that the

1-26     calculation of the rate does not include disallowed expenses.

1-27     Rates proposed in filings made under this subsection must be just,

1-28     reasonable, adequate and not excessive for the risks to which they

1-29     apply.  The rate takes effect on the date specified by the insurer,

1-30     but not later than the 60th day after the date of filing of the

1-31     rate with the commissioner.  For the purpose of this section, the

1-32     date the rate is received by the commissioner is the date of

1-33     filing.  From and after the effective date of the benchmark rate

1-34     and prior to the insurer's specified effective date of a new rate,

1-35     the insurer's previously filed rate shall remain in effect.

1-36     Subject to the limitations contained in Subsection (p) of this

1-37     section, an insurer may continue its previously filed rates or make

1-38     additional rate filings based on the previous benchmark rate for

1-39     new policies or policies renewing prior to the specified effective

1-40     date of its new rate.

1-41           SECTION 2.  This Act takes effect September 1, 1997, and

1-42     applies only to an insurance policy that is delivered, issued for

1-43     delivery, or renewed on or after January 1, 1998.  A policy that is

1-44     delivered, issued for delivery, or renewed before January 1, 1998,

1-45     is governed by the law as it existed immediately before the

1-46     effective date of this Act, and that law is continued in effect for

1-47     that purpose.

1-48           SECTION 3.  The importance of this legislation and the

1-49     crowded condition of the calendars in both houses create an

1-50     emergency and an imperative public necessity that the

1-51     constitutional rule requiring bills to be read on three several

1-52     days in each house be suspended, and this rule is hereby suspended.

1-53                                  * * * * *