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 * * * * *