By McCall H.B. No. 1898
76R8169 T
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to credit property insurance.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subchapter C of Chapter 5, Insurance Code, is
1-5 amended by adding Article 5.53-1 to read as follows:
1-6 Art. 5.53-1. CREDIT PROPERTY INSURANCE. (a) This article
1-7 applies to the filing of all rates and rate schedules used in the
1-8 writing of credit property insurance by every authorized insurer,
1-9 including lloyds plan insurers, county mutual insurers and
1-10 reciprocal or interinsurance exchanges.
1-11 (b) All premium rates or schedules of premium rates used in
1-12 conjunction with credit property insurance delivered or issued for
1-13 delivery in this state and covering property located in this state
1-14 shall be filed with the Commissioner.
1-15 (c) "Credit property insurance" means insurance that
1-16 provides coverage in conjunction with an open or closed end
1-17 consumer credit transaction that qualifies as a retail installment
1-18 transaction as defined in the Finance Code, Section 345.001.
1-19 (d) Within sixty (60) days after the filing of any such
1-20 rates or rate schedules, the Commissioner shall disapprove any such
1-21 rates or rate schedules if the benefits provided are not reasonable
1-22 in relation to the premium charged. If the Commissioner does not
1-23 disapprove a rate within sixty (60) days, it shall be deemed
1-24 approved. If the Commissioner requests additional information
2-1 regarding the filing, the Commissioner shall act within sixty (60)
2-2 days after the receipt of the response to that request.
2-3 (1) The Commissioner shall not disapprove a rate or
2-4 rate schedule that is just, reasonable, adequate, not confiscatory,
2-5 or not excessive. The Commissioner may request information from
2-6 any insurer with respect to compensation paid for the sale of
2-7 credit property insurance, expenses, losses, profits, and any other
2-8 relevant data relating to the premium rate.
2-9 (2) Premium rates or premium rate schedules for credit
2-10 property insurance shall be considered just, reasonable, adequate
2-11 and not excessive if it can be reasonably anticipated that a loss
2-12 ratio of "claims incurred" to "earned premiums" is no less than 55
2-13 percent.
2-14 (e) Any insurer may revise its premium rates or schedules of
2-15 premium rates from time to time, and shall file the revised
2-16 schedules with the Commissioner. No insurer shall issue any credit
2-17 property insurance policy for which the premium rate differs from
2-18 that determined by the schedules and classes of business of the
2-19 insurer as then on file with the Commissioner.
2-20 (f) If the Commissioner disapproves a filing, the
2-21 Commissioner shall issue an order specifying how the filing fails
2-22 to meet the requirements of this article. The filer is entitled to
2-23 a hearing on written request made to the Commissioner not later
2-24 than the 30th day after the effective date of the disapproval
2-25 order. Upon such request, the Commissioner shall conduct a hearing
2-26 under Chapter 2001, Government Code (the Administrative Procedure
2-27 Act) after which hearing, the Commissioner shall have 60 days to
3-1 approve or disapprove the filing or it is deemed approved.
3-2 (g) If the Commissioner disapproves a schedule of rates that
3-3 is in effect, the Commissioner may issue a disapproval order only
3-4 after a hearing held after at least 20 days written notice to the
3-5 insurer that made the filing. An insurer may continue to use any
3-6 such rate during the hearing process. An order of disapproval must
3-7 be issued not later than the 15th day after the close of the
3-8 hearing and must specify how the schedule of rates fails to meet
3-9 the requirements of this article. The order of disapproval must
3-10 also state the date on which the further use of that schedule of
3-11 rates is prohibited. The Commissioner shall set the date not
3-12 earlier than the 45th day after the date on which the hearing
3-13 closes.
3-14 SECTION 2. The provisions of this Act shall take effect
3-15 January 1, 2000, and apply to all credit property insurance
3-16 policies delivered or issued for delivery after that date.
3-17 SECTION 3. The importance of this legislation and the
3-18 crowded condition of the calendars in both houses create an
3-19 emergency and an imperative public necessity that the
3-20 constitutional rule requiring bills to be read on three several
3-21 days in each house be suspended, and this rule is hereby suspended,
3-22 and that this Act take effect and be in force from and after its
3-23 passage, and it is so enacted.