By Smithee H.B. No. 3017
76R7175 PB-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation by the commissioner of insurance of
1-3 rates, classifications, and forms for certain lines of insurance.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 ARTICLE 1. PRIVATE PASSENGER AUTOMOBILE AND RESIDENTIAL
1-6 PROPERTY LINES
1-7 SECTION 1.01. Chapter 5, Insurance Code, is amended by
1-8 adding Subchapter P to read as follows:
1-9 SUBCHAPTER P. PRIVATE PASSENGER AUTOMOBILE AND RESIDENTIAL
1-10 PROPERTY INSURANCE RATES AND FORMS
1-11 Art. 5.141. RATES AND FORMS FOR PRIVATE PASSENGER AUTOMOBILE
1-12 AND RESIDENTIAL PROPERTY INSURANCE
1-13 Sec. 1. DEFINITIONS. In this article:
1-14 (1) "Filer" means an insurer who files rates,
1-15 prospective loss costs, or supplementary rating information under
1-16 this article.
1-17 (2) "Insurer" means a residential property insurer or
1-18 private passenger automobile insurer. The term does not include
1-19 the Texas Windstorm Insurance Association or the Texas Automobile
1-20 Insurance Plan Association.
1-21 (3) "Private passenger automobile insurance" means
1-22 coverage that:
1-23 (A) covers a private passenger automobile and
1-24 that vehicle's operating equipment; or
2-1 (B) is required because of the liability imposed
2-2 under law for damages arising out of the ownership, operation,
2-3 maintenance, or use in this state of a motor vehicle.
2-4 (4) "Private passenger automobile insurer" means a
2-5 company or other entity authorized to engage in the business of
2-6 motor vehicle insurance in this state who writes private passenger
2-7 automobile insurance.
2-8 (5) "Prospective loss costs" means that portion of a
2-9 rate that:
2-10 (A) does not include provisions for profit or
2-11 expenses, other than loss adjustment expenses; and
2-12 (B) is based on historical aggregate losses and
2-13 loss adjustment expenses projected by development to their ultimate
2-14 value and through trending to a future point in time.
2-15 (6) "Rate" means the cost of insurance per exposure
2-16 unit, whether expressed as a single number or as a prospective loss
2-17 cost, adjusted for the treatment of expenses, profit, and
2-18 individual insurer variation in loss experience, before any
2-19 application of individual risk variations based on loss or expense
2-20 considerations. The term does not include a minimum premium.
2-21 (7) "Residential property insurance" means residential
2-22 fire and residential allied lines insurance that covers against
2-23 loss to real property or tangible personal property.
2-24 (8) "Residential property insurer" means an insurance
2-25 company or other entity authorized to engage in the business of
2-26 residential property in this state. The term includes homeowners
2-27 insurance.
3-1 (9) "Supplementary rating information" means any
3-2 manual, rating schedules, plans of rules, rating rules,
3-3 classification systems, territory codes and descriptions, rating
3-4 plans, and other similar information used by an insurer to
3-5 determine the applicable premium for an insured. The term
3-6 includes:
3-7 (A) factors and relativities, such as increased
3-8 limits factors, classification relativities, deductible
3-9 relativities, premium discount, and other similar factors; and
3-10 (B) rating plans, such as experience, schedule,
3-11 and retrospective rating.
3-12 Sec. 2. APPLICATION; EXCEPTIONS. (a) Except as provided by
3-13 Subsection (b) of this section, this article applies to all
3-14 insurance rates and forms for private passenger automobile and
3-15 residential property insurance.
3-16 (b) Sections 3, 4, 5, and 6 of this article do not apply to:
3-17 (1) a Lloyd's plan insurer or a reciprocal exchange
3-18 with respect to residential property insurance; or
3-19 (2) a county mutual insurer with respect to
3-20 residential property or private passenger automobile insurance.
3-21 Sec. 3. RATE STANDARDS. (a) Rates for insurance subject to
3-22 this article shall be made in accordance with this section.
3-23 (b) In setting rates, an insurer shall consider:
3-24 (1) past and prospective loss experience inside and
3-25 outside this state;
3-26 (2) any applicable catastrophe hazard;
3-27 (3) operation expenses;
4-1 (4) investment income;
4-2 (5) a reasonable margin for profit and contingencies;
4-3 and
4-4 (6) any other relevant factors inside and outside this
4-5 state.
4-6 (c) The insurer may group risks by classifications for the
4-7 establishment of rates and minimum premiums and may modify
4-8 classification rates to produce rates for individual risks in
4-9 accordance with rating plans that establish standards for measuring
4-10 variations in those risks on the basis of any factor listed in
4-11 Subsection (b) of this section.
4-12 (d) Rates may not be excessive, inadequate, or unfairly
4-13 discriminatory and may not be unreasonable.
4-14 (e) In setting rates applicable solely to policyholders in
4-15 this state, an insurer shall use available premium, loss, claim,
4-16 and exposure information from this state to the full extent of the
4-17 actuarial credibility of that information. The insurer may use
4-18 experience from outside this state as necessary to supplement
4-19 information from this state that is not actuarially credible.
4-20 Sec. 4. RATE FILINGS; LEGISLATIVE REPORT. (a) Each insurer
4-21 shall file with the commissioner all rates, supplementary rating
4-22 information, and reasonable and pertinent supporting information
4-23 for risks written in this state.
4-24 (b) If the commissioner determines after a hearing that an
4-25 insurer's rates require supervision because of the insurer's
4-26 financial condition or the insurer's rating practices, the
4-27 commissioner may require the insurer to file with the commissioner
5-1 all rates, supplementary rate information, and any supporting
5-2 information prescribed by the commissioner.
5-3 (c) An insured that is aggrieved with respect to any filing
5-4 in effect, or the public insurance counsel, may make a written
5-5 application to the commissioner for a hearing on the filing. The
5-6 application must specify the grounds on which the applicant bases
5-7 the grievance. If the commissioner finds that the application is
5-8 made in good faith, that the applicant would be so aggrieved if the
5-9 grounds in the application are established, and that those grounds
5-10 otherwise justify holding the hearing, the commissioner shall hold
5-11 a hearing not later than the 30th day after the date of receipt of
5-12 the application. The commissioner must give at least 10 days'
5-13 written notice to the applicant and to each insurer that made the
5-14 filing in question.
5-15 (d) If, after the hearing, the commissioner finds that the
5-16 filing does not meet the requirements of this article, the
5-17 commissioner shall issue an order specifying how the filing fails
5-18 to meet the requirements of this article and stating the date on
5-19 which, within a reasonable period after the order date, the filing
5-20 is no longer in effect. The commissioner shall send copies of the
5-21 order to the applicant and to each affected insurer.
5-22 (e) The commissioner shall require each insurer subject to
5-23 this article to file information with the commissioner on a
5-24 quarterly basis. Each insurer shall provide the commissioner with
5-25 information relating to changes in losses, premiums, and market
5-26 share as the commissioner considers appropriate. The commissioner
5-27 shall report to the governor, lieutenant governor, and speaker of
6-1 the house of representatives on a quarterly basis, relating to the
6-2 information provided by the insurers' reports and to market
6-3 conduct, especially consumer complaints.
6-4 Sec. 5. PUBLIC INFORMATION. Each rate filing and any
6-5 supplementary rating information filed under this article is open
6-6 to public inspection as of the date of the filing.
6-7 Sec. 6. DISAPPROVAL. (a) The commissioner shall disapprove
6-8 a rate if the commissioner determines that the rate filing made
6-9 under this article does not meet the standards established under
6-10 Section 3 of this article.
6-11 (b) If the commissioner disapproves a filing, the
6-12 commissioner shall issue an order specifying in what respects the
6-13 filing fails to meet the requirements of this article. The filer
6-14 is entitled to a hearing on written request made to the
6-15 commissioner not later than the 30th day after the effective date
6-16 of the disapproval order.
6-17 (c) If the commissioner disapproves a rate that is in
6-18 effect, the commissioner may issue a disapproval order only after a
6-19 hearing held after at least 20 days' written notice to the insurer
6-20 that made the filing. The disapproval order must be issued not
6-21 later than the 15th day after the close of the hearing and must
6-22 specify how the rate fails to meet the requirements of this
6-23 article. The disapproval order must state the date on which the
6-24 further use of that rate is prohibited. The commissioner shall set
6-25 the date not earlier than the 45th day after the date on which the
6-26 hearing closes.
6-27 Sec. 7. FORMS. (a) An insurance policy or printed
7-1 endorsement form for use in writing the types of insurance subject
7-2 to this article may not be delivered or issued for delivery in this
7-3 state unless the form has been filed with and approved by the
7-4 commissioner.
7-5 (b) The insurer shall make the filing not later than the
7-6 60th day before the date of any use or delivery for use of the
7-7 form. At the expiration of the 60-day period a filed form is
7-8 considered approved unless, before the expiration of the 60 days,
7-9 the commissioner approves or disapproves the form by order.
7-10 Approval of a form by the commissioner constitutes a waiver of any
7-11 unexpired portion of the 60-day period. The commissioner may
7-12 extend by not more than 10 additional days the period during which
7-13 the commissioner may approve or disapprove a form by giving notice
7-14 to the filer of the extension before the expiration of the initial
7-15 period. At the expiration of any extension and in the absence of
7-16 any earlier approval or disapproval, the form is considered
7-17 approved. For good cause shown, the commissioner may withdraw the
7-18 commissioner's approval at any time after notice and a hearing.
7-19 (c) A commissioner's order disapproving any form or any
7-20 notice of the commissioner's intention to withdraw a previous
7-21 approval must state the grounds for the disapproval in enough
7-22 detail to reasonably inform the filer of the grounds. An order of
7-23 withdrawal of a previously approved form takes effect on the
7-24 expiration of the period prescribed in the order, but not sooner
7-25 than the 30th day after the effective date of the withdrawal order,
7-26 as prescribed by the commissioner.
7-27 (d) An insurer may not use in this state any form after
8-1 disapproval of the form or withdrawal of approval by the
8-2 commissioner.
8-3 (e) The commissioner may disapprove a form or endorsement
8-4 filed under this section, or withdraw any previous approval, if the
8-5 form or endorsement:
8-6 (1) violates or does not comply with this code, a rule
8-7 adopted by the commissioner, or is otherwise contrary to law; or
8-8 (2) contains provisions or has any title or heading
8-9 that is unjust, encourages misrepresentation, is deceptive, or
8-10 violates public policy.
8-11 (f) The commissioner by rule may promulgate standard
8-12 insurance policy forms, endorsements, and other related forms that
8-13 may be used, at the discretion of the insurer, by an insurer
8-14 instead of the insurer's own forms in writing insurance subject to
8-15 this article.
8-16 Sec. 8. RULES. The commissioner may adopt rules as
8-17 necessary to implement and administer this article.
8-18 Sec. 9. ADMINISTRATIVE PROCEDURE ACT APPLICABLE. Chapter
8-19 2001, Government Code, applies to all rate hearings conducted under
8-20 this article.
8-21 ARTICLE 2. GENERAL LIABILITY AND COMMERCIAL LINES
8-22 SECTION 2.01. Section 1, Article 5.13-2, Insurance Code, is
8-23 amended to read as follows:
8-24 Sec. 1. PURPOSE. This article governs the regulation of
8-25 general liability, commercial property, which shall include farm
8-26 and ranch owners and farm and ranch policies, all commercial
8-27 casualty, commercial automobile, and medical professional liability
9-1 insurance rates and forms. It does not govern private passenger
9-2 automobile, fidelity, surety, or guaranty bonds. The purposes of
9-3 this article are to:
9-4 (1) promote the public welfare by regulating insurance
9-5 rates to prohibit excessive, inadequate, or unfairly discriminatory
9-6 rates;
9-7 (2) promote availability of insurance;
9-8 (3) promote price competition among insurers to
9-9 provide rates and premiums that are responsive to competitive
9-10 market conditions;
9-11 (4) prohibit price-fixing agreements and other
9-12 anticompetitive behavior by insurers;
9-13 (5) regulate the insurance forms used for lines of
9-14 insurance subject to this article to ensure that they are not
9-15 unjust, unfair, inequitable, misleading, or deceptive; and
9-16 (6) provide regulatory procedures for the maintenance
9-17 of appropriate information reporting systems.
9-18 SECTION 2.02. Section 2, Article 5.13-2, Insurance Code, is
9-19 amended to read as follows:
9-20 Sec. 2. SCOPE. This article applies to all lines of general
9-21 liability, commercial property, all commercial casualty, commercial
9-22 automobile, and medical professional liability insurance written
9-23 under policies or contracts of insurance issued by a licensed
9-24 insurer, other than a fidelity, surety, or guaranty bond or a
9-25 private passenger [an] automobile insurance policy.
9-26 ARTICLE 3. WINDSTORM AND HAIL INSURANCE LINES
9-27 SECTION 3.01. Subsections (h)(1), (2), (3), (10), and (12),
10-1 Section 8, Article 21.49, Insurance Code, are amended to read as
10-2 follows:
10-3 (h)(1) Each [extended coverage benchmark] rate used by the
10-4 association[, flexibility band, and promulgated rate established by
10-5 the commissioner in accordance with Chapter 5, Insurance Code,]
10-6 must be uniform for each classification throughout the first tier
10-7 of coastal counties.
10-8 (2) The rates for noncommercial windstorm and hail
10-9 insurance written by the association shall be filed by the
10-10 association with the department for approval not later than April 1
10-11 of each year. The association may not file rates for residential
10-12 risks for approval by the department more than once in any 12-month
10-13 period. Article 1.33B of this code does not apply to a rate filing
10-14 made under this subdivision. Subdivisions (4)-(10) of this
10-15 subsection apply to a rate filing made under this subdivision [90
10-16 percent of the modified extended coverage rates. For purposes of
10-17 this section, the modified extended coverage rate is the greater of
10-18 the upper flexibility band for extended coverage established by the
10-19 commissioner under Article 5.101 of this code or 25 percent above
10-20 the extended coverage benchmark rate established by the
10-21 commissioner under that article].
10-22 (3) Not later than August 1 of each year, the
10-23 Association shall file with the department for approval by the
10-24 commissioner a manual rate for commercial risks and classes of
10-25 risks written by the Association developed in accordance with
10-26 Subchapter P [C], Chapter 5, Insurance Code, which is applicable
10-27 only to the extent consistent with this article. The Association
11-1 may not make such a filing more than one time in any 12-month
11-2 period. Except as specifically provided by this subdivision, [The
11-3 rate for commercial windstorm and hail insurance written by the
11-4 Association shall be 90 percent of the rate for extended coverage
11-5 for commercial risks as developed in accordance with Subchapter C,
11-6 Chapter 5, Insurance Code, to the extent consistent with this
11-7 article.] Article 5.141 [5.13-2], Insurance Code, does not apply
11-8 to the rates of insurance written by the Association. Article
11-9 1.33B of this code does not apply to a filing made under [this
11-10 subdivision and] Subdivisions (4)-(10) of this subsection, or a
11-11 department action with respect to the filing.
11-12 (10) A rate filing made under this subsection relating
11-13 to a commercial risk may not reflect an annual premium rate change
11-14 that is more than 15 percent (higher or lower) of the rate for
11-15 commercial windstorm and hail insurance in each rate classification
11-16 in effect on September 1, 1995. A rate filing made under this
11-17 subsection regarding a dwelling extended risk may not reflect an
11-18 annual premium charge that is more than 15 percent (higher or
11-19 lower) of the extended coverage benchmark rate for residential
11-20 windstorm and hail insurance in each rate classification in effect
11-21 on February 1, 1999. This subdivision expires January 1, 2001,
11-22 provided however, that the commissioner may, after notice and
11-23 hearing, suspend this subdivision upon a finding that a catastrophe
11-24 loss or series of occurrences resulting in losses in the
11-25 catastrophe area justify a need to assure rate adequacy in the
11-26 catastrophe area and also justify a need to assure availability of
11-27 insurance outside the catastrophe area.
12-1 (12) The catastrophe element of extended coverage
12-2 rates [promulgated or] filed with [by] the commissioner under this
12-3 Act applicable to [commercial] risks written by the Association
12-4 shall be uniform throughout the designated catastrophe area
12-5 [seacoast territory and shall be based on all monoline extended
12-6 coverage loss experience of all regulated insurers authorized to do
12-7 business in this state, including the Association, for property
12-8 located in the seacoast territory, using the most recent 30 years'
12-9 experience available. Surcharges collected in the past and used in
12-10 the development of current manual rates may not be excluded from
12-11 future rate development as long as those surcharges were collected
12-12 during the experience period used by the commissioner].
12-13 ARTICLE 4. MULTI-PERIL POLICIES
12-14 SECTION 4.01. Article 5.81, Insurance Code, is amended to
12-15 read as follows:
12-16 Art. 5.81. MULTI-PERIL POLICIES; PREMIUM AND RATE ADJUSTMENT
12-17 PLANS; POWERS OF COMMISSIONER [BOARD]. (a) The commissioner may
12-18 [State Board of Insurance is hereby authorized and empowered to]
12-19 make, approve, promulgate, and prescribe policy forms [and rates]
12-20 for multi-peril policies of insurance. Such multi-peril policies
12-21 [and rates] may be in respect to one or more of the perils that are
12-22 otherwise separately and differently subject to regulation under
12-23 the provisions of one or more of the other subchapters of Chapter 5
12-24 of this Code. In prescribing, promulgating, or approving policy
12-25 forms [and rates] the commissioner [board] shall use the procedures
12-26 adopted under Article 5.13-2 of this Code to approve [have the
12-27 authority to designate the rating procedure which will be used in
13-1 making the rates and forms and may choose the procedure under any
13-2 of the subchapters of Chapter 5 for the purpose of determining]
13-3 forms [and rates]. [In making rates on multi-peril policies the
13-4 board may make a cumulative rate or premium or it may rate such
13-5 multi-peril policies on the basis of the experience resulting from
13-6 the experience under the multi-peril policy alone or the separate
13-7 experience as respects each peril and coverage. The board may
13-8 permit discounts from what the rates would otherwise be based on
13-9 the actual savings in expense as is effected by the combining of
13-10 coverages otherwise regulated under separate subchapters of this
13-11 chapter and as respects any multi-coverage policy or "multi-peril"
13-12 policy or any like combination of forms and rates.] No such form
13-13 shall include unnecessary coverages as determined by the
13-14 commissioner [board] and no rate or premium authorized by this
13-15 article shall be excessive, inadequate, or unfairly discriminatory.
13-16 The commissioner [board] may authorize rate filings and such
13-17 further discounts as may be warranted by provisions for inspection,
13-18 premises operation standards, loss prevention requirements, or any
13-19 other considerations and requisites as will improve the loss
13-20 experience of the risk insured.
13-21 (b) To provide for multi-peril policies and in order to
13-22 preserve normal and accepted rating procedures, included as
13-23 necessary level rating methods, and to provide mathematical
13-24 consistency in rate making, any deductible provision and any rate
13-25 or premium reduction shall be made as may be appropriate after
13-26 first arriving at a base rate or premium without the deductible.
13-27 In arriving at base rates and premiums and in determining and
14-1 evaluating the reported loss experience in the rate-making process,
14-2 the method shall include provision that the amount of the
14-3 deductible shall be added to any losses paid on policies containing
14-4 such deductible as a proper and necessary function of calculating
14-5 the base rate or premium, and as indicated, or in the event
14-6 statistics are not available and adequate, there shall be added to
14-7 the loss experience an amount which in the judgment of the board
14-8 represents those losses occurring to the insureds which were less
14-9 than the deductible and for which no insured loss was paid but
14-10 which would have been paid except for the deductible provision.
14-11 (c) Additionally, any deductible provision, or any provision
14-12 to pay the excess of loss over a stated amount, or any percentage
14-13 deductible shall be applied so as to determine the amount of loss
14-14 as is calculated after deducting the amount of the deductible from
14-15 the loss and after deducting the amount of the deductible from the
14-16 policy limit, and the amount of loss payable under such deductible
14-17 multi-peril policy shall be the lesser amount established by such
14-18 calculations notwithstanding any other provision of the Insurance
14-19 Code requiring certain policy language or any provision of an
14-20 insurance contract to the contrary.
14-21 (d) In carrying out the provisions of this article, the
14-22 commissioner [State Board of Insurance] shall make, approve, and
14-23 enforce such rules and regulations as in the best judgment of the
14-24 board are necessary and desirable in carrying out the purposes of
14-25 this article and in achieving the objectives hereof.
14-26 ARTICLE 5. CONFORMING AMENDMENTS
14-27 SECTION 5.01. Article 5.01(f), Insurance Code, is amended to
15-1 read as follows:
15-2 (f) Notwithstanding Subsections (a) through (d) of this
15-3 article, on and after January 1, 2000 [March 1, 1992], rates,
15-4 classifications, and rating manuals for private passenger
15-5 automobile insurance in this state are determined as provided by
15-6 Article 5.141 of this code and rates, classifications, and rating
15-7 manuals for other motor vehicle insurance in this state are
15-8 determined as provided by Article 5.13-2 of this code [the flexible
15-9 rating program adopted under Subchapter M of this chapter].
15-10 SECTION 5.02. Article 5.01-2(b), Insurance Code, is amended
15-11 to read as follows:
15-12 (b) On and after January 1, 2000 [March 1, 1992], rates,
15-13 classifications, and rating manuals for private passenger
15-14 automobile insurance written by a Lloyd's plan insurer or a
15-15 reciprocal or interinsurance exchange are determined as provided by
15-16 Article 5.141 of this code and rates, classifications, and rating
15-17 manuals for other motor vehicle insurance written by a Lloyd's plan
15-18 insurer or a reciprocal or interinsurance exchange are determined
15-19 as provided by Article 5.13-2 of this code [the flexible rating
15-20 program adopted under Subchapter M of this chapter].
15-21 SECTION 5.03. Article 5.03(g), Insurance Code, is amended to
15-22 read as follows:
15-23 (g) Notwithstanding Sections (a) through (e) of this
15-24 article, on and after January 1, 2000 [March 1, 1992], rates,
15-25 classifications, and rating manuals for private passenger
15-26 automobiles in this state are determined as provided by Article
15-27 5.141 of this chapter and rates, classifications, and rating
16-1 manuals for other motor vehicles are determined as provided by
16-2 Article 5.13-2 of this code [Subchapter M of this chapter].
16-3 SECTION 5.04. Section 1, Article 5.03-1, Insurance Code, is
16-4 amended to read as follows:
16-5 Sec. 1. A premium surcharge in an amount to be prescribed by
16-6 the commissioner [State Board of Insurance] shall be assessed by an
16-7 insurer defined in Article 5.01, Texas Insurance Code, against an
16-8 insured for no more than three years immediately following the date
16-9 of conviction of the insured of an offense committed while
16-10 operating a motor vehicle under Section 49.04 or 49.07, Penal Code,
16-11 or an offense under Section 49.08, Penal Code. The premium
16-12 surcharge shall be applied only to private passenger automobile
16-13 policies as defined by the commissioner [State Board of Insurance].
16-14 SECTION 5.05. Section 2(c), Article 5.03-2, Insurance Code,
16-15 is amended to read as follows:
16-16 (c) The discounts under this article shall be set by the
16-17 commissioner [State Board of Insurance].
16-18 SECTION 5.06. Article 5.04(c), Insurance Code, is amended to
16-19 read as follows:
16-20 (c) Notwithstanding Subsections (a) and (b) of this
16-21 article, on and after January 1, 2000 [March 1, 1992], rates,
16-22 classifications, and rating manuals for private passenger
16-23 automobile insurance in this state are determined as provided by
16-24 Article 5.141 of this chapter and rates, classifications, and
16-25 rating manuals for other motor vehicles are determined as provided
16-26 by Article 5.13-2 of this code [Subchapter M of this chapter].
16-27 SECTION 5.07. Article 5.05, Insurance Code, is amended to
17-1 read as follows:
17-2 Art. 5.05. REPORTS ON EXPERIENCE. (a) [Recording and
17-3 Reporting of Loss Experience and Other Data.] The commissioner
17-4 [Board] shall, after due consideration, promulgate reasonable rules
17-5 and statistical plans, which may be modified from time to time and
17-6 which shall be used thereafter by each insurer in the recording and
17-7 reporting of its loss experience and such other data as may be
17-8 required, in order that the total loss and expense experience of
17-9 all insurers may be made available at least annually in such form
17-10 and detail as may be necessary to aid in determining whether rates
17-11 and rating systems in use under this subchapter comply with the
17-12 standards adopted under this subchapter. In promulgating such
17-13 rules, the commissioner [Board] shall provide that rules be as
17-14 uniform as is practicable to the rules and to the form of the
17-15 statistical plans used in other states.
17-16 (b) [Interchange of Rating Plan Data.] Reasonable rules may
17-17 be promulgated by the commissioner [Board] after due consideration
17-18 to allow the interchange of loss experience information as
17-19 necessary for the application of rating plans.
17-20 (c) [Consultation with other States.] In order to further
17-21 uniform administration of rating laws, the commissioner [Board] and
17-22 every insurer and rating organization may exchange information and
17-23 experience data with insurance supervisory officials, insurers and
17-24 rating organizations in other states and may consult and cooperate
17-25 with them with respect to rate-making and the application of rating
17-26 systems.
17-27 (d) The commissioner [Board] is hereby authorized and
18-1 empowered to require sworn statements from any insurer affected by
18-2 this article, showing its experience on any classification or
18-3 classification of risks and such other information which may be
18-4 necessary or helpful in performing duties or authority imposed by
18-5 law. The commissioner [Board] shall prescribe the necessary forms
18-6 for such statements and reports, having due regard to the rules,
18-7 methods and forms in use in other states for similar purposes in
18-8 order that uniformity of statistics may not be disturbed.
18-9 SECTION 5.08. Subsections (2)(c) and (d), Article 5.06-1,
18-10 Insurance Code, are amended to read as follows:
18-11 (c) The [Board may, in the] policy forms adopted or
18-12 approved under Article 5.141 or 5.13-2 [5.06] of this code may[,]
18-13 define "uninsured motor vehicle" to exclude certain motor vehicles
18-14 whose operators are in fact uninsured.
18-15 (d) The portion of a policy form adopted or approved
18-16 under Article 5.141 or 5.13-2 [5.06] of this code to provide
18-17 coverage under this article shall include provisions that,
18-18 regardless of the number of persons insured, policies or bonds
18-19 applicable, vehicles involved, or claims made, the total aggregate
18-20 limit of liability to any one person who sustains bodily injury or
18-21 property damage as the result of any one occurrence shall not
18-22 exceed the limit of liability for these coverages as stated in the
18-23 policy and the total aggregate limit of liability to all claimants,
18-24 if more than one, shall not exceed the total limit of liability per
18-25 occurrence as stated in the policy; and shall provide for the
18-26 exclusion of the recovery of damages for bodily injury or property
18-27 damage or both resulting from the intentional acts of the insured.
19-1 The portion of a policy form adopted or approved under Article
19-2 5.141 or 5.13-2 [5.06] of this code to provide coverage under this
19-3 article shall require that in order for the insured to recover
19-4 under the uninsured motorist coverages where the owner or operator
19-5 of any motor vehicle which causes bodily injury or property damage
19-6 to the insured is unknown, actual physical contact must have
19-7 occurred between the motor vehicle owned or operated by such
19-8 unknown person and the person or property of the insured.
19-9 SECTION 5.09. Article 5.06-6, Insurance Code, is amended to
19-10 read as follows:
19-11 Art. 5.06-6. COVERAGES FOR SPOUSES AND FORMER SPOUSES. A
19-12 personal automobile policy or any similar policy form adopted or
19-13 approved by the commissioner [State Board of Insurance] under
19-14 Article 5.141 [5.06] of this code that covers liability arising out
19-15 of ownership, maintenance, or use of a motor vehicle of a spouse,
19-16 who is otherwise insured by the policy, shall contain a provision
19-17 to continue coverage for the spouse during a period of separation
19-18 in contemplation of divorce.
19-19 SECTION 5.10. Article 5.09(c), Insurance Code, is amended to
19-20 read as follows:
19-21 (c) Notwithstanding Subsection (a) of this article, on and
19-22 after January 1, 2000 [March 1, 1992], rates, classifications, and
19-23 rating manuals for private passenger automobile insurance in this
19-24 state are determined as provided by Article 5.141 of this chapter
19-25 and rates, classifications, and rating manuals for other motor
19-26 vehicles are determined as provided by Article 5.13-2 of this code
19-27 [Subchapter M of this chapter].
20-1 SECTION 5.11. Article 5.11(c), Insurance Code, is amended to
20-2 read as follows:
20-3 (c) Notwithstanding Subsections (a) and (b) of this
20-4 article, on and after January 1, 2000 [March 1, 1992], rates,
20-5 classifications, and rating manuals for private passenger
20-6 automobile insurance in this state are determined as provided by
20-7 Article 5.141 of this chapter and rates, classifications, and
20-8 rating manuals for other motor vehicles are determined as provided
20-9 by Article 5.13-2 of this code [Subchapter M of this chapter].
20-10 SECTION 5.12. Article 5.25(b), Insurance Code, is amended
20-11 to read as follows:
20-12 (b) Notwithstanding Subsection (a) of this article, on and
20-13 after January 1, 2000 [March 1, 1992], rates, manuals, and
20-14 classifications for homeowners and residential fire and residential
20-15 allied lines insurance coverage under this subchapter are
20-16 determined as provided by Article 5.141 [Subchapter M] of this code
20-17 [chapter], and rates for other lines of insurance subject to this
20-18 subchapter are determined as provided by Article 5.13-2 of this
20-19 code. This subsection does not affect the requirement for the
20-20 commissioner to conduct inspections of commercial property and
20-21 prescribe a manual of rules and rating schedules for commercial
20-22 property under this subchapter.
20-23 SECTION 5.13. Article 5.25A(b), Insurance Code, is amended
20-24 to read as follows:
20-25 (b) Notwithstanding Subsection (a) of this article, on and
20-26 after January 1, 2000 [March 1, 1992], rates, manuals, and
20-27 classifications for homeowners and residential fire and residential
21-1 allied lines insurance coverage under this subchapter are
21-2 determined as provided by Article 5.141 [Subchapter M] of this code
21-3 [chapter], and rates for other lines of insurance subject to this
21-4 subchapter are determined as provided by Article 5.13-2 of this
21-5 code.
21-6 SECTION 5.14. Article 5.26(i), Insurance Code, is amended
21-7 to read as follows:
21-8 (i) Notwithstanding Subsections (a)-(h) of this article, on
21-9 and after January 1, 2000 [March 1, 1992], rates, manuals, and
21-10 classifications for homeowners and residential fire and residential
21-11 allied lines insurance coverage under this subchapter are
21-12 determined as provided by Article 5.141 [Subchapter M] of this code
21-13 [chapter], and rates for other lines of insurance subject to this
21-14 subchapter are determined as provided by Article 5.13-2 of this
21-15 code.
21-16 SECTION 5.15. Article 5.28(d), Insurance Code, is amended to
21-17 read as follows:
21-18 (d) Notwithstanding Subsection (a) of this article, on and
21-19 after January 1, 2000 [March 1, 1992], rates, manuals, and
21-20 classifications for homeowners and residential fire and residential
21-21 allied lines insurance coverage under this subchapter are
21-22 determined as provided by Article 5.141 [Subchapter M] of this code
21-23 [chapter], and rates for other lines of insurance subject to this
21-24 subchapter are determined as provided by Article 5.13-2 of this
21-25 code.
21-26 SECTION 5.16. Article 5.29(b), Insurance Code, is amended to
21-27 read as follows:
22-1 (b) Notwithstanding Subsection (a) of this article, on and
22-2 after January 1, 2000 [March 1, 1992], rates, manuals, and
22-3 classifications for homeowners and residential fire and residential
22-4 allied lines insurance coverage under this subchapter are
22-5 determined as provided by Article 5.141 [Subchapter M] of this code
22-6 [chapter], and rates for other lines of insurance subject to this
22-7 subchapter are determined as provided by Article 5.13-2 of this
22-8 code.
22-9 SECTION 5.17. Article 5.30(b), Insurance Code, is amended to
22-10 read as follows:
22-11 (b) Notwithstanding Subsection (a) of this article, on and
22-12 after January 1, 2000 [March 1, 1992], rates, manuals, and
22-13 classifications for homeowners and residential fire and residential
22-14 allied lines insurance coverage under this subchapter are
22-15 determined as provided by Article 5.141 [Subchapter M] of this code
22-16 [chapter], and rates for other lines of insurance subject to this
22-17 subchapter are determined as provided by Article 5.13-2 of this
22-18 code.
22-19 SECTION 5.18. Article 5.31(b), Insurance Code, is amended to
22-20 read as follows:
22-21 (b) Notwithstanding Subsection (a) of this article, on and
22-22 after January 1, 2000 [March 1, 1992], rates, manuals, and
22-23 classifications for homeowners and residential fire and residential
22-24 allied lines insurance coverage under this subchapter are
22-25 determined as provided by Article 5.141 [Subchapter M] of this code
22-26 [chapter], and rates for other lines of insurance subject to this
22-27 subchapter are determined as provided by Article 5.13-2 of this
23-1 code.
23-2 SECTION 5.19. Article 5.32(b), Insurance Code, is amended to
23-3 read as follows:
23-4 (b) Notwithstanding Subsection (a) of this article, on and
23-5 after January 1, 2000 [March 1, 1992], rates, manuals, and
23-6 classifications for homeowners and residential fire and residential
23-7 allied lines insurance coverage under this subchapter are
23-8 determined as provided by Article 5.141 [Subchapter M] of this code
23-9 [chapter], and rates for other lines of insurance subject to this
23-10 subchapter are determined as provided by Article 5.13-2 of this
23-11 code.
23-12 SECTION 5.20. Article 5.34(b), Insurance Code, is amended to
23-13 read as follows:
23-14 (b) Notwithstanding Subsection (a) of this article, on and
23-15 after January 1, 2000 [March 1, 1992], rates, manuals, and
23-16 classifications for homeowners and residential fire and residential
23-17 allied lines insurance coverage under this subchapter are
23-18 determined as provided by Article 5.141 [Subchapter M] of this code
23-19 [chapter], and rates for other lines of insurance subject to this
23-20 subchapter are determined as provided by Article 5.13-2 of this
23-21 code.
23-22 SECTION 5.21. Article 5.35-1, Insurance Code, is amended to
23-23 read as follows:
23-24 Art. 5.35-1. COVERAGES FOR SPOUSES AND FORMER SPOUSES. A
23-25 homeowner's policy or fire policy promulgated under Article 5.141
23-26 [5.35] of this code may not be delivered, issued for delivery, or
23-27 renewed in this state unless the policy contains the following
24-1 language: "It is understood and agreed that this policy, subject
24-2 to all other terms and conditions contained in this policy, when
24-3 covering residential community property, as defined by state law,
24-4 shall remain in full force and effect as to the interest of each
24-5 spouse covered, irrespective of divorce or change of ownership
24-6 between the spouses unless excluded by endorsement attached to this
24-7 policy until the expiration of the policy or until canceled in
24-8 accordance with the terms and conditions of this policy."
24-9 SECTION 5.22. Article 5.39(b), Insurance Code, is amended
24-10 to read as follows:
24-11 (b) Notwithstanding Subsection (a) of this article, on and
24-12 after January 1, 2000 [March 1, 1992], rates, manuals, and
24-13 classifications for homeowners and residential fire and residential
24-14 allied lines insurance coverage under this subchapter are
24-15 determined, and hearings related to those rates are conducted, as
24-16 provided by Article 5.141 [Subchapter M] of this code [chapter],
24-17 and rates for other lines of insurance subject to this subchapter
24-18 are determined as provided by Article 5.13-2 of this code.
24-19 SECTION 5.23. Article 5.40(d), Insurance Code, is amended to
24-20 read as follows:
24-21 (d) Notwithstanding Subsections (a)-(c) of this article, on
24-22 and after January 1, 2000 [March 1, 1992], rates, manuals, and
24-23 classifications for homeowners and residential fire and residential
24-24 allied lines insurance coverage under this subchapter are
24-25 determined, and hearings related to those rates are conducted, as
24-26 provided by Article 5.141 [Subchapter M] of this code [chapter],
24-27 and rates for other lines of insurance subject to this subchapter
25-1 are determined as provided by Article 5.13-2 of this code.
25-2 SECTION 5.24. Article 5.41(b), Insurance Code, is amended to
25-3 read as follows:
25-4 (b) Notwithstanding Subsection (a) of this article, on and
25-5 after January 1, 2000 [March 1, 1992], rates, manuals, and
25-6 classifications for homeowners and residential fire and residential
25-7 allied lines insurance coverage under this subchapter are
25-8 determined as provided by Article 5.141 [Subchapter M] of this code
25-9 [chapter], and rates for other lines of insurance subject to this
25-10 subchapter are determined as provided by Article 5.13-2 of this
25-11 code.
25-12 SECTION 5.25. Article 5.96(a-1), Insurance Code, is amended
25-13 to read as follows:
25-14 (a-1) This [Except as provided by Section 5(d), Article
25-15 5.101, of this code, this] article does not apply to the setting of
25-16 [benchmark] rates for motor vehicle insurance and fire and allied
25-17 lines insurance under Article 5.13-2 or 5.141 of this code
25-18 [Subchapter M of this chapter].
25-19 SECTION 5.26. Section 8, Article 21.77, Insurance Code, is
25-20 amended to read as follows:
25-21 Sec. 8. POLICY FORMS. All policy forms for insurance
25-22 written under this article shall be approved [prescribed] by the
25-23 commissioner [board] as provided by [in] Article 5.13-2 or 5.141 of
25-24 this code [5.06, Insurance Code].
25-25 SECTION 5.27. Section 502.153(d), Transportation Code, is
25-26 amended to read as follows:
25-27 (d) A personal automobile policy used as evidence of
26-1 financial responsibility under this section must comply with
26-2 Article 5.141 [Article 5.06], Insurance Code.
26-3 SECTION 5.28. Section 521.143(c), Transportation Code, is
26-4 amended to read as follows:
26-5 (c) A personal automobile insurance policy used as evidence
26-6 of financial responsibility under this section must comply with
26-7 Article 5.141 [Article 5.06], Insurance Code.
26-8 ARTICLE 6. REPEALER
26-9 SECTION 6.01. The following laws are repealed:
26-10 (1) Article 5.06, Insurance Code;
26-11 (2) Article 5.35, Insurance Code; and
26-12 (3) Article 5.101, Insurance Code.
26-13 ARTICLE 7. TRANSITION; EFFECTIVE DATE; EMERGENCY
26-14 SECTION 7.01. This Act applies only to rates and policy and
26-15 endorsement forms for an insurance policy that is delivered, issued
26-16 for delivery, or renewed on or after January 1, 2000. Rates and
26-17 policy and endorsement forms for a policy that is delivered, issued
26-18 for delivery, or renewed before January 1, 2000, are governed by
26-19 the law as it existed immediately before the effective date of this
26-20 Act, and that law is continued in effect for that purpose.
26-21 SECTION 7.02. This Act takes effect September 1, 1999,
26-22 except that Article 6 of this Act takes effect January 1, 2000.
26-23 SECTION 7.03. The importance of this legislation and the
26-24 crowded condition of the calendars in both houses create an
26-25 emergency and an imperative public necessity that the
26-26 constitutional rule requiring bills to be read on three several
26-27 days in each house be suspended, and this rule is hereby suspended.