By Wohlgemuth H.B. No. 3668
76R8870 DLF-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to rates for homeowners and residential fire and
1-3 residential allied lines insurance coverage.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Article 5.25, Insurance Code, is amended to read
1-6 as follows:
1-7 Art. 5.25. [BOARD SHALL FIX] RATES. (a) [The State Board
1-8 of Insurance shall have the sole and exclusive power and authority
1-9 and it shall be its duty to prescribe, fix, determine and
1-10 promulgate the rates of premiums to be charged and collected by
1-11 fire insurance companies transacting business in this State. Said
1-12 Board shall also have authority to alter or amend any and all such
1-13 rates of premiums so fixed and determined and adopted by it, and to
1-14 raise or lower the same, or any part thereof, as herein provided.
1-15 Said Board shall have authority to employ clerical help,
1-16 inspectors, experts and other assistants, and to incur such other
1-17 expenses as may be necessary in carrying out the provisions of this
1-18 law. Said Board shall ascertain as soon as practicable the annual
1-19 fire loss in this State; obtain, make and maintain a record thereof
1-20 and collect such data with respect thereto as will enable said
1-21 Board to classify the fire losses of this State, the causes
1-22 thereof, and the amount of premiums collected therefor for each
1-23 class of risks and the amount paid thereon, in such manner as will
1-24 aid in determining equitable insurance rates, methods of reducing
2-1 such fire losses and reducing the insurance rates of the State, or
2-2 subdivisions of the State. The Board may designate one or more
2-3 advisory organizations or other agencies to gather, audit, and
2-4 compile such experience of insurers, and the cost thereof shall be
2-5 borne by such insurers.]
2-6 [(b)] Notwithstanding any other law [Subsection (a) of this
2-7 article, on and after March 1, 1992], the commissioner may not
2-8 establish or regulate the rates for homeowners and residential
2-9 fire and residential allied lines insurance coverage under this
2-10 subchapter, and an insurer writing homeowners and residential fire
2-11 and residential allied lines insurance coverage may use any rate or
2-12 rating manual considered appropriate by the insurer. An insurer is
2-13 not required to file a rate used under this subsection with the
2-14 commissioner.
2-15 (b) Rates [are determined as provided by Subchapter M of
2-16 this chapter, and rates] for other lines of insurance subject to
2-17 this subchapter are determined as provided by Article 5.13-2 of
2-18 this code. This subsection does not affect the requirement for the
2-19 commissioner to conduct inspections of commercial property and
2-20 prescribe a manual of rules and rating schedules for commercial
2-21 property under this subchapter.
2-22 SECTION 2. Article 5.25A(b), Insurance Code, is amended to
2-23 read as follows:
2-24 (b) Notwithstanding Subsection (a) of this article, on and
2-25 after January 1, 2000 [March 1, 1992], rates for homeowners and
2-26 residential fire and residential allied lines insurance coverage
2-27 under this subchapter are determined as provided by Article 5.25
3-1 [Subchapter M] of this code [chapter], and rates for other lines of
3-2 insurance subject to this subchapter are determined as provided by
3-3 Article 5.13-2 of this code.
3-4 SECTION 3. Article 5.26(i), Insurance Code, is amended to
3-5 read as follows:
3-6 (i) Notwithstanding Subsections (a)-(h) of this article, on
3-7 and after January 1, 2000 [March 1, 1992], rates for homeowners and
3-8 residential fire and residential allied lines insurance coverage
3-9 under this subchapter are determined as provided by Article 5.25
3-10 [Subchapter M] of this code [chapter], and rates for other lines of
3-11 insurance subject to this subchapter are determined as provided by
3-12 Article 5.13-2 of this code.
3-13 SECTION 4. Article 5.28(d), Insurance Code, is amended to
3-14 read as follows:
3-15 (d) Notwithstanding Subsection (a) of this article, on and
3-16 after January 1, 2000 [March 1, 1992], rates for homeowners and
3-17 residential fire and residential allied lines insurance coverage
3-18 under this subchapter are determined as provided by Article 5.25
3-19 [Subchapter M] of this code [chapter], and rates for other lines of
3-20 insurance subject to this subchapter are determined as provided by
3-21 Article 5.13-2 of this code.
3-22 SECTION 5. Article 5.29(b), Insurance Code, is amended to
3-23 read as follows:
3-24 (b) Notwithstanding Subsection (a) of this article, on and
3-25 after January 1, 2000 [March 1, 1992], rates for homeowners and
3-26 residential fire and residential allied lines insurance coverage
3-27 under this subchapter are determined as provided by Article 5.25
4-1 [Subchapter M] of this code [chapter], and rates for other lines of
4-2 insurance subject to this subchapter are determined as provided by
4-3 Article 5.13-2 of this code.
4-4 SECTION 6. Article 5.30(b), Insurance Code, is amended to
4-5 read as follows:
4-6 (b) Notwithstanding Subsection (a) of this article, on and
4-7 after January 1, 2000 [March 1, 1992], rates for homeowners and
4-8 residential fire and residential allied lines insurance coverage
4-9 under this subchapter are determined as provided by Article 5.25
4-10 [Subchapter M] of this code [chapter], and rates for other lines of
4-11 insurance subject to this subchapter are determined as provided by
4-12 Article 5.13-2 of this code.
4-13 SECTION 7. Article 5.31(b), Insurance Code, is amended to
4-14 read as follows:
4-15 (b) Notwithstanding Subsection (a) of this article, on and
4-16 after January 1, 2000 [March 1, 1992], rates for homeowners and
4-17 residential fire and residential allied lines insurance coverage
4-18 under this subchapter are determined as provided by Article 5.25
4-19 [Subchapter M] of this code [chapter], and rates for other lines of
4-20 insurance subject to this subchapter are determined as provided by
4-21 Article 5.13-2 of this code.
4-22 SECTION 8. Article 5.32(b), Insurance Code, is amended to
4-23 read as follows:
4-24 (b) Notwithstanding Subsection (a) of this article, on and
4-25 after January 1, 2000 [March 1, 1992], rates for homeowners and
4-26 residential fire and residential allied lines insurance coverage
4-27 under this subchapter are determined as provided by Article 5.25
5-1 [Subchapter M] of this code [chapter], and rates for other lines of
5-2 insurance subject to this subchapter are determined as provided by
5-3 Article 5.13-2 of this code.
5-4 SECTION 9. Article 5.34(b), Insurance Code, is amended to
5-5 read as follows:
5-6 (b) Notwithstanding Subsection (a) of this article, on and
5-7 after January 1, 2000 [March 1, 1992], rates for homeowners and
5-8 residential fire and residential allied lines insurance coverage
5-9 under this subchapter are determined as provided by Article 5.25
5-10 [Subchapter M] of this code [chapter], and rates for other lines of
5-11 insurance subject to this subchapter are determined as provided by
5-12 Article 5.13-2 of this code.
5-13 SECTION 10. Article 5.39(b), Insurance Code, is amended to
5-14 read as follows:
5-15 (b) Notwithstanding Subsection (a) of this article, on and
5-16 after January 1, 2000 [March 1, 1992], rates for homeowners and
5-17 residential fire and residential allied lines insurance coverage
5-18 under this subchapter are determined, and hearings related to those
5-19 rates are conducted, as provided by Article 5.25 [Subchapter M] of
5-20 this code [chapter], and rates for other lines of insurance subject
5-21 to this subchapter are determined as provided by Article 5.13-2 of
5-22 this code.
5-23 SECTION 11. Article 5.40(d), Insurance Code, is amended to
5-24 read as follows:
5-25 (d) Notwithstanding Subsections (a)-(c) of this article, on
5-26 and after January 1, 2000 [March 1, 1992], rates for homeowners and
5-27 residential fire and residential allied lines insurance coverage
6-1 under this subchapter are determined, and hearings related to those
6-2 rates are conducted, as provided by Article 5.25 [Subchapter M] of
6-3 this code [chapter], and rates for other lines of insurance subject
6-4 to this subchapter are determined as provided by Article 5.13-2 of
6-5 this code.
6-6 SECTION 12. Article 5.41(b), Insurance Code, is amended to
6-7 read as follows:
6-8 (b) Notwithstanding Subsection (a) of this article, on and
6-9 after January 1, 2000 [March 1, 1992], rates for homeowners and
6-10 residential fire and residential allied lines insurance coverage
6-11 under this subchapter are determined as provided by Article 5.25
6-12 [Subchapter M] of this code [chapter], and rates for other lines of
6-13 insurance subject to this subchapter are determined as provided by
6-14 Article 5.13-2 of this code.
6-15 SECTION 13. Article 5.96(a-1), Insurance Code, is amended to
6-16 read as follows:
6-17 (a-1) This [Except as provided by Section 5(d), Article
6-18 5.101, of this code, this] article does not apply to the setting of
6-19 benchmark rates for motor vehicle insurance under Subchapter M of
6-20 this chapter and rates for fire and allied lines insurance
6-21 determined under Article 5.25 of this code [Subchapter M of this
6-22 chapter].
6-23 SECTION 14. Section 1, Article 5.101, Insurance Code, is
6-24 amended to read as follows:
6-25 Sec. 1. PURPOSE; APPLICATION. (a) The program on flexible
6-26 rating is designed to help stabilize the rates charged for
6-27 insurance in lines of property and casualty insurance covered by
7-1 Subchapters A and C of this chapter.
7-2 (b) This article does not apply to:
7-3 (1) ocean marine insurance;
7-4 (2) inland marine insurance;
7-5 (3) fidelity, surety and guaranty bond insurance;
7-6 (4) errors and omissions insurance;
7-7 (5) directors' and officers' liability insurance;
7-8 (6) general liability insurance;
7-9 (7) commercial property insurance;
7-10 (8) workers' compensation insurance;
7-11 (9) professional liability insurance for physicians
7-12 and health care providers as defined in Article 5.15-1 of this
7-13 code; [or]
7-14 (10) homeowners and residential fire and residential
7-15 allied lines insurance coverage subject to Article 5.25 of this
7-16 code; or
7-17 (11) attorney's professional liability insurance.
7-18 SECTION 15. This Act takes effect September 1, 1999, and
7-19 applies only to rates for a homeowners and residential fire and
7-20 residential allied lines insurance policy that is delivered,
7-21 issued for delivery, or renewed on or after January 1, 2000.
7-22 Rates for a policy that is delivered, issued for delivery, or
7-23 renewed before January 1, 2000, are governed by the law as it
7-24 existed immediately before the effective date of this Act, and that
7-25 law is continued in effect for that purpose.
7-26 SECTION 16. The importance of this legislation and the
7-27 crowded condition of the calendars in both houses create an
8-1 emergency and an imperative public necessity that the
8-2 constitutional rule requiring bills to be read on three several
8-3 days in each house be suspended, and this rule is hereby suspended.