Amend CSHB 2102, committee printing, as follows:
(1) On page 10, between lines 17 and 18, insert the
following new SECTIONS:
SECTION 6. The heading to Article 5.131, Insurance Code, is
amended to read as follows:
Art. 5.131. <TEMPORARY> RATE ROLLBACK FOR CERTAIN LINES OF
INSURANCE.
SECTION 7. Section 1, Article 5.131, Insurance Code, is
amended to read as follows:
Sec. 1. FINDINGS. The legislature finds that:
(1) the cost of litigation against insureds and their
insurers, the possibility of large and unjust judgments, and the
uncertainty created by a litigious environment within this state
have been significant factors in the high cost of certain lines of
insurance;
(2) legislation enacted by regular sessions of the
75th, 76th, and 77th <73rd and 74th> legislatures, and legislation
passed by or pending in <which may be aided by legislation under
consideration by> the <104th> Congress of the United States, is
intended to meaningfully reform the civil justice system of this
state and this nation and will result in reductions in the cost of
litigation and in the size of judgments;
(3) certain decisions by the Supreme Court of Texas
and federal appellate courts during the years 1995-2001 have
resulted in reductions in the size of certain judgments;
(4) it can be reasonably anticipated that there will
be additional legislation and court decisions in the future that
will result in reductions in the cost of litigation and in the size
of judgments;
(5) while the monetary effect of the legislative
changes can be actuarially determined within a reasonable degree of
certainty, insurers will delay implementation of rate reductions
until they have data evidencing actual loss experience;
(6) <(4)> the delay described by Subdivision (5) <(3)>
of this section will result in a windfall for the insurers
benefited by the changes <legislation> described by Subdivisions
<Subdivision> (2), (3), and (4) of this section, and this benefit
should be passed on to their insureds; and
(7) <(5)> legislative action in the public interest
and within the police power of the state is required to eliminate
unnecessary delays to pass these benefits on to the insured public
of this state.
SECTION 8. Section 2(c), Article 5.131, Insurance Code, is
amended to read as follows:
(c) This article applies only to policies or coverages in
the following lines or sublines that are issued, issued for
delivery, or renewed on and after January 1, 2002 <1996>:
(1) professional liability insurance for a physician,
other health care provider, or hospital;
(2) commercial liability insurance for damages arising
out of the manufacture, design, importation, distribution,
packaging, labeling, lease, or sale of a product or for completed
operations coverage;
(3) private passenger automobile liability insurance
for bodily injury;
(4) commercial automobile liability insurance for
bodily injury;
(5) private umbrella and excess liability insurance;
(6) the liability portion of commercial multi-peril
insurance;
(7) the liability portion of homeowner's, farm and
ranch owner's, and renter's insurance;
(8) the employer's liability portion of workers'
compensation insurance; and
(9) other commercial liability insurance, including
the following lines and sublines:
(A) premises medical;
(B) fire legal liability;
(C) personal advertising injury;
(D) contractual liability;
(E) liability for all premises;
(F) pollution liability;
(G) owners and contractors protective liability;
(H) railroad protective liability;
(I) liquor liability;
(J) farm liability;
(K) commercial umbrella and excess liability;
(L) professional liability other than insurance
described by Subdivision (1) of this subsection; and
(M) garage liability.
SECTION 9. Sections 3(a), (b), (d), and (e), Article 5.131,
Insurance Code, are amended to read as follows:
(a) Notwithstanding Chapter 40 <Article 1.33B> of this code,
on or before September 1 of each year, the commissioner shall hold
a rulemaking hearing under Chapter 2001, Government Code, to
determine the percentage of equitable across-the-board reductions
in insurance rates required of insurers writing the lines and
sublines of liability coverage described by Section 2(c) of this
article.
(b) Not later than October 1, 2001 <1995>, the commissioner
shall issue rules mandating the appropriate rate reductions to
rates for the lines and sublines of liability coverage described by
Section 2(c) of this article and developed without consideration of
the effect of the changes <legislation> described by Section 1 of
this article.
(d) The rate reductions adopted under this section are
applicable to each policy or coverage issued, issued for delivery,
or renewed on and after January 1, 2002 <1996>, and to each policy
or coverage issued, issued for delivery, or renewed on and after
the 90th day after the date of each subsequent rule adopted under
Subsection (a) of this section.
(e) Notwithstanding Subsection (d) of this section, if, on
January 1, 2002 <1996>, the commissioner has not issued an order
establishing rate reductions for a line or subline under this
section, the following reductions, as measured from the base rates
in effect on April 1, 2001 <1995>, apply to each insurer for each
affected policy or coverage issued, issued for delivery, or renewed
on and after January 1, 2002 <1996>:
LINE or SUBLINE PERCENTAGE REDUCTION
(1) professional liability insurance for
physician, other health care provider,
or hospital: 30%
(2) commercial liability insurance for
damages arising out of the manufacture,
design, importation, distribution,
packaging, labeling, lease, or sale
of a product or for
completed operations coverage: 25%
(3) private passenger automobile liability
insurance for bodily injury: 15%
(4) commercial automobile liability
insurance for bodily injury: 20%
(5) private umbrella and excess liability
insurance: 20%
(6) the liability portion of commercial
multi-peril insurance: 10%
(7) the liability portion of homeowner's,
farm and ranch owner's,
and renter's insurance: 5%
(8) the employer's liability portion
of workers' compensation
insurance: 10%
(9) all lines and sublines of other
commercial liability insurance: 15%
SECTION 10. Section 4(a), Article 5.131, Insurance Code, is
amended to read as follows:
(a) Except as provided by Subsection (b) of this section, a
rate filed as to a line or subline of insurance coverage affected
by this article on and after January 1, 2002 <1996>, and a rate
filed on and after the 90th day following the effective date of a
subsequent rule adopted under Section 3(a) of this article, shall
reflect the rate reduction imposed by Section 3 of this article.
The commissioner shall disapprove a rate, subject to the procedures
established by Section 7, Article 5.13-2, of this code if the
commissioner finds that the filed rate does not reflect that
reduction.
SECTION 11. Section 6, Article 5.131, Insurance Code, is
amended to read as follows:
Sec. 6. CONTINUATION <DURATION> OF REDUCTION. After the
conclusion of each regular biennial legislative session, beginning
with the 78th legislative session, the commissioner shall conduct a
review of state and federal legislation and court decisions
analogous to that conducted under Section 3 of this article to
determine if that legislation and those court decisions can
reasonably be anticipated to reduce the cost of litigation or the
amount of damages. If the commissioner finds that those reductions
are likely, the commissioner shall order an additional rate
rollback, as provided by this article, to begin on January 1 of
each even-numbered year. <Unless the commissioner grants relief
under Section 4 or 5 of this article, each rate resulting from the
reduction required under Section 3 of this article remains in
effect until January 1, 2001.>
SECTION 12. Section 8, Article 5.131, Insurance Code, is
amended to read as follows:
Sec. 8. HEARINGS AND ORDERS. Notwithstanding Chapter 40
<Article 1.33B> of this code, a rulemaking hearing under this
article shall be held before the commissioner or the commissioner's
designee. <Article 1.09-5 of this code does not apply to hearings
under this article.> The rulemaking procedures established by this
section do not apply to any other rate promulgation proceeding.
SECTION 13. Section 9, Article 5.131, Insurance Code, is
amended to read as follows:
Sec. 9. PENDING RATE MATTERS. A rate filed pursuant to a
commissioner's order issued before May 1, 2001 <1995>, is not
subject to the rate reductions required by this article before
January 1, 2002 <1996>.
(2) On page 10, line 18, strike "SECTION 6" and substitute
"SECTION 14".
(3) On page 10, line 24, strike "SECTION 7" and substitute
"SECTION 15".