By Burnam H.B. No. 304
77R1152 PB-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the application of the flexible rating system to
1-3 insurance written by county mutual insurance companies, Lloyd's
1-4 associations, and reciprocal or interinsurance exchanges.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Article 5.101, Insurance Code, is amended by
1-7 adding Section 6 to read as follows:
1-8 Sec. 6. APPLICATION OF FLEX-RATING TO COUNTY MUTUAL
1-9 INSURANCE COMPANIES, LLOYD'S ASSOCIATIONS, AND RECIPROCAL AND
1-10 INTERINSURANCE EXCHANGES. (a) This article applies to:
1-11 (1) a county mutual insurance company;
1-12 (2) an underwriter at a Lloyd's; and
1-13 (3) a reciprocal or interinsurance exchange.
1-14 (b) Except as provided by Subsection (c) of this section,
1-15 each county mutual insurance company, underwriter at a Lloyd's, and
1-16 reciprocal or interinsurance exchange is subject to the rate and
1-17 rating manual filing requirements of Section 3 of this article.
1-18 (c) The commissioner shall establish separate benchmark
1-19 rates for county mutual insurance companies. In promulgating
1-20 benchmark rates applicable to county mutual insurance companies,
1-21 the commissioner shall consider the factors described by Section
1-22 3(c) of this article based only on the experience of county mutual
1-23 insurance companies. A county mutual insurance company may use
1-24 multiple rating tiers or rating programs within that company, but
2-1 must make a separate filing for each rating tier or rating program.
2-2 SECTION 2. Article 17.22, Insurance Code, is amended to
2-3 read as follows:
2-4 Art. 17.22. APPLICATION OF [EXEMPTION FROM] INSURANCE LAWS.
2-5 (a) County mutual insurance companies shall be exempt from the
2-6 operation of all insurance laws of this state, except such laws as
2-7 are made applicable by their specific terms or as in this Chapter
2-8 specifically provided.
2-9 (b) In addition to any laws made applicable under Subsection
2-10 (a) [such other Articles as may be made to apply by other Articles]
2-11 of this article [Code], county mutual insurance companies are
2-12 [shall be] subject to:
2-13 (1) Chapter 82 [Subdivision 7 of Article 1.10] of this
2-14 code [Code];
2-15 (2) Section 38.001 of this code; and
2-16 (3) [(2)] Articles 1.15, 1.15A, 1.16, [1.24,] 2.04,
2-17 2.05, 2.08, 2.10, 4.10, 5.12, 5.37, 5.38, 5.39, 5.40, 5.49, 5.101,
2-18 21.21, and 21.49 of this code [Code].
2-19 [(b) The flexible rating program created under Subchapter M,
2-20 Chapter 5, of this code does not apply to county mutual insurance
2-21 companies.]
2-22 SECTION 3. Article 18.23(b), Insurance Code, is amended to
2-23 read as follows:
2-24 (b) In addition to any laws made applicable under Subsection
2-25 (a) of this article [such Articles as may be made to apply by other
2-26 Articles of this Chapter], underwriters at a Lloyds' are [shall not
2-27 be exempt from and shall be] subject to Articles 1.15A, 2.20, 5.35,
3-1 5.38, 5.39, 5.40, 5.49, 5.101, 21.21, and 21.49-8 of this code
3-2 [Code].
3-3 SECTION 4. Article 19.12(b), Insurance Code, is amended to
3-4 read as follows:
3-5 (b) In addition to any laws made applicable under Subsection
3-6 (a) [such Articles as may be made to apply by other Articles] of
3-7 this article [Code], reciprocal or inter-insurance exchanges are
3-8 [shall not be exempt from and shall be] subject to:
3-9 (1) Section 5, Article 1.10, of this code [Code]; and
3-10 (2) Articles 1.15, 1.15A, 1.16, 2.20, 5.35, 5.37,
3-11 5.38, 5.39, 5.40, 5.101, 6.12, 8.07, 21.21, and 21.49-8 of this
3-12 code [Code].
3-13 SECTION 5. This Act applies only to rates for an insurance
3-14 policy that is delivered, issued for delivery, or renewed on or
3-15 after January 1, 2002. Rates for a policy that is delivered,
3-16 issued for delivery, or renewed before January 1, 2002, are
3-17 governed by the law as it existed immediately before the effective
3-18 date of this Act, and that law is continued in effect for that
3-19 purpose.
3-20 SECTION 6. This Act takes effect September 1, 2001.