By Brimer H.B. No. 1195
77R1990 MXM-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to rates, forms, and maintenance taxes for commercial
1-3 automobile insurance.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Sections 1 and 2, Article 5.13-2, Insurance Code,
1-6 are amended to read as follows:
1-7 Sec. 1. PURPOSE. (a) This article governs the regulation
1-8 of general liability, commercial automobile, commercial property,
1-9 which shall include farm and ranch owners and farm and ranch
1-10 policies, all commercial casualty, and medical professional
1-11 liability insurance rates and forms. It does not govern personal
1-12 automobile insurance or[,] fidelity, surety, or guaranty bonds.
1-13 (b) The purposes of this article are to:
1-14 (1) promote the public welfare by regulating insurance
1-15 rates to prohibit excessive, inadequate, or unfairly discriminatory
1-16 rates;
1-17 (2) promote availability of insurance;
1-18 (3) promote price competition among insurers to
1-19 provide rates and premiums that are responsive to competitive
1-20 market conditions;
1-21 (4) prohibit price-fixing agreements and other
1-22 anticompetitive behavior by insurers;
1-23 (5) regulate the insurance forms used for lines of
1-24 insurance subject to this article to ensure that they are not
2-1 unjust, unfair, inequitable, misleading, or deceptive; and
2-2 (6) provide regulatory procedures for the maintenance
2-3 of appropriate information reporting systems.
2-4 Sec. 2. SCOPE. This article applies to all lines of general
2-5 liability, commercial automobile, commercial property, all
2-6 commercial casualty, and medical professional liability insurance
2-7 written under policies or contracts of insurance issued by a
2-8 licensed insurer, other than a fidelity, surety, or guaranty bond
2-9 [or an automobile insurance policy].
2-10 SECTION 2. Article 5.01(f), Insurance Code, is amended to
2-11 read as follows:
2-12 (f) Notwithstanding Subsections (a) through (d) of this
2-13 article, [on and after March 1, 1992,] rates for motor vehicle
2-14 insurance in this state are determined as provided by Article
2-15 5.13-2 of this code or by the flexible rating program adopted under
2-16 Subchapter M of this chapter, as applicable.
2-17 SECTION 3. Article 5.01-2(b), Insurance Code, is amended to
2-18 read as follows:
2-19 (b) Rates [On and after March 1, 1992, rates] for motor
2-20 vehicle insurance written by a Lloyd's plan insurer or a reciprocal
2-21 or interinsurance exchange are determined as provided by Article
2-22 5.13-2 of this code or by the flexible rating program adopted under
2-23 Subchapter M of this chapter, as applicable.
2-24 SECTION 4. Article 5.03(g), Insurance Code, is amended to
2-25 read as follows:
2-26 (g) Notwithstanding Subsections [Sections] (a) through (e)
2-27 of this article, [on and after March 1, 1992,] rates for motor
3-1 vehicles are determined as provided by Article 5.13-2 of this code
3-2 or by the flexible rating program adopted under Subchapter M of
3-3 this chapter, as applicable.
3-4 SECTION 5. Article 5.04(c), Insurance Code, is amended to
3-5 read as follows:
3-6 (c) Notwithstanding Subsections (a) and (b) of this article,
3-7 [on and after March 1, 1992,] rates for motor vehicles are
3-8 determined as provided by Article 5.13-2 of this code or by the
3-9 flexible rating program adopted under Subchapter M of this chapter,
3-10 as applicable.
3-11 SECTION 6. Article 5.06, Insurance Code, is amended by
3-12 adding Subsection (11) to read as follows:
3-13 (11) This article does not apply to forms used by insurers
3-14 for commercial automobile insurance.
3-15 SECTION 7. Article 5.09(c), Insurance Code, is amended to
3-16 read as follows:
3-17 (c) Notwithstanding Subsection (a) of this article, [on and
3-18 after March 1, 1992,] rates for motor vehicles are determined as
3-19 provided by Article 5.13-2 of this code or by the flexible rating
3-20 program adopted under Subchapter M of this chapter, as applicable.
3-21 SECTION 8. Article 5.11(c), Insurance Code, is amended to
3-22 read as follows:
3-23 (c) Notwithstanding Subsections (a) and (b) of this article,
3-24 [on and after March 1, 1992,] rates for motor vehicles are
3-25 determined as provided by Article 5.13-2 of this code or by the
3-26 flexible rating program adopted under Subchapter M of this chapter,
3-27 as applicable.
4-1 SECTION 9. Article 5.12(a), Insurance Code, is amended to
4-2 read as follows:
4-3 (a) The State of Texas by and through the commissioner shall
4-4 annually determine the rate of assessment of a maintenance tax to
4-5 be paid on an annual or semiannual basis, as determined by the
4-6 comptroller. The rate of assessment may not exceed one-fifth of
4-7 one percent of the correctly reported gross motor vehicle insurance
4-8 premiums of all authorized insurers writing motor vehicle
4-9 insurance, other than commercial automobile insurance, in this
4-10 state. The comptroller shall collect the maintenance tax.
4-11 SECTION 10. Article 5.14(b), Insurance Code, is amended to
4-12 read as follows:
4-13 (b) Notwithstanding Subsection (a) of this article, [on and
4-14 after October 1, 1991,] rates and forms for general liability,
4-15 commercial automobile, and commercial property insurance coverage
4-16 subject to this subchapter are determined as provided by Article
4-17 5.13-2 of this code.
4-18 SECTION 11. Article 5.15(h), Insurance Code, is amended to
4-19 read as follows:
4-20 (h) Notwithstanding Subsections (a)-(g) of this article,
4-21 rates for general liability, commercial automobile, commercial
4-22 property, and all commercial casualty insurance coverage under
4-23 this article are determined, and hearings related to those rates
4-24 are conducted, as provided by Article 5.13-2 of this code.
4-25 SECTION 12. Article 5.24(a), Insurance Code, is amended to
4-26 read as follows:
4-27 (a) The State of Texas by and through the commissioner shall
5-1 annually determine the rate of assessment of a maintenance tax to
5-2 be paid on an annual or semiannual basis, as determined by the
5-3 comptroller. The rate of assessment may not exceed two-fifths of
5-4 one percent of the correctly reported gross premiums of all classes
5-5 of insurance covered by this subchapter, other than commercial
5-6 automobile insurance, of all authorized insurers writing those
5-7 classes of insurance in this state. The rate of assessment may
5-8 not exceed one-fifth of one percent of the correctly reported gross
5-9 premiums of all insurers writing commercial automobile insurance in
5-10 this state. The comptroller shall collect the maintenance tax.
5-11 SECTION 13. Article 5.96(a-1), Insurance Code, is amended to
5-12 read as follows:
5-13 (a-1) This article does not apply to commercial automobile
5-14 insurance. Except as provided by Section 5(d), Article 5.101, of
5-15 this code, this article does not apply to the setting of benchmark
5-16 rates for motor vehicle insurance and fire and allied lines
5-17 insurance under Subchapter M of this chapter.
5-18 SECTION 14. Section 1, Article 5.101, Insurance Code, is
5-19 amended to read as follows:
5-20 Sec. 1. PURPOSE. (a) The program on flexible rating is
5-21 designed to help stabilize the rates charged for insurance in lines
5-22 of property and casualty insurance covered by Subchapters A and C
5-23 of this chapter.
5-24 (b) This article does not apply to:
5-25 (1) ocean marine insurance;
5-26 (2) inland marine insurance;
5-27 (3) fidelity, surety and guaranty bond insurance;
6-1 (4) errors and omissions insurance;
6-2 (5) directors' and officers' liability insurance;
6-3 (6) general liability insurance;
6-4 (7) commercial property insurance or commercial
6-5 automobile insurance;
6-6 (8) workers' compensation insurance;
6-7 (9) professional liability insurance for physicians
6-8 and health care providers as defined in Article 5.15-1 of this
6-9 code; or
6-10 (10) attorney's professional liability insurance.
6-11 SECTION 15. Section 5.01B, Insurance Code, is repealed.
6-12 SECTION 16. This Act takes effect September 1, 2001, and
6-13 applies only to an insurance policy that is delivered, issued for
6-14 delivery, or renewed on or after January 1, 2002. A policy that is
6-15 delivered, issued for delivery, or renewed before January 1, 2002,
6-16 is governed by the law as it existed immediately before the
6-17 effective date of this Act, and that law is continued in effect for
6-18 this purpose.