By Ramsay                                             H.B. No. 2871
         77R7546 AJA-F                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to rate rollback for certain lines of insurance.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1. Section 2(b), Article 5.131, Insurance Code, is
 1-5     amended to read as follows:
 1-6           (b)  County [It is the intent of the legislature that all
 1-7     insurers, including county] mutual insurers, joint underwriting
 1-8     associations, and other insurers [others] whose rates are not
 1-9     regulated shall[,] pass through the savings that accrue from the
1-10     legislation described by Section 1 of this article to their
1-11     policyholders on a prospective basis.  To monitor compliance with
1-12     this legislative directive, the commissioner shall obtain and
1-13     examine data from each insurer described by this subsection as
1-14     necessary to ensure that the insurer is passing through savings to
1-15     the insurer's policyholders in compliance with this section.  The
1-16     commissioner may require information in rate filings, special data
1-17     calls, informational hearings, and any other means consistent with
1-18     other provisions of this code applicable to the affected insurers.
1-19     Information provided under this subsection is privileged and
1-20     confidential to the same extent as the information is privileged
1-21     and confidential under this code or other laws for other insurers
1-22     licensed and writing the same line of insurance in this state.  The
1-23     information remains privileged and confidential unless and until
1-24     introduced into evidence at an administrative hearing or in a court
 2-1     of competent jurisdiction.  Sections 3 and 4 of this article
 2-2     [subchapter] do not apply to the [nonrate regulated] insurers
 2-3     described [covered] by this subsection.  Notwithstanding the
 2-4     nonapplicability of those sections to those insurers, if the
 2-5     commissioner determines on or before January 1, 2003, that an
 2-6     insurer described by this subsection has failed to pass through
 2-7     savings to that insurer's policyholders in compliance with this
 2-8     subsection, the commissioner shall require the insurer to provide
 2-9     rate refunds or reductions to the insurer's policyholders on a
2-10     prospective basis in an amount and manner determined by the
2-11     commissioner by rule.
2-12           SECTION 2. Section 6, Article 5.131, Insurance Code, is
2-13     amended to read as follows:
2-14           Sec. 6.  DURATION OF REDUCTION. Unless the commissioner
2-15     grants relief under Section 4 or 5 of this article, each rate
2-16     resulting from the reduction required under Section 3 of this
2-17     article remains in effect until January 1, 2003 [2001].
2-18           SECTION 3. (a)  Not later than September 30, 2001, the
2-19     commissioner of insurance by rule shall adopt the insurance rates
2-20     that resulted from the reduction required under Section 3, Article
2-21     5.131, Insurance Code, and that were in effect immediately before
2-22     January 1, 2001.
2-23           (b)  The rates adopted under this section shall apply only to
2-24     an insurance policy delivered, issued for delivery, or renewed on
2-25     or after October 1, 2001.
2-26           (c)  Section 6, Article 5.131, Insurance Code, applies to the
2-27     duration of the rates adopted under this section.
 3-1           SECTION 4.  This Act takes effect immediately if it receives
 3-2     a vote of two-thirds of all the members elected to each house, as
 3-3     provided by Section 39, Article III, Texas Constitution.  If this
 3-4     Act does not receive the vote necessary for immediate effect, this
 3-5     Act takes effect September 1, 2001.