By Burnam H.B. No. 3080
Line and page numbers may not match official copy.
Bill not drafted by TLC or Senate E&E.
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to rates of Lloyds and reciprocals for policy forms filed
1-3 by national insurers and national organizations of insurance
1-4 companies.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Article 5.35, Insurance Code is amended by adding
1-7 Section (d) to read as follows:
1-8 (d) Rates and supplementary rating information for
1-9 homeowners and residential fire and allied lines insurance policy
1-10 forms and endorsements adopted or approved pursuant to Section (b)
1-11 or (c) of this article, delivered, issued for delivery, or renewed
1-12 by insurers, including a Lloyds plan insurer and a reciprocal or
1-13 interinsurance exchange, shall be subject to the provisions of
1-14 Article 5.13-2 of this code.
1-15 SECTION 2. Sections (e), (f), (g), (h), (i), and (j),
1-16 Article 5.35, Insurance Code, are amended to read as follows:
1-17 (e) [(d)] An insurer may use an endorsement to the policy
1-18 forms adopted or approved by the commissioner under this article if
1-19 the endorsement is approved by the commissioner pursuant to this
1-20 article.
1-21 (f) [(e)] Unless adopted or approved by the commissioner
1-22 pursuant to Subsection (a), (b), or (c) of this article or, in the
1-23 case of an endorsement, under Subsection (e) [(d)] of this article,
2-1 an insurance policy or endorsement for use in writing the types of
2-2 insurance subject to this article may not be delivered or issued
2-3 for delivery in this state.
2-4 (g) [(f)] Each filing pursuant to Subsection (c) or (e)
2-5 [(d)] of this article shall be made not later than the 60th day
2-6 before the date of any use or delivery for use. At the expiration
2-7 of the 60-day period, a filed form or endorsement is approved
2-8 unless before the expiration of the 60 days the commissioner either
2-9 disapproves the form or endorsement by order or approves the form
2-10 or endorsement. Approval of a form or endorsement by the
2-11 commissioner constitutes a waiver of any unexpired portion of the
2-12 60-day period. The commissioner may extend, by not more than an
2-13 additional 30 days, the period during which the commissioner may
2-14 approve or disapprove a form or endorsement by giving notice to the
2-15 filer of the extension before the expiration of the initial period.
2-16 At the expiration of any extension and in the absence of any
2-17 earlier approval or disapproval, the form or endorsement shall be
2-18 considered approved. For good cause shown, the commissioner may
2-19 withdraw the commissioner's approval at any time after notice and
2-20 hearing.
2-21 (h) [(g)](1) The commissioner may disapprove a policy form
2-22 or endorsement filed under this article, or withdraw any previous
2-23 approval thereof, if the policy form or endorsement:
2-24 (A) violates or does not comply with this code,
2-25 or any valid rule relating thereto duly adopted by the
2-26 commissioner, or is otherwise contrary to law; or
3-1 (B) contains provisions or has any titles or
3-2 headings which are unjust, encourage misrepresentation, are
3-3 deceptive, or violate public policy.
3-4 (2) The commissioner's order disapproving any form or
3-5 endorsement or any notice of the commissioner's intention to
3-6 withdraw a previous approval must state the grounds for the
3-7 disapproval in enough detail to reasonably inform the filer of the
3-8 grounds. An order of withdrawal of a previously filed form or
3-9 endorsement takes effect on the expiration of the prescribed period
3-10 but not sooner than the 60th day after the effective date of the
3-11 withdrawal order, as prescribed by the commissioner.
3-12 (i) [(h)] The commissioner may not adopt or approve policy
3-13 forms for personal fire or homeowner's insurance or any endorsement
3-14 to the policy if the policy or endorsement is not in plain
3-15 language. For the purposes of this subsection, a policy or
3-16 endorsement is written in plain language if it achieves the minimum
3-17 score established by the commissioner on the Flesch reading ease
3-18 test or an equivalent test selected by the commissioner or, at the
3-19 option of the commissioner, if it conforms to the language
3-20 requirements in a National Association of Insurance Commissioners
3-21 model act relating to plain language. This subsection does not
3-22 apply to policy language that is mandated by state or federal law.
3-23 (j) [(i)] An insurer may not use in this state any form or
3-24 endorsement after disapproval of the form or endorsement or
3-25 withdrawal of approval by the commissioner.
3-26 (k) [(j)] Notwithstanding Article 1.35A of this code, the
4-1 office of public insurance counsel may submit written comments to
4-2 the commissioner and otherwise participate regarding individual
4-3 company filings made pursuant to this article.
4-4 SECTION 3. Subsection (b), Article 5.25, Insurance Code, is
4-5 amended to read as follows:
4-6 (b) Notwithstanding Subsection (a) of this article, [on and
4-7 after March 1, 1992,] rates for homeowners and residential fire and
4-8 residential allied lines insurance coverage under this subchapter
4-9 are determined as provided by Article 5.13-2 of this code or by
4-10 Subchapter M of this chapter, as applicable, and rates for other
4-11 lines of insurance subject to this subchapter are determined as
4-12 provided by Article 5.13-2 of this code. This subsection does not
4-13 affect the requirement for the commissioner to conduct inspections
4-14 of commercial property and prescribe a manual of rules and rating
4-15 schedules for commercial property under this subchapter.
4-16 SECTION 4. Subsection (b), Article 5.25A, is amended to read
4-17 as follows:
4-18 (b) Notwithstanding Subsection (a) of this article, [on and
4-19 after March 1, 1992,] rates for homeowners and residential fire and
4-20 residential allied lines insurance coverage under this subchapter
4-21 are determined as provided by Article 5.13-2 of this code or by
4-22 Subchapter M of this chapter, as applicable, and rates for other
4-23 lines of insurance subject to this subchapter are determined as
4-24 provided by Article 5.13-2 of this code.
4-25 SECTION 5. Subsection (i), Article 5.26, is amended to read
4-26 as follows:
5-1 (i) Notwithstanding Subsections (a)-(h) of this article, [on
5-2 and after March 1, 1992,] rates for homeowners and residential fire
5-3 and residential allied lines insurance coverage under this
5-4 subchapter are determined as provided by Article 5.13-2 of this
5-5 code or by Subchapter M of this chapter, as applicable, and rates
5-6 for other lines of insurance subject to this subchapter are
5-7 determined as provided by Article 5.13-2 of this code.
5-8 SECTION 6. Subsection (d), Article 5.28, is amended to read
5-9 as follows:
5-10 (d) Notwithstanding Subsection (a) of this article, [on and
5-11 after March 1, 1992,] rates for homeowners and residential fire and
5-12 residential allied lines insurance coverage under this subchapter
5-13 are determined as provided by Article 5.13-2 of this code or by
5-14 Subchapter M of this chapter, as applicable, and rates for other
5-15 lines of insurance subject to this subchapter are determined as
5-16 provided by Article 5.13-2 of this code.
5-17 SECTION 7. Subsection (b), Article 5.29, is amended to read
5-18 as follows:
5-19 (b) Notwithstanding Subsection (a) of this article, [on and
5-20 after March 1, 1992,] rates for homeowners and residential fire and
5-21 residential allied lines insurance coverage under this subchapter
5-22 are determined as provided by Article 5.13-2 of this code or by
5-23 Subchapter M of this chapter, as applicable, and rates for other
5-24 lines of insurance subject to this subchapter are determined as
5-25 provided by Article 5.13-2 of this code.
5-26 SECTION 8. Subsection (b), Article 5.30, Insurance Code, is
6-1 amended to read as follows:
6-2 (b) Notwithstanding Subsection (a) of this article, [on and
6-3 after March 1, 1992,] rates for homeowners and residential fire and
6-4 residential allied lines insurance coverage under this subchapter
6-5 are determined as provided by Article 5.13-2 of this code or by
6-6 Subchapter M of this chapter, as applicable, and rates for other
6-7 lines of insurance subject to this subchapter are determined as
6-8 provided by Article 5.13-2 of this code.
6-9 SECTION 9. Subsection (b), Article 5.31, Insurance Code, is
6-10 amended to read as follows:
6-11 (b) Notwithstanding Subsection (a) of this article, [on and
6-12 after March 1, 1992,] rates for homeowners and residential fire and
6-13 residential allied lines insurance coverage under this subchapter
6-14 are determined as provided by Article 5.13-2 of this code or by
6-15 Subchapter M of this chapter, as applicable, and rates for other
6-16 lines of insurance subject to this subchapter are determined as
6-17 provided by Article 5.13-2 of this code.
6-18 SECTION 10. Subsection (b), Article 5.32, Insurance Code, is
6-19 amended to read as follows:
6-20 (b) Notwithstanding Subsection (a) of this article, [on and
6-21 after March 1, 1992,] rates for homeowners and residential fire and
6-22 residential allied lines insurance coverage under this subchapter
6-23 are determined as provided by Article 5.13-2 of this code or by
6-24 Subchapter M of this chapter, as applicable, and rates for other
6-25 lines of insurance subject to this subchapter are determined as
6-26 provided by Article 5.13-2 of this code.
7-1 SECTION 11. Subsection (b), Article 5.34, Insurance Code, is
7-2 amended to read as follows:
7-3 (b) Notwithstanding Subsection (a) of this article, [on and
7-4 after March 1, 1992,] rates for homeowners and residential fire and
7-5 residential allied lines insurance coverage under this subchapter
7-6 are determined as provided by Article 5.13-2 of this code or by
7-7 Subchapter M of this chapter, as applicable, and rates for other
7-8 lines of insurance subject to this subchapter are determined as
7-9 provided by Article 5.13-2 of this code.
7-10 SECTION 12. Subsection (b), Article 5.39, Insurance Code, is
7-11 amended to read as follows:
7-12 (b) Notwithstanding Subsection (a) of this article, [on and
7-13 after March 1, 1992,] rates for homeowners and residential fire and
7-14 residential allied lines insurance coverage under this subchapter
7-15 are determined, and hearings related to those rates are conducted,
7-16 as provided by Article 5.13-2 of this code or by Subchapter M of
7-17 this chapter, as applicable, and rates for other lines of insurance
7-18 subject to this subchapter are determined as provided by Article
7-19 5.13-2 of this code.
7-20 SECTION 13. Subsection (d), Article 5.40, Insurance Code, is
7-21 amended to read as follows:
7-22 (d) Notwithstanding Subsections (a)-(c) of this article, [on
7-23 and after March 1, 1992,] rates for homeowners and residential fire
7-24 and residential allied lines insurance coverage under this
7-25 subchapter are determined, and hearings related to those rates are
7-26 conducted, as provided by Article 5.13-2 of this code or by
8-1 Subchapter M of this chapter, as applicable, and rates for other
8-2 lines of insurance subject to this subchapter are determined as
8-3 provided by Article 5.13-2 of this code.
8-4 SECTION 14. Subsection (b), Article 5.41, Insurance Code, is
8-5 amended to read as follows:
8-6 (b) Notwithstanding Subsection (a) of this article, [on and
8-7 after March 1, 1992,] rates for homeowners and residential fire and
8-8 residential allied lines insurance coverage under this subchapter
8-9 are determined as provided by Article 5.13-2 of this code or by
8-10 Subchapter M of this chapter, as applicable, and rates for other
8-11 lines of insurance subject to this subchapter are determined as
8-12 provided by Article 5.13-2 of this code.
8-13 SECTION 15. This act takes effect September 1, 2001, and
8-14 applies only to an insurance policy that is delivered, issued for
8-15 delivery, or renewed on or after January 1, 2002. A policy that is
8-16 delivered, issued for delivery, or renewed before January 1, 2002,
8-17 is governed by the law as it existed immediately before the
8-18 effective date of this Act, and that law is continued in effect for
8-19 this purpose.