S.B. 310 78(R)    BILL ANALYSIS


S.B. 310
By: Fraser
Insurance
02/12/03
Committee Report (Unamended)



BACKGROUND AND PURPOSE 

Currently, 95% of homeowners insurance premiums are written by insurers
that are not rate regulated.  According to the Texas Department of
Insurance, the industry has moved most of its homeowners business to
unregulated Lloyds and reciprocal exchange companies that are not required
to file rate information with the commissioner of insurance.  Senate Bill
310 requires insurers writing residential property insurance to file rates
and supporting data on a one-time basis with the commissioner of
insurance.  

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency, or
institution. 

ANALYSIS

Senate Bill 310 amends the Insurance Code to require insurers writing
residential property insurance in Texas to file rates and supporting data,
including current rates and estimated rates to be charged in the six-month
period following the effective date of this Act, with the commissioner of
insurance (commissioner) on a one-time basis.  The bill requires the
commissioner to submit a report to the governor, lieutenant governor,
speaker of the house, and members of the legislature not later than the
30th day after the effective date of this Act.  The bill requires that the
report provide a summary review of the rates presented in a manner that
protects the identity of individual insurers to inform the legislature as
to whether the rates are just, adequate, and reasonable and not excessive
or unfairly discriminatory, and to assist in determining the most
effective and efficient regulatory system.   
The bill specifies the information that insurers are required to file, as
determined by the commissioner, and requires the commissioner to determine
which insurers are required to file the rating information, the type of
information to be included in the filing, and the date on which the filing
is due.  The commissioner is required to issue an order containing
specified information and to notify affected insurers of the order.   The
bill requires the commissioner to require the one filing of rates and
supporting information to be made not later than the 30th day after the
effective date of this Act.  The commissioner is authorized to require an
insurer to provide additional information after the initial rate
submission.   

Information filed with the Texas Department of Insurance under this Act
that is confidential under a law that applied to the insurer before the
effective date of this Act remains confidential and is not subject to
disclosure, except for legislative purposes.  The bill does not preclude
the use of filed information to prosecute a violation of this code and
sets forth provisions relating to the confidentiality of information used
for this purpose.  The bill provides that an insurer that fails to comply
with any request for information issued by the commissioner under this Act
is subject to sanctions.  The bill requires the commissioner to notify the
governor, lieutenant governor, speaker of the house, and members of the
legislature of the names of the insurers with whom a request was made for
the rate filings and the names of the insurers who did not respond in
whole or in part to the commissioner's request.  The bill requires that
the notification be made by separate letter on the fourth day following
the date on which the commissioner determines that the filing is due. 


 EFFECTIVE DATE

On passage or, if the Act does not receive the necessary vote, the Act
takes effect September 1, 2003.