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By: Van de Putte, et al. S.B. No. 113
A BILL TO BE ENTITLED
AN ACT
relating to premium discounts for certain residential property
insurance policies.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter C, Chapter 5, Insurance Code, is
amended by adding Article 5.43 to read as follows:
Art. 5.43. OPTIONAL PREMIUM DISCOUNT FOR CERTAIN
RESIDENTIAL PROPERTY INSURANCE POLICIES. (a) In this article:
(1) "Affiliate" means an entity classified as an
affiliate of an insurer under Section 823.003 of this code.
(2) "Insurer" means an insurer authorized to write
residential property insurance, including a county mutual
insurance company, farm mutual insurance company, Lloyd's plan, or
reciprocal or interinsurance exchange.
(3) "Residential property insurance" means property
or property and casualty insurance covering a dwelling, including
homeowners insurance, residential fire and allied lines insurance,
farm and ranch insurance, or farm and ranch owners insurance.
(b) An insurer that issues a residential property insurance
policy in this state may:
(1) provide a discount of not less than three percent
in the premiums that would otherwise be charged for the policy if
the policyholder has continuously been a residential property
insurance policyholder with that insurer or an affiliate of that
insurer but has not filed a residential property insurance claim
during the three years before the effective date of the policy; and
(2) increase the amount of the discount by one percent
for each subsequent year in which the policyholder has been a
residential property insurance policyholder with that insurer or an
affiliate of that insurer but has not filed a residential property
insurance claim.
(c) An insurer that provides a discount under this article
is not required to provide a discount under this article that
exceeds 10 percent of the premiums that would otherwise be charged
for the residential property insurance policy.
(d) This article applies without regard to whether any of
the policies that continuously covered the policyholder, as
described by Subsections (b)(1) and (2) of this article, was a
different type of residential property insurance policy from the
policy eligible for the discount.
(e) The commissioner shall adopt rules as necessary to
implement this article and shall establish by rule guidelines under
which an insurer that provides a discount under this article shall
determine the appropriate discount based on sound actuarial
principles. The commissioner may approve a discount filed with the
department that is greater or less than the discount specified by
this article if the commissioner determines the discount is
actuarially justified.
SECTION 2. As soon as practicable after the effective date
of this Act, the commissioner of insurance shall adopt rules to
implement Article 5.43, Insurance Code, as added by this Act.
SECTION 3. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2003.