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By:  Van de Putte                                                         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.  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 who issues a residential property insurance 
policy in this state shall:
		(1)  provide a three percent discount 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 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.
	SECTION 2.  This Act applies only to an insurance policy that 
is delivered, issued for delivery, or renewed on or after the 30th 
day after the effective date of this Act.  A policy that is 
delivered, issued for delivery, or renewed before the 30th day 
after the effective date of this Act is governed by the law as it 
existed immediately before that date, and that law is continued in 
effect for this purpose.
	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.