This website will be unavailable from Friday, April 26, 2024 at 6:00 p.m. through Monday, April 29, 2024 at 7:00 a.m. due to data center maintenance.
By: Taylor (Senate Sponsor - Averitt) H.B. No. 2760
(In the Senate - Received from the House April 25, 2005;
April 26, 2005, read first time and referred to Committee on
Business and Commerce; May 17, 2005, reported adversely, with
favorable Committee Substitute by the following vote: Yeas 6,
Nays 0; May 17, 2005, sent to printer.)
COMMITTEE SUBSTITUTE FOR H.B. No. 2760 By: Averitt
A BILL TO BE ENTITLED
AN ACT
relating to regulation of rates for personal automobile and fire
and allied lines insurance policies issued by a county mutual
insurance company.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 912.002, Insurance Code, is amended by
amending Subsection (c) and adding Subsections (c-1) and (c-2) to
read as follows:
(c) Rate regulation for a residential fire and allied lines
insurance policy written by a county mutual insurance company is
subject to Subchapter [Subchapters Q and] U, Chapter 5. On and
after December 1, 2004, rate regulation for a personal automobile
insurance policy and a residential fire and allied lines insurance
policy written by a county mutual insurance company, including a
policy written through one of multiple insurance programs marketed
or offered to consumers by managing general agents appointed by the
same county mutual insurance company, is subject to Article 5.13-2.
For the purposes of this subsection, rates for a program marketed or
offered to consumers for personal automobile insurance by a
managing general agent appointed by a county mutual insurance
company shall be considered independently of the other rates for
personal automobile insurance of that county mutual insurance
company if the county mutual insurance company:
(1) has historically written business through
managing general agents;
(2) was writing business through managing general
agents as of December 1, 2004; and
(3) is issuing or writing personal automobile
insurance policies only at nonstandard rates, as that term is
defined by Section 13(e), Article 5.13-2, as determined after any
policy fees are applied to the rates, or renewing policies at rates
that are at least 105 percent of the applicable standard rate index
adopted under Section 13(c) or (d), Article 5.13-2, as determined
after any policy fees are applied to the rates [A county mutual
insurance company is subject to Subchapter U, Chapter 5].
(c-1) An independent program of a county mutual insurance
company described by Subsection (c) is subject to the rate
standards of Article 5.13-2.
(c-2) The commissioner may adopt rules as necessary to
implement Subsections (c) and (c-1) [this subsection].
SECTION 2. Section 13(e), Article 5.13-2, Insurance Code,
is amended to read as follows:
(e) For purposes of this section, "nonstandard rates" means
rates that are 20 [30] percent or more above the standard rate index
as determined by the commissioner under this section. The
commissioner, on written request, may permit a county mutual
insurance company that issues policies that are 10 percent or more
above the standard rate index to be eligible for the exemption
described by Subsection (f) of this section. A county mutual
insurance company that renews policies using rates that are at
least 105 percent of the applicable standard rate index is eligible
for the exemption described by Subsection (f) of this section.
SECTION 3. (a) The commissioner of insurance shall submit a
report to the governor, the lieutenant governor, the speaker of the
house of representatives, and the members of the 80th Legislature
on the market insured by county mutual insurers. The report may
also include information on the market served by other types of
insurers that issue personal automobile insurance policies only at
nonstandard rates as defined by Section 13, Article 5.13-2,
Insurance Code. The report must be submitted before September 1,
2006.
(b) The report required by this section must include:
(1) the types and terms of policies issued;
(2) a description of the geographic spread of business
throughout the state;
(3) the scope of coverage provided;
(4) a description of the insureds serviced by the
insurers and the relative level of risk posed by the insureds;
(5) recommendations from the Texas Department of
Insurance to the legislature regarding the application of Section
13, Article 5.13-2, Insurance Code, to county mutual insurers and
other types of insurers; and
(6) any other information considered necessary by the
commissioner of insurance.
(c) Insurers shall provide sufficient information as
determined by the commissioner of insurance to allow the Texas
Department of Insurance to prepare the report required by this
section.
(d) This section expires March 1, 2007.
SECTION 4. The change in law made by this Act applies only
to an insurance policy delivered, issued for delivery, or renewed
on or after January 1, 2006. A policy delivered, issued for
delivery, or renewed before that date is governed by the law in
effect immediately before the effective date of this Act, and that
law is continued in effect for that purpose.
SECTION 5. This Act takes effect September 1, 2005.
* * * * *