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79R3205 KCR-D
By: Keffer of Dallas H.B. No. 2878
A BILL TO BE ENTITLED
AN ACT
relating to the premium surcharges applicable to and renewal of
residential property insurance policies.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Article 5.43, Insurance Code, is amended by
adding Subsection (a-1) to read as follows:
(a-1) A residential property insurance claim under this
article does not include a claim:
(1) resulting from a loss caused by natural causes;
(2) that is filed but is not paid or payable under the
policy; or
(3) that an insurer is prohibited from using under
Section 3, Article 5.35-4, of this code.
SECTION 2. Section 551.107, Insurance Code, as effective
April 1, 2005, is amended by amending Subsections (b), (c), (e), and
(f) and adding Subsection (g) to read as follows:
(b) A claim under this section does not include a claim:
(1) resulting from a loss caused by natural causes;
[or]
(2) that is filed but is not paid or payable under the
policy; or
(3) that an insurer is prohibited from using under
Section 3, Article 5.35-4.
(c) An insurer may assess a premium surcharge at the time an
insurance policy is renewed only if the insured has filed one [two]
or more claims in the preceding three policy years [year]. [The
insurer may assess an additional premium surcharge if an additional
claim is made in the following policy year. The department shall
set the amount of any surcharge that may be assessed under this
subsection.] The amount of the surcharge may not exceed 10 percent
of the total premium and must be:
(1) computed by multiplying the total policy premium
for the renewal period by the surcharge percentage; and
(2) actuarially justifiable [, including any premium
surcharge, actually paid by the insured in the preceding policy
year].
(e) An insurer may notify an insured who has filed two
claims in a period of less than three years that the insurer may
refuse to renew the policy if the insured files a third claim during
the three-year period. If the insurer does not notify the insured
in accordance with this subsection, the insurer may not refuse to
renew the policy because of claims [losses]. The notice form must:
(1) list the policyholder's claims; and
(2) contain the sentence: "The filing by you of
another claim, except for a claim resulting from a loss caused by
natural causes, a claim filed but not paid or payable under the
policy under which it was filed, or an appliance-related claim that
an insurer is prohibited from using under Section 3, Article
5.35-4, Texas Insurance Code, [Another non-weather related loss]
could cause us to refuse to renew your policy."
(f) In this section, "premium surcharge" means any increase
in the total premium paid by an insured as a result of the insured's
claims history. The term includes a surcharge fee, a reduction or
elimination of a discount previously received by an insured,
reassignment of an insured from one rating tier to another,
re-rating an insured, or re-underwriting an insured using multiple
affiliates [An insurer that renews the insurance policy of an
insured who has filed three or more claims under the policy in a
three-year period may assess a premium surcharge in an amount set by
the department].
(g) The commissioner shall adopt rules as necessary to
implement this section.
SECTION 3. The changes in law made by this Act apply only to
an insurance policy that is delivered, issued for delivery, or
renewed on or after January 1, 2006. An insurance policy that is
delivered, issued for delivery, or renewed before January 1, 2006,
is covered by the law in effect at the time the policy was
delivered, issued for delivery, or renewed, and that law is
continued in effect for that purpose.
SECTION 4. This Act takes effect September 1, 2005.