By:  Jackson                                                      S.B. No. 14 
	(In the Senate - Filed December 21, 2004; January 31, 2005, 
read first time and referred to Committee on Business and Commerce; 
April 11, 2005, reported favorably by the following vote:  Yeas 9, 
Nays 0; April 11, 2005, sent to printer.)


A BILL TO BE ENTITLED

AN ACT


relating to disapproval by the commissioner of insurance of certain 
property and casualty insurance rates; providing penalties.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 7, Article 5.13-2, Insurance Code, is 
amended by adding Subsections (d) and (e) to read as follows:
	(d)  A new rate filing that is made by an insurer whose rate 
is disapproved under Subsection (c) of this section and that is made 
on or after the date of the written notice required under Subsection 
(c) of this section is subject to prior approval by the commissioner 
until the expiration of any appeal period related to a hearing 
conducted under Subsection (c) of this section.
	(e)  In conjunction with a hearing required under Subsection 
(c) of this section, the commissioner may:
		(1)  order restitution under Section 82.053 of this 
code;            
		(2)  impose any sanction authorized under Chapter 83 of 
this code, including assessment of an administrative penalty as 
provided by Chapter 84 of this code; or
		(3)  take any combination of the actions described by 
Subdivisions (1) and (2) of this subsection.
	SECTION 2.  Article 5.144, Insurance Code, is amended by 
amending Subsection (b) and by adding Subsection (b-1) to read as 
follows:
	(b)  Except as provided by Subsection (d) of this article, if 
the commissioner determines that an insurer has charged a rate for 
personal automobile insurance or residential property insurance 
that is excessive or unfairly discriminatory, as described by 
Article 5.13-2 [or 5.101] of this code, the commissioner may order 
the insurer to:
		(1)  issue a refund of the excessive or unfairly 
discriminatory portion of the premium, plus interest on that 
amount, directly to each affected policyholder if the amount of 
that portion of the premium is at least 7.5 percent of the total 
premium charged for the coverage; or
		(2)  if the amount of that portion of the premium is 
less than 7.5 percent: 
			(A)  provide each affected policyholder who 
renews the policy a future premium discount in the amount of the 
excessive or unfairly discriminatory portion of the premium, plus 
interest on that amount; and
			(B)  provide each affected policyholder who does 
not renew or whose coverage is otherwise terminated a refund in the 
amount described by Subdivision (1) of this subsection.
	(b-1)  The rate for interest assessed under Subsection (b) of 
this article is the prime rate for the calendar year in which the 
order is issued plus six percent.  For purposes of this subsection, 
the prime rate is the prime rate as published by The Wall Street 
Journal for the first day of that calendar year that is not a 
Saturday, Sunday, or legal holiday.  The interest accrues beginning 
on the date on which the insurer first charged the excessive or 
unfairly discriminatory rate, as determined by the commissioner, 
and continues to accrue until the refund is paid.
	SECTION 3.  The change in law made by this Act applies only 
to a rate used for an insurance policy delivered, issued for 
delivery, or renewed on or after January 1, 2006.  A rate used for a 
policy delivered, issued for delivery, or renewed before January 1, 
2006, is governed by the law as it existed immediately before the 
effective date of this Act, and that law is continued in effect for 
that purpose.
	SECTION 4.  This Act takes effect September 1, 2005.                           



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