2005S0559-1  03/10/05


By:  Carona                                                       S.B. No. 1585


A BILL TO BE ENTITLED

AN ACT

relating to the regulation of nonstandard rates for personal lines 
automobile insurance.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subsections (a) and (f), Section 13, Article 
5.13-2, Insurance Code, are amended to read as follows:
	(a)  This section governs rate regulation of personal 
automobile insurance issued at nonstandard rates [by a county 
mutual insurance company] as prescribed by this section.
	(f)(1)  An insurer authorized to write personal automobile 
insurance may issue personal automobile policies at nonstandard 
rates.  Any insurer writing personal automobile insurance only at 
nonstandard rates may have a separate rating plan for each personal 
automobile insurance program of the insurer that is subject to a 
separate reinsurance agreement, and differences in the premium, 
fees, and rates charged under such rating plans shall not be 
considered discriminatory, provided the following conditions are 
met:
			(A)  all personal automobile insurance written by 
the insurer is written at nonstandard rates;
			(B)  the total annual premium for all personal 
automobile insurance written by the insurer and its affiliates at 
nonstandard rates is no more than two percent of the Texas personal 
automobile insurance market; and
			(C)  the insurer has no more than five such rating 
plans [A county mutual insurance company that issues personal 
automobile insurance policies only at nonstandard rates is subject 
to filing requirements as determined by the commissioner by rule if 
the insurer and the insurer's affiliated companies or group have a 
market share of less than 3.5 percent].
		(2)  In setting rates, an insurance company subject to 
this subsection must comply with the rating standards established 
by this article.  Not later than the first day on which any change in 
the rates becomes effective, the company shall for informational 
purposes file the rates and any additional information required by 
the department.  The commissioner by rule shall determine the 
information required to be provided in the filing under this 
subsection.  The commissioner may inspect the books and records of 
the company at any time to ensure compliance with the rating 
standards.  An insurance company described by this subsection is 
subject to Article 5.144 of this code.  All insurers writing 
personal automobile insurance only at nonstandard rates are subject 
to the same reduced filing requirements as determined by the 
commissioner by rule and are not subject to Article 5.01-1 or 21.81 
of this code [A county mutual insurance company not described by 
this section is subject to Article 21.81 of this code and is 
required to comply with the filing requirements of this article and 
any other provision of this code applicable to a county mutual 
insurance company].
	Section 2.  The following laws are repealed:                                   
		(1)  Subsection (g), Section 13, Article 5.13-2, 
Insurance Code;            
		(2)  Article 5.01, Insurance Code; and                                        
		(3)  Article 5.03, Insurance Code.                                            
	SECTION 3.  This Act applies 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 governed by the law as it 
existed immediately before the effective date of this Act, and that 
law is continued in effect for this purpose.
	SECTION 4.  This Act takes effect September 1, 2005.