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A BILL TO BE ENTITLED
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AN ACT
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relating to refund of excessive or unfairly discriminatory premium, |
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providing penalties. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 2254.003, Insurance Code, is amended to |
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read as follows: |
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(a) This section applies to a rate filed on or after the |
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effective date of Chapter 206, Acts of the 78th Legislature, |
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Regular Session, 2003. |
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(b) Except as provided by Section 2254.004(c), if the |
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commissioner determines that an insurer has charged a rate for |
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personal automobile insurance or residential property insurance |
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that is excessive or unfairly discriminatory, as described by |
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Section 2251.051, the commissioner may: |
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(1) order the insurer to refund directly to each |
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affected policyholder the portion of the premium, plus interest on |
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that amount, that is excessive or unfairly discriminatory, if that |
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portion of the premium is at least 7.5 percent of the total premium |
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charged for the coverage; or |
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(2) if that portion of the premium is less than 7.5 |
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percent of the total premium, order the insurer to provide, to each |
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affected policyholder: |
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(A) who renews the policy, a future premium |
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discount equal to the amount of the excessive or unfairly |
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discriminatory portion of the premium, plus interest on that |
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amount; and |
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(B) who does not renew or whose coverage is |
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otherwise terminated, a refund in the amount described by |
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Subdivision (1). |
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(c) The rate for interest assessed under Subsection (b) of |
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this section is the lesser of 18 percent or the sum of six percent |
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and the prime rate for the calendar year in which the commissioner's |
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order finding that the rate is excessive or unfairly discriminatory |
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is issued. For purposes of this subsection, the prime rate is the |
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prime rate as published in The Wall Street Journal for the first day |
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of the calendar year that is not a Saturday, Sunday, or legal |
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holiday. The period for the refund and interest begins on the date |
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the department first provides the insurer with formal written |
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notice that the insurer's filed rate is excessive or unfairly |
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discriminatory, and interest continues to accrue until the refund |
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is paid. An insurer may not be required to pay any interest penalty |
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if the insurer prevails in an appeal of the commissioner's order |
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under Subchapter D, Chapter 36, of this code. |
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(d) An insurer may not claim a premium tax credit to which |
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the insurer is otherwise entitled unless the insurer complies with |
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Subsection (b) of this section. |
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SECTION 2. Section 1 Chapter 291, Acts of the 79th |
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Legislature, 2005 [[S.B. No. 14]], is hereby repealed. |
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SECTION 3. Section 16.01, Chapter 899, Acts of the 79th |
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Legislature, 2005 [[S.B. No. 1863]], is hereby repealed. |
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SECTION 4. The amendments to Section 2254.003, Insurance |
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Code, in SECTION 1, are made to conform Section 2254.003, Insurance |
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Code, with the amendments enacted in Section 1 Chapter 291, Acts of |
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the 79th Legislature, 2005 [[S.B. No. 14]]. |
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SECTION 5. This Act applies to an insurance policy that is |
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delivered, issued for delivery, or renewed on or after the |
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effective date of this Act and to rates for such a policy. An |
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insurance policy delivered, issued for delivery, or renewed prior |
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to the effective date of this Act and the rates for such a policy are |
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governed by the law as it existed immediately before the effective |
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date of this Act, and that law is continued in effect for that |
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purpose. |
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SECTION 6. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2007. |