81R522 KCR-D
 
  By: West S.B. No. 225
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the classifications used in rating personal automobile
  insurance.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 2251.002, Insurance Code, is amended by
  adding Subdivisions (2-a) and (2-b) to read as follows:
               (2-a)  "Non-preferred classification" means a
  classification, other than a preferred classification, used in
  rating personal automobile insurance in this state.
               (2-b)  "Preferred classification" means any of the
  following classifications used in rating personal automobile
  insurance in this state:
                     (A)  the number of miles driven annually by the
  insured;
                     (B)  the insured's driving record; and
                     (C)  the insured's number of years of driving
  experience.
         SECTION 2.  The heading to Subchapter B, Chapter 2251,
  Insurance Code, is amended to read as follows:
  SUBCHAPTER B. RATE STANDARDS; RATE CLASSIFICATIONS
         SECTION 3.  Subchapter B, Chapter 2251, Insurance Code, is
  amended by adding Section 2251.053 to read as follows:
         Sec. 2251.053.  RATE STANDARDS FOR PERSONAL AUTOMOBILE
  INSURANCE.  (a)  Notwithstanding Section 2251.052, in setting rates
  for personal automobile insurance in this state, an insurer:
               (1)  must assign the greatest aggregate weight to
  preferred classifications;
               (2)  may not assign non-preferred classifications a
  greater aggregate weight than the aggregate weight assigned to
  preferred classifications; and
               (3)  may not use a non-preferred classification until
  the classification has been filed with the department and approved
  by the commissioner in accordance with Subchapter G.
         (b)  A rate set in accordance with this section:
               (1)  may not be excessive, inadequate, unreasonable, or
  unfairly discriminatory for the risks to which the rate applies;
  and
               (2)  must be based on actuarially sound principles.
         SECTION 4.  Chapter 2251, Insurance Code, is amended by
  adding Subchapter G to read as follows:
  SUBCHAPTER G. PRIOR APPROVAL OF CERTAIN RATING CLASSIFICATIONS
  USED IN RATING PERSONAL AUTOMOBILE INSURANCE
         Sec. 2251.301.  APPLICABILITY OF SUBCHAPTER. This
  subchapter applies only to classifications used in rating personal
  automobile insurance in this state.
         Sec. 2251.302.  APPROVAL OF NON-PREFERRED CLASSIFICATION
  REQUIRED. An insurer may not use a non-preferred classification
  until the classification has been filed with the department and
  approved by the commissioner in accordance with this subchapter.
         Sec. 2251.303.  COMMISSIONER ACTION.  (a)  Not later than
  the 30th day after the date a non-preferred classification is filed
  with the department under this subchapter, the commissioner shall:
               (1)  approve the classification if the commissioner
  determines that the classification and rates resulting from the use
  of the classification comply with the requirements of this chapter;
  or
               (2)  disapprove the classification if the commissioner
  determines that the classification or the rates resulting from the
  use of the classification do not comply with the requirements of
  this chapter.
         (b)  Except as provided by Subsection (c), if a non-preferred
  classification has not been approved or disapproved by the
  commissioner before the expiration of the 30-day period described
  by Subsection (a), the classification is considered approved and
  the insurer may use the non-preferred classification.
         (c)  For good cause, the commissioner may, on the expiration
  of the 30-day period described by Subsection (a), extend the period
  for approval or disapproval of a non-preferred classification for
  one additional 30-day period.  The commissioner and the insurer may
  not by agreement extend the 30-day period described by Subsection
  (a).
         Sec. 2251.304.  ADDITIONAL INFORMATION.  (a)  If the
  department determines that the information filed by an insurer
  under this chapter is incomplete or otherwise deficient, the
  department may request additional information from the
  insurer.  If the department requests additional information from
  the insurer during the 30-day period provided by Section
  2251.303(a) or under a second 30-day period provided under Section
  2251.303(c), the time between the date the department submits the
  request to the insurer and the date the department receives the
  information requested is not included in the computation of the
  first 30-day period or the second 30-day period, as applicable.
         (b)  For purposes of this section, the date of the
  department's submission of a request for additional information is:
               (1)  the date of the department's electronic mailing or
  telephone call relating to the request for additional information;
  or
               (2)  the postmarked date on the department's letter
  relating to the request for additional information.
         Sec. 2251.305.  CLASSIFICATION DISAPPROVAL; HEARING.  (a)  
  If the commissioner disapproves under Section 2251.303(a)(2) a
  classification filed with the department, the commissioner shall
  issue an order disapproving the filed classification in the manner
  prescribed for a disapproved filing under Section 2251.103(b).
         (b)  An insurer whose non-preferred classification is
  disapproved is entitled to a hearing in the manner prescribed  for a
  disapproved filing under Section 2251.103(c).
         Sec. 2251.306.  CLASSIFICATIONS PROVIDED TO PUBLIC. The
  department shall periodically update insurer profiles maintained
  on the department's Internet website to provide information to
  policyholders and potential policyholders stating:
               (1)  whether or not an insurer uses non-preferred
  classifications; and
               (2)  if an insurer uses non-preferred classifications:
                     (A)  the names and content of any non-preferred
  classifications used; and
                     (B)  the aggregate weight assigned to any
  non-preferred classifications used.
         SECTION 5.  The change in law made by this Act applies only
  to a personal automobile insurance policy that is delivered, issued
  for delivery, or renewed on or after January 1, 2010. An insurance
  policy that is delivered, issued for delivery, or renewed before
  January 1, 2010, 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 6.  This Act takes effect September 1, 2009.