| |
| |
|
|
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. |