|
|
|
A BILL TO BE ENTITLED
|
|
AN ACT
|
|
relating to the nonrenewal of, and the assessment of premium |
|
surcharges against, certain insurance policies. |
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
SECTION 1. Sections 551.107(b) and (e), Insurance Code, are |
|
amended to read as follows: |
|
(b) A claim under this section does not include a claim: |
|
(1) resulting from a loss caused by natural causes; or |
|
(2) that is filed but is not paid or payable under the |
|
policy[; or
|
|
[(3)
that an insurer is prohibited from using under
|
|
Section 544.353]. |
|
(e) An insurer may notify an insured who has filed two |
|
claims in a period of less than three years that the insurer may |
|
refuse to renew the policy if the insured files a third claim during |
|
the three-year period. If the insurer does not notify the insured |
|
in accordance with this subsection, the insurer may not refuse to |
|
renew the policy because of claims. The notice form must: |
|
(1) list the policyholder's claims; and |
|
(2) contain the sentence: "The filing by you of |
|
another claim, except for a claim resulting from a loss caused by |
|
natural causes or[,] a claim filed but not paid or payable under the |
|
policy under which it was filed, [or an appliance-related claim
|
|
that we are prohibited from using under Section 544.353, Texas
|
|
Insurance Code,] could cause us to refuse to renew your policy." |
|
SECTION 2. Subchapter C, Chapter 551, Insurance Code, is |
|
amended by adding Sections 551.1071 and 551.1072 to read as |
|
follows: |
|
Sec. 551.1071. ELECTION OF NONRENEWAL AND SURCHARGE |
|
PRACTICE; REPORT; CONSTRUCTION OF LAW. (a) An insurer to which |
|
Sections 551.107 and 551.1072 apply shall elect whether the insurer |
|
will nonrenew policies and assess surcharges in accordance with |
|
Section 551.107 or 551.1072. |
|
(b) An election made under this section remains in effect |
|
until an insurer notifies the department of a change in the |
|
insurer's election. The department shall allow an insurer an |
|
opportunity to change the insurer's election under this section |
|
once every three years and may not allow an insurer to change the |
|
insurer's election more frequently. |
|
(c) An insurer that does not make an initial election under |
|
this section is governed by Section 551.107. |
|
(d) Not later than January 31 of each calendar year, an |
|
insurer that elects to nonrenew policies and assess surcharges in |
|
accordance with Section 551.1072 shall submit a report to the |
|
department containing the total number of policies that the insurer |
|
refused to renew in this state, and in each county of this state, in |
|
the calendar year immediately preceding the year in which the |
|
report is submitted. |
|
(e) Sections 551.107 and 551.1072 may not be construed to |
|
limit an insurer's authority to refuse to renew an insurance policy |
|
for a reason other than the insured's claim history. |
|
Sec. 551.1072. RENEWAL OF CERTAIN POLICIES; PREMIUM |
|
SURCHARGE AUTHORIZED; ALTERNATIVE PRACTICE. (a) This section |
|
applies only to a standard fire, homeowners, or farm or ranch owners |
|
insurance policy. |
|
(b) A claim under this section does not include a claim that |
|
is filed but is not paid or payable under the policy. |
|
(c) Subject to Subsection (d), an insurer may, consistent |
|
with the insurer's underwriting standards, refuse to renew an |
|
insurance policy for any reason related to: |
|
(1) the insured's claim history under the policy; or |
|
(2) an increased risk of hazard on the property |
|
insured under the policy. |
|
(d) The total number of policies an insurer refuses in a |
|
calendar year to renew under Subsection (c) may not exceed: |
|
(1) for the entire state, two percent of the total |
|
number of standard fire, homeowners, or farm or ranch owners |
|
insurance policies written by the insurer in this state in the |
|
immediately preceding calendar year; and |
|
(2) except as provided by Subsection (e), for each |
|
county, two percent of the total number of standard fire, |
|
homeowners, or farm or ranch owners insurance policies written by |
|
the insurer in the county in the immediately preceding calendar |
|
year. |
|
(e) An insurer may, in each calendar year, refuse to renew |
|
one policy in each county in which the insurer writes standard fire, |
|
homeowners, or farm or ranch owners insurance policies if the two |
|
percent limit described by Subsection (d)(2) is an amount that is |
|
less than one. |
|
(f) An insurer may assess a premium surcharge at the time an |
|
insurance policy is renewed if the insured has filed one or more |
|
claims in the preceding three policy years. The amount of the |
|
surcharge must be based on sound actuarial principles. |
|
(g) In this section, "premium surcharge" has the meaning |
|
assigned by Section 551.107. |
|
SECTION 3. Section 2006.052(c), Insurance Code, is amended |
|
to read as follows: |
|
(c) A residential property insurance claim under this |
|
section does not include a claim: |
|
(1) resulting from a loss caused by natural causes; or |
|
(2) that is filed but is not paid or payable under the |
|
policy[; or
|
|
[(3)
that an insurer is prohibited from using under
|
|
Section 544.353]. |
|
SECTION 4. Section 2006.0521, Insurance Code, is amended to |
|
read as follows: |
|
Sec. 2006.0521. COMPLIANCE WITH OTHER LAW REQUIRED. Any |
|
change in the amount of a premium discount provided under this |
|
subchapter must comply with the requirements of Section 551.107 or |
|
551.1072, as applicable. |
|
SECTION 5. Subchapter H, Chapter 544, Insurance Code, is |
|
repealed. |
|
SECTION 6. The change in law made by this Act applies only |
|
to an insurance policy that is delivered, issued for delivery, |
|
renewed, or subject to nonrenewal on or after January 1, 2012. An |
|
insurance policy that is delivered, issued for delivery, renewed, |
|
or subject to nonrenewal before January 1, 2012, is governed by the |
|
law as it existed immediately before January 1, 2012, and that law |
|
is continued in effect for that purpose. |
|
SECTION 7. This Act takes effect September 1, 2011. |