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A BILL TO BE ENTITLED
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AN ACT
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relating to regulation of title insurance rates on a file and use |
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basis. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. The heading to Section 2703.153, Insurance Code, |
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is amended to read as follows: |
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Sec. 2703.153. COLLECTION OF DATA FOR DETERMINING [FIXING] |
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PREMIUM RATES; ANNUAL STATISTICAL REPORT. |
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SECTION 2. Section 2703.153(a), Insurance Code, is amended |
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to read as follows: |
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(a) Each title insurance company and title insurance agent |
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engaged in the business of title insurance in this state shall |
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annually submit to the department, as required by the department to |
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collect data to use to determine [fix] premium rates, a statistical |
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report containing information relating to: |
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(1) loss experience; |
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(2) expense of operation; and |
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(3) other material matters. |
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SECTION 3. Subchapter D, Chapter 2703, Insurance Code, is |
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amended by adding Section 2703.154 to read as follows: |
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Sec. 2703.154. EXCEPTIONS. Notwithstanding this |
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subchapter, real property title insurance rates are determined |
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under Subchapter F. |
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SECTION 4. Subchapter E, Chapter 2703, Insurance Code, is |
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amended by adding Section 2703.209 to read as follows: |
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Sec. 2703.209. EXCEPTIONS. Notwithstanding this |
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subchapter, real property title insurance rates are determined |
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under Subchapter F. |
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SECTION 5. Chapter 2703, Insurance Code, is amended by |
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adding Subchapter F to read as follows: |
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SUBCHAPTER F. FILE AND USE PREMIUM RATES |
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Sec. 2703.251. RATE STANDARDS. (a) In setting rates, a |
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title insurance company shall consider: |
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(1) past and prospective loss experience and expense: |
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(A) inside this state; and |
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(B) outside this state if the data from this |
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state is not credible; |
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(2) the insurer's and agents' actuarially credible |
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historical premium, exposure, loss, and expense experience; |
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(3) operating expenses; |
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(4) investment income; |
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(5) a reasonable margin for profit; and |
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(6) any other factors derived from information or data |
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inside and outside this state: |
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(A) determined relevant by the insurer; and |
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(B) not disallowed by the commissioner. |
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(b) A rate may not be excessive, inadequate, unreasonable, |
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or unfairly discriminatory for the risks to which the rate applies. |
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(c) In setting rates that apply only to policyholders in |
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this state, an insurer shall use available premium, loss, expenses, |
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and exposure information from this state to the full extent of the |
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actuarial credibility of the information. The insurer may use |
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experience from outside this state to supplement information from |
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this state that is not actuarially credible. |
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Sec. 2703.252. RATE FILINGS AND SUPPORTING INFORMATION. |
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(a) For title insurance policies written in this state, each title |
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insurance company shall file with the commissioner all rates, |
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supporting information, supplementary rating information, and |
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additional information required by the commissioner. |
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(b) The commissioner by rule shall determine the |
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information required to be included in the filing, including: |
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(1) categories of supporting information and |
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supplementary rating information; and |
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(2) statistics or other information to support the |
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rates to be used by the insurer or agent. |
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Sec. 2703.253. DISAPPROVAL OF RATE IN RATE FILING; HEARING. |
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(a) The commissioner shall disapprove a rate if the commissioner |
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determines that the filing made under this chapter does not meet the |
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standards established under Section 2703.251. |
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(b) If the commissioner disapproves a filing, the |
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commissioner shall issue an order specifying in what respects the |
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filing fails to meet the requirements of this subchapter. |
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(c) The filer is entitled to a hearing on written request |
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made to the commissioner not later than the 30th day after the date |
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the order disapproving the filing takes effect. |
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Sec. 2703.254. DISAPPROVAL OF RATE IN EFFECT; HEARING. (a) |
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The commissioner may disapprove a rate that is in effect only after |
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a hearing. The commissioner shall provide the filer at least 20 |
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days' written notice. |
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(b) The commissioner must issue an order disapproving a rate |
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under Subsection (a) not later than the 15th day after the close of |
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the hearing. The order must: |
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(1) specify in what respects the rate fails to meet the |
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requirements of this chapter; and |
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(2) state the date on which further use of the rate is |
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prohibited, which may not be earlier than the 45th day after the |
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close of the hearing under this section. |
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Sec. 2703.255. GRIEVANCE. (a) An insured, underwriter, or |
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agent who is aggrieved with respect to any filing under this chapter |
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that is in effect, or the public insurance counsel, may apply to the |
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commissioner in writing for a hearing on the filing. The |
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application must specify the grounds for the applicant's grievance. |
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(b) The commissioner shall hold a hearing on an application |
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filed under Subsection (a) not later than the 30th day after the |
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date the commissioner receives the application if the commissioner |
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determines that: |
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(1) the application is made in good faith; |
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(2) the applicant would be aggrieved as alleged if the |
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grounds specified in the application were established; and |
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(3) the grounds specified in the application otherwise |
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justify holding the hearing. |
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(c) The commissioner shall provide written notice of a |
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hearing under Subsection (b) to the applicant and each insurer that |
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made the filing not later than the 10th day before the date of the |
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hearing. |
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(d) If, after the hearing, the commissioner determines that |
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the filing does not meet the requirements of this chapter, the |
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commissioner shall issue an order: |
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(1) specifying in what respects the filing fails to |
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meet those requirements; and |
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(2) stating the date on which the filing is no longer |
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in effect, which must be within a reasonable period after the order |
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date. |
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(e) The commissioner shall send copies of the order issued |
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under Subsection (d) to the applicant and each affected insurer. |
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Sec. 2703.256. PUBLIC INFORMATION. Each filing made, and |
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any supporting information filed under this chapter as of the date |
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the filing is received by the department: |
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(1) is public information; |
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(2) is not subject to any exceptions to disclosure |
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under Chapter 552, Government Code; and |
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(3) cannot be withheld from disclosure under any other |
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law. |
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SECTION 6. Subchapter B, Chapter 2751, Insurance Code, is |
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amended by adding Section 2751.056 to read as follows: |
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Sec. 2751.056. EXCEPTIONS. Notwithstanding this |
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subchapter, personal property title insurance rates are determined |
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under Subchapter F, Chapter 2703. |
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SECTION 7. Section 2703.153(c), Insurance Code, is |
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repealed. |
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SECTION 8. The change in law made by this Act applies only |
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to a rate that first becomes effective on or after January 1, 2012. |
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A rate that first becomes effective before January 1, 2012, is |
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governed by the law in effect immediately before the effective date |
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of this Act, and that law is continued in effect for that purpose. |
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SECTION 9. This Act takes effect on September 1, 2011. |