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A BILL TO BE ENTITLED
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AN ACT
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relating to withdrawal and restriction plans for certain insurers. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 827.001, Insurance Code, is amended by |
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amending Subdivision (1) and adding Subdivision (3) to read as |
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follows: |
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(1) "Insurer" means an insurance company or other |
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legal entity authorized to engage in the business of insurance in |
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this state, including a fraternal benefit society, a reciprocal or |
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interinsurance exchange, a Lloyd's plan, a farm mutual insurance |
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company, and a county mutual insurance company. The term includes |
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an affiliate. The term does not include [a farm mutual insurance
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company or] an eligible surplus lines insurer regulated under |
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Chapter 981. |
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(3) "Residential property insurance" and "personal |
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automobile insurance" have the meanings assigned by Section |
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2254.001. |
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SECTION 2. Section 827.006, Insurance Code, is amended to |
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read as follows: |
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Sec. 827.006. [RESUMPTION OF] WRITING INSURANCE AFTER |
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COMPLETE WITHDRAWAL. An insurer that withdraws from writing |
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residential property insurance or personal automobile [all lines
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of] insurance in this state may not, without the approval of the |
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commissioner, write any line of [resume writing] insurance in this |
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state before the fifth anniversary of the date of withdrawal. |
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SECTION 3. Section 827.007, Insurance Code, is amended to |
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read as follows: |
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Sec. 827.007. PENALTIES. The commissioner may impose |
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sanctions [the civil penalties] under Chapter 82 on an insurer that |
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fails to comply in any manner with this chapter [obtain the
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commissioner's approval before the insurer:
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[(1) withdraws from writing a line of insurance in
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this state; or
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[(2) reduces the insurer's total annual premium volume
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by 75 percent or more in any year]. |
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SECTION 4. Sections 827.008(a) and (b), Insurance Code, are |
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amended to read as follows: |
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(a) Before an insurer[, in response to a catastrophic
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natural event that occurred during the preceding six months,] may |
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restrict writing new residential property insurance or personal |
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automobile insurance business in this state or a rating territory |
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[in a line of personal automobile or residential property
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insurance], the insurer must file a proposed restriction plan with |
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the commissioner for the commissioner's review and approval. The |
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commissioner may not approve a restriction plan in which the |
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insurer proposes to increase the relative number of residential |
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property insurance policies issued by the insurer that offer |
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substantially less coverage than the average residential property |
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insurance policy previously issued by the insurer. |
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(b) The commissioner may modify, restrict, or limit a |
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restriction plan under this section as necessary if the |
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commissioner finds that a line of insurance subject to the |
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restriction plan is not offered in this state in a quantity or |
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manner to adequately cover the risks in this state or to adequately |
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protect the residents of this state and policyholders in this state |
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[in light of the impact of the catastrophic natural event]. The |
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commissioner may by order set the date on which the insurer's |
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restriction begins. |
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SECTION 5. Section 827.008(c), Insurance Code, is repealed. |
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SECTION 6. The change in law made by this Act applies only |
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to a withdrawal or restriction plan filed with the Texas Department |
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of Insurance on or after the effective date of this Act. A |
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withdrawal or restriction plan filed with the Texas Department of |
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Insurance before the effective date of this Act is covered by the |
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law in effect at the time the withdrawal or restriction plan was |
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filed, and that law is continued in effect for that purpose. |
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SECTION 7. This Act takes effect September 1, 2011. |