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A BILL TO BE ENTITLED
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AN ACT
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relating to corrective action with regard to excessive or unfairly |
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discriminatory residential property or personal automobile premium |
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rates. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 2254.003, Insurance Code, is amended by |
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amending Subsection (a) and adding Subsections (a-1), (a-2), and |
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(a-3) to read as follows: |
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(a) This section applies to a rate for personal automobile |
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insurance or residential property insurance filed on or after the |
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effective date of Chapter 206, Acts of the 78th Legislature, |
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Regular Session, 2003. |
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(a-1) If the department provides an insurer with formal |
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written notice that a rate is excessive or unfairly discriminatory, |
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then the insurer may file a new rate or take other corrective action |
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to substantially address the departments concerns. The new rate or |
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other corrective action must be filed on or before the 60th day |
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following the date of formal written notice. At the commissioner's |
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discretion, the commissioner may extend the deadline to file by an |
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additional 30 days. If the department accepts the new rate or other |
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corrective action, then the insurer shall, according to |
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commissioner order, refund or issue a premium discount directly to |
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each affected policyholder on the portion of the premium found to be |
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excessive or unfairly discriminatory, plus interest on that amount. |
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The interest rate to be paid on refunds or discounts under this |
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subsection is the sum of six percent and the prime rate for the |
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calendar year in which formal written notice is given. For purposes |
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of this subsection, the prime rate is the prime rate as published in |
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The Wall Street Journal for the first day of the calendar year that |
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is not a Saturday, Sunday, or legal holiday. |
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(a-2) If the insurer does not file or take, or the |
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department does not accept, a new rate or other corrective action as |
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provided under Subsection (a-1), and the commissioner issues an |
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order disapproving the rate as excessive or unfairly discriminatory |
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under Section 2251.104, then the insurer must refund or issue a |
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premium discount directly to each affected policyholder on the |
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portion of the premium found to be excessive or unfairly |
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discriminatory, plus interest on that amount. The interest rate to |
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be paid on refunds or discounts under this subsection is 18 percent. |
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An insurer is not required to pay any interest penalty if the |
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insurer prevails in an appeal of the commissioner's order under |
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Subchapter D, Chapter 36. |
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(a-3) The period for the refund and interest begins on the |
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date the department first provides the insurer with formal written |
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notice that the insurer's filed rate is excessive or unfairly |
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discriminatory, and interest continues to accrue until the refund |
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or discount is paid or issued. |
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SECTION 2. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2011. |