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A BILL TO BE ENTITLED
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AN ACT
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relating to premium rates for title insurance. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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ARTICLE 1. GENERAL PROVISIONS |
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SECTION 1. Section 2703.003, Insurance Code, is amended to |
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read as follows: |
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Sec. 2703.003. PAYMENT OF PREMIUMS |
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(a) The premium for a title insurance policy or for another |
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form prescribed or approved by the commissioner shall be paid in the |
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due and ordinary course of business; |
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(b) The commission shall not regulate the division of |
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premium between the title insurance company, as defined in |
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Sec. 2501.003(14) and its title insurance agent, or any title |
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insurance agent as defined in Sec. 2501.003. |
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ARTICLE 2. FILE AND USE RATES |
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SECTION 1.01. The heading to Subchapter D, Chapter 2703, |
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Insurance Code, is amended to read as follows: |
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SUBCHAPTER D. [FIXING AND PROMULGATING] TITLE INSURANCE PREMIUM |
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RATES |
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SECTION 1.02. Section 2703.151, Insurance Code, is amended |
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to read as follows: |
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(a) Except as provided by Subsection (b), [the commissioner
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shall fix and promulgate the premium rates to be charged by a title
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insurance company or by a title insurance agent for title insurance
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policies or for other forms prescribed or approved by the
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commissioner.] premium rates for title insurance are governed by |
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Subchapters A-D, Chapter 2251. |
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(b) [The commissioner may not fix or promulgate] A title |
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insurance company is not required to file the premium rates for |
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reinsurance between title insurance companies. Title insurance |
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companies may establish the premium rates in amounts to which the |
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companies agree. |
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(c) Except for a premium charged for reinsurance, a premium |
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may not be charged for a title insurance policy or for another |
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prescribed or approved form at a rate different than the rate [fixed
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and promulgated by] filed with the commissioner under Chapter 2251. |
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SECTION 1.03. The heading to Section 2703.153, Insurance |
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Code, is amended to read as follows: |
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Sec. 2703.153. DATA COLLECTION [OF DATA FOR FIXING PREMIUM
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RATES]; ANNUAL STATISTICAL REPORT |
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SECTION 1.04. Section 2703.153(a), Insurance Code, is |
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amended 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 |
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[to collect data to use to [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 1.05. Sections 2251.002 and 2251.003, Insurance |
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Code, are amended to read as follows: |
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Sec. 2251.002. DEFINITIONS. In this chapter: |
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(9) "Title insurance" has the meaning assigned by |
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Section 2501.003. |
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Sec. 2251.003. APPLICABILITY OF CERTAIN SUBCHAPTERS. (a) |
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This subchapter and Subchapters B, C, D, and E apply to: |
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(3) a title insurance company, as defined by Section |
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2501.003(14). |
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(b) This subchapter and Subchapters B, C, D, and E apply to |
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all lines of the following kinds of insurance written under an |
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insurance policy or contract issued by an insurer authorized to |
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engage in the business of insurance in this state: |
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(15) multi-peril insurance; [and] |
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(16) identity theft insurance issued under Chapter |
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706;[.] and |
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(17) title insurance. |
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SECTION 1.06. Section 2251.052, Insurance Code, is amended |
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to read as follows: |
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Sec. 2251.052. RATE STANDARDS. |
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(f) In setting rates for title insurance, an insurer shall |
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also consider all relevant income and expenses of title insurance |
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agents attributable to engaging in the business of title insurance |
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in this state. |
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SECTION 1.07. The heading to Section 2751.051, Insurance |
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Code, is amended to read as follows: |
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Sec. 2751.051. [FIXING AND PROMULGATING] PREMIUM RATES AND |
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FORMS. |
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SECTION 1.08. Section 2751.051, Insurance Code, is amended |
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to read as follows: |
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(a) Premium rates for personal property title insurance are |
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governed by Subchapters A-D, Chapter 2251; and |
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(b) The commissioner shall, in the manner prescribed by this |
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subchapter,[:
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(1)
fix and promulgate the premium rates to be charged
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by a title insurance company or by a title insurance agent for
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personal property title insurance policies under this chapter; and
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(2)] prescribe the policies and forms to be used for |
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title insurance [in connection with those policies]. |
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(c) [(b)] A premium may not be charged for a personal |
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property title insurance policy or for another prescribed or |
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approved form at a rate different than the rate [fixed and
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promulgated by] filed with the commissioner under Chapter 2251. |
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ARTICLE 3. CONFORMING AMENDMENTS |
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SECTION 2.01. Section 2501.003(8), Insurance Code, is |
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amended to read as follows: |
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(8) "Premium" means the premium rates charged for a |
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title insurance policy or other form prescribed or approved by the |
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Commissioner [promulgated by the commissioner under Subchapters D
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and E, Chapter 2703,] and includes a charge for: |
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(A) title examination and closing the |
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transaction, regardless of whether the examination or closing is |
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performed by an attorney; and |
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(B) issuing the policy or form. |
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SECTION 2.02. Section 2551.204(d), Insurance Code, is |
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amended to read as follows: |
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(d) The amount, handling, and distribution of any reserves |
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required under Subsection (c)(2) are subject to the control and |
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discretion of the department and are reviewable in judicial |
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proceedings governed by rules applicable to review of rates under |
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Section 2703.202, as it existed before its repeal effective |
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September 1, 2014 [Subchapters D and E, Chapter 2703]. |
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SECTION 2.03. Section 2551.351(a), Insurance Code, is |
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amended to read as follows: |
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a) A foreign or domestic corporation forfeits any right to |
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engage in business in this state if the corporation: |
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(1) issues any form of title insurance policy, or any |
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other adopted or approved form, on real property in this state other |
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than a form prescribed by the department; |
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(2) charges any premium rate on an owner, mortgagee, |
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or other title insurance policy, or on any other adopted or approved |
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form, on real property in this state other than a premium rate filed |
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under Chapter 2251 [prescribed by the commissioner]; or |
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(3) otherwise engages in the business of title |
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insurance in relation to real property in this state on a form [or
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for a premium rate] not prescribed by the department or |
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commissioner or for a premium rate not filed under Chapter 2251. |
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SECTION 2.04. Section 2602.210(a), Insurance Code, is |
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amended to read as follows: |
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(a) A title insurance company is entitled to recover in its |
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rates for the succeeding calendar year amounts paid in assessments |
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not to exceed one percent of the company's net direct written |
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premiums. A title insurance company may include those amounts, |
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less any refund, as an expense of operation in a rate filing under |
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Chapter 2251. [In promulgating or establishing rates the
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commissioner shall consider assessments and refunds of assessments
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and shall adjust the rates to allow for recovery under this
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subsection.] |
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SECTION 2.05. The heading to Subchapter E, Chapter 2703, |
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Insurance Code, is amended to read as follows: |
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SUBCHAPTER E. PROCEDURES REGARDING [PREMIUM RATES,] POLICY |
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FORMS[,] AND OTHER RELATED MATTERS |
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SECTION 2.06. Sections 2703.203, 2703.206 and 2703.207, |
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Insurance Code, are amended to read as follows: |
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Sec. 2703.203. PERIODIC HEARING. The commissioner shall |
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hold a public hearing not earlier than July 1 after the fifth |
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anniversary of the closing of a hearing held under this chapter to |
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consider [adoption of premium rates and other] matters relating to |
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regulating the business of title insurance that an association, |
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title insurance company, title insurance agent, or member of the |
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public admitted as a party under Section 2703.204 requests to be |
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considered or that the commissioner determines necessary to |
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consider. |
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Sec. 2703.206. COMMISSIONER AUTHORITY TO HOLD HEARINGS AS |
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NECESSARY. At any time, the commissioner may order a public hearing |
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to consider [adoption of premium rates and other] matters relating |
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to regulating the business of title insurance as the commissioner |
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determines necessary or proper. |
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Sec. 2703.207. NOTICE OF CERTAIN HEARINGS. Not later than |
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the 60th day before the date of a hearing under Section [2703.202,
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2703.203, or] 2703.206, notice of the hearing and of each item to be |
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considered at the hearing shall be: |
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(1) sent directly to all parties to the previous |
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hearing conducted under Section [2703.202, 2703.203, or] 2703.206, |
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if the hearing was conducted as a contested case hearing; and |
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(2) published in the Texas Register and on the |
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department's Internet website. |
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SECTION 2.07. Section 2703.208(a), Insurance Code, is |
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amended to read as follows: |
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(a) An addition or amendment to the Basic Manual of Rules[,
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Rates,] and Forms for the Writing of Title Insurance in the State of |
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Texas may be proposed and adopted by reference by publishing notice |
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of the proposal or adoption by reference in the Texas Register. |
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SECTION 2.08. 2751.053(a), Insurance Code, is amended to |
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read as follows: |
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(a) Before the commissioner may adopt forms [a premium rate
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may be fixed and forms adopted] for personal property title |
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insurance under this chapter, the department must provide |
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reasonable notice and a hearing must be afforded to title insurance |
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companies, title insurance agents, and the public. |
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SECTION 2.09. Section 2751.054, Insurance Code, is amended |
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to read as follows: |
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[(a)] Not later than the 90th day after the date of a hearing |
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under Section 2751.053, the commissioner shall issue an order |
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prescribing the [rates and] forms to be used in connection with |
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personal property title insurance policies under this chapter. |
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[(b)
The commissioner's order promulgating rates must be
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based on the evidence adduced at the hearing.] |
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SECTION 2.10. The heading to Section 2751.055, Insurance |
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Code, is amended to read as follows: |
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Sec. 2751.055. REVISIONS TO [RATES AND] FORMS; HEARING. |
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SECTION 2.11. Section 2751.055(a), Insurance Code, is |
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amended to read as follows: |
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(a) A title insurance company may apply to the department in |
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the manner prescribed by the commissioner for approval of a new or |
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revised personal property title insurance form [or a change in a
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rate associated with such a form]. The commissioner may approve or |
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disapprove an application after a hearing conducted in the manner |
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prescribed by Section 2751.053. |
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SECTION 2.12. The following laws are repealed: |
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Sections 2703.152, 2703.201, 2703.202, 2703.204, and |
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2751.052, Insurance Code. |
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ARTICLE 4. TRANSITION; EFFECTIVE DATE |
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SECTION 3.01. The change in law made by this Act applies |
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only to a premium rate in effect on or after January 1, 2014. A |
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premium rate that in effect before January 1, 2014, is governed by |
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the law in effect immediately before the effective date of this Act, |
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and that law is continued in effect for that purpose. |
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SECTION 3.02. This Act takes effect September 1, 2014. |