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A BILL TO BE ENTITLED
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AN ACT
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relating to prior approval of certain residential property |
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insurance rates of certain insurers. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 2251.1031(b), Insurance Code, is amended |
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to read as follows: |
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(b) If the department requests additional information from |
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the insurer during the [30-day] period described by Section |
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2251.103(a), [or] 2251.153(a), or 2251.153(a-1) or under a second |
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[30-day] period described by Section 2251.103(c) or 2251.153(c), as |
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applicable, the time between the date the department submits the |
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request to the insurer and the date the department receives the |
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information requested is not included in the computation of the |
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first [30-day] period or the second [30-day] period, as applicable. |
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SECTION 2. Section 2251.151, Insurance Code, is amended by |
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adding Subsection (a-2) and amending Subsections (c), (c-1), and |
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(e) to read as follows: |
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(a-2) An insurer shall file with the department for the |
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commissioner's approval a residential property insurance rate, |
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supplemental rating information, and any supporting documentation |
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if the insurer's rate is more than 105 percent of any rate used by |
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the insurer for the same insurance in the previous 12-month period. |
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(c) The commissioner may require an insurer to file the |
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insurer's rates under Subsection (a) [this section] until the |
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commissioner determines that the conditions described by |
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Subsection (a) no longer exist. |
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(c-1) If the commissioner requires an insurer to file the |
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insurer's rates under Subsection (a) [this section], the |
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commissioner shall periodically assess whether the conditions |
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described by Subsection (a) continue to exist. If the commissioner |
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determines that the conditions no longer exist, the commissioner |
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shall issue an order excusing the insurer from filing the insurer's |
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rates under Subsection (a) [this section]. |
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(e) If the commissioner requires an insurer to file the |
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insurer's rates under Subsection (a) [this section], the |
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commissioner shall issue an order specifying the commissioner's |
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reasons for requiring the rate filing and explaining any steps the |
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insurer must take and any conditions the insurer must meet in order |
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to be excused from filing the insurer's rates under Subsection (a) |
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[this section]. An affected insurer is entitled to a hearing on |
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written request made to the commissioner not later than the 30th day |
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after the date the order is issued. |
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SECTION 3. Sections 2251.152(a) and (b), Insurance Code, |
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are amended to read as follows: |
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(a) An insurer subject to this subchapter may not use a rate |
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subject to this subchapter until the rate has been filed with the |
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department and approved by the commissioner in accordance with this |
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subchapter. |
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(b) Notwithstanding Subsection (a), after a rate filing is |
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approved under this subchapter, an insurer, without prior approval |
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of the commissioner, may use any rate subsequently filed by the |
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insurer if the subsequently filed rate is not for residential |
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property insurance and does not exceed the lesser of: |
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(1) 107.5 percent of the rate approved by the |
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commissioner; or |
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(2) 110 percent of any rate used by the insurer in the |
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previous 12-month period. |
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SECTION 4. Section 2251.153, Insurance Code, is amended by |
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amending Subsections (a) and (c) and adding Subsection (a-1) to |
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read as follows: |
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(a) Not later than the 30th day after the date a rate is |
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filed with the department under Section 2251.151(a) [this
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subchapter], the commissioner shall: |
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(1) approve the rate if the commissioner determines |
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that the rate complies with the requirements of this chapter; or |
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(2) disapprove the rate if the commissioner determines |
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that the rate does not comply with the requirements of this chapter. |
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(a-1) Not later than the 90th day after the date a rate is |
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filed with the department under Section 2251.151(a-2), the |
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commissioner shall: |
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(1) approve the rate if the commissioner determines |
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that the rate complies with the requirements of this chapter; or |
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(2) disapprove the rate if the commissioner determines |
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that the rate does not comply with the requirements of this chapter. |
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(c) For good cause, the commissioner may, on the expiration |
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of the 30-day period described by Subsection (a) or the 90-day |
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period described by Subsection (a-1), extend the period for |
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approval or disapproval of a rate for one additional 30-day |
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period. The commissioner and the insurer may not by agreement |
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extend the 30-day period described by Subsection (a) or the 90-day |
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period described by Subsection (a-1). |
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SECTION 5. Section 2251.156(a), Insurance Code, is amended |
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to read as follows: |
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(a) If the commissioner disapproves a rate filing under |
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Section 2251.153(a)(2) or 2251.153(a-1)(2), the commissioner shall |
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issue an order disapproving the filing in accordance with Section |
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2251.103(d). |
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SECTION 6. The change in law made by this Act applies only |
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to a rate for residential property insurance that is delivered, |
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issued for delivery, or renewed on or after January 1, 2016. A rate |
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for residential property insurance delivered, issued for delivery, |
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or renewed before January 1, 2016, is governed by the law as it |
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existed immediately before the effective date of this Act, and that |
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law is continued in effect for that purpose. |
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SECTION 7. This Act takes effect September 1, 2015. |