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A BILL TO BE ENTITLED
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AN ACT
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relating to commercial insurance rates and forms. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 2251.003(b), Insurance Code, is amended |
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to read as follows: |
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(b) Except as provided by Section 2251.0031, this [This] |
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subchapter and Subchapters B, C, and D apply to all lines of the |
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following kinds of insurance written under an insurance policy or |
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contract issued by an insurer authorized to engage in the business |
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of insurance in this state: |
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(1) general liability insurance; |
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(2) residential and commercial property insurance, |
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including farm and ranch insurance and farm and ranch owners |
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insurance; |
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(3) personal and commercial casualty insurance, |
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except as provided by Section 2251.004; |
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(4) medical professional liability insurance; |
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(5) fidelity, guaranty, and surety bonds other than |
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criminal court appearance bonds; |
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(6) personal umbrella insurance; |
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(7) personal liability insurance; |
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(8) guaranteed auto protection (GAP) insurance; |
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(9) involuntary unemployment insurance; |
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(10) financial guaranty insurance; |
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(11) inland marine insurance; |
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(12) rain insurance; |
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(13) hail insurance on farm crops; |
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(14) personal and commercial automobile insurance; |
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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. |
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SECTION 2. Subchapter A, Chapter 2251, Insurance Code, is |
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amended by adding Section 2251.0031 to read as follows: |
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Sec. 2251.0031. EXCEPTIONS FOR CERTAIN LINES. (a) Except |
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as provided by Subsection (c), Subchapter C does not apply to any |
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line of the following kinds of insurance written under an insurance |
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policy or contract issued by an insurer authorized to engage in the |
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business of insurance in this state: |
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(1) aircraft liability and hull; |
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(2) surety bonds; |
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(3) fidelity bonds; |
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(4) commercial inland marine; |
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(5) boiler and machinery; |
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(6) environmental impairment or pollution liability; |
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(7) kidnap and ransom; |
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(8) political risk or expropriation; |
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(9) commercial excess liability or umbrella |
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liability; |
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(10) directors' and officers' liability; |
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(11) fiduciary liability; |
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(12) employment practices liability; |
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(13) errors and omission and professional liability |
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other than medical malpractice; |
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(14) media liability; |
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(15) product liability, product recall, or completed |
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operations; |
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(16) cybersecurity, including first and third party |
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commercial lines coverage for losses arising out of or relating to |
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data privacy breaches, network security, computer viruses, and |
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similar exposures; |
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(17) highly protected commercial property; or |
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(18) commercial flood insurance not provided through |
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the National Flood Insurance Program. |
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(b) The commissioner by rule may exempt a commercial line of |
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insurance or commercial risk not listed in Subsection (a) from the |
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rate filing requirements of Subchapter C to promote enhanced |
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competition or more effectively use the resources of the department |
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that might otherwise be used to review commercial lines filings. |
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(c) Notwithstanding Subsection (a), the commissioner may |
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require rate filings under Subchapter C for a specific kind of |
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insurance listed in Subsection (a) for a period of not longer than |
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one year if, after notice and hearing, the commissioner issues an |
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order that: |
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(1) includes a finding that a reasonable degree of |
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competition does not exist for that specific kind of insurance; and |
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(2) specifies the relevant tests and test results used |
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to determine the degree of competition for that kind of insurance. |
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(d) In the absence of a finding described by Subsection (c) |
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with respect to a specific kind of insurance, a competitive market |
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is presumed to exist for that kind of insurance. |
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SECTION 3. Section 2251.004, Insurance Code, is amended to |
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read as follows: |
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Sec. 2251.004. REGULATION OF INLAND MARINE RATES. The |
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commissioner shall adopt rules governing the manner in which rates |
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for the various classifications of risks insured under personal |
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lines inland marine insurance, as determined by the commissioner, |
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are regulated. |
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SECTION 4. Section 2301.003(b), Insurance Code, is amended |
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to read as follows: |
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(b) Except as provided by Section 2301.0031, this [This] |
|
subchapter applies to all lines of the following kinds of insurance |
|
written under an insurance policy or contract issued by an insurer |
|
authorized to engage in the business of insurance in this state: |
|
(1) general liability insurance; |
|
(2) residential and commercial property insurance, |
|
including farm and ranch insurance and farm and ranch owners |
|
insurance; |
|
(3) personal and commercial casualty insurance, |
|
except as provided by Section 2301.005; |
|
(4) medical professional liability insurance; |
|
(5) fidelity, guaranty, and surety bonds other than |
|
criminal court appearance bonds; |
|
(6) personal umbrella insurance; |
|
(7) personal liability insurance; |
|
(8) guaranteed auto protection (GAP) insurance; |
|
(9) involuntary unemployment insurance; |
|
(10) financial guaranty insurance; |
|
(11) inland marine insurance; |
|
(12) rain insurance; |
|
(13) hail insurance on farm crops; |
|
(14) personal and commercial automobile insurance; |
|
(15) multi-peril insurance; and |
|
(16) identity theft insurance issued under Chapter |
|
706. |
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SECTION 5. Subchapter A, Chapter 2301, Insurance Code, is |
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amended by adding Section 2301.0031 to read as follows: |
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Sec. 2301.0031. EXCEPTIONS FOR CERTAIN LINES. (a) Except |
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as provided by Subsection (c), Sections 2301.006, 2301.007(a) and |
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(b), and 2301.008 do not apply to any line of the following kinds of |
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insurance written under an insurance policy or contract issued by |
|
an insurer authorized to engage in the business of insurance in this |
|
state: |
|
(1) aircraft liability and hull; |
|
(2) surety bonds; |
|
(3) fidelity bonds; |
|
(4) commercial inland marine; |
|
(5) boiler and machinery; |
|
(6) environmental impairment or pollution liability; |
|
(7) kidnap and ransom; |
|
(8) political risk or expropriation; |
|
(9) commercial excess liability or umbrella |
|
liability; |
|
(10) directors' and officers' liability; |
|
(11) fiduciary liability; |
|
(12) employment practices liability; |
|
(13) errors and omission and professional liability |
|
other than medical malpractice; |
|
(14) media liability; |
|
(15) product liability, product recall, or completed |
|
operations; |
|
(16) cybersecurity, including first and third party |
|
commercial lines coverage for losses arising out of or relating to |
|
data privacy breaches, network security, computer viruses, and |
|
similar exposures; |
|
(17) highly protected commercial property; or |
|
(18) commercial flood insurance not provided through |
|
the National Flood Insurance Program. |
|
(b) The commissioner by rule may exempt a commercial line of |
|
insurance or commercial risk not listed in Subsection (a) from the |
|
form filing requirements of this subchapter to promote enhanced |
|
competition or more effectively use the resources of the department |
|
that might otherwise be used to review commercial lines filings. |
|
(c) Notwithstanding Subsection (a), the commissioner may |
|
require form filings under this subchapter for a specific kind of |
|
insurance listed in Subsection (a) for a period of not longer than |
|
one year if, after notice and hearing, the commissioner issues an |
|
order that: |
|
(1) includes a finding that a reasonable degree of |
|
competition does not exist for that specific kind of insurance; and |
|
(2) specifies the relevant tests and test results used |
|
to determine the degree of competition for that kind of insurance. |
|
(d) In the absence of a finding described by Subsection (c) |
|
with respect to a specific kind of insurance, a competitive market |
|
is presumed to exist for that kind of insurance. |
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SECTION 6. Section 2301.005, Insurance Code, is amended to |
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read as follows: |
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Sec. 2301.005. REGULATION OF INLAND MARINE FORMS. The |
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commissioner shall adopt rules governing the manner in which forms |
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for the various classifications of risks insured under personal |
|
lines inland marine insurance, as determined by the commissioner, |
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are regulated. |
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SECTION 7. The changes in law made by this Act apply only to |
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an insurance policy that is delivered, issued for delivery, or |
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renewed on or after January 1, 2018. An insurance policy |
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delivered, issued for delivery, or renewed before January 1, 2018, |
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is governed by the law as it existed immediately before the |
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effective date of this Act, and that law is continued in effect for |
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that purpose. |
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SECTION 8. This Act takes effect September 1, 2017. |