86R9980 LED-F
  By: Lucio III H.B. No. 1946
  relating to the workers' compensation classification system and
  rate filings.
         SECTION 1.  Section 2051.157, Insurance Code, is amended to
  read as follows:
         Sec. 2051.157.  PENALTY FOR CERTAIN VIOLATIONS. An officer
  or other representative of an insurance company is subject to a fine
  of not less than $100 or more than $500 if the officer or other
  representative violates any provision of the following relating to
  the company's business:
               (1)  Subchapter A or B;
               (2)  Section 2051.156 or 2051.201;
               (3)  Chapter 426 or 2052;
               (4)  Subchapter A, C, or D, Chapter 2053; or
               (5)  Section 2053.051, 2053.052, [2053.053,] or
         SECTION 2.  Section 2053.001(5), Insurance Code, is amended
  to read as follows:
               (5)  "Supplementary rating information" means any
  manual, rating plan or schedule, plan of rules, rating rule,
  classification system, territory code or description, or other
  similar information required to determine the applicable premium
  for an insured. The term includes increased limits factors,
  [classification relativities,] deductible relativities, and other
  similar factors and relativities.
         SECTION 3.  Section 2053.051, Insurance Code, is amended to
  read as follows:
         Sec. 2053.051.  HAZARD CLASSIFICATION SYSTEM.  (a)  For
  workers' compensation insurance, the department shall:
               (1)  determine hazards by class; and
               (2)  [establish classification relativities applicable
  to an employer's payroll in each of the classes at levels adequate
  to the risks to which the relativities apply.
         [(b)     The classification relativities established under
  Subsection (a)(2):
               [(1) must be designed to encourage safety;
               [(2) may be territorially based; and
               [(3) may reflect a difference in losses between
  employers of high wage earners and employers of low wage earners
  within the same class.
         [(c)  The department shall] revise the classification system
  as necessary to carry out the purposes of this chapter [at least
  once every five years].
         (b)  A stock company, mutual insurance company, reciprocal
  or interinsurance exchange, or Lloyd's plan authorized to engage in
  the business of workers' compensation insurance in this state may
  not use hazard classifications other than the classifications
  established by the department.
         SECTION 4.  Section 2053.056(c), Insurance Code, is amended
  to read as follows:
         (c)  The commissioner shall review the information submitted
  under Subsection (b) to determine the positive or negative impact
  of the enactment of workers' compensation reform legislation
  enacted by the 79th Legislature, Regular Session, 2005, on workers'
  compensation rates and premiums. The commissioner may consider
  other factors[, including relativities under Section 2053.051,] in
  determining whether a change in rates has impacted the premium
  charged to policyholders.
         SECTION 5.  Sections 407A.351(a) and (b), Labor Code, are
  amended to read as follows:
         (a)  Except as provided by Subsection (b), each group shall
  use the uniform classification system and [,] experience rating
  plan[, and rate relativities] of the department.
         (b)  A group must [may:
               [(1) use the relativities promulgated by the department
  modified to produce rates in accordance with the group's historical
  experience; or
               [(2)] file [its own] rates with the department in
  accordance with Chapter 2053, Insurance Code, including any
  reasonable and supporting information required by the
         SECTION 6.  Effective July 1, 2020, Sections 2053.053 and
  2054.354(b), Insurance Code, are repealed.
         SECTION 7.  Sections 2051.157, 2053.001(5), 2053.051, and
  2053.056(c), Insurance Code, and Sections 407A.351(a) and (b),
  Labor Code, as amended by this Act, apply only to an insurance
  policy that is delivered, issued for delivery, or renewed on or
  after July 1, 2020. A policy delivered, issued for delivery, or
  renewed before July 1, 2020, is governed by the law as it existed
  immediately before the effective date of this Act, and that law is
  continued in effect for that purpose.
         SECTION 8.  This Act takes effect September 1, 2019.