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A BILL TO BE ENTITLED
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AN ACT
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relating to the workers' compensation classification system and |
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rate filings. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 2051.157, Insurance Code, is amended to |
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read as follows: |
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Sec. 2051.157. PENALTY FOR CERTAIN VIOLATIONS. An officer |
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or other representative of an insurance company is subject to a fine |
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of not less than $100 or more than $500 if the officer or other |
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representative violates any provision of the following relating to |
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the company's business: |
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(1) Subchapter A or B; |
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(2) Section 2051.156 or 2051.201; |
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(3) Chapter 426 or 2052; |
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(4) Subchapter A, C, or D, Chapter 2053; or |
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(5) Section 2053.051, 2053.052, [2053.053,] or |
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2053.055. |
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SECTION 2. Section 2053.001(5), Insurance Code, is amended |
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to read as follows: |
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(5) "Supplementary rating information" means any |
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manual, rating plan or schedule, plan of rules, rating rule, |
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classification system, territory code or description, or other |
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similar information required to determine the applicable premium |
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for an insured. The term includes increased limits factors, |
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[classification relativities,] deductible relativities, and other |
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similar factors and relativities. |
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SECTION 3. Section 2053.051, Insurance Code, is amended to |
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read as follows: |
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Sec. 2053.051. HAZARD CLASSIFICATION SYSTEM. (a) For |
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workers' compensation insurance, the department shall: |
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(1) determine hazards by class; and |
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(2) [establish classification relativities applicable
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to an employer's payroll in each of the classes at levels adequate
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to the risks to which the relativities apply.
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[(b)
The classification relativities established under
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Subsection (a)(2):
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[(1) must be designed to encourage safety;
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[(2) may be territorially based; and
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[(3) may reflect a difference in losses between
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employers of high wage earners and employers of low wage earners
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within the same class.
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[(c) The department shall] revise the classification system |
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as necessary to carry out the purposes of this chapter [at least
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once every five years]. |
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(b) A stock company, mutual insurance company, reciprocal |
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or interinsurance exchange, or Lloyd's plan authorized to engage in |
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the business of workers' compensation insurance in this state may |
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not use hazard classifications other than the classifications |
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established by the department. |
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SECTION 4. Section 2053.056(c), Insurance Code, is amended |
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to read as follows: |
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(c) The commissioner shall review the information submitted |
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under Subsection (b) to determine the positive or negative impact |
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of the enactment of workers' compensation reform legislation |
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enacted by the 79th Legislature, Regular Session, 2005, on workers' |
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compensation rates and premiums. The commissioner may consider |
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other factors[, including relativities under Section 2053.051,] in |
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determining whether a change in rates has impacted the premium |
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charged to policyholders. |
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SECTION 5. Sections 407A.351(a) and (b), Labor Code, are |
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amended to read as follows: |
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(a) Except as provided by Subsection (b), each group shall |
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use the uniform classification system and [,] experience rating |
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plan[, and rate relativities] of the department. |
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(b) A group must [may:
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[(1) use the relativities promulgated by the department
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modified to produce rates in accordance with the group's historical
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experience; or
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[(2)] file [its own] rates with the department in |
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accordance with Chapter 2053, Insurance Code, including any |
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reasonable and supporting information required by the |
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commissioner. |
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SECTION 6. Effective July 1, 2020, Sections 2053.053 and |
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2054.354(b), Insurance Code, are repealed. |
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SECTION 7. Sections 2051.157, 2053.001(5), 2053.051, and |
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2053.056(c), Insurance Code, and Sections 407A.351(a) and (b), |
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Labor Code, as amended by this Act, apply only to an insurance |
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policy that is delivered, issued for delivery, or renewed on or |
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after July 1, 2020. A policy delivered, issued for delivery, or |
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renewed before July 1, 2020, is governed by the law as it existed |
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immediately before the effective date of this Act, and that law is |
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continued in effect for that purpose. |
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SECTION 8. This Act takes effect September 1, 2019. |