Relating to rates for residential property insurance and personal automobile insurance.

The text as introduced · 768 words

90R6754 SCL-F

By: Martinez Fischer
H.B. No. 226

A BILL TO BE ENTITLED

AN ACT

relating to rates for residential property insurance and personal

automobile insurance.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 2251.101(a), Insurance Code, is amended

to read as follows:

(a) Except as provided by Subchapter D, for risks written in

this state, each insurer shall file with the commissioner all

rates, applicable rating manuals, supplementary rating

information, and additional information as required by the

commissioner. Except as provided by Section 2251.132, an [ An ]

insurer may use a rate filed under this subchapter on and after the

date the rate is filed.

SECTION 2. Section 2251.103, Insurance Code, is amended by

adding Subsection (g) to read as follows:

(g) This section does not apply to a rate for an insurance

policy to which Subchapter C-1 applies.

SECTION 3. Section 2251.1031, Insurance Code, is amended by

adding Subsection (b-1) to read as follows:

(b-1) If the department requests additional information

from the insurer during the 90-day period described by Section

2251.133(a) or under a second 90-day period described by Section

2251.133(c), as applicable, the time between the date the

department submits the request to the insurer and the date the

department receives the information requested is not included in

the computation of the first 90-day period or the second 90-day

period, as applicable.

SECTION 4. Chapter 2251, Insurance Code, is amended by

adding Subchapter C-1 to read as follows:

SUBCHAPTER C-1. PRIOR APPROVAL FOR CERTAIN RESIDENTIAL PROPERTY AND

PERSONAL AUTOMOBILE INSURANCE RATES

Sec. 2251.131. APPLICABILITY OF SUBCHAPTER. This

subchapter applies only to residential property insurance and

personal automobile insurance.

Sec. 2251.132. PRIOR APPROVAL OF CERTAIN FILED RATES

REQUIRED. (a) An insurer may not use a rate filed under Section

2251.101 without prior commissioner approval if the rate increased

or decreased by more than five percent from the insurer's

previously filed rate that is in effect on the date of the filing.

(b) From the date of the filing of the rate with the

department to the effective date of the new rate, the insurer's

previously filed rate that is in effect on the date of the filing

remains in effect.

Sec. 2251.133. COMMISSIONER APPROVAL OF CERTAIN RATE

INCREASES OR DECREASES. (a) Not later than the 90th day after the

date a rate described by Section 2251.132 is filed with the

department under Section 2251.101, the commissioner shall approve

or disapprove the rate after determining whether the rate complies

with this chapter.

(b) The commissioner may approve a rate under this section

only if:

(1) the commissioner finds the resulting premiums will

be just, adequate, reasonable, not excessive, and not unfairly

discriminatory, taking into consideration:

(A) the financial condition of the insurer;

(B) the method of operation and expenses of the

insurer;

(C) the actual paid and incurred loss experience

of the insurer;

(D) earnings of the insurer from investments

together with a projection of prospective earnings from investments

during the period for which the rates will be in effect; and

(E) the composite effect of the factors described

by Paragraphs (B), (C), and (D); and

(2) the application meets the conditions,

limitations, and restrictions considered necessary by the

commissioner.

(c) For good cause, the commissioner may, on the expiration

of the 90-day period described by Subsection (a), extend the period

for approval or disapproval of a rate for one additional 90-day

period. The commissioner and insurer may not by agreement extend

the 90-day period described by Subsection (a) or this subsection.

(d) A rate that is not disapproved in the period required by

this section is considered approved.

(e) If the commissioner disapproves a rate under this

section, the commissioner shall issue an order specifying in what

respects the rate fails to meet the requirements of this chapter.

(f) An insurer that files a rate that is disapproved under

this section is entitled to a hearing on written request made to the

commissioner not later than the 30th day after the date the order

disapproving the rate takes effect.

(g) The department shall track, compile, and routinely

analyze the factors that contribute to the disapproval of rates

under this section.

SECTION 5. The changes in law made by this Act apply only to

a rate that is filed on or after January 1, 2028. A rate that is

filed before January 1, 2028, 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 6. This Act takes effect September 1, 2027.