Bill Text: MS HB773 | 2020 | Regular Session | Enrolled
Bill Title: Commercial Lines Modernization Act; enact.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2020-07-07 - Approved by Governor [HB773 Detail]
Download: Mississippi-2020-HB773-Enrolled.html
MISSISSIPPI LEGISLATURE
2020 Regular Session
To: Insurance
By: Representative Ford (54th)
House Bill 773
(As Sent to Governor)
AN ACT TO AMEND SECTION 83-2-7, MISSISSIPPI CODE OF 1972, TO ENACT THE COMMERCIAL LINES MODERNIZATION ACT; TO PROVIDE THAT RATES, SUPPLEMENTARY RATE INFORMATION, POLICY FORMS AND ENDORSEMENTS FOR CERTAIN COMMERCIAL LINES INSURANCE COVERAGES SHALL BE EXEMPT FROM FILING AND APPROVAL REQUIREMENTS; TO AMEND SECTION 83-2-3, MISSISSIPPI CODE OF 1972, TO AUTHORIZE THE COMMISSIONER OF INSURANCE TO ADOPT RULES AND REGULATIONS TO ESTABLISH THE CRITERIA AND PROCEDURES FOR DETERMINING WHEN A RATE FILING SHOULD BE SUBMITTED TO AN ACTUARY FOR REVIEW; TO AMEND SECTION 45-45-27, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT THE OWNER OF AN ELEVATOR THAT SERVES ONLY TWO ADJACENT FLOORS MAY REQUEST AN EXEMPTION FROM THE ANNUAL INSPECTION REQUIREMENT UNDER THE MISSISSIPPI CONVEYANCE SAFETY ACT PURSUANT TO RULES AND REGULATIONS PROMULGATED BY THE COMMISSIONER OF INSURANCE; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 83-2-7, Mississippi Code of 1972, is amended as follows:
83-2-7. (1) Except as
provided in Section 83-2-9 and subsections (2) * * *, (3) and (5) of this
section, every insurer shall file with the commissioner all rates,
supplementary rate information, policy forms and endorsements at least thirty (30)
days prior to the proposed effective date which shall be stated in the filing.
Rates, supplementary rate information, policy forms and endorsements need not
be filed for inland marine risks which by general custom of the business are
not written according to manual rules or rating plans. Upon the request of the
commissioner, supporting information shall also be filed. Any filing made
under this section is deemed to be approved unless disapproved by the
Commissioner of Insurance within thirty (30) days after the date of filing.
(2) A filing of adjustments of rates for existing rating systems made under this section which does not involve a change in the relationship between such rates and the expense portion thereof or does not involve a change of the element of expenses which are paid as a percentage of premiums and does not involve a change in rate relativities among such classifications on any basis other than loss experience is effective on the date specified in the filing which shall not be less than thirty (30) days after the filing is made and shall be deemed to meet the requirements of this chapter.
(3) The commissioner may give written notice within thirty (30) days of the receipt of the filing that additional time, not to exceed sixty (60) days from the date of such notice, is necessary to consider the filing. A filing is deemed to meet the requirements of this chapter and becomes effective unless disapproved by the commissioner before the expiration of the waiting period or an extension thereof. Whenever a filing made under this section is not accompanied by sufficient supporting information, the commissioner shall inform the filing entity as to what information is required to complete the filing. The filing shall not be deemed to be completed until such information is furnished.
(4) No insurance company shall make or issue a contract or policy except in accordance with filings made with the commissioner, if such filings are required.
(5) Subject to the provisions of subsections (6), (7) and (8) of this section, rates and supplementary rate information for the following commercial lines insurance coverages shall be exempt from filing and approval requirements. However, the rates shall remain subject to the standards set forth in Section 83-2-3. Policy forms and endorsements for the following commercial lines insurance coverages must be filed with the commissioner within sixty (60) days of use for informational purposes only:
(a) Surety and Fidelity;
(b) Boiler and Machinery;
(c) Environmental Impairment or Pollution Liability;
(d) Kidnap and Ransom;
(e) Political Risk or Expropriation;
(f) Excess and Umbrella Liability;
(g) Employment Practices Liability;
(h) Media Liability;
(i)_ Product Liability, Product Recall, and Completed Operations;
(j) Highly Protected Commercial Property; and
(k) Any other commercial lines insurance coverage or risk that the commissioner shall, pursuant to regulation, exempt from rate, rate supplementary information, or policy form filing requirements in order to promote enhanced competition or to more effectively use the resources of the department that might otherwise be used to review commercial lines filings.
(6) If a commercial lines insurance rate, policy form or endorsement is determined not to comply with the requirements of Mississippi law, the commissioner may issue an order specifying in detail how the rate, policy form, or endorsement fails to meet statutory requirements and further specifying a prospective date after which the rate or form may not be used. The commissioner's findings shall not affect policies in force prior to the date specified in the order. As part of such an order, the commissioner may require the insurer subject to the order to submit a filing for approval by the commissioner of a new rate or policy form, if any, that will replace the discontinued rate or policy form.
(7) The commissioner may temporarily reinstate, for a period of no longer than one (1) year, the filing and approval requirements for rate, rate supplementary information, or policy form for a specific type of commercial lines insurance if, after a hearing, the commissioner makes a finding of fact that a reasonable degree of competition does not exist for that specific type of insurance coverage. Such a finding of fact by the commissioner must specify the relevant tests used to determine whether a lack of a reasonable degree of competition exists and the results thereof. In the absence of such specific findings of fact by the commissioner, it shall be presumed that a competitive market exists.
(8) For purposes of this section, commercial lines insurance means property and casualty insurance for any risk that is not a personal or family risk, but shall not include workers' compensation, medical malpractice liability, creditor-placed insurance or any insurance issued by residual market mechanisms or assigned risk plans.
SECTION 2. Section 83-2-3, Mississippi Code of 1972, is amended as follows:
83-2-3. (1) Rates shall comply with the following standards:
(a) Rates shall not be excessive, inadequate or unfairly discriminatory.
(b) A rate is excessive if it is likely to produce a profit that is unreasonably high for the insurance provided or if the expense provision included therein is unreasonably high in relation to the services rendered.
(c) A rate is inadequate if it threatens the solvency of the insurance company or tends to create a monopoly.
(d) Unfair discrimination exists if, after allowing for practical limitations, price differentials fail to reflect equitably the differences in expected losses and expenses. A rate is not unfairly discriminatory because different premiums result for policyholders with like loss exposures with different expenses, or like expenses but different loss exposures, so long as the rate reflects the differences with reasonable accuracy.
(2) In determining whether rates comply with the standards set forth in subsection (1), the following criteria shall apply:
(a) Due consideration shall be given to past and prospective loss and expense experience within and outside this state; to catastrophe hazards; to any residual market loss redistributions and other similar obligations; to a reasonable provision for profit and contingencies; to trends within and outside this state; to loadings for leveling premium rates over a reasonable period of time or for dividends or savings to be allowed or returned by insurers to their policyholders, members or subscribers; and to all other relevant factors, including the judgment of the filer.
(b) Risks may be classified in any reasonable way for the establishment of rates except that no risks may be grouped by classifications based, in whole or in part, on race, color, creed, or national origin of the risk. Rates may be modified for individual risks in accordance with rating plans or schedules which provide for recognition of probable variations in hazards, expenses or both.
(c) The systems of expense provisions included in rates for use by an insurer or group of insurers may differ from those of other insurers or group of insurers to reflect the operating methods of such insurer or group with respect to any kind of insurance, or with respect to any subdivision or combination thereof.
(d) Any homeowners' insurance policy filed with the Commissioner of Insurance that offers a percentage deductible for the peril of windstorm from a named storm shall offer a buy-back provision for that deductible which is actuarially sound; however, the Commissioner of Insurance may grant a waiver from the mandatory buy-back provision in accordance with the following procedure and criteria:
(i) An insurance company shall make a formal filing requesting a waiver from the buy-back provision requirement with the Commissioner of Insurance.
(ii) An insurance company shall submit written proof in its formal filing as to why it is in the best interest of Mississippi policyholders to receive a waiver from the buy-back provision requirement and shall provide any supporting documentation requested by the commissioner deemed appropriate to make his decision.
(iii) All expenses incurred by the Commissioner of Insurance or his designee in determining the validity of the waiver request shall be borne by the petitioning insurer. Such expenses may include, but not be limited to, the cost of reviewing the filing by actuaries, and if the commissioner deems a public hearing appropriate, the cost of a facility, the cost of publicity and the cost of a court reporter for the hearing.
(e) The commissioner shall establish by regulation uniform policy language regarding the applicability of hurricane deductibles and the form of notice to be provided to an insured under a homeowner's insurance policy by an insurer utilizing a hurricane deductible program or programs. The term "hurricane," for the purpose of a hurricane deductible program, means a storm system that has been declared to be a hurricane by the National Hurricane Center of the National Weather Service. The duration of the hurricane includes the time period, in Mississippi:
(i) Beginning at the time a hurricane watch or hurricane warning is issued for any part of Mississippi by the National Hurricane Center of the National Weather Service;
(ii) Continuing for the time period during which the hurricane conditions exist anywhere in Mississippi; and
(iii) Ending twenty-four (24) hours following the termination of the last hurricane watch or hurricane warning issued for any part of Mississippi by the National Hurricane Center of the National Weather Service.
(3) To ensure the most appropriate use of state resources with respect to the engagement of actuarial services for the review of rate filings under this chapter, the commissioner may adopt rules and regulations to establish the criteria and procedures for determining when a rate filing should be submitted to an actuary for review.
SECTION 3. Section 45-45-27, Mississippi Code of 1972, is amended as follows:
45-45-27. (1) It shall be the responsibility of the owner of all new and existing conveyances located in any building or structure to have the conveyance inspected annually (ASME A17.1/CSA B44, category one) by a licensed elevator inspector who shall supply the property owner or lessee and the licensing authority with a written inspection report that describes any and all code violations. However, if the conveyance is an elevator that serves only two (2) adjacent floors, the owner may request an exemption from the annual inspection requirement pursuant to rules and regulations promulgated by the commissioner governing said exemption. Property owners shall have thirty (30) days from the date of the published inspection report to be in full compliance with correcting the violations.
(2) (a) It shall be the responsibility of the owner of all conveyances to hire an elevator contractor or a limited elevator contractor to supervise the required tests at intervals in compliance with the ASME A17.1/CSA B44 Appendix N, ASME A18.1 and ASCE 21.
(b) All tests shall be performed by a licensed elevator mechanic.
SECTION 4. This act shall take effect and be in force from and after July 1, 2020.
