Bill Text: TX SB1367 | 2021-2022 | 87th Legislature | Enrolled


Bill Title: Relating to the regulation of commercial property and casualty insurance and insurance for certain large risks.

Spectrum: Partisan Bill (Republican 2-0)

Status: (Passed) 2021-05-15 - Effective on 9/1/21 [SB1367 Detail]

Download: Texas-2021-SB1367-Enrolled.html
 
 
  S.B. No. 1367
 
 
 
 
AN ACT
  relating to the regulation of commercial property and casualty
  insurance and insurance for certain large risks.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 981.004, Insurance Code, is amended by
  adding Subsection (g) to read as follows:
         (g)  Except with respect to a line of insurance for which the
  commissioner has temporarily reinstated the requirements for rate
  and form filings under Section 2251.0031(d) or 2301.0031(d),
  Subsections (a)(1) and (b) do not apply to an insurance policy
  issued by an eligible surplus lines insurer for any line of the
  kinds of insurance described by Sections 2251.0031(a) and
  2301.0031(a) or exempted under Section 2251.0031(c) or
  2301.0031(c).
         SECTION 2.  Section 2251.003(b), Insurance Code, is amended
  to read as follows:
         (b)  Except as provided by Section 2251.0031, this [This]
  subchapter and Subchapters B, C, and D apply 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 2251.004;
               (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.
         SECTION 3.  Subchapter A, Chapter 2251, Insurance Code, is
  amended by adding Section 2251.0031 to read as follows:
         Sec. 2251.0031.  EXCEPTIONS FOR CERTAIN LINES. (a) Except
  as provided by Subsection (d), Subchapter C does not apply to any
  line of the following kinds of insurance written under a commercial
  insurance policy or contract issued by an insurer authorized to
  engage in the business of insurance in this state:
               (1)  surety bonds; 
               (2)  fidelity bonds;
               (3)  commercial inland marine;
               (4)  boiler and machinery;
               (5)  environmental impairment or pollution liability;
               (6)  kidnap and ransom;
               (7)  political risk or expropriation;
               (8)  commercial excess liability or umbrella
  liability;
               (9)  directors' and officers' liability; 
               (10)  fiduciary liability;
               (11)  employment practices liability;
               (12)  errors and omission and professional liability
  other than medical professional liability;
               (13)  media liability;
               (14)  product liability, product recall, or completed
  operations;
               (15)  commercial 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;
               (16)  highly protected commercial property;
               (17)  commercial flood insurance not provided through
  the National Flood Insurance Program; or
               (18)  any combination of only the kinds of insurance
  listed in this subsection or exempted under Subsection (c).
         (b)  For purposes of Subsection (a), "highly protected
  commercial property" is commercial property that is subject to a
  much lower than normal probability of loss due to low-hazard
  occupancy or property type, superior construction, special fire
  protection equipment and procedures, and management commitment to
  loss prevention.
         (c)  The commissioner by rule may exempt a commercial line of
  insurance or commercial risk not listed in Subsection (a) from the
  rate filing requirements of Subchapter C to promote enhanced
  competition or more effectively use the resources of the department
  that might otherwise be used to review commercial lines filings.
         (d)  Notwithstanding Subsection (a), the commissioner may
  temporarily require rate filings under Subchapter C 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.
         (e)  In the absence of a finding described by Subsection (d)
  with respect to a specific kind of insurance, a competitive market
  is presumed to exist for that kind of insurance.
         (f)  The commissioner may adopt reasonable and necessary
  rules to implement this section.
         SECTION 4.  Section 2251.101, Insurance Code, is amended by
  adding Subsection (c) to read as follows:
         (c)  This section does not apply to rates for use with an
  insured that has:
               (1)  total insured property values of $5 million or
  more;
               (2)  total annual gross revenues of $10 million or
  more; or
               (3)  a total premium of $25,000 or more for property
  insurance, $25,000 or more for general liability insurance, or
  $50,000 or more for multi-peril insurance.
         SECTION 5.  Section 2301.003(b), Insurance Code, is amended
  to read as follows:
         (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.
         SECTION 6.  Subchapter A, Chapter 2301, Insurance Code, is
  amended by adding Section 2301.0031 to read as follows:
         Sec. 2301.0031.  EXCEPTIONS FOR CERTAIN LINES. (a) Except
  as provided by Subsection (d), Sections 2301.006, 2301.007(a) and
  (b), and 2301.008 do not apply to any line of the following kinds of
  insurance written under a commercial insurance policy or contract
  issued by an insurer authorized to engage in the business of
  insurance in this state:
               (1)  surety bonds; 
               (2)  fidelity bonds;
               (3)  commercial inland marine;
               (4)  boiler and machinery;
               (5)  environmental impairment or pollution liability;
               (6)  kidnap and ransom;
               (7)  political risk or expropriation;
               (8)  commercial excess liability or umbrella
  liability;
               (9)  directors' and officers' liability; 
               (10)  fiduciary liability;
               (11)  employment practices liability;
               (12)  errors and omission and professional liability
  other than medical professional liability;
               (13)  media liability;
               (14)  product liability, product recall, or completed
  operations;
               (15)  commercial 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;
               (16)  highly protected commercial property;
               (17)  commercial flood insurance not provided through
  the National Flood Insurance Program; or
               (18)  any combination of only the kinds of insurance
  listed in this subsection or exempted under Subsection (c).
         (b)  For purposes of Subsection (a), "highly protected
  commercial property" is commercial property that is subject to a
  much lower than normal probability of loss due to low-hazard
  occupancy or property type, superior construction, special fire
  protection equipment and procedures, and management commitment to
  loss prevention.
         (c)  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.
         (d)  Notwithstanding Subsection (a), the commissioner may
  temporarily impose the requirements of Sections 2301.006,
  2301.007(a) and (b), and 2301.008 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.
         (e)  In the absence of a finding described by Subsection (d)
  with respect to a specific kind of insurance, a competitive market
  is presumed to exist for that kind of insurance.
         (f)  The commissioner may adopt reasonable and necessary
  rules to implement this section.
         SECTION 7.  The changes in law made by this Act apply only to
  an insurance policy that is delivered, issued for delivery, or
  renewed on or after September 1, 2021. An insurance policy
  delivered, issued for delivery, or renewed before September 1,
  2021, 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, 2021.
 
 
 
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
         I hereby certify that S.B. No. 1367 passed the Senate on
  April 19, 2021, by the following vote:  Yeas 31, Nays 0.
 
 
  ______________________________
  Secretary of the Senate    
 
         I hereby certify that S.B. No. 1367 passed the House on
  April 30, 2021, by the following vote:  Yeas 138, Nays 3, two
  present not voting.
 
 
  ______________________________
  Chief Clerk of the House   
 
 
 
  Approved:
 
  ______________________________ 
              Date
 
 
  ______________________________ 
            Governor
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