Bill Text: TX SB563 | 2017-2018 | 85th Legislature | Comm Sub

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Bill Title: Relating to the definition of commercial property insurance for purposes of certain provisions governing insurance rates and policy forms.

Sponsorship: Partisan Bill (Republican 2)

Status: (Engrossed - Dead) 2017-05-24 - Returned to Local & Consent Calendars Comm. [SB563 Detail]

Download: Texas-2017-SB563-Comm_Sub.html

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By: Hancock S.B. No. 563
(Frullo)

A BILL TO BE ENTITLED
AN ACT
relating to the definition of commercial property insurance for
purposes of certain provisions governing insurance rates and policy
forms.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2251.002, Insurance Code, is amended by
amending Subdivision (1) and adding Subdivision (1-a) to read as
follows:
(1) "Commercial property insurance" means insurance
coverage against loss caused by or resulting from loss, damage, or
destruction of real or personal property provided through a
commercial property insurance policy. The term includes any
combination of:
(A) commercial fire or allied lines;
(B) commercial inland marine insurance;
(C) commercial crime coverage;
(D) boiler and machinery insurance other than
explosion;
(E) glass insurance provided as part of other
coverage; and
(F) as authorized by commissioner rule,
insurance covering other perils or providing other coverages or
other lines of first party property insurance.
(1-a) "Disallowed expenses" includes:
(A) administrative expenses, other than
acquisition, loss control, and safety engineering expenses, that
exceed 110 percent of the industry median for those expenses;
(B) lobbying expenses;
(C) advertising expenses, other than for
advertising:
(i) directly related to the services or
products provided by the insurer; or
(ii) designed and directed at loss
prevention;
(D) amounts paid by an insurer:
(i) as damages in an action brought against
the insurer for bad faith, fraud, or any matters other than payment
under the insurance contract; or
(ii) as fees, fines, penalties, or
exemplary damages for a civil or criminal violation of law;
(E) contributions to:
(i) social, religious, political, or
fraternal organizations; or
(ii) organizations engaged in legislative
advocacy;
(F) except as authorized by commissioner rule,
fees and assessments paid to advisory organizations;
(G) any amount determined by the commissioner to
be excess premiums charged by the insurer; and
(H) any unreasonably incurred expenses, as
determined by the commissioner after notice and hearing.
SECTION 2. Section 2301.002, Insurance Code, is amended by
amending Subdivision (1) and adding Subdivision (1-a) to read as
follows:
(1) "Commercial property insurance" means insurance
coverage against loss caused by or resulting from loss, damage, or
destruction of real or personal property provided through a
commercial property insurance policy. The term includes any
combination of:
(A) commercial fire or allied lines;
(B) commercial inland marine insurance;
(C) commercial crime coverage;
(D) boiler and machinery insurance other than
explosion;
(E) glass insurance provided as part of other
coverage; and
(F) as authorized by commissioner rule,
insurance covering other perils or providing other coverages or
other lines of first party property insurance.
(1-a) "Form" means an insurance policy form or a
printed endorsement form.
SECTION 3. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2017.