Bill Text: TX SB871 | 2011-2012 | 82nd Legislature | Engrossed
Bill Title: Relating to corrective action with regard to excessive or unfairly discriminatory residential property or personal automobile premium rates.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed - Dead) 2011-04-28 - Referred to Insurance [SB871 Detail]
Download: Texas-2011-SB871-Engrossed.html
| By: Lucio | S.B. No. 871 | |
|
|
||
|
|
||
| relating to corrective action with regard to excessive or unfairly | ||
| discriminatory residential property or personal automobile premium | ||
| rates. | ||
| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
| SECTION 1. Section 2254.003, Insurance Code, is amended by | ||
| amending Subsection (a) and adding Subsections (a-1), (a-2), and | ||
| (a-3) to read as follows: | ||
| (a) This section applies to a rate for personal automobile | ||
| insurance or residential property insurance filed on or after the | ||
| effective date of Chapter 206, Acts of the 78th Legislature, | ||
| Regular Session, 2003. | ||
| (a-1) If the department provides an insurer with formal | ||
| written notice that a rate is excessive or unfairly discriminatory, | ||
| then the insurer may file a new rate or take other corrective action | ||
| to substantially address the departments concerns. The new rate or | ||
| other corrective action must be filed on or before the 60th day | ||
| following the date of formal written notice. At the commissioner's | ||
| discretion, the commissioner may extend the deadline to file by an | ||
| additional 30 days. If the department accepts the new rate or other | ||
| corrective action, then the insurer shall, according to | ||
| commissioner order, refund or issue a premium discount directly to | ||
| each affected policyholder on the portion of the premium found to be | ||
| excessive or unfairly discriminatory, plus interest on that amount. | ||
| The interest rate to be paid on refunds or discounts under this | ||
| subsection is the sum of six percent and the prime rate for the | ||
| calendar year in which formal written notice is given. For purposes | ||
| of this subsection, the prime rate is the prime rate as published in | ||
| The Wall Street Journal for the first day of the calendar year that | ||
| is not a Saturday, Sunday, or legal holiday. | ||
| (a-2) If the insurer does not file or take, or the | ||
| department does not accept, a new rate or other corrective action as | ||
| provided under Subsection (a-1), and the commissioner issues an | ||
| order disapproving the rate as excessive or unfairly discriminatory | ||
| under Section 2251.104, then the insurer must refund or issue a | ||
| premium discount directly to each affected policyholder on the | ||
| portion of the premium found to be excessive or unfairly | ||
| discriminatory, plus interest on that amount. The interest rate to | ||
| be paid on refunds or discounts under this subsection is 18 percent. | ||
| An insurer is not required to pay any interest penalty if the | ||
| insurer prevails in an appeal of the commissioner's order under | ||
| Subchapter D, Chapter 36. | ||
| (a-3) The period for the refund and interest begins on the | ||
| date the department first provides the insurer with formal written | ||
| notice that the insurer's filed rate is excessive or unfairly | ||
| discriminatory, and interest continues to accrue until the refund | ||
| or discount is paid or issued. | ||
| SECTION 2. 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, 2011. | ||
