Bill Text: TX HB1731 | 2013-2014 | 83rd Legislature | Introduced
Bill Title: Relating to a mile-based rating plan for personal automobile insurance.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2013-04-24 - Committee report sent to Calendars [HB1731 Detail]
Download: Texas-2013-HB1731-Introduced.html
83R6627 KKR-D | ||
By: McClendon | H.B. No. 1731 |
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relating to a mile-based rating plan for personal automobile | ||
insurance. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Chapter 2251, Insurance Code, is amended by | ||
adding Subchapter H to read as follows: | ||
SUBCHAPTER H. MILE-BASED AUTOMOBILE INSURANCE RATING PLANS | ||
Sec. 2251.351. DEFINITION. In this subchapter, "mile-based | ||
automobile insurance" means personal automobile insurance that is | ||
rated using a rating plan for which a unit of exposure is one mile | ||
driven by the insured. | ||
Sec. 2251.352. APPLICABILITY OF OTHER LAW. (a) | ||
Subchapters A, B, C, and D apply to mile-based automobile insurance | ||
written under this subchapter. | ||
(b) An insurer shall make separate filings under Subchapter | ||
C for mile-based automobile insurance written under this subchapter | ||
and other automobile insurance written in this state. | ||
Sec. 2251.353. MILE-BASED AUTOMOBILE INSURANCE AUTHORIZED. | ||
(a) An insurer authorized to write personal automobile insurance | ||
in this state may write mile-based automobile insurance in this | ||
state. | ||
(b) An insurer that writes mile-based automobile insurance | ||
in this state may also write personal automobile insurance in this | ||
state using a rating plan for which a unit of exposure is a unit | ||
other than the number of miles driven by the insured and that | ||
complies with this chapter. | ||
(c) An insurer may require a person purchasing personal | ||
automobile insurance to use the same type of rating plan for all | ||
vehicles covered under the person's personal automobile insurance | ||
policy. | ||
Sec. 2251.354. COMMISSIONER POWERS AND DUTIES; RULES. | ||
(a) The commissioner shall compile information regarding: | ||
(1) the number of insurers writing mile-based | ||
automobile insurance in this state; | ||
(2) the geographic areas of this state in which | ||
mile-based automobile insurance is written; and | ||
(3) the premium rates for mile-based automobile | ||
insurance compared to personal automobile insurance rated on | ||
another basis. | ||
(b) The commissioner shall adopt rules as necessary or | ||
appropriate to govern the use of mile-based automobile insurance | ||
under this subchapter, including rules regarding: | ||
(1) prepayment arrangements; | ||
(2) proof of financial responsibility; and | ||
(3) auditing of the odometer of a vehicle for the | ||
purpose of determining coverage and number of miles driven. | ||
SECTION 2. Section 1952.054, Insurance Code, is amended to | ||
read as follows: | ||
Sec. 1952.054. REQUIRED DISCLOSURES REGARDING SHORT-TERM | ||
POLICIES. (a) An insurance policy or other document evidencing | ||
proof of purchase of a personal automobile insurance policy, other | ||
than a mile-based automobile insurance policy written under | ||
Subchapter H, Chapter 2251, that is written for a term of less than | ||
30 days or a mile-based automobile insurance policy written under | ||
Subchapter H, Chapter 2251, that is written for fewer than 1,000 | ||
miles may not be used to obtain an original or renewal driver's | ||
license, an automobile registration or license plates, or a motor | ||
vehicle inspection certificate. An insurance policy or other | ||
document described by this subsection must contain the following | ||
statement: | ||
TEXAS LAW PROHIBITS USE OF THIS DOCUMENT TO OBTAIN A | ||
MOTOR VEHICLE INSPECTION CERTIFICATE, AN ORIGINAL OR | ||
RENEWAL DRIVER'S LICENSE, OR AN AUTOMOBILE | ||
REGISTRATION OR LICENSE PLATES. | ||
(b) Before accepting any premium or fee for a personal | ||
automobile insurance policy or binder for a term of less than 30 | ||
days, other than a policy or binder for a mile-based automobile | ||
insurance policy written under Subchapter H, Chapter 2251, or any | ||
premium or fee for a mile-based automobile insurance policy written | ||
under Subchapter H, Chapter 2251, that is written for fewer than | ||
1,000 miles, an agent or insurer must make the following written | ||
disclosure to the applicant or insured: | ||
TEXAS LAW PROHIBITS USE OF THIS POLICY OR BINDER TO | ||
OBTAIN A MOTOR VEHICLE INSPECTION CERTIFICATE, AN | ||
ORIGINAL OR RENEWAL DRIVER'S LICENSE, OR AN AUTOMOBILE | ||
REGISTRATION OR LICENSE PLATES. | ||
SECTION 3. Section 2251.001, Insurance Code, is amended to | ||
read as follows: | ||
Sec. 2251.001. PURPOSE. The purposes of this subchapter | ||
and Subchapters B, C, D, [ |
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(1) promote the public welfare by regulating insurance | ||
rates to prohibit excessive, inadequate, or unfairly | ||
discriminatory rates; | ||
(2) promote the availability of insurance; | ||
(3) promote price competition among insurers to | ||
provide rates and premiums that are responsive to competitive | ||
market conditions; | ||
(4) prohibit price-fixing agreements and other | ||
anticompetitive behavior by insurers; and | ||
(5) provide regulatory procedures for the maintenance | ||
of appropriate information reporting systems. | ||
SECTION 4. Sections 2251.003(a) and (b), Insurance Code, | ||
are amended to read as follows: | ||
(a) This subchapter and Subchapters B, C, D, [ |
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apply to: | ||
(1) an insurer to which Article 5.13 applies, other | ||
than the Texas Windstorm Insurance Association, the FAIR Plan | ||
Association, and the Texas Automobile Insurance Plan Association; | ||
and | ||
(2) except as provided by Subsection (c), a Lloyd's | ||
plan, reciprocal or interinsurance exchange, and county mutual | ||
insurance company with respect to the lines of insurance described | ||
by Subsection (b). | ||
(b) This subchapter and Subchapters B, C, D, [ |
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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 5. Section 32.102(a), Insurance Code, is amended to | ||
read as follows: | ||
(a) The department, in conjunction with the office of public | ||
insurance counsel, shall establish and maintain a single Internet | ||
website that provides information to enable consumers to make | ||
informed decisions relating to the purchase of residential property | ||
insurance and personal automobile insurance. The website must | ||
include: | ||
(1) a description of each type of residential property | ||
insurance policy and personal automobile insurance policy issued in | ||
this state, including a comparison of the coverage, exclusions, and | ||
restrictions of each policy that allows a side-by-side comparison | ||
of the features of the policy forms; | ||
(2) a listing of each insurer writing residential | ||
property insurance or personal automobile insurance in this state, | ||
indexed by each county or zip code in which the insurer is actively | ||
writing that insurance, and a profile of the insurer that includes: | ||
(A) contact information for the insurer, | ||
including the insurer's full name, address, and telephone number | ||
and the insurer's fax number and e-mail address, if available; | ||
(B) information on rates charged by the insurer, | ||
including: | ||
(i) sample rates for different policyholder | ||
profiles in each county or zip code; and | ||
(ii) the percentage by which the sample | ||
rate has fallen or risen due to filings in the previous 12, 24, and | ||
36 months; | ||
(C) a list of policy forms, exclusions, | ||
endorsements, and discounts offered by the insurer; | ||
(D) an indication of whether the insurer uses | ||
credit scoring in underwriting, rating, or tiering, and a link to | ||
the insurer's credit model or a link explaining how to request the | ||
insurer's credit model; | ||
(E) the insurer's financial rating determined by | ||
A. M. Best or similar rating organization and an explanation of the | ||
meaning and importance of the rating; | ||
(F) a complaint ratio or similar complaint rating | ||
system for the insurer for each of the previous three years and an | ||
explanation of the meaning of the rating system; and | ||
(G) information, other than information made | ||
confidential by law, on the insurer's regulatory and administrative | ||
experience with the department, the office of public insurance | ||
counsel, and insurance regulatory authorities in other states; | ||
[ |
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(3) if feasible, as determined by the commissioner and | ||
the public insurance counsel: | ||
(A) a side-by-side comparison of credit scoring | ||
models, including factors, key variables, and weights, of | ||
residential property insurers in this state; and | ||
(B) a side-by-side comparison of credit scoring | ||
models, including factors, key variables, and weights, of private | ||
passenger automobile insurers in this state; and | ||
(4) information that is compiled by the commissioner | ||
under Section 2251.354 concerning mile-based automobile insurance | ||
policies written under Subchapter H, Chapter 2251, and is not | ||
otherwise described by this subsection. | ||
SECTION 6. The change in law made by this Act applies only | ||
to a personal automobile insurance policy that is delivered, issued | ||
for delivery, or renewed on or after January 1, 2014. An insurance | ||
policy that is delivered, issued for delivery, or renewed before | ||
January 1, 2014, is covered by the law in effect at the time the | ||
policy was delivered, issued for delivery, or renewed, and that law | ||
is continued in effect for that purpose. | ||
SECTION 7. This Act takes effect September 1, 2013. |