HB5519 - Relating to rates for residential property insurance and personal automobile insurance.

      By: Martinez Fischer H.B. No. 5519       A BILL TO BE ENTITLED   AN ACT   relating to rates for residential property insurance and personal   automobile insurance.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 2251.003, Insurance Code, is amended by   amending Subsection (b) and adding Subsection (d) to read as   follows:          (b)  Except as provided by Section 2251.0031, 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.           (d)     This subchapter and Subchapters B and C-1 apply to all   lines of residential property insurance and personal automobile   insurance written under an insurance policy or contract issued by   an insurer authorized to engage in the business of insurance in this   state, including a Lloyd's plan, reciprocal or interinsurance   exchange, or county mutual insurance company.          SECTION 2.  Chapter 2251, Insurance Code, is amended by   adding Subchapter C-1 to read as follows:   SUBCHAPTER C-1. PRIOR APPROVAL FOR RESIDENTIAL PROPERTY AND   PERSONAL AUTOMOBILE INSURANCE           Sec.   2251.131.     RATE FILINGS AND SUPPORTING INFORMATION; USE   OF FILED RATE. (a) For residential property and personal   automobile insurance policies written in this state, each insurer   shall file with the department all rates, applicable rating   manuals, supplementary rating information, and additional   information as required by the commissioner, if the insurer's rate   increased or decreased by more than 5% from the insurer's   previously filed rate that is in effect on the date of the filing.           (b)     Rules adopted by the commissioner under Section   2251.101(b) apply with respect to rate filing under this section.           (c)     From the date of the filing of the rate with the   department to the effective date of the new rate, the insurer's   previously filed rate that is in effect on the date of the filing   remains in effect.           (d)     For purposes of this section, a rate is filed with the   department on the date the department receives the rate filing.           Sec.   2251.133.     COMMISSIONER APPROVAL OF RATE INCREASE OR   DECREASE. (a) Not later than the 90th day after the date a rate is   filed with the department under Section 2251.131, the commissioner   shall approve or disapprove the rate after determining whether the   rate complies with the requirements of this subchapter.           (b)     The commissioner may approve a rate that increased or   decreased by more than 5% from the insurer's previously filed rate   under Section 2251.131 only if:                 (1)     the commissioner finds the resulting premiums will   be just, adequate, reasonable, not excessive, and not unfairly   discriminatory, taking into consideration:                       (A)  the financial condition of the insurer;                       (B)     the method of operation and expenses of the   insurer;                       (C)     the actual paid and incurred loss experience   of the insurer;                       (D)     earnings of the insurer from investments   together with a projection of prospective earnings from investments   during the period for which the rates will be in effect; and                       (E)     the composite effect of the factors described   by Paragraphs (B), (C), and (D); and                 (2)     the application meets the conditions,   limitations, and restrictions considered necessary by the   commissioner.           (c)     For good cause, the commissioner may, on the expiration   of the 90-day period described by Subsection (a), extend the period   for approval or disapproval of a rate for one additional 90-day   period. The commissioner and the insurer may not by agreement   extend the 90-day period described by Subsection (a) or this   subsection.           (d)     If the commissioner disapproves a rate under this   section, the commissioner shall issue an order specifying in what   respects the rate fails to meet the requirements of this chapter.           (e)     An insurer that files a rate that is disapproved under   this section is entitled to a hearing on written request made to the   commissioner not later than the 30th day after the date the order   disapproving the rate takes effect.           (f)     The department shall track, compile, and routinely   analyze the factors that contribute to the disapproval of rates   under this section.           Sec.   2251.134.     AMENDMENT, SUSPENSION, OR REVOCATION OF   APPROVED RATE. (a) An insurer whose rate is approved under Section   2251.133 may:                 (1)  apply for an amendment to the rate; or                 (2)  by notice to the commissioner withdraw the rate.           (b)  The commissioner may, after notice and a hearing:                 (1)     suspend or revoke approval for a rate considered   approved under Section 2251.133(b) if the commissioner determines   that the rate filing:                       (A)  contains false or erroneous information; or                       (B)     does not meet the requirements of this   subchapter; or                 (2)     suspend or revoke approval for a rate approved if   the commissioner determines after examination or otherwise that:                       (A)     the insurer has had a change in the insurer's   financial condition since the application was approved;                       (B)     the actual paid and incurred losses of the   insurer have materially changed since the application was approved;                       (C)     there has been a material increase in   expenses of the insurer since the application was approved;                       (D)     there has been a material reduction in   earning from investments by the insurer since the application was   approved; or                       (E)     the insurer has failed or refused to provide   information required by the commissioner.          SECTION 3.  The changes in law made by this Act apply only to   rates for an insurance policy that is delivered, issued for   delivery, or renewed on or after January 1, 2026. Rates for an   insurance policy that is delivered, issued for delivery, or renewed   before January 1, 2026, are 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 4.  This Act takes effect September 1, 2025.