80C355(1) PEP

 

CHAPTER 1953. RATE REGULATION AND RATEMAKING FOR AUTOMOBILE INSURANCE

SUBCHAPTER A. RATE REGULATION

Revised Law

Sec. 1953.001.  EXCLUSION OF CERTAIN TYPES OR CLASSES OF INSURANCE FROM CERTAIN REGULATIONS.  (a) This section applies only to insurance against liability for damages arising out of the ownership, operation, maintenance, or use of a motor vehicle described by Article 5.01 or against loss of or damage to the motor vehicle that, in the judgment of the commissioner, is a type or class of insurance that is also the subject of or is more properly regulated under other insurance rating laws that cover that type or class of insurance.

(b)  A type or class of insurance to which this section applies is excluded from regulation under this chapter and:

(1)  Articles 5.01, 5.01B, 5.03, 5.04, 5.04-1, 5.06, 5.10, and 5.11;

(2)  Chapters 251 and 254;

(3)  Sections 941.003 and 942.003;

(4)  Subchapters A and B, Chapter 1806; and

(5)  Chapters 1951 and 1952.

(c)  If the commissioner finds that a type or class of insurance is also the subject of or is more properly regulated under other insurance rating laws that cover that type or class of insurance, the commissioner shall issue an order declaring which other insurance rating laws apply to:

(1)  the type or class of insurance; and

(2)  any motor vehicle equipment described by Article 5.01.  (V.T.I.C. Art. 5.02.)

Source Law

Art. 5.02.  There shall be excluded from regulation under the provisions of this subchapter any insurance against liability for damages arising out of the ownership, operation, maintenance or use of or against loss of or damage to motor vehicles described in the foregoing section which may, in the judgment of the Board, be a type or class of insurance which is also the subject of or may be more properly regulated under the terms or provisions of other insurance rating laws heretofore or hereafter enacted covering such insurance.  If such situation shall be found to exist, then the Board shall make an order declaring which of the said rating laws shall be applicable to such type or class of insurance, and to any motor vehicle equipment mentioned in Article 5.01 of this subchapter.

Revisor's Note

(1)  V.T.I.C. Article 5.02 refers to "the foregoing section."  Article 5.02 was enacted by Chapter 491, Acts of the 52nd Legislature, Regular Session, 1951, and has not been subsequently amended.  V.T.I.C. Article 5.01 was also enacted by Chapter 491, Acts of the 52nd Legislature, Regular Session, 1951, and immediately preceded Article 5.02 in that act. The revised law, therefore, substitutes "Article 5.01" for "the foregoing section."

(2)  V.T.I.C. Article 5.02 refers to the "Board," meaning the Board of Insurance Commissioners.  Under Chapter 499, Acts of the 55th  Legislature, Regular Session, 1957, administration of the insurance laws of this state was reorganized, and the powers and duties of the Board of Insurance Commissioners were transferred to the State Board of Insurance. Chapter 685, Acts of the 73rd Legislature, Regular Session, 1993, abolished the State Board of Insurance and transferred its functions to the commissioner of insurance and the Texas Department of Insurance.  Throughout this chapter, references to the "Board" and the "State Board of Insurance" have been changed appropriately.

(3)  V.T.I.C. Article 5.02 refers to insurance rating laws  "heretofore or hereafter" enacted.  The revised law omits the quoted language as unnecessary because it is not a limitation and encompasses any possible period.

[Sections 1953.002-1953.050 reserved for expansion]

SUBCHAPTER B. RATEMAKING

Revised Law

Sec. 1953.051.  CERTAIN RATING PLANS PROHIBITED.  A rating plan regarding the writing of automobile insurance, other than insurance written under Chapter 2151, may not:

(1)  assign a rate consequence to a charge or conviction for a violation of Subtitle C, Title 7, Transportation Code; or

(2)  otherwise cause premiums for automobile insurance to be increased because of a charge or conviction described by Subdivision (1).  (V.T.I.C. Art. 5.01-1.)

Source Law

Art. 5.01-1.  A rating plan respecting the writing of motor vehicle insurance, other than insurance written pursuant to Section 35 of the Texas Motor Vehicle Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil Statutes), may not assign any rate consequence to a charge or conviction, or otherwise cause premiums for motor vehicle insurance to be increased because of a charge or conviction for a violation of the Uniform Act Regulating Traffic on Highways, as amended (Article 6701d, Vernon's Texas Civil Statutes).

Revisor's Note

(1)  V.T.I.C. Article 5.01-1 refers to "motor vehicle insurance." The revised law substitutes "automobile insurance" for "motor vehicle insurance" in this section for consistency with terminology used in this code and because "automobile insurance" is the term more commonly used to describe the kind of insurance that provides coverage for motor vehicles.

(2)  V.T.I.C. Article 5.01-1 refers to "insurance written pursuant to Section 35 of the Texas Motor Vehicle Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil Statutes)."  Section 35, Article 6701h, provided for insurers to establish an administrative agency to administer an assigned risk plan to provide automobile liability insurance to persons unable to secure it through ordinary methods. Section 35 was repealed by Section 14.08, Chapter 685, Acts of the 73rd Legislature, Regular Session, 1993. Section 14.03 of that act added V.T.I.C. Article 21.81, which created the Texas Automobile Insurance Plan Association. The association's primary duty is to provide eligible persons with insurance required by the Texas Motor Vehicle Safety-Responsibility Act.  Section 14.09(b) of that act required the administrative agency created under Section 35, Article 6701h, to transfer its assets and obligations to the Texas Automobile Insurance Plan Association. Article 21.81 was codified by  Chapter 727, Acts of the 79th Legislature, Regular Session, 2005, as Chapter 2151 of this code.  The revised law is drafted accordingly.

(3)  V.T.I.C. Article 5.01-1 refers to the "Uniform Act Regulating Traffic on Highways, as amended (Article 6701d, Vernon's Texas Civil Statutes)."  Article 6701d, Vernon's Texas Civil Statutes, was codified in 1995 as Subtitle C, Title 7, Transportation Code.  The revised law is drafted accordingly.  The revised law also omits "as amended" because under Section 311.027, Government Code (Code Construction Act), applicable to the revised law, unless expressly provided otherwise, a reference to a statute applies to an amendment of the statute.

Revised Law

Sec. 1953.052.  PREMIUM SURCHARGE REQUIRED.  (a) An insurer described by Section 1952.001 shall assess a premium surcharge in an amount prescribed by the department against an insured for no more than three years immediately following the date the insured is convicted of:

(1)  an offense relating to the operating of a motor vehicle while intoxicated in violation of Section 49.04 or 49.07, Penal Code; or

(2)  an offense under Section 49.08, Penal Code.

(b)  An insurer may apply the premium surcharge described by Subsection (a) only to a private passenger automobile policy, as defined by the department.

(c)  If an insured assessed a premium surcharge under Subsection (a) is convicted of an offense under one of the statutes listed in Subsection (a)(1) or (2) during the period the insured is assessed the premium surcharge, the period for which the premium surcharge is assessed is increased by three additional consecutive years for each conviction.  (V.T.I.C. Art. 5.03-1.)

Source Law

Art. 5.03-1

Sec. 1.  A premium surcharge in an amount to be prescribed by the State Board of Insurance shall be assessed by an insurer defined in Article 5.01, Texas Insurance Code, against an insured for no more than three years immediately following the date of conviction of the insured of an offense committed while operating a motor vehicle under Section 49.04 or 49.07, Penal Code, or an offense under Section 49.08, Penal Code.  The premium surcharge shall be applied only to private passenger automobile policies as defined by the State Board of Insurance.

Sec. 2.  If an insured assessed a premium surcharge as a result of a conviction of an offense as set out in Section 1 of this article is subsequently convicted of a violation of one of those statutes during the period he is assessed the premium surcharge, the period for which the premium surcharge shall be imposed is increased by three additional consecutive years for each conviction.

Revisor's Note

(1)  Section 1, V.T.I.C. Article 5.03-1, refers to an insurer defined by "Article 5.01, Texas Insurance Code."  The relevant portion of V.T.I.C. Article 5.01 was codified by Chapter 727, Acts of the 79th Legislature, Regular Session, 2005, as Section 1952.001 of this code.  The revised law is drafted accordingly.

(2)  Section 1, V.T.I.C. Article 5.03-1, refers to an offense "committed while operating a motor vehicle under Section 49.04 or 49.07, Penal Code."   The revised law substitutes "relating to the operating of a motor vehicle while intoxicated in violation of Section 49.04 or 49.07, Penal Code," for the quoted language for consistency with the terminology used in the Penal Code.

[Sections 1953.053-1953.100 reserved for expansion]

SUBCHAPTER C.  LOSS AND EXPENSE EXPERIENCE

Revised Law

Sec. 1953.101.  RECORDING AND REPORTING OF LOSS AND EXPENSE EXPERIENCE AND OTHER DATA.  (a)  The commissioner shall adopt reasonable rules and statistical plans for the recording and reporting of loss experience and other required data by insurers.  The rules and plans must ensure that each insurer's total loss and expense experience is made available at least as frequently as annually in the form and with the detail necessary to aid in determining whether rates and rating systems in use under the following provisions comply with the standards adopted under those provisions:

(1)  this chapter;

(2)  Articles 5.01, 5.01B, 5.03, 5.04, 5.04-1, 5.06, 5.10, and 5.11;

(3)  Chapters 251 and 254;

(4)  Sections 941.003 and 942.003;

(5)  Subchapters A and B, Chapter 1806; and

(6)  Chapters 1951 and 1952.

(b)  In adopting the rules, the commissioner shall adopt rules that are as uniform as is practicable to the rules and forms of statistical plans used in other states.

(c)  Each insurer shall use the statistical plans adopted under this section to record and report loss experience and other required data in accordance with the rules adopted by the commissioner.

(d)  The commissioner may modify statistical plans adopted under this section.  (V.T.I.C. Art. 5.05, Sec. (a).)

Source Law

Art. 5.05.  (a) Recording and Reporting of Loss Experience and Other Data.  The Board shall, after due consideration, promulgate reasonable rules and statistical plans, which may be modified from time to time and which shall be used thereafter by each insurer in the recording and reporting of its loss experience and such other data as may be required, in order that the total loss and expense experience of all insurers may be made available at least annually in such form and detail as may be necessary to aid in determining whether rates and rating systems in use under this subchapter comply with the standards adopted under this subchapter.  In promulgating such rules, the Board shall provide that rules be as uniform as is practicable to the rules and to the form of the statistical plans used in other states.

Revisor's Note

(1)  Section (a), V.T.I.C. Article 5.05, requires the commissioner of insurance to adopt reasonable rules and statistical plans "after due consideration."  The revised law omits "after due consideration" as unnecessary because the requirement that a rule or a plan be reasonable implies that the commissioner will give the rule or plan due consideration before adopting that rule or plan.

(2)  Section (a), V.T.I.C. Article 5.05, requires the adoption of "rules and statistical plans, which may be modified from time to time."  The revised law omits the authorization to modify a rule because the authority to adopt a rule includes the authority to modify that rule.  The revised law also omits "from time to time" with respect to the modification of statistical plans because without an express limitation, the authority to modify includes the authority to modify from time to time.

Revised Law

Sec. 1953.102.  RULES ALLOWING INTERCHANGE OF LOSS EXPERIENCE INFORMATION.  The commissioner may adopt reasonable rules to allow the interchange of loss experience information as necessary for the application of rating plans.  (V.T.I.C. Art. 5.05, Sec. (b).)

Source Law

(b)  Interchange of Rating Plan Data.  Reasonable rules may be promulgated by the Board after due consideration to allow the interchange of loss experience information as necessary for the application of rating plans.

Revisor's Note

Section (b), V.T.I.C. Article 5.05, authorizes the commissioner of insurance to adopt certain reasonable rules "after due consideration."  The revised law omits the quoted language for the reason stated in Revisor's Note (1) to Section 1953.101.

Revised Law

Sec. 1953.103.  EXCHANGE OF RATE INFORMATION WITH OTHER STATES.  To further the uniform administration of rating laws, the department, an insurer, or a rating organization may:

(1)  exchange information and experience data with insurance supervisory officials, insurers, and rating organizations in other states; and

(2)  consult and cooperate with the individuals or entities described by Subdivision (1) with respect to ratemaking and the application of rating systems.  (V.T.I.C. Art. 5.05, Sec. (c).)

Source Law

(c)  Consultation with other States.  In order to further uniform administration of rating laws, the Board and every insurer and rating organization may exchange information and experience data with insurance supervisory officials, insurers and rating organizations in other states and may consult and cooperate with them with respect to rate-making and the application of rating systems.

Revised Law

Sec. 1953.104.  SWORN STATEMENTS.  (a) The department may require a sworn statement from an insurer affected by this subchapter that shows:

(1)  the insurer's experience on any classification or classifications of risks; and

(2)  other information that is necessary or helpful in performing duties or exercising authority imposed by law.

(b)  The department shall prescribe the necessary forms for statements and reports required under Subsection (a) with due regard for the rules, methods, and forms in use in other states for similar purposes so that uniformity of statistics is not disturbed.  (V.T.I.C. Art. 5.05, Sec. (d).)

Source Law

(d)  The Board is hereby authorized and empowered to require sworn statements from any insurer affected by this article, showing its experience on any classification or classifications of risks and such other information which may be necessary or helpful in performing duties or authority imposed by law.  The Board shall prescribe the necessary forms for such statements and reports, having due regard to the rules, methods and forms in use in other states for similar purposes in order that uniformity of statistics may not be disturbed.