HBA-ATS H.B. 2376 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2376
By: Burnam
Insurance
4/4/1999
Introduced



BACKGROUND AND PURPOSE 

In 1991, the legislature established a benchmark rating system for
homeowners insurance.  Insurers subject to the rate regulation set their
premiums within a range determined by the Texas Department of Insurance.
However, Texas law exempts some insurers from rate regulation.  These
companies (Lloyds and reciprocal exchanges) set their own rates, which may
be higher or lower than those of the rate-regulated insurers.
Consequently, most rate-regulated insurers have circumvented the rating
system by writing policies through Lloyds plans.  Lloyds and reciprocal
exchanges write about two-thirds of Texas homeowners policies;
rate-regulated companies write about one-third. 

H.B. 2376 requires each Lloyds plan insurer to file quarterly with the
commissioner of insurance the rates for insurance issued by the insurer
that covers risks written in this state and supplementary rating
information and reasonable and pertinent supporting information relating to
those rates.  Under this bill, the information supplied by each Lloyds plan
insurer is available to the public. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the commissioner of insurance in
SECTION 1 (Section 3, Article 18.17, Insurance Code) of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 18, Insurance Code, by adding Article 18.17, as
follows: 

ARTICLE 18.17.  RATE FILINGS

Sec. 1.  RATE FILINGS.  Requires each Lloyd's plan insurer to file
quarterly with the commissioner of insurance (commissioner) the rates for
insurance issued by the insurer that covers risks written in this state and
supplementary rating information and reasonable and pertinent supporting
information relating to those rates.  

Sec. 2.  PUBLIC INFORMATION.  Sets forth that this information is public
information and is available on request to any member of the public.  

Sec. 3.  RULES.  Authorizes the commissioner to adopt rules as necessary to
administer this article. 

SECTION 2.  Effective date: September 1, 1999.

SECTION 3.  Requires the commissioner to adopt the rules by December 15,
1999. 

SECTION 4.  Provides that a Lloyd's plan insurer is not required to comply
with this article before January 1, 2000. 

SECTION 5.  Emergency clause.