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.