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AN ACT
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relating to refund of excessive or unfairly discriminatory premium; |
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providing penalties. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 2254.003, Insurance Code, is amended to |
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conform to Section 1, Chapter 291, Acts of the 79th Legislature, |
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Regular Session, 2005, and to Section 16.01, Chapter 899, Acts of |
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the 79th Legislature, Regular Session, 2005, by adding Subsections |
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(c) and (d) and is further amended to read as follows: |
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Sec. 2254.003. REFUND OR DISCOUNT BASED ON EXCESSIVE OR |
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UNFAIRLY DISCRIMINATORY PREMIUM RATES. (a) This section applies |
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to a rate filed on or after the effective date of Chapter 206, Acts |
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of the 78th Legislature, Regular Session, 2003. |
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(b) Except as provided by Section 2254.004(c), if the |
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commissioner determines that an insurer has charged a rate for |
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personal automobile insurance or residential property insurance |
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that is excessive or unfairly discriminatory, as described by |
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Section 2251.051, the commissioner may: |
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(1) order the insurer to refund directly to each |
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affected policyholder the portion of the premium, plus interest on |
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that amount, that is excessive or unfairly discriminatory, if that |
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portion of the premium is at least 7.5 percent of the total premium |
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charged for the coverage; or |
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(2) if that portion of the premium is less than 7.5 |
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percent of the total premium, order the insurer to provide, to each |
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affected policyholder: |
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(A) who renews the policy, a future premium |
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discount equal to the amount of the excessive or unfairly |
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discriminatory portion of the premium, plus interest on that |
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amount; and |
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(B) who does not renew or whose coverage is |
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otherwise terminated, a refund in the amount described by |
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Subdivision (1). |
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(c) The rate for interest assessed under Subsection (b) is |
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the lesser of 18 percent or the sum of six percent and the prime rate |
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for the calendar year in which the commissioner's order finding |
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that the rate is excessive or unfairly discriminatory is issued. |
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For purposes of this subsection, the prime rate is the prime rate as |
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published in The Wall Street Journal for the first day of the |
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calendar year that is not a Saturday, Sunday, or legal holiday. The |
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period for the refund and interest begins on the date the department |
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first provides the insurer with formal written notice that the |
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insurer's filed rate is excessive or unfairly discriminatory, and |
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interest continues to accrue until the refund is paid. An insurer |
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may not be required to pay any interest penalty if the insurer |
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prevails in an appeal of the commissioner's order under Subchapter |
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D, Chapter 36. |
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(d) An insurer may not claim a premium tax credit to which |
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the insurer is otherwise entitled unless the insurer complies with |
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Subsection (b). |
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SECTION 2. Section 1, Chapter 291, and Section 16.01, |
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Chapter 899, Acts of the 79th Legislature, Regular Session, 2005, |
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which amended former Article 5.144, Insurance Code, by amending |
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Subsection (b) and adding Subsections (b-1) and (b-2), are |
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repealed. |
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SECTION 3. The amendments to Section 2254.003, Insurance |
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Code, in Section 1 of this Act, are made to conform Section |
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2254.003, Insurance Code, with the amendments enacted in Section 1, |
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Chapter 291, and Section 16.01, Chapter 899, Acts of the 79th |
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Legislature, Regular Session, 2005. |
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SECTION 4. This Act applies to an insurance policy that is |
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delivered, issued for delivery, or renewed on or after the |
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effective date of this Act and to rates for such a policy. An |
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insurance policy delivered, issued for delivery, or renewed prior |
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to the effective date of this Act and the rates for such a policy are |
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governed by the law as it existed immediately before the effective |
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date of this Act, and that law is continued in effect for that |
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purpose. |
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SECTION 5. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2007. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I certify that H.B. No. 2551 was passed by the House on May 8, |
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2007, by the following vote: Yeas 146, Nays 0, 2 present, not |
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voting. |
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______________________________ |
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Chief Clerk of the House |
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I certify that H.B. No. 2551 was passed by the Senate on May |
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23, 2007, by the following vote: Yeas 31, Nays 0. |
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______________________________ |
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Secretary of the Senate |
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APPROVED: _____________________ |
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Date |
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_____________________ |
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Governor |