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A BILL TO BE ENTITLED
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AN ACT
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relating to the regulation of the title insurance industry. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 2502.055(a), Insurance Code, is amended |
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to read as follows: |
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(a) The activities described in this section are not |
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rebates. Nothing in this subchapter prohibits a title insurance |
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company or a title insurance agent from: |
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(1) engaging in [legal] promotional and educational |
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activities that are not conditioned on the referral of title |
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insurance business; |
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(2) purchasing advertising promoting the title |
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insurance company or the title insurance agent at market rates from |
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any person in any publication, event, or media; |
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(3) delivering to a party in the transaction or the |
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party's representative legal documents or funds which are directly |
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or indirectly related to a transaction closed by the title |
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insurance company or title insurance agent; [or] |
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(4) participating in an association of attorneys, |
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builders, developers, realtors, or other real estate practitioners |
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provided that the level of such participation does not exceed |
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normal participation of a volunteer member of the association and |
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is not activity that would ordinarily be performed by paid staff of |
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an association; or |
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(5) providing continuing education courses at market |
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rates, regardless of whether participants receive credit hours. |
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SECTION 2. Section 2651.007, Insurance Code, is amended by |
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adding Subsections (d), (e), (f), and (g) to read as follows: |
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(d) Not later than the 20th business day after the date the |
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department receives a renewal application, the department shall |
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notify the applicant in writing of any deficiencies in the |
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application that render the renewal application incomplete. |
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(e) Not later than the fifth business day after the date the |
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renewal application is complete, the department shall notify the |
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applicant in writing of the date that the renewal application is |
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complete. |
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(f) A renewal application is automatically approved on the |
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30th business day after the date the renewal application is |
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complete, unless on or before that date the department notifies the |
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applicant in writing of the factual grounds on which the department |
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proposes to deny the license under Section 2651.301. |
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(g) The department may provide a notice required under this |
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section by e-mail. |
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SECTION 3. Section 2651.009, Insurance Code, is amended by |
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amending Subsection (c) and adding Subsections (c-1), (c-2), and |
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(c-3) to read as follows: |
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(c) Not later than the 20th business day after the date the |
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department receives a notice under Subsection (b), the department |
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shall notify the title insurance agent and appointing title |
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insurance company in writing of any deficiencies in the notice that |
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render the notice incomplete. A notice under Subsection (b) is |
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considered complete on the date the department receives the notice, |
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unless the department provides notice of the deficiencies under |
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this section. |
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(c-1) Not later than the fifth business day after the date |
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the notice under Subsection (b) is complete, the department shall |
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notify the title insurance agent and appointing title insurance |
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company in writing of the date that the notice under Subsection (b) |
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is complete. |
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(c-2) The appointment is effective on the eighth business |
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day following the date [the department receives] the [completed] |
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notice of appointment is complete and the department receives the |
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fee, unless the department proposes to reject [rejects] the |
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appointment. If the department proposes to reject [rejects] the |
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appointment, the department shall notify the title insurance agent |
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and the appointing title insurance company [state] in writing of |
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the factual grounds on which the department proposes to reject the |
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appointment [reasons for rejection] not later than the seventh |
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business day after the date on which the [department receives the
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completed] notice of appointment is complete. |
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(c-3) The department may provide a notice required under |
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this section by e-mail. |
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SECTION 4. Subchapter G, Chapter 2651, Insurance Code, is |
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amended by adding Sections 2651.3015 and 2651.303 to read as |
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follows: |
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Sec. 2651.3015. PROHIBITED GROUNDS FOR REJECTION, DELAY, OR |
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DENIAL. (a) The department may not reject or delay a notice of |
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appointment under Section 2651.009 based wholly or partly on a |
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pending department audit or complaint investigation or a pending |
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disciplinary action against a title insurance agent or appointing |
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title insurance company that has not been closed or finally |
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adjudicated on or before the date on which the notice is received by |
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the department. |
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(b) The department may not delay or deny a license |
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application under Section 2651.002 or a renewal application under |
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Section 2651.007 based wholly or partly on a department audit or |
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complaint investigation of, or disciplinary or enforcement action |
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against, an applicant or license holder that is pending and has not |
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been finally closed or adjudicated on or before the date on which |
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the application is filed. |
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Sec. 2651.303. NOTICE OF DISCIPLINARY OR ENFORCEMENT |
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ACTION; AUTOMATIC DISMISSAL. (a) The department shall notify a |
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license holder in writing of a disciplinary or enforcement action |
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against the license holder not later than the 60th business day |
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after the date the department assigns a file number to the action. |
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(b) A notice required by Subsection (a) may be provided by |
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e-mail and must provide a license holder fair notice of the alleged |
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facts known by the department on the date of the notice that |
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constitute grounds for the action. |
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(c) A disciplinary or enforcement action is automatically |
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dismissed with prejudice, unless the department serves a notice of |
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hearing on the license holder not later than the 60th business day |
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after the date the department receives a hearing request from the |
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license holder. |
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(d) This section does not apply to an action: |
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(1) that is the subject of a pending criminal |
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investigation or prosecution; or |
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(2) about which the deputy commissioner of the title |
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division of the department has made a good faith determination, |
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based on credible suspicion, that a person who is the subject of the |
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action is committing ongoing acts of fraud. |
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SECTION 5. Subchapter B, Chapter 2652, Insurance Code, is |
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amended by adding Section 2652.059 to read as follows: |
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Sec. 2652.059. DENIAL OF LICENSE APPLICATION OR LICENSE |
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RENEWAL; APPROVAL. (a) Not later than the 20th business day after |
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the date the department receives a license application or a license |
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renewal under this chapter, the department shall notify the |
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applicant or license holder in writing of any deficiencies in the |
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application that render the application incomplete. |
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(b) Not later than the fifth business day after the date the |
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application is complete, the department shall notify the applicant |
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or license holder in writing of the date that the license |
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application or license renewal is complete. |
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(c) An application is automatically approved on the 30th |
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business day after the date the application is complete, unless on |
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or before that date the department notifies the applicant or |
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license holder in writing of the factual grounds on which the |
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department proposes to deny the application. |
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(d) The department may provide a notice required under this |
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section by e-mail. |
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SECTION 6. Subchapter E, Chapter 2652, Insurance Code, is |
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amended by adding Sections 2652.2015 and 2652.203 to read as |
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follows: |
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Sec. 2652.2015. PROHIBITED GROUNDS FOR DELAY OR DENIAL. |
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The department may not delay or deny a license application or a |
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license renewal based wholly or partly on a department audit or |
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complaint investigation of, or disciplinary or enforcement action |
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against, a license holder or applicant that is pending and has not |
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been closed or finally adjudicated on or before the date on which |
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the initial or renewal application is filed. |
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Sec. 2652.203. NOTICE OF DISCIPLINARY OR ENFORCEMENT |
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ACTION; AUTOMATIC DISMISSAL. (a) The department shall notify a |
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license holder of a disciplinary action or enforcement action |
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against the license holder not later than the 60th business day |
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after the date the department assigns a file number to the action. |
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(b) A notice required by Subsection (a) must provide a |
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license holder fair notice of the alleged facts known by the |
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department on the date of the notice that constitute grounds for the |
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action. |
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(c) A disciplinary or enforcement action is automatically |
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dismissed with prejudice, unless the department serves a notice of |
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hearing on the license holder not later than the 60th business day |
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after the date the department receives a hearing request from the |
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license holder. |
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(d) This section does not apply to an action: |
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(1) that is the subject of a pending criminal |
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investigation or prosecution; or |
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(2) about which the deputy commissioner of the title |
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division of the department has made a good faith determination, |
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based on credible suspicion, that a person who is the subject of the |
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action is committing ongoing acts of fraud. |
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SECTION 7. Section 2703.153, Insurance Code, is amended by |
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amending Subsection (d) and adding Subsections (h) and (i) to read |
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as follows: |
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(d) A title insurance company or a title insurance agent |
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aggrieved by a department requirement concerning the submission of |
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information may bring a suit in a district court in Travis County |
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alleging that the request for information: |
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(1) is unduly burdensome; or |
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(2) is not a request for information material to |
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fixing and promulgating premium rates or another matter that may be |
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the subject of the periodic [biennial] hearing and is not a request |
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reasonably designed to lead to the discovery of that information. |
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(h) The contents of the statistical report, including any |
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amendments to the statistical report, must be established in a |
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rulemaking hearing under Subchapter B, Chapter 2001, Government |
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Code. |
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(i) An amendment to the contents of the statistical report |
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may not apply retroactively. |
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SECTION 8. Section 2703.202, Insurance Code, is amended by |
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amending Subsections (b) and (d) and adding Subsections (g), (h), |
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(i), (j), (k), (l), (m), (n), and (o) to read as follows: |
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(b) The commissioner shall order a public hearing to |
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consider changing a premium rate, including fixing a new premium |
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rate, in response to a written [At the] request of: |
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(1) a title insurance company; |
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(2) an association composed of at least 50 percent of |
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the number of title insurance agents and title insurance companies |
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licensed or authorized by the department; |
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(3) an association composed of at least 20 percent of |
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the number of title insurance agents licensed or authorized by the |
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department; or |
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(4) the office of public insurance counsel[, the
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commissioner shall order a public hearing to consider changing a
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premium rate]. |
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(d) Notwithstanding Subsection (c), [at the request of a
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title insurance company or the public insurance counsel,] a public |
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hearing held under Subsection (a) or under Section 2703.206 must be |
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conducted by the commissioner as a contested case hearing under |
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Subchapters C through H and Subchapter Z, Chapter 2001, Government |
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Code, at the request of: |
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(1) a title insurance company; |
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(2) an association composed of at least 50 percent of |
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the number of title insurance agents and title insurance companies |
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licensed or authorized by the department; |
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(3) an association composed of at least 20 percent of |
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the number of title insurance agents licensed or authorized by the |
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department; or |
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(4) the office of public insurance counsel. |
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(g) If a hearing held under Subsection (a) is not conducted |
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as a contested case hearing, the commissioner shall render a |
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decision and issue a final order not later than the 120th day after |
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the date the commissioner receives a written request under |
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Subsection (b). |
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(h) If a hearing held under Subsection (a) is conducted as a |
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contested case hearing: |
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(1) not later than the 30th day after the date the |
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commissioner receives a request for a public hearing under |
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Subsection (b), the commissioner shall issue a notice of call for |
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items to be considered at the hearing; |
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(2) the commissioner may not require responses to the |
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notice of call before the 60th day after the date the commissioner |
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issues the notice of call; |
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(3) the commissioner shall issue a notice of public |
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hearing requested under Subsection (d) not later than the 30th day |
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after the date responses to the notice of call are required under |
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Subdivision (2); |
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(4) the commissioner shall commence the public hearing |
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not earlier than the 120th day after the date the commissioner |
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issues a notice of hearing under Subdivision (3); |
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(5) the commissioner shall close the public hearing |
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not later than the 150th day after the date the commissioner issues |
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the notice of hearing under Subdivision (3); and |
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(6) the commissioner shall render a decision and issue |
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a final order not later than the 60th day after the record made in |
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the public hearing is closed under Subdivision (5). |
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(i) A party's presentation of relevant, admissible oral |
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testimony in a hearing under this section may not be limited. |
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(j) The commissioner shall consider each matter presented |
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in a hearing under this section and announce in a public hearing all |
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decisions on all matters considered. |
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(k) A party described by Subsection (b) may petition a |
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district court in Travis County to enter an order requiring the |
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commissioner to comply with the deadlines described by this section |
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if the commissioner fails to meet a requirement in Subsection (g) or |
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(h). |
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(l) Subject to Subsection (m), if the commissioner fails to |
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comply with the requirements under Subsection (g) or (h)(6), a |
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combination of at least three associations, persons, or entities |
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listed in Subsection (b) may jointly petition a district court of |
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Travis County to adopt a rate based on the record made in the |
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hearing before the commissioner under this section. |
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(m) If the record made in the hearing before the |
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commissioner is not complete before the request for the court to |
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adopt a premium rate under Subsection (l), the court shall hold an |
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evidentiary hearing to establish a record before adopting the |
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premium rate. |
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(n) After a petition has been filed under Subsection (l), |
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the commissioner may not issue findings or an order related to the |
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subject matter of the petition until after the date the court enters |
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a final judgment. |
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(o) A district court may appoint a magistrate to adopt a |
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rate under this section. |
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SECTION 9. Section 2703.203, Insurance Code, is amended to |
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read as follows: |
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Sec. 2703.203. PERIODIC [BIENNIAL] HEARING. The |
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commissioner shall hold a [biennial] public hearing not earlier |
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than July 1 after the fifth anniversary of the closing of a hearing |
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held under this chapter [of each even-numbered year] to consider |
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adoption of premium rates and other matters relating to regulating |
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the business of title insurance that an association, title |
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insurance company, title insurance agent, or member of the public |
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admitted as a party under Section 2703.204 requests to be |
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considered or that the commissioner determines necessary to |
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consider. |
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SECTION 10. Section 2703.204, Insurance Code, is amended to |
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read as follows: |
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Sec. 2703.204. ADMISSION AS PARTY TO PERIODIC [BIENNIAL] |
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HEARING. (a) Subject to this section, a trade association whose |
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membership is composed of at least 20 percent of the members of an |
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industry or group represented by a trade association, an |
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association, a person or entity described by Section 2703.202(b), |
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or department staff [an
individual or association or other entity
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recommending adoption of a premium rate or another matter relating
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to regulating the business of title insurance] shall be admitted as |
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a party to the periodic [biennial] hearing under Section 2703.203. |
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(b) A party to any portion of the periodic [the ratemaking
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phase of the biennial] hearing relating to ratemaking may request |
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that the commissioner remove any other party to that portion of [the
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ratemaking phase of] the hearing on the grounds that the other party |
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does not have a substantial interest in title insurance. A decision |
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of the commission to deny or grant the request is final and subject |
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to appeal in accordance with Section 36.202. |
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SECTION 11. Section 2703.207, Insurance Code, is amended to |
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read as follows: |
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Sec. 2703.207. NOTICE OF CERTAIN HEARINGS. Not later than |
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the 60th day before the date of a hearing under Section 2703.202, |
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2703.203, or 2703.206, notice of the hearing and of each item to be |
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considered at the hearing shall be: |
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(1) sent directly to all parties to the previous |
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hearing conducted under Section 2703.202, 2703.203, or 2703.206, if |
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the hearing was conducted as a contested case hearing [title
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insurance companies and title insurance agents]; and |
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(2) published in the Texas Register and on the |
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department's Internet website [provided to the public in a manner
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that gives fair notice concerning the hearing]. |
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SECTION 12. Section 2703.205, Insurance Code, is repealed. |
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SECTION 13. This Act takes effect immediately if it |
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receives a vote of two-thirds of all the members elected to each |
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house, as provided by Section 39, Article III, Texas Constitution. |
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If this Act does not receive the vote necessary for immediate |
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effect, this Act takes effect September 1, 2011. |