INSURANCE CODE - NOT CODIFIED CHAPTER 5. RATING AND POLICY FORMS
INSURANCE CODE - NOT CODIFIED
CHAPTER 5. RATING AND POLICY FORMS
SUBCHAPTER A. MOTOR VEHICLE OR AUTOMOBILE INSURANCE
Art. 5.01. FIXING RATE OF AUTOMOBILE INSURANCE. (a) Every
insurance company, corporation, interinsurance exchange, mutual,
reciprocal, association, Lloyd's or other insurer, hereinafter
called insurer, writing any form of motor vehicle insurance in this
State, shall annually file with the State Board of Insurance,
hereinafter called Board, on forms prescribed by the Board, a
report showing its premiums and losses on each classification of
motor vehicle risks written in this State.
(b) The Board shall have the sole and exclusive power and
authority, and it shall be its duty to determine, fix, prescribe,
and promulgate just, reasonable and adequate rates of premiums to
be charged and collected by all insurers writing any form of
insurance on motor vehicles in this State, including fleet or other
rating plans designed to discourage losses from fire and theft and
similar hazards and any rating plans designed to encourage the
prevention of accidents. In promulgating any such rating plans the
Board shall give due consideration to the peculiar hazards and
experience of individual risks, past and prospective, within and
outside the State and to all other relevant factors, within and
outside the State. The Board shall have the authority also to alter
or amend any and all of such rates of premiums so fixed and
determined and adopted by it, and to raise or lower the same or any
part thereof.
(c) At least annually, the Board shall conduct a hearing to
review the reports of premiums earned and losses incurred in the
writing of motor vehicle insurance in this State and may fix,
determine, and adopt new rates in whole or in part or may alter or
amend rates previously fixed, determined, and adopted by the Board
to assure that those rates comply with the requirements of this
subchapter.
(d) Said Board shall have authority to employ clerical help,
inspectors, experts, and other assistants, and to incur such other
expenses as may be necessary in carrying out the provisions of this
law; provided, however, that the number of employees and salary of
each shall be fixed in the General Appropriation Bill passed by the
Legislature. The Board shall ascertain as soon as practicable the
annual insurance losses incurred under all policies on motor
vehicles in this State, make and maintain a record thereof, and
collect such data as will enable said Board to classify the various
motor vehicles of the State according to the risk and usage made
thereof, and to classify and assign the losses according to the
various classes of risks to which they are applicable; the Board
shall also ascertain the amount of premiums on all such policies for
each class of risks, and maintain a permanent record thereof in such
manner as will aid in determining just, reasonable and adequate
rates of premiums.
(e) Motor vehicle or automobile insurance as referred to in
this subchapter shall be taken and construed to mean every form of
insurance on any automobile or other vehicle hereinafter enumerated
and its operating equipment or necessitated by reason of the
liability imposed by law for damages arising out of the ownership,
operation, maintenance, or use in this State of any automobile,
motorcycle, motorbicycle, truck, truck-tractor, tractor, traction
engine, or any other self-propelled vehicle, and including also
every vehicle, trailer or semi-trailer pulled or towed by a motor
vehicle, but excluding every motor vehicle running only upon fixed
rails or tracks. Workers' Compensation Insurance is excluded from
the foregoing definition.
(f) Notwithstanding Subsections (a) through (d) of this
article, on and after the effective date of S.B. No. 14, Acts of the
78th Legislature, Regular Session, 2003, rates for personal
automobile insurance in this state are determined as provided by
Article 5.101 of this code, and rates for commercial motor vehicle
insurance in this state are determined as provided by Article
5.13-2 of this code. On and after December 1, 2004, rates for
personal automobile insurance and commercial automobile insurance
in this state are determined as provided by Article 5.13-2 of this
code.
Acts 1951, 52nd Leg., ch. 491. Amended by Acts 1953, 53rd Leg., p.
64, ch. 50, Sec. 2.
Amended by Acts 1987, 70th Leg., 1st C.S., ch. 1, Sec. 2.06, eff.
Sept. 2, 1987; Subsec. (f) added by Acts 1991, 72nd Leg., ch. 242,
Sec. 2.02, eff. Sept. 1, 1991; Subsec. (f) amended by Acts 1991,
72nd Leg., 2nd C.S., ch. 12, Sec. 8.04, eff. Jan. 1, 1992; amended
by Acts 1995, 74th Leg., ch. 984, Sec. 2, eff. Sept. 1, 1995;
Subsec. (f) amended by Acts 2003, 78th Leg., ch. 206, Sec. 21.01,
eff. June 11, 2003.
Art. 5.01B. PUBLIC INFORMATION. (a) Information filed or
otherwise provided by an insurer to the State Board of Insurance for
the purpose of determining, fixing, prescribing, promulgating,
altering, or amending commercial automobile liability insurance
rates under Article 5.01 of this code, obtaining a rate deviation
under Article 5.03 of this code, or reporting losses under Article
5.04-1 of this code is public information unless it is exempt under
Section 3(a), Chapter 424, Acts of the 63rd Legislature, Regular
Session, 1973 (Article 6252-17a, Vernon's Texas Civil Statutes), or
Section (b) of this article.
(b) Information provided with an application under Section
(d), Article 5.03, of this code is exempt from the disclosure
requirements of this article.
Added by Acts 1987, 70th Leg., 1st C.S., ch. 1, Sec. 2.03, eff.
Sept. 2, 1987. Sec. (a) amended by Acts 1991, 72nd Leg., ch. 750,
Sec. 1, eff. Sept. 1, 1991.
Text of article effective until April 1, 2009
Art. 5.01-1. PREMIUM RATING PLANS. 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).
Acts 1979, 66th Leg., p. 1769, ch. 717, Sec. 1, eff. June 13, 1979.
Amended by Acts 1991, 72nd Leg., ch. 242, Sec. 2.03, eff. Sept. 1,
1991.
Text of article effective until April 1, 2009
Art. 5.02. AUTHORITY TO ASSIGN CERTAIN TYPES OR CLASSES TO
APPROPRIATE RATING LAWS. 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.
Acts 1951, 52nd Leg., ch. 491.
Art. 5.03. PROMULGATED RATES AS CONTROLLING. (a) On and
after the filing and effective date of such classification of such
risks and rates, no such insurer, except as otherwise provided
herein, shall issue or renew any such insurance at premium rates
which are greater or lesser than those promulgated by the Board as
just, reasonable, adequate and not excessive for the risks to which
they respectively apply, and not confiscatory as to any class of
insurance carriers authorized by law to write such insurance after
taking into consideration the deviation provisions of this Article.
Any insurer desiring to write insurance at rates different from
those promulgated by the Board shall make a written application to
the Board for permission to file a uniform percentage deviation for
a lesser or greater rate, on a statewide basis unless otherwise
ordered by the Board, from the class rates or classes of rates
promulgated by the Board. Any insurer desiring to write insurance
under a classification plan different from that promulgated by the
Board shall make written application to the Board for permission to
do so; provided, however, the Board shall approve the use of only
such additions or refinements in its classification plan as will
produce subclassifications which, when combined, will enable
consideration of the insurer's experience under both the Board
classification plan and its own classification plan. Such
application shall be approved in whole or in part by the Board,
provided the Board finds that the resulting premiums will be just,
adequate, reasonable, not excessive and not unfairly
discriminatory, taking into consideration the following:
(1) the financial condition of the insurer;
(2) the method of operation and expenses of such insurer;
(3) the actual paid and incurred loss experience of the
insurer;
(4) earnings of the insurer from investments together with a
projection of prospective earnings from investments during the
period for which the application is made; and
(5) such application meets the reasonable conditions,
limitations, and restrictions deemed necessary by the Board.
In considering all matters set forth in such application the
Board shall give consideration to the composite effect of items
(2), (3), and (4) above and the Board shall deny such application if
it finds that the resulting premiums would be inadequate,
excessive, or unfairly discriminatory. Any original or renewal
policy of insurance issued pursuant to an approved plan of
deviation shall have attached to or imprinted on the face of such
policy the following notice: "The premium charged for this policy
is greater than the premium rates promulgated by the State Board of
Insurance." The notice shall be in 10-point or larger prominent
typesize.
Except as the Board may authorize, the deviation provisions
in this Article shall not apply to insurance written pursuant to
other provisions of this Chapter in which a deviation from standard
rates is authorized, including, but not limited to, automobile
liability experience rating and fleet rating plans.
(b) The Board shall issue its order in writing setting forth
the terms of approval or reasons for denial of each application
filed for deviation. On January 1, 1974 and thereafter if the Board
has not issued its order within 30 days after the filing of an
application, the application shall be "deemed approved" by the
Board. Provided, however, that the Board may thereafter require
the applicant insurer to furnish proof to the Board that the matters
set out in the application are true and correct and that such
application meets the requirements of this Article. If after
notice and hearing the Board determines that any application
"deemed to have been approved" by the Board contains false or
erroneous information or the Board determines that the application
does not meet the requirements of this Article the Board may suspend
or revoke the approval "deemed to have been granted."
An insurer that has received approval, or is "deemed to have
received approval" for the use of a deviation may apply for an
amendment to such deviation or by notice to the Board withdraw the
deviation.
(c) From and after the effective date of an application
approved by the Board, or "deemed to have been approved" by the
Board, such insurer may write insurance in accordance with such
approval. Provided, however, that the right to write insurance at a
lesser or greater rate as approved may be suspended or revoked by
the Board, after notice and hearing, if upon examination or at any
time it appears to or is the opinion of the Board that such insurer:
(1) has had a change in its financial condition since the
granting of the application; or
(2) the actual paid and incurred losses of the insurer have
materially changed since the granting of the application; or
(3) there has been a material increase in expenses of such
insurer since the granting of the application; or
(4) there has been a material reduction in earnings from
investments by the insurer since the granting of the application;
or
(5) the insurer has failed or refused to furnish information
required by the Board; or
(6) the insurer has failed to abide by or follow its rate
deviation previously approved by the Board. The Board may suspend
the right of an insurer to write insurance at the rates approved
under such application, pending hearing, provided that the Board in
or accompanying the order suspending such right, sets such hearing
within not less than 10 nor more than 30 days following the issuance
of its order. The Board shall conduct the hearing within not less
than 10 nor more than 30 days following the issuance of its order
suspending such right, unless the insurer subject to the order
requests the Board to delay the hearing beyond 30 days. The right
to write insurance at the lesser or greater rate previously
approved by the Board shall automatically terminate, except as
herein provided, upon the promulgation by the Board of new or
different rates as provided for in the first sentence of "Section
(a)" of this Article, and as further provided in paragraphs one and
two of Article 5.01, Insurance Code, as amended. After the
effective date of the Board's promulgation or authorization of new
or different rates, the insurer may not thereafter write insurance
at a lesser or greater rate, except that an insurer may continue to
write insurance at a deviated rate by applying the percentage of the
previously approved deviation applicable to the prior rates as the
percentage of deviation applicable to the new or different rates
promulgated by the Board, limited, however, to a period of 60 days
after the effective date of the new or different rates, and not
thereafter, and only if such insurer within 30 days following
promulgation by the Board of new or different rates, shall make a
written application to the Board for permission to deviate from the
new or different rates promulgated by the Board. The Board by order
may extend the use of prior approved deviations beyond the 60 day
period hereinabove set out.
(d) It is expressly provided, however, that notwithstanding
any other provision of this chapter to the contrary, a rate or
premium for such insurance greater than the standard rate or
premium that has been promulgated by the Board may be used on any
specific risk if:
(1) a written application is made to the Board naming the
insurer and stating the coverage and rate proposed;
(2) the person to be insured or person authorized to act in
relation to the risk to be insured consents to such rate;
(3) the reasons for requiring such greater rate or premium
are stated in or attached to the application;
(4) the person to be insured or person authorized to act for
such person signs the application; and
(5) the Board approves the application by order or by
stamping.
(e) In the administration of this Act the Board shall resolve
by rules and regulations, to the extent permitted by law, any
conflicts or ambiguities as may be necessary to accomplish the
purposes of this Act.
(f) This Article, as amended, is effective September 1, 1973.
(g) Notwithstanding Sections (a) through (e) of this article,
on and after the effective date of S.B. No. 14, Acts of the 78th
Legislature, Regular Session, 2003, rates for personal automobile
insurance in this state are determined as provided by Article 5.101
of this code, and rates for commercial motor vehicle insurance in
this state are determined as provided by Article 5.13-2 of this
code. On and after December 1, 2004, rates for personal automobile
insurance and commercial automobile insurance in this state are
determined as provided by Article 5.13-2 of this code.
Acts 1951, 52nd Leg., ch. 491. Amended by Acts 1971, 62nd Leg., p.
864, ch. 104, Sec. 1, eff. April 30, 1971; Acts 1973, 63rd Leg., p.
1118, ch. 425, Sec. 1, eff. Sept. 1, 1973; Acts 1977, 65th Leg., p.
1981, ch. 792, Sec. 1, eff. Aug. 29, 1977.
Subsec. (g) added by Acts 1991, 72nd Leg., ch. 242, Sec. 2.04, eff.
Sept. 1, 1991; Subsec. (g) amended by Acts 1991, 72nd Leg., 2nd
C.S., ch. 12, Sec. 8.05, eff. Jan. 1, 1992; amended by Acts 1995,
74th Leg., ch. 984, Sec. 4, eff. Sept. 1, 1995; Subsec. (g) amended
by Acts 2003, 78th Leg., ch. 206, Sec. 21.05, eff. June 11, 2003.
Text of article effective until April 1, 2009
Art. 5.03-1. PREMIUM SURCHARGE.
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.
Added by Acts 1983, 68th Leg., p. 1606, ch. 303, Sec. 26, eff. Jan.
1, 1984. Sec. 1 amended by Acts 1995, 74th Leg., ch. 76, Sec. 14.46,
eff. Sept. 1, 1995.
Art. 5.04. EXPERIENCE AS FACTOR. (a) To insure the adequacy
and reasonableness of rates the Board may take into consideration
past and prospective experience, within and outside the State, and
all other relevant factors, within and outside the State, gathered
from a territory sufficiently broad to include the varying
conditions of the risks involved and the hazards and liabilities
assumed, and over a period sufficiently long to insure that the
rates determined therefrom shall be just, reasonable and adequate,
and to that end the Board may consult any rate making organization
or association that may now or hereafter exist.
(b) As a basis for motor vehicle rates under this subchapter,
the State Board of Insurance shall use data from within this State
to the extent that the data is credible and available.
(c) Notwithstanding Subsections (a) and (b) of this article,
on and after the effective date of S.B. No. 14, Acts of the 78th
Legislature, Regular Session, 2003, rates for personal automobile
insurance in this state are determined as provided by Article 5.101
of this code, and rates for commercial motor vehicle insurance in
this state are determined as provided by Article 5.13-2 of this
code. On and after December 1, 2004, rates for personal automobile
insurance and commercial automobile insurance in this state are
determined as provided by Article 5.13-2 of this code.
Acts 1951, 52nd Leg., ch. 491. Amended by Acts 1953, 53rd Leg., p.
64, ch. 50, Sec. 3.
Amended by Acts 1987, 70th Leg., 1st C.S., ch. 1, Sec. 2.01, eff.
Sept. 2, 1987; Subsec. (c) added by Acts 1991, 72nd Leg., ch. 242,
Sec. 2.05, eff. Sept. 1, 1991; Subsec. (c) amended by Acts 1991,
72nd Leg., 2nd C.S., ch. 12, Sec. 8.06, eff. Jan. 1, 1992; amended
by Acts 1995, 74th Leg., ch. 984, Sec. 5, eff. Sept. 1, 1995;
Subsec. (c) amended by Acts 2003, 78th Leg., ch. 206, Sec. 21.06,
eff. June 11, 2003.
Art. 5.04-1. REPORT OF BASIC LIMITS LOSSES. (a) A report
filed under Article 5.01(a) of this code must include the
information necessary to compute a Texas automobile experience
modifier as provided by this code or a rule adopted by the State
Board of Insurance. In reporting losses under Article 5.01(a) of
this code, an insurer may include only the following as basic limits
losses:
(1) indemnity losses, up to the basic limits for the losses;
(2) losses based on payments for immediate medical or
surgical treatment;
(3) fees paid to an attorney who is not an employee of the
insurer, if the fees were for services rendered in the trial of an
action arising under a covered claim;
(4) specific expenses incurred as a direct result of
defending an action in connection with which the expense is
claimed;
(5) specific expenses, other than claims adjustment
expenses, incurred in connection with the settlement of a claim
with respect to which the expense is claimed;
(6) all medical payments coverage; and
(7) personal injury protection coverage losses.
(b) In reporting its basic limits losses to the State Board of
Insurance, each insurer shall disclose the specific nature of each
loss expense claimed and shall show to the Board's satisfaction
that each specific expense claimed was necessary with respect to
the specific risk involved.
Added by Acts 1991, 72nd Leg., ch. 750, Sec. 2, eff. Sept. 1, 1991.
Text of article effective until April 1, 2009
Art. 5.05. REPORTS ON EXPERIENCE. (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.
(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.
(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.
(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.
Acts 1951, 52nd Leg., ch. 491. Amended by Acts 1953, 53rd Leg., p.
64, ch. 50, Sec. 4.
Amended by Acts 1991, 72nd Leg., ch. 242, Sec. 2.06, eff. Sept. 1,
1991.
Art. 5.06. POLICY FORMS AND ENDORSEMENTS.
(1) The Board shall adopt a policy form and endorsements for
each type of motor vehicle insurance subject to this subchapter.
The coverage provided by a policy form adopted under this
subsection is the minimum coverage that may be provided under an
insurance policy for that type of insurance in this State. Each
policy form must provide the coverages mandated under Articles
5.06-1 and 5.06-3 of this code, except that the coverages may be
rejected by the named insured as provided by those articles.
(2) Except as provided by Subsections (3) and (4) of this
article, an insurer may only use a form adopted by the Board under
this section in writing motor vehicle insurance delivered, issued
for delivery, or renewed in this State. A contract or agreement not
written into the application and policy is void and of no effect and
in violation of the provisions of this subchapter, and is
sufficient cause for revocation of license of such insurer to write
automobile insurance within this State.
(3) The Board may approve the use of a policy form adopted by
a national organization of insurance companies, or similar
organization, if the form, with any endorsement to the form
required and approved by the Board, provides coverage equivalent to
the coverage provided by the form adopted by the Board under
Subsection (1) of this section.
(4) An insurer may use an endorsement to the policy form
adopted or approved by the Board under this article if the
endorsement is approved by the Board.
(5) Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18, eff.
April 1, 2007.
(6) Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18, eff.
April 1, 2007.
(7) The Board may not adopt or approve a policy form for
private passenger automobile insurance or any endorsement to the
policy if the policy or endorsement is not in plain language. For
the purposes of this subsection, a policy or endorsement is written
in plain language if it achieves the minimum score established by
the commissioner on the Flesch reading ease test or an equivalent
test selected by the commissioner, or, at the option of the
commissioner, if it conforms to the language requirements in a
National Association of Insurance Commissioners model act relating
to plain language. This subsection does not apply to policy
language that is mandated by state or federal law.
(8) The Board may withdraw its approval of a policy or
endorsement form at any time, after notice and hearing.
(9) Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18, eff.
April 1, 2007.
(10) Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18,
eff. April 1, 2007.
(11) Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18,
eff. April 1, 2007.
(12)(a) Notwithstanding Subsections (1)-(10) of this
article, policy forms and endorsements for automobile insurance in
this state are regulated under Article 5.13-2 of this code.
(b) Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18,
eff. April 1, 2007.
Acts 1951, 52nd Leg., ch. 491. Amended by Acts 1981, 67th Leg., p.
2700, ch. 736, Sec. 1, eff. Jan. 1, 1982.
Amended by Acts 1991, 72nd Leg., ch. 242, Sec. 2.07, eff. Sept. 1,
1991; Subsecs. (9), (10) added by Acts 1993, 73rd Leg., ch. 685,
Sec. 14.04, eff. Sept. 1, 1993; Subsecs. (9), (10) amended by and
(11) added by Acts 2001, 77th Leg., ch. 971, Sec. 2, eff. Sept. 1,
2001; Subsec. (12) added by Acts 2003, 78th Leg., ch. 206, Sec.
21.07, eff. June 11, 2003.
Amended by:
Acts 2005, 79th Leg., Ch. 727, Sec. 18, eff. April 1, 2007.
Text of article as repealed by Acts 2005, 79th Leg., R.S., Ch. 727,
Sec. 18 effective April 1, 2007
Art. 5.06-1. UNINSURED OR UNDERINSURED MOTORIST COVERAGE.
Text of subsection as amended by Acts 2005, 79th Leg., R.S., Ch.
1159, Sec. 3
(1) No automobile liability insurance (including insurance
issued pursuant to an Assigned Risk Plan established under
authority of Section 35 of the Texas Motor Vehicle
Safety-Responsibility Act), covering liability arising out of the
ownership, maintenance, or use of any motor vehicle shall be
delivered or issued for delivery in this state unless coverage is
provided therein or supplemental thereto, in at least the limits
described in the Texas Motor Vehicle Safety-Responsibility Act,
under provisions prescribed by the Board, for the protection of
persons insured thereunder who are legally entitled to recover
damages from owners or operators of uninsured or underinsured motor
vehicles because of bodily injury, sickness, or disease, including
death, or property damage resulting therefrom. The coverages
required under this Article shall not be applicable where any
insured named in the policy shall reject the coverage in writing;
provided that unless the named insured thereafter requests such
coverage in writing, such coverage need not be provided in or
supplemental to a reinstated policy or renewal policy where the
named insured has rejected the coverage in connection with that
policy or a policy previously issued to him by the same insurer or
by an affiliated insurer.
(1) Repealed by Acts 2007, 80th Leg., R.S., Ch. 730, Sec.
3B.037(b), eff. September 1, 2007.
(2) For the purpose of these coverages: (a) the term "
uninsured motor vehicle" shall, subject to the terms and conditions
of such coverage, be deemed to include an insured motor vehicle
where the liability insurer thereof is unable to make payment with
respect to the legal liability of its insured within the limits
specified therein because of insolvency.
(b) The term "underinsured motor vehicle" means an insured
motor vehicle on which there is valid and collectible liability
insurance coverage with limits of liability for the owner or
operator which were originally lower than, or have been reduced by
payment of claims arising from the same accident to, an amount less
than the limit of liability stated in the underinsured coverage of
the insured's policy.
(c) The commissioner may, in the policy forms adopted under
Article 5.06 of this code, define "uninsured motor vehicle" to
exclude certain motor vehicles whose operators are in fact
uninsured. The commissioner may in the policy forms filed under
Article 5.145 of this code allow the term "uninsured motor vehicle"
to be defined to exclude certain motor vehicles whose operators are
in fact uninsured.
(d) The portion of a policy form adopted under Article 5.06 of
this code or filed under Article 5.145 of this code to provide
coverage under this article shall include provisions that,
regardless of the number of persons insured, policies or bonds
applicable, vehicles involved, or claims made, the total aggregate
limit of liability to any one person who sustains bodily injury or
property damage as the result of any one occurrence shall not exceed
the limit of liability for these coverages as stated in the policy
and the total aggregate limit of liability to all claimants, if more
than one, shall not exceed the total limit of liability per
occurrence as stated in the policy; and shall provide for the
exclusion of the recovery of damages for bodily injury or property
damage or both resulting from the intentional acts of the insured.
The portion of a policy form adopted under Article 5.06 of this code
or filed under Article 5.145 of this code to provide coverage under
this article shall require that in order for the insured to recover
under the uninsured motorist coverages where the owner or operator
of any motor vehicle which causes bodily injury or property damage
to the insured is unknown, actual physical contact must have
occurred between the motor vehicle owned or operated by such
unknown person and the person or property of the insured.
(3) The limits of liability for bodily injury, sickness, or
disease, including death, shall be offered to the insured in
amounts not less than those prescribed in the Texas Motor Vehicle
Safety-Responsibility Act and such higher available limits as may
be desired by the insured, but not greater than the limits of
liability specified in the bodily injury liability provisions of
the insured's policy.
(4) (a) Coverage for property damage shall be offered to the
insured in amounts not less than those prescribed in the Texas Motor
Vehicle Safety-Responsibility Act and such higher available limits
as may be desired by the insured, but not greater than limits of
liability specified in the property damage liability provisions of
the insured's policy, subject to a deductible amount of $250.
(b) If the insured has collision coverage and uninsured or
underinsured property damage liability coverage, the insured may
recover under the policy coverage chosen by the insured. In the
event neither coverage is sufficient alone to cover all damage
resulting from a single occurrence, the insured may recover under
both coverages. When recovering under both coverages, the insured
shall designate one coverage as the primary coverage and pay the
deductible applicable to that coverage. The primary coverage must
be exhausted before any recovery is made under the secondary
coverage. If both coverages are utilized in the payment of damages
from a single occurrence, the insured shall not be required to pay
the deductible applicable to the secondary coverage when the amount
of the deductible otherwise applicable to the secondary coverage is
the same as or less than the amount of the deductible applicable to
the primary coverage. If both coverages are utilized in the payment
of damages from a single occurrence and the amount of the deductible
otherwise applicable to the secondary coverage is greater than the
amount of the deductible applicable to the primary coverage, the
insured shall be required to pay in respect of the secondary
coverage only the difference between the amount of the two
deductibles. In no event shall the insured recover under both
coverages more than the actual damages suffered.
(5) The underinsured motorist coverage shall provide for
payment to the insured of all sums which he shall be legally
entitled to recover as damages from owners or operators of
underinsured motor vehicles because of bodily injury or property
damage in an amount up to the limit specified in the policy, reduced
by the amount recovered or recoverable from the insurer of the
underinsured motor vehicle.
(6) In the event of payment to any person under any coverage
required by this Section and subject to the terms and conditions of
such coverage, the insurer making such payment shall, to the extent
thereof, be entitled to the proceeds of any settlement or judgment
resulting from the exercise of any rights of recovery of such person
against any person or organization legally responsible for the
bodily injury, sickness or disease, or death for which such payment
is made, including the proceeds recoverable from the assets of the
insolvent insurer; provided, however, whenever an insurer shall
make payment under a policy of insurance issued pursuant to this
Act, which payment is occasioned by the insolvency of an insurer,
the insured of said insolvent insurer shall be given credit in any
judgment obtained against him, with respect to his legal liability
for such damages, to the extent of such payment, but, subject to
Section 12 of Article 21.28-C of this code, such paying insurer
shall have the right to proceed directly against the insolvent
insurer or its receiver, and in pursuance of such right such paying
insurer shall possess any rights which the insured of the insolvent
company might otherwise have had if the insured of the insolvent
insurer had made the payment.
(7) If a dispute exists as to whether a motor vehicle is
uninsured, the burden of proof as to that issue shall be upon the
insurer.
(8) Notwithstanding Section 15.032, Civil Practice and
Remedies Code, an action against an insurer in relation to the
coverage provided under this article, including an action to
enforce that coverage, may be brought only:
(a) in the county in which the policyholder or beneficiary
instituting the suit resided at the time of the accident; or
(b) in the county in which the accident involving the
uninsured or underinsured motor vehicle occurred.
Added by Acts 1967, 60th Leg., p. 448, ch. 202, Sec. 1, eff. Oct. 1,
1967. Amended by Acts 1977, 65th Leg., p. 370, ch. 182, Sec. 1, eff.
Aug. 29, 1977; Acts 1979, 66th Leg., p. 1418, ch. 626, Sec. 1, eff.
Jan. 1, 1980; Acts 1981, 67th Leg., p. 1002, ch. 380, Sec. 1, eff.
Aug. 31, 1981.
Sec. (6) amended by Acts 1989, 71st Leg., ch. 1082, Sec. 6.01, eff.
Sept. 1, 1989; Sec. (2) amended by Acts 1991, 72nd Leg., ch. 242,
Sec. 2.08, eff. Sept. 1, 1991; Sec. (8) added by Acts 1995, 74th
Leg., ch. 138, Sec. 8, eff. Aug. 28, 1995; Subsec. (2) amended by
Acts 2003, 78th Leg., ch. 206, Sec. 21.08, eff. June 11, 2003.
Amended by:
Acts 2005, 79th Leg., Ch. 727, Sec. 18, eff. April 1, 2007.
Acts 2005, 79th Leg., Ch. 1159, Sec. 3, eff. June 18, 2005.
Acts 2007, 80th Leg., R.S., Ch. 730, Sec. 3B.037(b), eff.
September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch. 921, Sec. 9.037(b), eff.
September 1, 2007.
Art. 5.10. RULES AND REGULATIONS. The Board is hereby
empowered to make and enforce all such reasonable rules and
regulations not inconsistent with the provisions of this subchapter
as are necessary to carry out its provisions.
Acts 1951, 52nd Leg., ch. 491.
Amended by Acts 1991, 72nd Leg., ch. 242, Sec. 2.13, eff. Sept. 1,
1991.
Art. 5.11. HEARING ON GRIEVANCES. (a) Any policyholder or
insurer shall have the right to a hearing before the Board on any
grievance occasioned by the approval or disapproval by the Board of
any classification, rate, rating plan, endorsement or policy form,
or any rule or regulation established under the terms hereof, such
hearing to be held in conformity with rules prescribed by the Board.
Upon receipt of request that such hearing is desired, the Board
shall forthwith set a date for the hearing, at the same time
notifying all interested parties in writing of the place and date
thereof, which date, unless otherwise agreed to by the parties at
interest, shall not be less than ten (10) nor more than thirty (30)
days after the date of said notice. Any party aggrieved shall have
the right to apply to any court of competent jurisdiction to obtain
redress.
(b) No hearing shall suspend the operation of any
classification, rate, rating plan or policy form unless the Board
shall so order.
(c) Notwithstanding Subsections (a) and (b) of this article,
on and after the effective date of S.B. No. 14, Acts of the 78th
Legislature, Regular Session, 2003, rates for personal automobile
insurance in this state are determined as provided by Article 5.101
of this code, and rates for commercial motor vehicle insurance in
this state are determined as provided by Article 5.13-2 of this
code. On and after December 1, 2004, rates for personal automobile
insurance and commercial automobile insurance in this state are
determined as provided by Article 5.13-2 of this code.
Acts 1951, 52nd Leg., ch. 491. Amended by Acts 1953, 53rd Leg., p.
64, ch. 50, Sec. 6.
Amended by Acts 1991, 72nd Leg., ch. 242, Sec. 2.14, eff. Sept. 1,
1991; Subsec. (c) amended by Acts 1991, 72nd Leg., 2nd C.S., ch.
12, Sec. 8.08, eff. Jan. 1, 1992; amended by Acts 1995, 74th Leg.,
ch. 984, Sec. 7, eff. Sept. 1, 1995; Subsec. (c) amended by Acts
2003, 78th Leg., ch. 206, Sec. 21.11, eff. June 11, 2003.
SUBCHAPTER B. CASUALTY INSURANCE AND FIDELITY, GUARANTY AND SURETY
BONDS
Art. 5.13. SCOPE OF SUBCHAPTER. (a) This subchapter
applies to every insurance company, corporation, interinsurance
exchange, mutual, reciprocal, association, Lloyd's plan, or other
organization or insurer writing any of the characters of insurance
business herein set forth, hereinafter called "Insurer"; provided
that nothing in this entire subchapter shall be construed to apply
to any county or farm mutual insurance company or association, as
regulated under Chapters 911 and 912 of this code, except that:
(1) Article 5.13-2 of this code shall apply to a county
mutual insurance company with respect to personal automobile and
commercial automobile insurance, residential and commercial
property insurance, and inland marine insurance;
(2) Article 5.20 of this code shall apply to a county
mutual insurance company with respect to each line of insurance
that a county mutual insurance company is authorized to write under
Section 912.151; and
(3) Article 5.20 of this code shall apply to a farm
mutual insurance company with respect to each line of insurance
that a farm mutual insurance company is authorized to write under
Section 911.151.
(b) This subchapter applies to the writing of casualty
insurance and the writing of fidelity, surety, and guaranty bonds,
on risks or operations in this State except as herein stated.
(c) Except as otherwise provided by this subchapter, this
subchapter does not apply to the writing of motor vehicle, life,
health, accident, professional liability, reinsurance, aircraft,
fraternal benefit, fire, lightning, tornado, windstorm, hail,
smoke or smudge, cyclone, earthquake, volcanic eruption, rain,
frost and freeze, weather or climatic conditions, excess or
deficiency of moisture, flood, the rising of the waters of the ocean
or its tributaries, bombardment, invasion, insurrection, riot,
civil war or commotion, military or usurped power, any order of a
civil authority made to prevent the spread of a conflagration,
epidemic or catastrophe, vandalism or malicious mischief, strike or
lockout, water or other fluid or substance, resulting from the
breakage or leakage of sprinklers, pumps, or other apparatus
erected for extinguishing fires, water pipes or other conduits or
containers, or resulting from casual water entering through leaks
or opening in buildings or by seepage through building walls,
including insurance against accidental injury of such sprinklers,
pumps, fire apparatus, conduits or container, workers'
compensation, noncommercial inland marine, ocean marine, marine,
or title insurance; nor does this subchapter apply to the writing
of explosion insurance, except insurance against loss from injury
to person or property which results accidentally from steam
boilers, heaters or pressure vessels, electrical devices, engines
and all machinery and appliances used in connection therewith or
operation thereby.
(d) This subchapter shall not be construed as limiting in any
manner the types or classes of insurance which may be written by the
several types of insurers under appropriate statutes or their
charters or permits.
(e) The regulatory power herein conferred is vested in the
commissioner.
Acts 1951, 52nd Leg., ch. 491. Amended by Acts 1955, 54th Leg., p.
359, ch. 76, Sec. 1; Acts 2003, 78th Leg., ch. 206, Sec. 5.01, eff.
June 11, 2003; Acts 2003, 78th Leg., ch. 206, Sec. 6.01, eff. Dec.
1, 2004.
Amended by:
Acts 2005, 79th Leg., Ch. 631, Sec. 1, eff. September 1, 2005.
Art. 5.13-1. LEGAL SERVICE CONTRACTS. (a) Every insurer
governed by Subchapter B of Chapter 5 of the Insurance Code, as
amended, and every life, health, and accident insurer governed by
Chapter 3 of the Insurance Code, as amended, is authorized to issue
prepaid legal services contracts. Every such insurer or rating
organization authorized under Article 5.16 of the Insurance Code
shall file with the State Board of Insurance all rules and forms
applicable to prepaid legal service contracts in a manner to be
established by the State Board of Insurance. Certification, by a
qualified actuary, to the appropriateness of the charges, rates, or
rating plans, based upon reasonable assumptions, shall accompany
the filing along with adequate supporting information.
(b) The State Board of Insurance shall, within a reasonable
period, approve any form if the requirements of this section are
met. It shall be unlawful to issue such forms until approved or to
use such schedules of charges, rates, or rating plans until filed.
If the State Board of Insurance has good cause to believe such rates
and rating plans do not comply with the standards of this article,
it shall give notice in writing to every insurer or rating
organization which filed such rates or rating plans, stating
therein in what manner and to what extent such noncompliance is
alleged to exist and specifying therein a reasonable time, not less
than 30 days thereafter, in which such noncompliance may be
corrected. If the board has not acted on any form, rate, rating
plan, or charges within 30 days after the filing of same, they shall
be deemed approved. The board may require the submission of
whatever relevant information is deemed necessary in determining
whether to approve or disapprove a filing made pursuant to this
section.
(c) The right of such insurers to issue prepaid legal
services contracts on individual, group, or franchise bases is
hereby recognized, and qualified agents of such insurers who are
licensed under Article 21.07-1 or 21.14 of this code shall be
authorized to write such coverages under such rules as the
commissioner may prescribe.
(d) The State Board of Insurance is hereby vested with power
and authority under this article to promulgate, after notice of
hearing, and to enforce, rules and regulations concerning the
application to the designated insurers of this article and for such
clarification, amplification, and augmentation as in the
discretion of the State Board of Insurance are deemed necessary to
accomplish the purposes of this article.
(e) This article shall be construed as a specific exception
to Article 3.54 of the Texas Insurance Code.
(f) All legal services contracts and related promotional
material issued pursuant to Chapter 23 and the issuance of legal
services contracts pursuant to Article 5.13-1 shall be truthful and
accurate and shall properly describe the coverage offered. Such
description should include, but not be limited to, a description of
coverage offered as either an indemnity coverage or a contract that
provides only consultation and advice on simple legal matters,
either alone or in combination with a referral service, and that
provides fee discounts for other matters. To provide for the
actuarial soundness of a prepaid legal services contract issued
under this article, the State Board of Insurance may require that
prepaid legal services contracts have rates that are adequate to
reasonably provide the benefits under the prepaid legal services
contracts. This subsection does not apply to a prepaid legal
services contract that provides only consultation and advice on
simple legal matters, either alone or in combination with a
referral service, and that provides fee discounts for other
matters.
(g) The State Board of Insurance may not determine, fix,
prescribe, set, or promulgate maximum rates or maximum amounts of
premium to be charged for a prepaid legal services contract issued
under this chapter. Nothing in this Act shall be construed as
compelling the State Board of Insurance to establish standard or
absolute rates and the board is specifically authorized, in its
discretion, to approve different rates for different insurers for
the same risk or risks on the types of insurance covered by this
article. The board shall approve such rates as filed by any insurer
unless it finds that such filing does not meet the requirements of
this article.
(h) An insurer may not issue or renew a prepaid legal service
contract under this article after March 1, 2004.
Added by Acts 1975, 64th Leg., p. 134, ch. 60, Sec. 2, eff. Sept. 1,
1975.
Subsecs. (a), (b), (f), (g) amended by Acts 1995, 74th Leg., ch.
873, Sec. 1, eff. Sept. 1, 1995; Subsec. (c) amended by Acts 2001,
77th Leg., ch. 703, Sec. 7.03, eff. Sept. 1, 2001. Subsec. (h)
added by Acts 2003, 78th Leg., ch. 1181, Sec. 2, eff. Sept. 1, 2003.
Art. 5.13-2. RATES AND FORMS FOR CERTAIN PROPERTY AND
CASUALTY INSURANCE.
Purpose
Sec. 1. This article governs the regulation of insurance
described by Section 2 of this article. The purposes of this
article are to:
(1) promote the public welfare by regulating insurance rates
to prohibit excessive, inadequate, or unfairly discriminatory
rates;
(2) promote availability of insurance;
(3) promote price competition among insurers to provide rates
and premiums that are responsive to competitive market conditions;
(4) prohibit price-fixing agreements and other
anticompetitive behavior by insurers;
(5) regulate the insurance forms used for lines of insurance
subject to this article to ensure that they are not unjust, unfair,
inequitable, misleading, or deceptive; and
(6) provide regulatory procedures for the maintenance of
appropriate information reporting systems.
Sec. 2. Repealed by Acts 2007, 80th Leg., R.S., Ch. 730,
Sec. 3B.071(c), eff. September 1, 2007.
Sec. 3. Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18,
eff. April 1, 2007.
Sec. 4. Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18,
eff. April 1, 2007.
Sec. 5. Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18,
eff. April 1, 2007.
Sec. 5A. Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18,
eff. April 1, 2007.
Sec. 6. Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18,
eff. April 1, 2007.
Sec. 7. Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18,
eff. April 1, 2007.
Sec. 8. Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18,
eff. April 1, 2007.
Commissioner authority
Sec. 9. If the commissioner determines at any time that the
implementation of this article or any part thereof is contrary to
the public interest and has resulted in or may result in imminent
peril to the insurance consumers of this state, the commissioner
may issue an order stating the harm to the public and shall
thereafter rely upon Subchapters A-L of this chapter, or parts
thereof, in the regulation of property and casualty insurance.
Sec. 10. Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18,
eff. April 1, 2007.
Sec. 13. Repealed by Acts 2007, 80th Leg., R.S., Ch. 730,
Sec. 3B.072(b), eff. September 1, 2007.
Sec. 14. Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18,
eff. April 1, 2007.
Sec. 15. Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18,
eff. April 1, 2007.
Sec. 16. Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18,
eff. April 1, 2007.
Added by Acts 1991, 72nd Leg., ch. 242, Sec. 2.15, eff. Sept. 1,
1991. Sec. 8(e) amended by Acts 1991, 72nd Leg., 2nd C.S., ch. 12,
Sec. 8.01, eff. Jan. 1, 1992; Secs. 1 and 2 amended by Acts 1993,
73rd Leg., ch. 685, Sec. 6.07, eff. Sept. 1, 1993; Sec. 3(5), (6)
amended by Acts 1993, 73rd Leg., ch. 685, Sec. 6.08, eff. Sept. 1,
1993; Secs. 5, 7 to 9 amended by Acts 1993, 73rd Leg., ch. 685, Sec.
6.09, eff. Sept. 1, 1993; Sec. 1 amended by Acts 1995, 74th Leg.,
ch. 984, Sec. 8, eff. Sept. 1, 1995; Sec. 3(2) amended by Acts 1995,
74th Leg., ch. 984, Sec. 9, eff. Sept. 1, 1995; Sec. 10 amended by
Acts 1995, 74th Leg., ch. 984, Sec. 10, eff. Sept. 1, 1995; Sec. 1
amended by Acts 1997, 75th Leg., ch. 1330, Sec. 1, eff. Sept. 1,
1997; Sec. 3(2) amended by Acts 1997, 75th Leg., ch. 438, Sec. 1,
eff. Sept. 1, 1997; Sec. 8(e) amended by Acts 1997, 75th Leg., ch.
1330, Sec. 2, eff. Sept. 1, 1997; Sec. 8(f) amended by Acts 1997,
75th Leg., ch. 1426, Sec. 1, eff. Sept. 1, 1997; Section heading
amended by Acts 2003, 78th Leg., ch. 206, Sec. 5.02, 6.02, eff. June
11, 2003; Sec. 1 amended by Acts 2003, 78th Leg., ch. 206, Sec.
5.03, 6.03, eff. June 11, 2003; Sec. 2 amended by Acts 2003, 78th
Leg., ch. 206, Sec. 5.03, 6.03, eff. June 11, 2003; Sec. 3 amended
by Acts 2003, 78th Leg., ch. 206, Sec. 6.04, eff. Dec. 1, 2004; Sec.
3(2) amended by Acts 2003, 78th Leg., ch. 206, Sec. 5.04, eff. June
11, 2003; Sec. 4(b) amended by Acts 2003, 78th Leg., ch. 206, Sec.
6.05, eff. Dec. 1, 2004; Sec. 4(d) amended by Acts 2003, 78th Leg.,
ch. 206, Sec. 6.05, eff. Dec. 1, 2004; Sec. 4(f) added by Acts 2003,
78th Leg., ch. 206, Sec. 6.05, eff. Dec. 1, 2004; Sec. 5(a) amended
by Acts 2003, 78th Leg., ch. 206, Sec. 6.06, eff. Dec. 1, 2004; Sec.
5(a-1) added by Acts 2003, 78th Leg., ch. 206, Sec. 6.06, eff. Dec.
1, 2004; Sec. 5(a-2) added by Acts 2003, 78th Leg., ch. 206, Sec.
6.06, eff. Dec. 1, 2004; Sec. 5(b) amended by Acts 2003, 78th Leg.,
ch. 206, Sec. 21.47(3), eff. June 11, 2003; Sec. 5A added by Acts
2003, 78th Leg., ch. 206, Sec. 6.07, eff. Dec. 1, 2004; Sec. 13
added by Acts 2003, 78th Leg., ch. 206, Sec. 6.08, eff. Dec. 1,
2004; Sec. 14 added by Acts 2003, 78th Leg., ch. 206, Sec. 6.09,
eff. June 11, 2003; Sec. 15 added by Acts 2003, 78th Leg., ch. 206,
Sec. 6.10, eff. June 11, 2003; Sec. 16 added by Acts 2003, 78th
Leg., ch. 206, Sec. 6.11, eff. Dec. 1, 2004.
Amended by:
Acts 2005, 79th Leg., Ch. 70, Sec. 1, eff. September 1, 2005.
Acts 2005, 79th Leg., Ch. 71, Sec. 1, eff. September 1, 2005.
Acts 2005, 79th Leg., Ch. 102, Sec. 4, eff. September 1, 2005.
Acts 2005, 79th Leg., Ch. 727, Sec. 18, eff. April 1, 2007.
Acts 2005, 79th Leg., Ch. 1118, Sec. 1, eff. June 18, 2005.
Acts 2007, 80th Leg., R.S., Ch. 730, Sec. 3B.071(c), eff.
September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch. 730, Sec. 3B.072(b), eff.
September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch. 921, Sec. 9.071(c), eff.
September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch. 921, Sec. 9.072(b), eff.
September 1, 2007.
Text of article effective until April 1, 2009
Art. 5.14. COVERAGE FOR CERTAIN LOSS OR DAMAGE CAUSED BY
WINDSTORM, HURRICANE, OR HAIL. (a) In this article, "insurer" has
the meaning assigned by Section 3, Article 5.13-2, of this code.
(b) An insurance policy written by an insurer against loss
or damage by windstorm, hurricane, or hail may include coverage
for:
(1) a building or other structure that is built wholly
or partially over water; and
(2) the corporeal movable property contained in a
building or structure described by Subdivision (1) of this
subsection.
(c) An insurer that writes coverage described by Subsection
(b) of this section may impose appropriate limits of coverage and
deductibles for the coverage described by Subsection (b).
Added by Acts 2005, 79th Leg., Ch. 1153, Sec. 6, eff. September 1,
2005.
Art. 5.15-1. PROFESSIONAL LIABILITY INSURANCE FOR PHYSICIANS
AND HEALTH CARE PROVIDERS.
Sec. 1. Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18,
eff. April 1, 2007.
Sec. 2. Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18,
eff. April 1, 2007.
Text of section as repealed by Acts 2005, 79th Leg., R.S., Ch. 727,
Sec. 18
Text of section as amended by Acts 2005, 79th Leg., R.S., Ch. 1135,
Sec. 1
Without reference to the amendment of this section, this section
was repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18, eff. April
1, 2007.
Sec. 3. RATE STANDARDS. Rates shall be made in accordance
with the following provisions:
(a) Consideration shall be given to past and prospective
loss and expense experience for all professional liability
insurance for physicians and health care providers written in this
state, unless the department shall find that the group or risk to be
insured is not of sufficient size to be deemed credible, in which
event, past and prospective loss and expense experience for all
professional liability insurance for physicians and health care
providers written outside this state shall also be considered, to a
reasonable margin for underwriting profit and contingencies, to
investment income, to dividends or savings allowed or returned by
insurers to their policyholders or members.
(b) The department shall consider the impact of risk
management courses taken by physicians and health care providers in
this state in approving rates under this article.
(c) For the establishment of rates, risks may be
grouped by classifications, by rating schedules, or by any other
reasonable methods. Classification rates may be modified to
produce rates for individual risks in accordance with rating plans
which establish standards for measuring variations in hazards or
expense provisions, or both. Those standards may measure any
difference among risks that can be demonstrated to have a probable
effect upon losses or expenses.
(d) Rates shall be reasonable and shall not be
excessive or inadequate, as defined in this subsection, nor shall
they be unfairly discriminatory. No rate shall be held to be
excessive unless the rate is unreasonably high for the insurance
coverage provided. No rate shall be held to be inadequate unless
the rate is unreasonably low for the insurance coverage provided
and is insufficient to sustain projected losses and expenses; or
unless the rate is unreasonably low for the insurance coverage
provided and the use of the rate has or, if continued, will have the
effect of destroying competition or creating a monopoly.
Sec. 3. Repealed by Acts 2007, 80th Leg., R.S., Ch. 730,
Sec. 3B.034(c), eff. September 1, 2007.
Sec. 4. Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18,
eff. April 1, 2007.
Sec. 4A. Repealed by Acts 1993, 73rd Leg., ch. 685, Sec. 6.12,
eff. Sept. 1, 1993.
Sec. 4B. Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18,
eff. April 1, 2007.
Sec. 5. Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18,
eff. April 1, 2007.
Sec. 6. Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18,
eff. April 1, 2007.
Sec. 7. Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18,
eff. April 1, 2007.
Sec. 8. Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18,
eff. April 1, 2007.
Sec. 9. Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18,
eff. April 1, 2007.
Premium Discount Recoupment
Sec. 10. (a) Eligibility. Effective January 1, 1999, each
insurer that has filed and issued premium discounts to health care
professionals pursuant to Article 5.15-4 of this code shall be
eligible to elect to receive a premium tax credit in lieu of
indemnification for claims filed with the Attorney General under
Chapter 110, Civil Practice and Remedies Code.
(b) Amount of Tax Credit. An eligible company may elect to
recoup premium discounts issued to eligible health care
professionals in lieu of indemnification from the State of Texas
for claims filed under Chapter 110, Civil Practice and Remedies
Code. Such election shall be made as a credit that is part of the
annual premium tax return filed on or before March 1, 1999. An
insurer may credit the total amount of any discounts issued less any
reimbursements received prior to January 1, 1999, by the insurer
for claims filed under Chapter 110, Civil Practice and Remedies
Code, against its premium tax under Article 4.10 of this code. The
tax credit herein authorized shall be allowed at a rate not to
exceed 20 percent of the credit per year for five or more successive
years following the initial election made in March 1999. The
balance of payments due the insurer and not claimed as a tax credit
may be reflected in the books and records of the insurer as an
admitted asset for all purposes, including exhibition in annual
statements pursuant to Article 6.12 of this code. The tax credit
allowed in any one year may not exceed the premium tax due in that
year.
(c) An eligible insurer that elects to receive tax credits
shall not be eligible to file claims for indemnity under Chapter
110, Civil Practice and Remedies Code after January 1, 1999. Any
claims of an eligible insurer filed with the Attorney General prior
to January 1, 1999, that have not been reimbursed shall also be
deemed to have been waived by the insurer by making its election.
An insurer that elects not to recoup its discount through tax credit
will continue to remain eligible for indemnification of eligible
claims under Chapter 110, Civil Practice and Remedies Code.
(d) The elections provided herein shall not affect the right
of a self-insurance trust created under Article 21.49-4 of this
code from seeking indemnification for eligible claims.
(e) The provisions of Article 21.46 of this code shall not
apply to the credits authorized herein.
Sec. 11. Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18,
eff. April 1, 2007.
Sec. 12. Repealed by Acts 2007, 80th Leg., R.S., Ch. 730,
Sec. 3B.035(c), eff. September 1, 2007.
Sec. 12. Repealed by Acts 2007, 80th Leg., R.S., Ch. 730,
Sec. 3B.036(b), eff. September 1, 2007.
Sec. 13. Repealed by Acts 2007, 80th Leg., R.S., Ch. 730,
Sec. 3B.035(c), eff. September 1, 2007.
Added by Acts 1977, 65th Leg., p. 2054, ch. 817, Sec. 31.01, eff.
Aug. 29. 1977.
Sec. 2(2) amended by Acts 1987, 70th Leg., ch. 718, Sec. 1, eff.
Sept. 1, 1987; Sec. 4A added by Acts 1987, 70th Leg., 1st C.S., ch.
1, Sec. 2.05, eff. Sept. 2, 1987; Sec. 8 amended by Acts 1987, 70th
Leg., 1st C.S., ch. 1, Sec. 7.01, eff. Sept. 2, 1987; Sec. 3 amended
by Acts 1989, 71st Leg., ch. 1027, Sec. 15, eff. Sept. 1, 1989; Sec.
4B added by Acts 1989, 71st Leg., ch. 1027, Sec. 16, eff. Sept. 1
1989; Sec. 2(3) amended by Acts 1991, 72nd Leg., ch. 14, Sec.
284(15), eff. Sept. 1, 1991; Sec. 3 amended by Acts 1991, 72nd
Leg., ch. 606, Sec. 1, eff. Sept. 1, 1991; Sec. 4A amended by Acts
1991, 72nd Leg., ch. 242, Sec. 2.17D, eff. Sept. 1, 1991; Sec.
4B(b) amended by Acts 1991, 72nd Leg., ch. 606, Sec. 2, eff. Sept.
1, 1991; Sec. 4(a) amended by Acts 1993, 73rd Leg., ch. 685, Sec.
6.11, eff. Sept. 1, 1993; Sec. 4A repealed by Acts 1993, 73rd Leg.,
ch. 685, Sec. 6.12, eff. Sept. 1, 1993; Sec. 8 amended by Acts 1997,
75th., ch. 746, Sec. 1, eff. Sept. 1, 1997; Sec. 10 added by Acts
1997, 75th Leg., ch. 991, Sec. 1, eff. Sept. 1, 1997; Sec. 2(2)
amended by Acts 2001, 77th Leg., ch. 1284, Sec. 5.01, eff. June 15,
2001; Sec. 8 amended by Acts 2001, 77th Leg., ch. 1284, Sec. 5.02,
eff. June 15, 2001; Sec. 2(2) amended by Acts 2003, 78th Leg., ch.
141, Sec. 1, eff. Sept. 1, 2003; Sec. 8 amended by Acts 2003, 78th
Leg., ch. 141, Sec. 2, eff. Sept. 1, 2003; Sec. 11 added by Acts
2003, 78th Leg., ch. 204, Sec. 10.08, eff. Sept. 1, 2003.
Amended by:
Acts 2005, 79th Leg., Ch. 184, Sec. 1, eff. May 27, 2005.
Acts 2005, 79th Leg., Ch. 727, Sec. 18, eff. April 1, 2007.
Acts 2005, 79th Leg., Ch. 1135, Sec. 1, eff. September 1,
2005.
Acts 2005, 79th Leg., Ch. 1135, Sec. 2, eff. September 1,
2005.
Acts 2007, 80th Leg., R.S., Ch. 730, Sec. 3B.034(c), eff.
September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch. 730, Sec. 3B.035(c), eff.
September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch. 730, Sec. 3B.036(b), eff.
September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch. 921, Sec. 9.034(c), eff.
September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch. 921, Sec. 9.035(c), eff.
September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch. 921, Sec. 9.036(b), eff.
September 1, 2007.
Art. 5.22. PENALTIES. (a) The Board may suspend the license
of any advisory organization licensed under Article 5.73 of this
code, insurer or agent which fails to comply with an order of the
Board within the time limited by such order, or any extension
thereof which the Board may grant. The Board shall not suspend the
license of any advisory organization, agent or insurer for failure
to comply with an order until the time prescribed for an appeal
therefrom has expired or, if an appeal has been taken, until such
order has been affirmed. The Board may determine when a suspension
of license shall become effective and it shall remain in effect for
the period fixed by it, unless it modifies or rescinds such
suspension or until the order upon which such suspension is based is
modified, rescinded or reversed.
(b) No license shall be suspended except upon a written order
of the Board, stating its findings, made after a hearing held upon
not less than ten (10) days' notice to such person or organization
specifying the alleged violation.
Acts 1951, 52nd Leg., ch. 491.
Amended by Acts 1991, 72nd Leg., ch. 242, Sec. 2.22, eff. Sept. 1,
1991.
Art. 5.23. JUDICIAL REVIEW. Any order or decision of the
Board shall be subject to review, which shall be on the basis of the
record of the proceedings before the Board and shall not be limited
to questions of law, by direct action in the District Court of
Travis County, instituted by any party aggrieved by any action
taken under this subchapter.
Pending final disposition of any proceedings which attack the
correctness of a rate, any insurer affected by such order may
continue to charge the rate which obtained prior to such order of
decrease or may charge the rate resulting from such order of
increase, on condition that the difference in the premiums be
deposited in a special account by said insurer, to be held in trust
by said insurer, and to be retained by said insurer or paid to the
holders of policies issued after the order of the Board, as the
court may determine.
In all other cases, the court shall determine whether the
filing of the appeal shall operate as a stay. The court may, in
disposing of the issue before it, modify, affirm or reverse the
order or decision of the Board in whole or in part.
Acts 1951, 52nd Leg., ch. 491.
SUBCHAPTER C. FIRE INSURANCE AND ALLIED LINES
Art. 5.25. BOARD SHALL FIX RATES. (a) The State Board of
Insurance shall have the sole and exclusive power and authority and
it shall be its duty to prescribe, fix, determine and promulgate the
rates of premiums to be charged and collected by fire insurance
companies transacting business in this State. Said Board shall
also have authority to alter or amend any and all such rates of
premiums so fixed and determined and adopted by it, and to raise or
lower the same, or any part thereof, as herein provided.
(b) Notwithstanding Subsection (a) of this article, on and
after the effective date of S.B. No. 14, Acts of the 78th
Legislature, Regular Session, 2003, rates for homeowners and
residential fire and residential allied lines insurance coverage
under this subchapter are determined as provided by Subchapter Q of
this chapter, and rates for other lines of insurance subject to this
subchapter are determined as provided by Article 5.13-2 of this
code, except that on and after December 1, 2004, rates for all lines
of insurance subject to this subchapter are determined as provided
by Article 5.13-2 of this code.
Acts 1951, 52nd Leg., ch. 491.
Amended by Acts 1985, 69th Leg., ch. 861, Sec. 1, eff. June 15,
1985; Acts 1991, 72nd Leg., ch. 242, Sec. 2.23, eff. Sept. 1, 1991;
Acts 1991, 72nd Leg., ch. 628, Sec. 10, eff. Sept. 1, 1991; Subsec.
(b) amended by Acts 1991, 72nd Leg., 2nd C.S., ch. 12, Sec. 8.10,
eff. Jan. 1, 1992; amended by Acts 1995, 74th Leg., ch. 984, Sec.
13, eff. Sept. 1, 1995; Subsec. (b) amended by Acts 1997, 75th
Leg., ch. 1330, Sec. 3, eff. Sept. 1, 1997; Subsec. (b) amended by
Acts 2003, 78th Leg., ch. 206, Sec. 21.12, eff. June 11, 2003.
Amended by:
Acts 2005, 79th Leg., Ch. 727, Sec. 5, eff. April 1, 2007.
Art. 5.25A. RATES APPLICABLE TO CERTAIN LOCATIONS. (a) The
State Board of Insurance in adopting fire insurance and homeowners
insurance rates under this subchapter shall authorize a fringe area
rating as defined under its general basis rating schedule for any
dwelling located within five miles of the outer boundary of a
platted subdivision classified by the board under board criteria as
a first key town.
(b) Notwithstanding Subsection (a) of this article, on and
after the effective date of S.B. No. 14, Acts of the 78th
Legislature, Regular Session, 2003, rates for homeowners and
residential fire and residential allied lines insurance coverage
under this subchapter are determined as provided by Subchapter Q of
this chapter, and rates for other lines of insurance subject to this
subchapter are determined as provided by Article 5.13-2 of this
code, except that on and after December 1, 2004, rates for all lines
of insurance subject to this subchapter are determined as provided
by Article 5.13-2 of this code.
Added by Acts 1989, 71st Leg., ch. 481, Sec. 1, eff. Sept. 1, 1989.
Amended by Acts 1991, 72nd Leg., ch. 242, Sec. 2.24, eff. Sept. 1,
1991; Subsec. (b) amended by Acts 1991, 72nd Leg., 2nd C.S., ch.
12, Sec. 8.11, eff. Jan. 1, 1992; amended by Acts 1995, 74th Leg.,
ch. 984, Sec. 14, eff. Sept. 1, 1995; Subsec. (b) amended by Acts
1997, 75th Leg., ch. 1330, Sec. 4, eff. Sept. 1, 1997; Subsec. (b)
amended by Acts 2003, 78th Leg., ch. 206, Sec. 21.13, eff. June 11,
2003.
Art. 5.25-3. FIRE INSURANCE RATES AND FIRE SUPPRESSION
RATINGS FOR BORDER MUNICIPALITY. The commissioner, in adopting
fire insurance rates for a municipality at or near the border
between this state and another state or the United Mexican States,
shall take into account the existence and capabilities of a fire
department or volunteer fire department that serves an adjoining or
nearby municipality in the other state or the United Mexican States
and that by agreement or by long-standing practice provides fire
suppression services to the Texas municipality.
Added by Acts 1997, 75th Leg., ch. 1413, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2005, 79th Leg., Ch. 727, Sec. 6, eff. April 1, 2007.
Art. 5.26. MAXIMUM RATE FIXED, AND DEVIATIONS THEREFROM. (a)
A maximum rate of premiums to be charged or collected by all
companies transacting in this state the business of fire insurance,
as herein defined, shall be exclusively fixed and determined and
promulgated by the Board, and no such fire insurance company shall
charge or collect any premium or other compensation for or on
account of any policy or contract of fire insurance as herein
defined in excess of the maximum rate as herein provided for;
provided, however, upon the written application of the insured
stating his reasons therefor, filed with and approved by the Board,
a rate in excess of the maximum rate promulgated by the Board may be
used on any specific risk.
(b) Any insurer desiring to write insurance at a less rate
than the maximum rate provided for in paragraph (a) above shall make
a written application to the Board for permission to file a uniform
percentage deviation for a lesser rate than the maximum rate, on a
state-wide basis or by reasonable territories as approved by the
Board, from the class rates or schedules or rating plans respecting
fire insurance and its allied lines of insurance or class of risk
within such kind of insurance or a combination thereof promulgated
by the Board. Such application shall specify the basis of the
deviation, and shall be accompanied by the data upon which the
applicant relies; provided, however, such application, data and
all other information filed in connection with such deviation shall
be public records open to inspection at any reasonable time. The
provisions of this paragraph shall not be construed to prohibit the
application of a uniform scale of percentage deviations from the
maximum rate provided the general standards fixed in paragraph (d)
hereof are met.
(c) Provided further, that any insurer desiring to write
insurance at a lesser net rate than the maximum rate provided for in
paragraph (a) above, either individually or as a member of a group
or association, said lesser net rate being obtained by the
application of a rating plan or procedure in use by it or by a group
or association of which it is a member, which said rating plan or
procedure shall apply only to special types or classes of risk in
connection with which an inspection or engineering service and set
of standards all acceptable to the Board are used, and which
inspection or engineering services and set of standards have been
and will continue to be maintained, shall make a written
application to the Board for permission to file its said rating plan
or procedure, the application of which would produce such lesser
net rate. Said application shall specify the basis of the
modification and shall be accompanied by the data on which
applicant relies. Every insurer or group or association which
avails itself of the provisions of this paragraph shall thereafter
follow in the conduct of its business as to such classes or types of
risks, only such rating plan or procedure ordered as permitted by
the Board for its use as to said special types or classes of risks.
If the Board shall issue an order permitting such deviation, such
insurer or such group or association for it shall file with the
Board all rates of premium or deposit for individual risks
underwritten by it, which rates shall be considered as deviations
from the rates that would have been promulgated by the Board on such
risks.
(d) In considering any application provided for in (b) or (c)
above, the Board shall give consideration to the factors applied by
insurers in determining the bases for rates; the financial
condition of the insurer; the method of operation and expenses of
such insurer; the loss experience of the insurer, past and
prospective, including where pertinent the conflagration and
catastrophe hazards, if any, both within and without this state; to
all factors reasonably related to the kind of insurance involved;
to a reasonable margin for an underwriting profit for the insurer,
and, in the case of participating insurers, to policyholders'
dividends. The Board shall issue an order permitting the deviation
for such insurer to be filed if it is found to be justified upon the
applicant's showing that the resulting premiums would be adequate
and not unfairly discriminatory. The Board shall issue an order
denying such application if it finds that the resulting premiums
would be inadequate or unfairly discriminatory. As soon as
reasonably possible after such application has been made the Board
shall in writing permit or deny the same; provided, that any such
application shall be deemed permitted unless denied within thirty
(30) days; provided, that the Board may by official order postpone
action for one additional period not exceeding thirty (30) days if
deemed necessary for proper consideration; except that deviations
in effect at the time this Act becomes effective shall be controlled
by subdivision (f) hereof. Each deviation permitted to be filed
shall be effective for a period of one (1) year from the date of
final granting of such permission whether by the Board in the first
instance or upon direction of the court. However, a deviation may
be withdrawn at any time with the approval of the Board or
terminated by order of the Board, which order must specify the
reasons for such termination. All deviations from maximum rates
shall be governed by this Article.
(e) No policy of insurance in force prior to the taking effect
of any changes in rate that result from the provisions of this Act
shall be affected thereby, unless there shall be a change in the
hazard of the risk necessitating a change in the rate applicable to
such risk, in which event such policy shall be subject to new rates
developed under the provisions hereof.
(f) Any deviations from maximum rates on file with the Board
and in effect until the effective time of this Act shall remain in
effect for a period of thirty (30) days after such effective time,
and if during such thirty (30) day period a written application to
the Board is made for permission to file such deviations under this
Act, same shall remain in effect until the Board has entered its
order either permitting or denying the application and during the
full course of any hearings on and appeal from any such order.
(g) The Board may call a public hearing on any application for
permission to file a deviation or a hearing on a permitted deviation
and shall call a hearing upon the request of any aggrieved
policyholder of the company filing the deviation made within thirty
(30) days after the granting or denying of any deviation. The Board
shall give reasonable notice of such hearings and shall hear
witnesses respecting such matters. Any applicant dissatisfied with
any order of the Board made without a hearing under this Article may
within thirty (30) days after entry of such order make written
request of the Board for a hearing thereon. The Board shall hear
such applicant within twenty (20) days after receiving such request
and shall give not less than ten (10) days written notice of the
time and place of the hearing. Within fifteen (15) days after such
hearing the Board shall affirm, reverse or modify by order its
previous action, specifying in such order its reasons therefor.
Any applicant who may be dissatisfied with any order of the Board
respecting its application may appeal in accordance with Article
1.04 of this code. The judgment of the District Court shall be
appealable as in any other civil case. Such action shall have
precedence over other civil cases on the dockets of the appellate
courts. Should the Board terminate or refuse to renew a permitted
deviation or refuse permission for filing of a deviation under
subdivision (f) hereof, then such deviation shall remain in effect
during the course of any hearing thereon and thirty (30) days
thereafter, and during the course of any appeal taken from such
order and until final judgment of the courts.
(h) Repealed by Acts 2003, 78th Leg., ch. 206, Sec. 21.47(2).
(i) Notwithstanding Subsections (a)-(h) of this article, on
and after the effective date of S.B. No. 14, Acts of the 78th
Legislature, Regular Session, 2003, rates for homeowners and
residential fire and residential allied lines insurance coverage
under this subchapter are determined as provided by Subchapter Q of
this chapter, and rates for other lines of insurance subject to this
subchapter are determined as provided by Article 5.13-2 of this
code, except that on and after December 1, 2004, rates for all lines
of insurance subject to this subchapter are determined as provided
by Article 5.13-2 of this code.
Acts 1951, 52nd Leg., ch. 491. Amended by Acts 1957, 55th Leg., p.
1443, ch. 497, Sec. 1; Acts 1981, 67th Leg., p. 2637, ch. 707, Sec.
4(23), eff. Aug. 31, 1981.
Subsec. (d) amended by and Subsec. (i) added by Acts 1991, 72nd
Leg., ch. 242, Sec. 2.26, eff. Sept. 1, 1991; Subsec. (i) amended
by Acts 1991, 72nd Leg., 2nd C.S., ch. 12, Sec. 8.12, eff. Jan. 1,
1992; Subsec. (g) amended by Acts 1993, 73rd Leg., ch. 685, Sec.
4.03, eff. Sept. 1, 1993; Subsec. (i) amended by Acts 1995, 74th
Leg., ch. 984, Sec. 15, eff. Sept. 1, 1995; Subsec. (i) amended by
Acts 1997, 75th Leg., ch. 1330, Sec. 5, eff. Sept. 1, 1997; Subsec.
(h) repealed by Acts 2003, 78th Leg., ch. 206, Sec. 21.47(2), eff.
June 11, 2003; Subsec. (i) amended by Acts 2003, 78th Leg., ch.
206, Sec. 21.15, eff. June 11, 2003.
Art. 5.27. NO COMPANY EXEMPT. Every fire insurance company,
every marine insurance company, every fire and marine insurance
company, every fire and tornado insurance company, and each and
every insurance company of every kind and name issuing a contract or
policy of insurance, or contracts or policies of insurance against
loss by fire on property within this State, whether such property be
fixed or movable, stationary or in transit, or whether such
property is consigned or billed for shipment within or beyond the
boundary of this State or to some foreign county, whether such
company is organized under the laws of this State or under the laws
of any other state, territory or possession of the United States, or
foreign country, or by authority of the Federal Government, now
holding certificate of authority to transact business in this
State, shall be deemed to have accepted such certificate and to
transact business thereunder, upon condition that it consents to
the terms and provisions of this subchapter and that it agrees to
transact business in this State, subject thereto; it being
intended that every contract or policy of insurance against the
hazard of fire shall be issued in accordance with the terms and
provisions of this subchapter, and the company issuing the same
governed thereby, regardless of the kind and character of such
property and whether the same is fixed or movable, stationary or in
transit, including the shore end of all marine risks insured
against loss by fire.
Acts 1951, 52nd Leg., ch. 491.
Art. 5.28. STATEMENTS AND BOOKS. (a) Said Board is
authorized and empowered to require sworn statements for any period
of time from any insurance company affected by this law and from any
of its directors, officers, representatives, general agents, state
agents, special agents, and local agents of the rates and premiums
collected for fire insurance on each class of risks, on all property
in this State and of the causes of fire, if such be known, if they
are in possession of such data, and information, or can obtain it at
a reasonable expense; and said Board is empowered to require such
statements showing all necessary facts and information to enable
said Board to make, amend and maintain the general basis schedules
provided for in this law and the rules and regulations for applying
same and to determine reasonable and proper maximum specific rates.
(b) Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18, eff.
April 1, 2007.
(c) Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18, eff.
April 1, 2007.
(d) Notwithstanding Subsection (a) of this article, on and
after the effective date of S.B. No. 14, Acts of the 78th
Legislature, Regular Session, 2003, rates for homeowners and
residential fire and residential allied lines insurance coverage
under this subchapter are determined as provided by Subchapter Q of
this chapter, and rates for other lines of insurance subject to this
subchapter are determined as provided by Article 5.13-2 of this
code, except that on and after December 1, 2004, rates for all lines
of insurance subject to this subchapter are determined as provided
by Article 5.13-2 of this code.
Acts 1951, 52nd Leg., ch. 491.
Amended by Acts 1991, 72nd Leg., ch. 242, Sec. 2.27, eff. Sept. 1,
1991; Subsec. (d) amended by Acts 1991, 72nd Leg., 2nd C.S., ch.
12, Sec. 8.13, eff. Jan. 1, 1992; amended by Acts 1995, 74th Leg.,
ch. 984, Sec. 16, eff. Sept. 1, 1995; Subsec. (d) amended by Acts
1997, 75th Leg., ch. 1330, Sec. 6, eff. Sept. 1, 1997; Subsec. (d)
amended by Acts 2003, 78th Leg., ch. 206, Sec. 21.16, eff. June 11,
2003.
Amended by:
Acts 2005, 79th Leg., Ch. 727, Sec. 7, eff. April 1, 2007.
Acts 2005, 79th Leg., Ch. 727, Sec. 18, eff. April 1, 2007.
Art. 5.29. SCHEDULE AND REPORT. (a) The rates of premium
fixed by said Board in pursuance of the provision of this subchapter
shall be at all times reasonable and the schedules thereof made and
promulgated by said Board shall be in such forms as will in the
judgment of the Board most clearly and in detail disclose the rate
so fixed and determined by said Board to be charged and collected
for policies of fire insurance. Said Board may employ and use any
facts obtainable from and concerning fire insurance companies
transacting business in this State, showing their expense and
charges for fire insurance premiums for any period or periods said
Board may deem advisable, which in their opinion will enable them to
devise and fix and determine reasonable rates of premiums for fire
insurance. The said Board in making and publishing schedules of the
rates fixed and determined by it shall show all charges, credits,
terms, privileges and conditions which in anywise affect such
rates, and copies of all such schedules shall be furnished by said
Board to any and all companies affected by this subchapter applying
therefor, and the same shall be furnished to any citizens of this
State applying therefor, upon the payment of the actual cost
thereof. No rate or rates fixed or determined by the Board shall
take effect until it shall have entered an order or orders fixing
and determining same, and shall give notice thereof to all fire
insurance companies affected by this subchapter, authorized to
transact business in the State. The Board, and any inspector or
other agent or employee thereof, who shall inspect any risk for the
purpose of enabling the Board to fix and determine the reasonable
rate to be charged thereon, shall furnish to the owner of such risk
at the date of such inspection a copy of the inspection report,
showing all defects that may operate as charges to increase the
insurance rate.
(b) Notwithstanding Subsection (a) of this article, on and
after the effective date of S.B. No. 14, Acts of the 78th
Legislature, Regular Session, 2003, rates for homeowners and
residential fire and residential allied lines insurance coverage
under this subchapter are determined as provided by Subchapter Q of
this chapter, and rates for other lines of insurance subject to this
subchapter are determined as provided by Article 5.13-2 of this
code, except that on and after December 1, 2004, rates for all lines
of insurance subject to this subchapter are determined as provided
by Article 5.13-2 of this code.
Acts 1951, 52nd Leg., ch. 491.
Amended by Acts 1991, 72nd Leg., ch. 242, Sec. 2.28, eff. Sept. 1,
1991; Subsec. (b) amended by Acts 1991, 72nd Leg., 2nd C.S., ch.
12, Sec. 8.14, eff. Jan. 1, 1992; amended by Acts 1995, 74th Leg.,
ch. 984, Sec. 17, eff. Sept. 1, 1995; Subsec. (b) amended by Acts
1997, 75th Leg., ch. 1330, Sec. 7, eff. Sept. 1, 1997; Subsec. (b)
amended by Acts 2003, 78th Leg., ch. 206, Sec. 21.17, eff. June 11,
2003.
Art. 5.30. ANALYSIS OF RATE. (a) All schedules of rates
promulgated by said Board shall be open to the public, and every
local agent of any company engaging in the business of fire
insurance in this state shall have and exhibit to the public copies
of such schedules covering all risks upon which he is authorized to
write insurance.
(b) Notwithstanding Subsection (a) of this article, on and
after the effective date of S.B. No. 14, Acts of the 78th
Legislature, Regular Session, 2003, rates for homeowners and
residential fire and residential allied lines insurance coverage
under this subchapter are determined as provided by Subchapter Q of
this chapter, and rates for other lines of insurance subject to this
subchapter are determined as provided by Article 5.13-2 of this
code, except that on and after December 1, 2004, rates for all lines
of insurance subject to this subchapter are determined as provided
by Article 5.13-2 of this code.
Acts 1951, 52nd Leg., ch. 491.
Amended by Acts 1991, 72nd Leg., ch. 242, Sec. 2.29, eff. Sept. 1,
1991; Subsec. (b) amended by Acts 1991, 72nd Leg., 2nd C.S., ch.
12, Sec. 8.15, eff. Jan. 1, 1992; amended by Acts 1995, 74th Leg.,
ch. 984, Sec. 18, eff. Sept. 1, 1995; Subsec. (b) amended by Acts
1997, 75th Leg., ch. 1330, Sec. 8, eff. Sept. 1, 1997; Subsec. (b)
amended by Acts 2003, 78th Leg., ch. 206, Sec. 21.18, eff. June 11,
2003.
Amended by:
Acts 2005, 79th Leg., Ch. 727, Sec. 8, eff. April 1, 2007.
Art. 5.31. CHANGE OR LIMIT OF RATE. (a) Said Board shall have
full power and authority to alter, amend, modify or change any rate
fixed and determined by it on thirty (30) days' notice, or to
prescribe that any such rate or rates shall be in effect for a
limited time, and said Board shall also have full power and
authority to prescribe reasonable rules whereby in cases where no
rate of premium shall have been fixed and determined by the Board,
for certain risks or classes of risks, policies may be written
thereon at rates to be determined by the company. Such company or
companies shall immediately report to said Board such risk so
written, and the rates collected therefor, and such rates shall
always be subject to review by the Board.
(b) Notwithstanding Subsection (a) of this article, on and
after the effective date of S.B. 14, Acts of the 78th Legislature,
Regular Session, 2003, rates for homeowners and residential fire
and residential allied lines insurance coverage under this
subchapter are determined as provided by Subchapter Q of this
chapter, and rates for other lines of insurance subject to this
subchapter are determined as provided by Article 5.13-2 of this
code, except that on and after December 1, 2004, rates for all lines
of insurance subject to this subchapter are determined as provided
by Article 5.13-2 of this code.
Acts 1951, 52nd Leg., ch. 491.
Amended by Acts 1991, 72nd Leg., ch. 242, Sec. 2.30, eff. Sept. 1,
1991; Subsec. (b) amended by Acts 1991, 72nd Leg., 2nd C.S., ch.
12, Sec. 8.16, eff. Jan. 1, 1992; amended by Acts 1995, 74th Leg.,
ch. 984, Sec. 19, eff. Sept. 1, 1995; Subsec. (b) amended by Acts
1997, 75th Leg., ch. 1330, Sec. 9, eff. Sept. 1, 1997; Subsec. (b)
amended by Acts 2003, 78th Leg., ch. 206, Sec. 21.19, eff. June 11,
2003.
Art. 5.32. PETITION FOR CHANGE. (a) Any such fire insurance
company shall have the right at any time to petition the Board for
an order changing or modifying any rate or rates fixed and
determined by the Board, and the Board shall consider such petition
in the manner provided in this subchapter and enter such order
thereon as it may deem just and equitable.
(b) Notwithstanding Subsection (a) of this article, on and
after the effective date of S.B. No. 14, Acts of the 78th
Legislature, Regular Session, 2003, rates for homeowners and
residential fire and residential allied lines insurance coverage
under this subchapter are determined as provided by Subchapter Q of
this chapter, and rates for other lines of insurance subject to
this subchapter are determined as provided by Article 5.13-2 of
this code, except that on and after December 1, 2004, rates for all
lines of insurance subject to this subchapter are determined as
provided by Article 5.13-2 of this code.
Acts 1951, 52nd Leg., ch. 491.
Amended by Acts 1991, 72nd Leg., ch. 242, Sec. 2.31, eff. Sept. 1,
1991; Subsec. (b) amended by Acts 1991, 72nd Leg., 2nd C.S., ch.
12, Sec. 8.17, eff. Jan. 1, 1992; amended by Acts 1995, 74th Leg.,
ch. 984, Sec. 20, eff. Sept. 1, 1995; Subsec. (b) amended by Acts
1997, 75th Leg., ch. 1330, Sec. 10, eff. Sept. 1, 1997; Subsec. (b)
amended by Acts 2003, 78th Leg., ch. 206, Sec. 21.20, eff. June 11,
2003.
Art. 5.34. REVISING RATES. (a) The Board shall have
authority after having given reasonable notice, not exceeding
thirty (30) days, of its intention to do so, to alter, amend or
revise any rates of premium fixed and determined by it in any
schedules of such rates promulgated by it, and to give reasonable
notice of such alteration, amendment or revision to the public, or
to any company or companies affected thereby. Such altered,
amended or revised rates shall be the rates thereafter to be charged
and collected by all fire insurance companies affected by this
subchapter. No policy in force prior to the taking effect of such
changes or amendments shall be affected thereby, unless there shall
be a change in the hazard of the risk, necessitating a change in the
rate applicable to such risk, in which event such policy shall be
subject to the new rates.
(b) Notwithstanding Subsection (a) of this article, on and
after the effective date of S.B. No. 14, Acts of the 78th
Legislature, Regular Session, 2003, rates for homeowners and
residential fire and residential allied lines insurance coverage
under this subchapter are determined as provided by Subchapter Q of
this chapter, and rates for other lines of insurance subject to this
subchapter are determined as provided by Article 5.13-2 of this
code, except that on and after December 1, 2004, rates for all lines
of insurance subject to this subchapter are determined as provided
by Article 5.13-2 of this code.
Acts 1951, 52nd Leg., ch. 491.
Amended by Acts 1991, 72nd Leg., ch. 242, Sec. 2.32, eff. Sept. 1,
1991; Subsec. (b) amended by Acts 1991, 72nd Leg., 2nd C.S., ch.
12, Sec. 8.18, eff. Jan. 1, 1992; amended by Acts 1995, 74th Leg.,
ch. 984, Sec. 21, eff. Sept. 1, 1995; Subsec. (b) amended by Acts
1997, 75th Leg., ch. 1330, Sec. 12, eff. Sept. 1, 1997; Subsec. (b)
amended by Acts 2003, 78th Leg., ch. 206, Sec. 21.21, eff. June 11,
2003.
Art. 5.35. POLICY FORMS. (a) The commissioner shall adopt
policy forms and endorsements for each kind of insurance subject to
this subchapter other than a line regulated under Article 5.13-2 of
this code that may be used by an insurer without filing for approval
to use such forms.
(b) The commissioner may also adopt policy forms and
endorsements of national insurers or policy forms and endorsements
adopted by a national organization of insurance companies or
similar organization on policy forms and endorsements. Policy
forms and endorsements may be adopted under this subsection for
each kind of insurance subject to this subchapter other than a line
regulated under Article 5.13-2 of this code on the request of an
insurer. For purposes of this subsection, "national insurer" means
an insurer subject to this article that, either directly or
together with its affiliates as part of an insurance holding
company system as those terms are defined by Article 21.49-1 of this
code, is licensed to do business and write the kinds of insurance
that are subject to this subchapter in 26 or more states and
maintains minimum annual direct written premiums for residential
property insurance of $750 million in the aggregate for all states.
(c) The commissioner may approve the use of policy forms and
endorsements adopted by a national organization of insurance
companies or a similar organization, if such forms or endorsements
are filed with and are approved by the commissioner in accordance
with this article.
(d) An insurer may use an endorsement to the policy forms
adopted or approved by the commissioner under this article if the
endorsement is approved by the commissioner pursuant to this
article.
(e) Unless adopted or approved by the commissioner pursuant
to Subsection (a), (b), or (c) of this article or, in the case of an
endorsement, under Subsection (d) of this article, an insurance
policy or endorsement for use in writing the types of insurance
subject to this article may not be delivered or issued for delivery
in this state.
(f) Each filing pursuant to Subsection (c) or (d) of this
article shall be made not later than the 60th day before the date of
any use or delivery for use. At the expiration of the 60-day
period, a filed form or endorsement is approved unless before the
expiration of the 60 days the commissioner either disapproves the
form or endorsement by order or approves the form or endorsement.
Approval of a form or endorsement by the commissioner constitutes a
waiver of any unexpired portion of the 60-day period. The
commissioner may extend, by not more than an additional 30 days, the
period during which the commissioner may approve or disapprove a
form or endorsement by giving notice to the filer of the extension
before the expiration of the initial period. At the expiration of
any extension and in the absence of any earlier approval or
disapproval, the form or endorsement shall be considered approved.
For good cause shown, the commissioner may withdraw the
commissioner's approval at any time after notice and hearing.
(g)(1) The commissioner may disapprove a policy form or
endorsement filed under this article, or withdraw any previous
approval thereof, if the policy form or endorsement:
(A) violates or does not comply with this code, or any valid
rule relating thereto duly adopted by the commissioner, or is
otherwise contrary to law; or
(B) contains provisions or has any titles or headings which
are unjust, encourage misrepresentation, are deceptive, or violate
public policy.
(2) The commissioner's order disapproving any form or
endorsement or any notice of the commissioner's intention to
withdraw a previous approval must state the grounds for the
disapproval in enough detail to reasonably inform the filer of the
grounds. An order of withdrawal of a previously filed form or
endorsement takes effect on the expiration of the prescribed period
but not sooner than the 60th day after the effective date of the
withdrawal order, as prescribed by the commissioner.
(h) The commissioner may not adopt or approve policy forms
for personal fire or homeowner's insurance or any endorsement to
the policy if the policy or endorsement is not in plain language.
For the purposes of this subsection, a policy or endorsement is
written in plain language if it achieves the minimum score
established by the commissioner on the Flesch reading ease test or
an equivalent test selected by the commissioner or, at the option of
the commissioner, if it conforms to the language requirements in a
National Association of Insurance Commissioners model act relating
to plain language. This subsection does not apply to policy
language that is mandated by state or federal law.
(i) An insurer may not use in this state any form or
endorsement after disapproval of the form or endorsement or
withdrawal of approval by the commissioner.
(j) Notwithstanding Article 1.35A of this code, the office of
public insurance counsel may submit written comments to the
commissioner and otherwise participate regarding individual
company filings made pursuant to this article.
Text of subsec. (k) as added by Acts 2003, 78th Leg., ch. 797, Sec. 2
(k)(1) For any policy form and endorsements approved by the
commissioner under Subsections (a), (b), or (c) of this article,
the commissioner shall promulgate a comparison form for that
policy.
(2) The comparison form shall be developed with the
assistance of the office of public insurance counsel and with input
from the public and shall be designed to explain the features and
limitations of the policy compared to other approved policies. An
insurer using a policy form may be required to develop the
comparison form and submit it for approval by the commissioner. The
comparison form shall be made available by an insurer to anyone
inquiring about the policy and shall be made available by the
department via the Internet and other means as prescribed by the
commissioner.
(3) The comparison form shall be designed to be easily read
and understood in order to facilitate comparison and understanding
of the policy and must meet the requirements of Subsection (h) of
this article. At a minimum, the comparison form shall show the
features of the policy compared to the HO-B, HO-A, and at least one
other policy form widely in use in this state.
(4) The commissioner may adopt rules to carry out the
purposes of this subsection.
(k) Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18, eff.
April 1, 2007.
Acts 1951, 52nd Leg., ch. 491.
Amended by Acts 1991, 72nd Leg., ch. 242, Sec. 2.33, eff. Sept. 1,
1991; Acts 1997, 75th Leg., ch. 1330, Sec. 13, eff. Sept. 1, 1997;
Subsec. (k) added by Acts 2003, 78th Leg., ch. 206, Sec. 21.22, eff.
June 11, 2003; Subsec. (k) added by Acts 2003, 78th Leg., ch. 797,
Sec. 2, eff. June 20, 2003.
Amended by:
Acts 2005, 79th Leg., Ch. 727, Sec. 18, eff. April 1, 2007.
Art. 5.39. COMPLAINT OF RATES OR ORDERS. (a) Any citizen or
number of citizens of this State or any policyholder or
policyholders, or any insurance company affected by this
subchapter, or any board of trade, chamber of commerce, or other
civic organization, or the civil authorities of any town, city, or
village, shall have the right to file a petition with the Board,
setting forth any cause of complaint that they may have as to any
order made by this Board, or any rate fixed and determined by the
Board, and they shall have the right to offer evidence in support of
the allegations of such petition by witnesses, or by depositions,
or by affidavits; upon the filing of such petition, the party
complained of, if other than the Board, shall be notified by the
Board of the filing of such petition and a copy thereof furnished
the party or parties, company or companies, of whom complaint is
made, and the said petition shall be set down for a hearing at a time
not exceeding thirty (30) days after the filing of such petition and
the Board shall hear and determine said petition; but it shall not
be necessary for the petitioners or any one of them to be present to
present the cause to the Board, but they shall consider the
testimony of all witnesses, whether such witnesses testify in
person or by depositions, or by affidavits, and if it be found that
the complaint made in such petition is a just one, then the matter
complained of shall be corrected or required to be corrected by said
Board.
(b) Notwithstanding Subsection (a) of this article, on and
after the effective date of S.B. No. 14, Acts of the 78th
Legislature, Regular Session, 2003, rates for homeowners and
residential fire and residential allied lines insurance coverage
under this subchapter are determined, and hearings related to those
rates are conducted, as provided by Subchapter Q of this chapter,
and rates for other lines of insurance subject to this subchapter
are determined as provided by Article 5.13-2 of this code, except
that on and after December 1, 2004, rates for all lines of insurance
subject to this subchapter are determined as provided by Article
5.13-2 of this code.
Acts 1951, 52nd Leg., p. 868, ch. 491.
Amended by Acts 1991, 72nd Leg., ch. 242, Sec. 2.34, eff. Sept. 1,
1991; Subsec. (b) amended by Acts 1991, 72nd Leg., 2nd C.S., ch.
12, Sec. 8.19, eff. Jan. 1, 1992; amended by Acts 1995, 74th Leg.,
ch. 984, Sec. 22, eff. Sept. 1, 1995; Subsec. (b) amended by Acts
1997, 75th Leg., ch. 1330, Sec. 14, eff. Sept. 1, 1997; Subsec. (b)
amended by Acts 2003, 78th Leg., ch. 206, Sec. 21.25, eff. June 11,
2003.
Art. 5.40. HEARING OF PROTESTS. (a) The Board shall give the
public and all insurance companies to be affected by its orders or
decisions, reasonable notice thereof, not exceeding thirty (30)
days, and an opportunity to appear and be heard with respect to the
same; which notice to the public shall be published in one or more
daily papers of the State, and such notice to any insurance company
to be affected thereby shall be mailed addressed to the State or
general agent of such company, if such address be known to the
Board, or if not known, then such letter shall be addressed to some
local agent of such company, or if the address of a local agent be
unknown to the Board, then by publication in one or more of the
daily papers of the State, and the Board shall hear all protests or
complaints from any insurance company or any citizen or any city, or
town, or village or any commercial or civic organization as to the
inadequacy or unreasonableness of any rates fixed by it or approved
by it, or as to the inadequacy or unreasonableness of any general
basis schedules promulgated by it or the injustice of any order or
decision by it, and if any insurance company, or other person, or
commercial or civic organization, or any city, town or village,
which shall be interested in any such order or decision shall be
dissatisfied with any regulation, schedule or rate adopted by such
Board, such company or person, commercial or civic organization,
city, town or village shall have the right, within thirty (30) days
after the making of such regulation or order, or rate, or schedule
or within thirty (30) days after hearing above provided for, to
bring an action against said Board in the District Court of Travis
County to have such regulation or order or schedule or rate vacated
or modified; and shall set forth in a petition therefor the
principal grounds of objection to any or all of such regulations,
schedules, rates or orders. In any such suit the issue shall be
formed and the controversy tried and determined as in other civil
cases. The court may set aside and vacate or annul any or all or any
part of any regulation, schedule, order or rate promulgated or
adopted by said Board, which shall be found by the court to be
unreasonable, unjust, excessive or inadequate, without disturbing
others. No injunction, interlocutory order or decree suspending or
restraining, directly or indirectly, the enforcement of any
schedule, rate, order or regulation of said Board shall be granted.
In such suit, the court, by interlocutory order, may authorize the
writing and acceptance of fire insurance policies at any rate which
in the judgment of court is fair and reasonable, during the pending
of such suit, upon condition that the party to such suit in whose
favor the said interlocutory order of said court may be, shall
execute and file with the Board a good and sufficient bond to be
first approved by said court, conditioned that the party giving
said bond will abide the final judgment of said court and will pay
to the Board whatever difference in the rate of insurance, it may be
finally determined to exist between the rates as fixed by the Board
complained of in such suit, and the rate finally determined to be
fair and reasonable by the court in said suit, and the said Board,
when it receives such difference in money, shall transmit the same
to the parties entitled thereto.
(b) Whenever any action shall be brought by any company under
any provision of this article within said period of thirty (30)
days, no penalties nor forfeitures shall attach or accrue on
account of the failure of the plaintiff to comply with the orders,
schedules, rates or regulations sought to be vacated in such action
until the final determination of the same.
(c) Either party to any such action, if dissatisfied with the
judgment or decree of said court, may appeal therefrom as in other
civil cases. No action shall be brought in any court of the United
States to set aside any orders, rates, schedules or regulations
made by said Board under the provisions of this law until all of the
remedies provided herein shall have been exhausted by the party
complaining.
(d) Notwithstanding Subsections (a)-(c) of this article, on
and after the effective date of S.B. No. 14, Acts of the 78th
Legislature, Regular Session, 2003, rates for homeowners and
residential fire and residential allied lines insurance coverage
under this subchapter are determined, and hearings related to those
rates are conducted, as provided by Subchapter Q of this chapter,
and rates for other lines of insurance subject to this subchapter
are determined as provided by Article 5.13-2 of this code, except
that on and after December 1, 2004, rates for all lines of insurance
subject to this subchapter are determined as provided by Article
5.13-2 of this code.
Acts 1951, 52nd Leg., p. 868, ch. 491.
Amended by Acts 1991, 72nd Leg., ch. 242, Sec. 2.35, eff. Sept. 1,
1991; Subsec. (d) amended by Acts 1991, 72nd Leg., 2nd C.S., ch.
12, Sec. 8.20, eff. Jan. 1, 1992; amended by Acts 1995, 74th Leg.,
ch. 984, Sec. 23, eff. Sept. 1, 1995; Subsec. (d) amended by Acts
1997, 75th Leg., ch. 1330, Sec. 15, eff. Sept. 1, 1997; Subsec. (d)
amended by Acts 2003, 78th Leg., ch. 206, Sec. 21.26, eff. June 11,
2003.
Art. 5.41. REBATING OR DISCRIMINATION. (a) A company
engaging or participating in the insuring or reinsuring of any
property in this state against loss or damage by fire may not
knowingly write insurance at any lesser rate than the rates herein
provided for, and it shall be unlawful for any company so to do,
unless it shall thereafter file an analysis of same with the Board.
(b) Notwithstanding Subsection (a) of this article, on and
after the effective date of S.B. No. 14, Acts of the 78th
Legislature, Regular Session, 2003, rates for homeowners and
residential fire and residential allied lines insurance coverage
under this subchapter are determined as provided by Subchapter Q of
this chapter, and rates for other lines of insurance subject to this
subchapter are determined as provided by Article 5.13-2 of this
code, except that on and after December 1, 2004, rates for all lines
of insurance subject to this subchapter are determined as provided
by Article 5.13-2 of this code.
Acts 1951, 52nd Leg., p. 868, ch. 491.
Amended by Acts 1991, 72nd Leg., ch. 242, Sec. 2.36, eff. Sept. 1,
1991; Subsec. (b) amended by Acts 1991, 72nd Leg., 2nd C.S., ch.
12, Sec. 8.21, eff. Jan. 1, 1992; amended by Acts 1995, 74th Leg.,
ch. 984, Sec. 24, eff. Sept. 1, 1995; Subsec. (b) amended by Acts
1997, 75th Leg., ch. 1330, Sec. 16, eff. Sept. 1, 1997; Subsec. (b)
amended by Acts 2003, 78th Leg., ch. 206, Sec. 21.27, eff. June 11,
2003.
Amended by:
Acts 2005, 79th Leg., Ch. 727, Sec. 9, eff. April 1, 2007.
Text of article effective until April 1, 2009
Art. 5.43-1. FIRE EXTINGUISHERS.
Purpose
Sec. 1. The purpose of this article is to regulate the
leasing, renting, selling, installing, and servicing of portable
fire extinguishers and the planning, certifying, installing, or
servicing of fixed fire extinguisher systems, and to prohibit
portable fire extinguishers, fixed fire extinguisher systems, and
extinguisher equipment not labeled or listed by a testing
laboratory approved by the State Board of Insurance, in the
interest of safeguarding lives and property.
Administration
Sec. 2. The State Board of Insurance shall administer this
article and it may issue rules and regulations which it considers
necessary to its administration through the State Fire Marshal.
The board, in adopting necessary rules and regulations, may use
recognized standards such as, but not limited to, those of the
National Fire Protection Association, those recognized by federal
law or regulation, and those published by any nationally recognized
standards-making organization, or the manufacturer's installation
manuals.
Sec. 2A. Repealed by Acts 1997, 75th Leg., ch. 1172, Sec.
4.14(1), eff. Sept. 1, 1997.
Definitions
Sec. 3. As used in this article the following terms have the
meanings specified in this section.
(a) "Firm" means any person, partnership, corporation, or
association.
(b) "Hydrostatic testing" means pressure testing by
hydrostatic methods.
(c) "Portable fire extinguisher" means any device that
contains liquid, powder, or gases for suppressing or extinguishing
fires.
(d) "Service and servicing" means servicing portable fire
extinguishers or fixed fire extinguisher systems by inspecting,
charging, filling, maintaining, recharging, refilling, repairing,
or testing.
(e) "Fixed fire extinguisher systems" means those assemblies
of piping, conduits, or containers that convey liquid, powder, or
gases to dispersal openings or devices protecting one or more
hazards by suppressing or extinguishing fires.
Text of (f) as added by Acts 1989, 71st Leg., ch. 762, Sec. 2
(f) "Registered firm" means a person, partnership,
corporation, or association that holds a current certificate of
registration.
Text of (f) as added by Acts 1989, 71st Leg., ch. 823, Sec. 1
(f) "Insurance agent" means:
(1) a person, firm, or corporation licensed under Article
21.14 or 1.14-2 of this code;
(2) a salaried, state, or special agent; or
(3) a person authorized to represent an insurance fund or
pool created by a city, county, or other political subdivision of
the state under The Interlocal Cooperation Act (Article 4413(32c),
Vernon's Texas Civil Statutes).
Registration, Licensing, and Fees
Sec. 4. (a) Each firm engaged in the business of installing or
servicing portable fire extinguishers or planning, certifying,
installing, or servicing fixed fire extinguisher systems must have
a certificate of registration issued by the State Board of
Insurance. The initial fee for the certificate of registration
must be in an amount not to exceed $450 and the renewal fee for each
year thereafter must be in an amount not to exceed $300. Each
separate office location of a firm engaged in the business of
installing or servicing portable fire extinguishers or planning,
certifying, installing, or servicing fixed extinguisher systems,
other than the location identified on the certificate of
registration, must have a branch office registration certificate
issued by the board. The initial fee for a branch office
registration certificate must be in an amount not to exceed $100,
and the renewal fee for each year thereafter must be in an amount
not to exceed $100. The board shall identify each branch office
location as a part of a registered firm before a branch office
registration certificate may be issued.
(b) A fee in an amount not to exceed $20 shall be charged for a
duplicate certificate of registration, license, or apprentice
permit issued under this article or for any request requiring
changes to a certificate of registration, license, or permit. A new
certificate of registration with a new number shall be issued to a
registered firm on a change of ownership for a fee in an amount not
to exceed $450. A fee in an amount not to exceed $100 shall be
charged for a change of ownership of a branch office.
(c) Each employee, other than an apprentice, of registered
firms engaged in the business of installing or servicing portable
fire extinguishers or planning, installing, or servicing fixed fire
extinguisher systems, must have a license issued by the State Board
of Insurance before engaging in the following:
(1) installing or servicing portable fire extinguishers;
(2) installing, servicing, or certifying preengineered fixed
fire extinguisher systems; or
(3) planning, supervising, or certifying the installation of
fixed fire extinguisher systems other than preengineered systems or
the servicing of such systems.
(c-1) The initial fee for the license required by Subsection
(c) of this section must be in an