HB 226 — Rates for residential property insurance

90R6754 SCL-F By: Martinez Fischer H.B. No. 226 relating to rates for residential property insurance and personal automobile insurance.

SECTION 1. Section 2251.101(a), Insurance Code, is amended to read as follows: (a) Except as provided by Subchapter D, for risks written in this state, each insurer shall file with the commissioner all rates, applicable rating manuals, supplementary rating information, and additional information as required by the commissioner. Except as provided by Section 2251.132, an [ An ] insurer may use a rate filed under this subchapter on and after the date the rate is filed.

SECTION 2. Section 2251.103, Insurance Code, is amended by adding Subsection (g) to read as follows: (g) This section does not apply to a rate for an insurance policy to which Subchapter C-1 applies.

SECTION 3. Section 2251.1031, Insurance Code, is amended by adding Subsection (b-1) to read as follows: (b-1) If the department requests additional information from the insurer during the 90-day period described by Section 2251.133(a) or under a second 90-day period described by Section 2251.133(c), as applicable, the time between the date the department submits the request to the insurer and the date the department receives the information requested is not included in the computation of the first 90-day period or the second 90-day period, as applicable.

SECTION 4. Chapter 2251, Insurance Code, is amended by adding Subchapter C-1 to read as follows: SUBCHAPTER C-1. PRIOR APPROVAL FOR CERTAIN RESIDENTIAL PROPERTY AND PERSONAL AUTOMOBILE INSURANCE RATES Sec. 2251.131. APPLICABILITY OF SUBCHAPTER. This subchapter applies only to residential property insurance and personal automobile insurance. Sec. 2251.132. PRIOR APPROVAL OF CERTAIN FILED RATES REQUIRED. (a) An insurer may not use a rate filed under Section 2251.101 without prior commissioner approval if the rate increased or decreased by more than five percent from the insurer's previously filed rate that is in effect on the date of the filing. (b) From the date of the filing of the rate with the department to the effective date of the new rate, the insurer's previously filed rate that is in effect on the date of the filing remains in effect. Sec. 2251.133. COMMISSIONER APPROVAL OF CERTAIN RATE INCREASES OR DECREASES. (a) Not later than the 90th day after the date a rate described by Section 2251.132 is filed with the department under Section 2251.101, the commissioner shall approve or disapprove the rate after determining whether the rate complies with this chapter. (b) The commissioner may approve a rate under this section only if: (1) the commissioner finds the resulting premiums will be just, adequate, reasonable, not excessive, and not unfairly discriminatory, taking into consideration: (A) the financial condition of the insurer; (B) the method of operation and expenses of the insurer; (C) the actual paid and incurred loss experience of the insurer; (D) earnings of the insurer from investments together with a projection of prospective earnings from investments during the period for which the rates will be in effect; and (E) the composite effect of the factors described by Paragraphs (B), (C), and (D); and (2) the application meets the conditions, limitations, and restrictions considered necessary by the commissioner. (c) For good cause, the commissioner may, on the expiration of the 90-day period described by Subsection (a), extend the period for approval or disapproval of a rate for one additional 90-day period. The commissioner and insurer may not by agreement extend the 90-day period described by Subsection (a) or this subsection. (d) A rate that is not disapproved in the period required by this section is considered approved. (e) If the commissioner disapproves a rate under this section, the commissioner shall issue an order specifying in what respects the rate fails to meet the requirements of this chapter. (f) An insurer that files a rate that is disapproved under this section is entitled to a hearing on written request made to the commissioner not later than the 30th day after the date the order disapproving the rate takes effect. (g) The department shall track, compile, and routinely analyze the factors that contribute to the disapproval of rates under this section.

SECTION 5. The changes in law made by this Act apply only to a rate that is filed on or after January 1, 2028. A rate that is filed before January 1, 2028, is governed by the law as it existed immediately before the effective date of this Act, and that law is continued in effect for that purpose.

SECTION 6. This Act takes effect September 1, 2027.