A bill that becomes effective in Texas repeals a section of the state’s insurance code that allows certain auto insurers to file rates with the Texas Department of Insurance (TDI) without providing actuarial support or justification for those rates.
Senate Bill 965 was backed by the Texas Office of Public Insurance Council (OPIC), which said the exemption in Section 2251.1025 of the Insurance Code for some auto insurers limits the ability of OPIC and the Texas Department of Insurance to monitor those carriers’ rates for compliance with state law. When the exemption is lifted regulators will be able to monitor rate filings to make sure insurers’ rates are not inadequate, excessive, unreasonable, or unfairly discriminatory, OPIC said.
This exemption limits OPIC’s and TDI’s ability to monitor those insurers’ rates for compliance with state law, or in other words, (Insurance Code Section 2251.052). With the exemption in place, “TDI can still require these insurers to provide certain kinds of actuarial support on an ad hoc basis, [however] there is no uniform applicability in what is required and for which filings because of the exemption. Moreover, the current file and use system makes this delayed receipt of information problematic for thorough and timely rate review,” OPIC said in a statement on its website.
Section 2251.1025 is repealed by SB 965 as of Sept. 1. After that date all auto insurers will have to file actuarial support for their rates with TDI.
Source: OPIC
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