US Laws, Codes, Statutes & Cases

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;  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.


	Art. 5.01C. SHORT-TERM LIABILITY INSURANCE FOR NON-TEXAS 
RESIDENT MOTORISTS VISITING THIS STATE.  

Article repealed effective April 1, 2007
	                                                                               

Definitions
	Sec. 1. In this article:                                                       
	(1)  "Insurer" means an insurance company, interinsurance 
exchange, mutual, capital stock company, county mutual, reciprocal 
association, Lloyd's plan insurer, or other entity authorized to 
write motor vehicle insurance in this state.
	(2)  "Motor vehicle" means any private passenger vehicle or 
utility type vehicle that has a gross weight of 25,000 pounds or 
less.
	(3)  "Short-term liability insurance policy" means an 
insurance policy that: 
	(A)  provides coverage for at least 24 hours but not for more 
than one week; 
	(B)  meets the requirements of Chapter 601, Transportation 
Code;             
	(C)  covers liability for bodily injury, death, and property 
damage arising from the use or operation of a motor vehicle;  and
	(D)  is not insurance assigned to an authorized insurance 
company by the Texas Automobile Insurance Plan Association under 
Section 4(a), Article 21.81, of this code.

Rules
	Sec. 2. (a) The commissioner by rule may establish a program 
to provide for the sale of short-term liability insurance policies 
to non-Texas resident motorists visiting this state.
	(b)  The commissioner may negotiate an agreement with any 
insurer under which the insurer will sell policies described by 
Subsection (a) of this section.

License required
	Sec. 3. A person representing an insurer in selling 
short-term liability insurance policies under this article must be 
licensed under Subchapter A, Chapter 21, of this code.

Forms
	Sec. 4. An insurer selling short-term liability insurance 
policies under this article must use the policy forms adopted by the 
commissioner under Article 5.06 of this code or filed and in effect 
as provided by Article 5.145 of this code unless the insurer is 
exempt from using those forms.

Added by Acts 2001, 77th Leg., ch. 123, Sec. 1, eff. Sept. 1, 2001;  
Sec. 4 amended by Acts 2003, 78th Leg., ch. 206, Sec. 21.02, eff. 
June 11, 2003.


	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.    


	Art. 5.01-3. FORMER MILITARY VEHICLES.                                         

Article repealed effective April 1, 2007
	(a) A rating plan that includes a classification applicable 
to antique, private passenger vehicles maintained primarily for use 
in exhibitions, club activities, parades, and other functions of 
public interest and occasionally used for other purposes must 
include in the classification former military vehicles maintained 
for those uses.
	(b)  In this article, "former military vehicle" has the 
meaning assigned by Section 502.275, Transportation Code.

Added by Acts 1997, 75th Leg., ch. 1222, Sec. 4, eff. Sept. 1, 1997.          


	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 and 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.


	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.           


	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.

Text of subsec (5) effective until April 1, 2007
	(5)  An insurer, if in compliance with applicable 
requirements and conditions, may issue and deliver a certificate of 
insurance as a substitute for the entire policy of insurance.  The 
certificate of insurance shall make reference to and identify the 
policy form adopted or approved by the Board for which the 
substitution of certificate is made.  The certificate shall be in 
such form as is prescribed by the Board.  The certificate will 
represent the policy of insurance, and when issued, shall be 
evidence that the certificate holder is insured under the 
identified policy form.  The certificate is subject to the same 
limitations, conditions, coverages, selection of options, and 
other provisions of the policy as are provided in the policy, and 
that insurance policy information is to be shown on and adequately 
referenced by the certificate of insurance issued by the insurer to 
the insured.  Reference shall be made in the certificate, or in 
subsequent attachments, to all endorsements to the policy of 
insurance.  The certificate shall be executed in the same manner as 
though a policy were issued.  When the certificate is substituted 
for the policy of insurance by an insurer, the insurer shall 
simultaneously furnish to the insured receiving the certificate an 
"outline of coverages", the form and content of which has been 
approved by the Board.  At the request of an insured at any time, an 
insurer which has substituted a certificate for a policy of 
insurance shall provide a copy of the policy.

Text of subsec (6) effective until April 1, 2007
	(6)  The Board may promulgate such rules as are necessary to 
implement the certificate in lieu of policy provision herein, 
including a rule limiting the application thereof to private 
passenger automobile policies.
	(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.

Text of subsec (9) effective until April 1, 2007
	(9)  An insurance policy or other document evidencing proof 
of purchase of a personal automobile insurance policy written for a 
term of less than 30 days if the policy premium is computed using a 
time-based rating plan, or written for less than 1,000 miles if the 
policy premium is computed using a mile-based rating plan, may not 
be used to obtain an original or renewal driver's license, an 
automobile registration or license plates, or a motor vehicle 
inspection certificate and must contain a statement as follows:
	"TEXAS LAW PROHIBITS USE OF THIS DOCUMENT TO OBTAIN A MOTOR 
VEHICLE INSPECTION CERTIFICATE, AN ORIGINAL OR RENEWAL DRIVER'S 
LICENSE, OR AN AUTOMOBILE REGISTRATION OR LICENSE PLATES."

Text of subsec (10) effective until April 1, 2007
	(10)  Before accepting any premium or fee for a personal 
automobile insurance policy or binder for a term of less than 30 
days if the policy premium is computed using a time-based rating 
plan, or written for less than 1,000 miles if the policy premium is 
computed using a mile-based rating plan, an agent or insurer must 
make the following written disclosure to the applicant or insured:
	"TEXAS LAW PROHIBITS USE OF THIS POLICY OR BINDER TO OBTAIN A 
MOTOR VEHICLE INSPECTION CERTIFICATE, AN ORIGINAL OR RENEWAL 
DRIVER'S LICENSE, OR AN AUTOMOBILE REGISTRATION OR LICENSE PLATES."

Text of subsec (11) effective until April 1, 2007
	(11)  In this article, the terms "time-based rating plan" and 
"mile-based rating plan" have the meanings assigned by Article 
5.01-4 of this code.
	(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.

Text of subsec (12)(b) effective until April 1, 2007
	(b)  An insurer may continue to use the policy forms and 
endorsements promulgated, approved, or adopted by the commissioner 
under this article before the effective date of S.B. No. 14, Acts of 
the 78th Legislature, Regular Session, 2003, on notification in 
writing to the commissioner that the insurer will continue to use 
the policy forms and endorsements promulgated, approved, or adopted 
by the commissioner under this article.

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;  Subsecs. (5), (6), (9), (10), and 
(12)(b) are repealed by Acts 2005, 79th Leg., ch. 727, Sec. 18(c), 
eff. April 1, 2007.


	Art. 5.06-1. UNINSURED OR UNDERINSURED MOTORIST COVERAGE.                      

Article repealed effective April 1, 2007
	(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.
	(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;  Sec. (2) amended by Acts 
2003, 78th Leg., ch. 206, Sec. 21.08, eff. June 11, 2003;  Sec. (1) 
amended by Acts 2005, 79th Leg., ch. 1159, Sec. 3, eff. June 18, 
2005.


	Art. 5.06-2. GARAGE INSURANCE.                                                 

Article repealed effective April 1, 2007
	(1) Definitions.  As used in this Act:                                         
	(a)  "Garage Insurance" means motor vehicle or automobile 
insurance as defined in Article 5.01 hereof issued to a named 
insured engaged in the business of selling, servicing or repairing 
motor vehicles as now or hereafter defined by rules, regulations or 
orders of the State Board of Insurance;
	(b)  "Garage Customer" means any person or organization 
other than the named insured, or an employee, director, officer, 
stockholder, partner, or agent of the named insured;  or a resident 
of the same household as the named insured, such employee, 
director, officer, stockholder, partner, or agent;
	(c)  "Financial Responsibility Limits" means the minimum 
limits specified by the Texas Motor Vehicle Safety-Responsibility 
Act.
	(2)  A policy of garage insurance may contain a provision to 
the effect that garage customers are not insureds under the garage 
insurance policy and that the garage insurance shall not apply to 
garage customers, except to the extent that other valid and 
collectible insurance, if any, available to the garage customer is 
not equal to the financial responsibility limits.  Notwithstanding 
any provision to the contrary in such other policy or policies of 
insurance as to whether such insurance is primary, excess, or 
contingent insurance, or otherwise, such other valid and 
collectible insurance shall be primary insurance as to the garage 
customer.  Any garage insurance policy containing such a provision 
shall not cover garage customers except to such extent, 
notwithstanding the terms and provisions of such other policy or 
policies of insurance.
	(3)  This Act shall apply only to insurance policies issued 
or renewed or made subject to this Act by endorsement after the 
effective date hereof.

Added by Acts 1969, 61st Leg., 2nd C.S., p. 193, ch. 35, Sec. 1, eff. 
Sept. 19, 1969.


	Art. 5.06-3. PERSONAL INJURY PROTECTION COVERAGE.                              

Article repealed effective April 1, 2007
	(a) No automobile liability insurance policy, 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 personal 
injury protection coverage is provided therein or supplemental 
thereto.  The coverage required by this article shall not be 
applicable if any insured named in the policy shall reject the 
coverage in writing;  provided, 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 if 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.
	(b)  "Personal injury protection" consists of provisions of 
a motor vehicle liability policy which provide for payment to the 
named insured in the motor vehicle liability policy and members of 
the insured's household, any authorized operator or passenger of 
the named insured's motor vehicle including a guest occupant, up to 
an amount of $2,500 for each such person for payment of all 
reasonable expenses arising from the accident and incurred within 
three years from the date thereof for necessary medical, surgical, 
X-ray and dental services, including prosthetic devices, and 
necessary ambulance, hospital, professional nursing and funeral 
services, and in the case of an income producer, payment of benefits 
for loss of income as the result of the accident;  and where the 
person injured in the accident was not an income or wage producer at 
the time of the accident, payments of benefits must be made in 
reimbursement of necessary and reasonable expenses incurred for 
essential services ordinarily performed by the injured person for 
care and maintenance of the family or family household.  The insurer 
providing loss of income benefits may require, as a condition of 
receiving such benefits, that the insured person furnish the 
insurer reasonable medical proof of his injury causing loss of 
income.  The personal injury protection in this paragraph specified 
shall not exceed $2,500 for all benefits, in the aggregate, for each 
person.
	(c)  The benefits required by this Act shall be payable 
without regard to the fault or non-fault of the named insured or the 
recipient in causing or contributing to the accident, and without 
regard to any collateral source of medical, hospital, or wage 
continuation benefits.  Except as provided by Subsection (i) of 
this article, an insurer paying benefits pursuant to this Act shall 
have no right of subrogation and no claim against any other person 
or insurer to recover any such benefits by reason of the alleged 
fault of such other person in causing or contributing to the 
accident.
	(d)  All payments of benefits prescribed under this Act shall 
be made periodically as the claims therefor arise and within thirty 
(30) days after satisfactory proof thereof is received by the 
insurer subject to the following limitations:
	(1)  The coverage described in this Act may prescribe a 
period of not less than six months after the date of accident within 
which the original proof of loss with respect to a claim for 
benefits must be presented to the insurer.
	(2)  The coverage described in this Act may provide that in 
any instance where a lapse occurs in the period of total disability 
or in the medical treatment of an injured person who has received 
benefits under such coverage and such person subsequently claims 
additional benefits based upon an alleged recurrence of the injury 
for which the original claim for benefits was made, the insurer may 
require reasonable medical proof of such alleged recurrence;  
provided, that in no event shall the aggregate benefits payable to 
any person exceed the maximum limits prescribed in the policy.
	(3)  In the event the insurer fails to pay such benefits when 
due, the person entitled to such benefits may bring an action in 
contract to recover the same;  and, in the event the insurer is 
required to pay such benefits, the person entitled to such benefits 
shall be entitled to recover reasonable attorneys fees plus 12% 
penalty, plus interest thereon at the legal rate from the date such 
sums became overdue.
	(e)  An insurer shall exclude benefits to any insured, or his 
personal representative, under a policy required by Section 1, when 
the insured's conduct contributed to the injury he sustained in any 
of the following ways:
	(1)  Causing injury to himself intentionally.                                  
	(2)  While in the commission of a felony, or while seeking to 
elude lawful apprehension or arrest by a law enforcement official.
	(f)  This article applies only to motor vehicle insurance 
policies subject to this subchapter and does not apply to other 
accident or health policies even though they promise indemnity 
against automobile-connected injuries.
	(g)  Nothing contained in this Act shall affect the offering 
of medical payments coverage, disability benefits, and accidental 
death benefits, as presently prescribed by the State Board of 
Insurance;  and nothing contained in this Act shall be construed to 
prevent an insurer from providing broader benefits than the minimum 
benefits enumerated in this Act subject to the rules and forms 
prescribed by the State Board of Insurance.
	(h)  When any liability claim is made by any guest or 
passenger described in paragraph (b) hereof against the owner or 
operator of the motor vehicle in which he was riding or the owner's 
or operator's liability insurance carrier, the owner or operator of 
such motor vehicle or his liability insurance carrier shall be 
entitled to an offset, credit or deduction against any award made to 
such guest or passenger in an amount of money equal to the amounts 
paid by the owner, operator or his automobile liability insurance 
carrier under "personal injury protection" as defined in this Act 
to such guests or passengers;  provided, however, that nothing 
herein shall be construed to authorize a direct action against a 
liability insurance company if such right does not presently exist 
at law.
	(i)  An insurer paying benefits pursuant to this Act, 
including a county mutual insurance company, shall have a right of 
subrogation and a claim against a person causing or contributing to 
the accident if, on the date of loss, financial responsibility as 
required by Chapter 601, Transportation Code, has not been 
established for a motor vehicle involved in the accident and 
operated by that person.

Added by Acts 1973, 63rd Leg., p. 90, ch. 52, Sec. 1, eff. Aug. 27, 
1973.  Amended by Acts 1981, 67th Leg., p. 100, ch. 51, Sec. 1, eff. 
Aug. 31, 1981.

Sec. (f) amended by Acts 1991, 72nd Leg., ch. 242, Sec. 2.09, eff. 
Sept. 1, 1991;  Sec. (c) amended by and (i) added by Acts 2005, 79th 
Leg., ch. 1074, Sec. 2, eff. Sept. 1, 2005;  Sec. (a) amended by Acts 
2005, 79th Leg., ch. 1159, Sec. 4, eff. June 18, 2005.


	Art. 5.06-4. LOSS CONTROL SERVICES.                                            

Article repealed effective April 1, 2007
	(a) Any insurer desiring to write commercial automobile 
liability insurance in this state must provide loss control 
information as a prerequisite for writing that insurance.
	(b)  The insurer shall provide loss control information to 
its policyholders reasonably commensurate with the risks and 
exposures and experience of the insured's business.  To provide 
this information or services, the insurer may employ qualified 
personnel, retain qualified independent contractors, contract with 
the policyholder to provide qualified accident prevention 
personnel and services, or use a combination of the methods 
provided by this section.
	(c)  If there is evidence that reasonable loss control 
information is not being provided by the insurer or is not being 
used by the insurer in a reasonable manner to reduce losses, the 
State Board of Insurance shall order a hearing to determine if the 
insurer is not in compliance with this article.  If it is determined 
that the insurer is not in compliance, the board may impose any of 
the sanctions authorized by Section 7, Article 1.10, of this code.
	(d)  The State Board of Insurance may promulgate reasonable 
rules and regulations for the enforcement of this article after 
holding a public hearing on the proposed rules and regulations.
	(e)  An insurer or its agents, servants, or employees are not 
liable for, and no cause of action arises with respect to, any 
accident based on the allegation that the accident was caused or 
could have been prevented by a program, information, inspection, or 
other activity or service undertaken by the insurer for the 
prevention of accidents in connection with operations of its 
insured.  However, this immunity does not affect the liability of an 
insurer for compensation or as otherwise provided in a policy of 
insurance.
	(f)  Loss control information provided by an insurer to an 
insured pursuant to this article is not subject to discovery or 
admissible in any civil proceeding as evidence.

Added by Acts 1987, 70th Leg., 1st C.S., ch. 1, Sec. 4.02, eff. 
Sept. 2, 1987.  Subsec. (a) amended by Acts 2001, 77th Leg., ch. 
172, Sec. 1, eff. Sept. 1, 2001.


	Art. 5.06-5. RECOVERY PROHIBITED FOR VEHICLES IMPOUNDED FOR 
DRUG VIOLATIONS.  

Article repealed effective April 1, 2007
	(a) A motor vehicle insurance policy delivered or issued for 
delivery in this state may not provide payment on final conviction 
of the named insured for loss for a covered motor vehicle that is 
seized by federal or state law enforcement officers as evidence in a 
case against the named insured under Chapter 481, Health and Safety 
Code or the federal Controlled Substances Act, 21 U.S.C. Section 
801 et seq.  For the purpose of this section a named insured shall be 
the person named on the declaration page of an automobile insurance 
policy and his or her spouse if the policy is written on an 
individual.  If a policy is other than an individual policy, a named 
insured shall be the company or corporation named on the 
declaration page of an automobile insurance policy and any officer, 
director, or stockholder of that company or corporation.
	(b)  An insurer may not deliver or issue for delivery in this 
state a motor vehicle insurance policy that provides payment on 
final conviction of the named insured for loss for a covered motor 
vehicle that is seized by federal or state law enforcement officers 
as evidence in a case against the named insured under Chapter 481, 
Health and Safety Code or the federal Controlled Substances Act, 21 
U.S.C. Section 801 et seq.

Added by Acts 1989, 71st Leg., ch. 568, Sec. 1, eff. Aug. 28, 1989.  
Amended by Acts 1991, 72nd Leg., ch. 14, Sec. 284(42), eff. Sept. 1, 
1991.


	Art. 5.06-6. COVERAGES FOR SPOUSES AND FORMER SPOUSES.                         

Article repealed effective April 1, 2007
	A personal automobile policy or any similar policy form 
adopted or approved by the commissioner under Article 5.06 of this 
code or filed under Article 5.145 of this code that covers liability 
arising out of ownership, maintenance, or use of a motor vehicle of 
a spouse, who is otherwise insured by the policy, shall contain a 
provision to continue coverage for the spouse during a period of 
separation in contemplation of divorce.

Added by Acts 1989, 71st Leg., ch. 377, Sec. 4, eff. Sept. 1, 1989.  
Renumbered from art. 5.06-5 and amended by Acts 1991, 72nd Leg., ch. 
242, Sec. 2.10, eff. Sept. 1, 1991;  Acts 2003, 78th Leg., ch. 206, 
Sec. 21.09, eff. June 11, 2003.


	Art. 5.07. PARTICIPATING POLICIES.                                             

Article repealed effective April 1, 2007
	Nothing in this subchapter shall be construed to prohibit the 
operation hereunder of any stock company, mutual company, 
reciprocal or interinsurance exchange or Lloyd's association or to 
prohibit any stock company, mutual company, reciprocal or 
interinsurance exchange or Lloyd's association issuing 
participating policies;  provided no distribution of profit or 
dividends to insured shall take effect or be paid until the same 
shall have been approved by the Board;  and provided further that no 
such distribution shall be approved until adequate reserves shall 
have been provided, such reserves to be computed on the same basis 
for all classes of insurers operating under this subchapter.

Acts 1951, 52nd Leg., ch. 491.                                                


	Art. 5.07-1. REPAIR OF MOTOR VEHICLES;  DISCLOSURE OF 
CONSUMER INFORMATION.  

Article repealed effective April 1, 2007
	(a) Except as provided by rules duly adopted by the 
commissioner, under an auto insurance policy that is delivered, 
issued for delivery, or renewed in this state an insurer may not, 
directly or indirectly, limit its coverage under a policy covering 
damage to a motor vehicle by specifying the brand, type, kind, age, 
vendor, supplier, or condition of parts or products that may be used 
to repair the vehicle or by limiting the beneficiary of the policy 
from selecting a repair person or facility to repair damage to the 
motor vehicle covered under the policy.
	(b)  In connection with the repair of damage to a motor 
vehicle covered under an auto insurance policy, an insurer, an 
employee of an insurer, an agent of an insurer, a solicitor of 
insurance for an insurer, an insurance adjuster, or an entity that 
employs an insurance adjuster may not:
	(1)  solicit or accept a referral fee or gratuity in exchange 
for referring a beneficiary or third-party claimant to a repair 
person or facility to repair the damage;
	(2)  state or suggest, either orally or in writing, to a 
beneficiary that a specific repair person or facility or a repair 
person or facility identified on a preferred list compiled by an 
insurer must be used by a beneficiary in order for the damage repair 
or parts replacement to be covered by the policy;  or
	(3)  restrict a beneficiary's or third-party claimant's 
right to choose a repair person or facility by requiring the 
beneficiary or third-party claimant to travel an unreasonable 
distance to repair the damage.
	(c)  A contract between an insurer and a repair person or 
facility, including an agreement under which the repair person or 
facility agrees to extend discounts for parts or labor to the 
insurer in exchange for referrals by the insurer, may not result in 
a reduction of coverage under the insured's auto insurance policy.
	(d)  An insurer may not prohibit a repair person or facility 
from providing a beneficiary or third-party claimant with 
information that states the description, manufacturer, or source of 
the parts used and the amounts charged to the insurer for the parts 
and related labor.
	(e)  At the time the vehicle is presented to an insurer or an 
insurance adjuster or other person in connection with a claim for 
damage repair, the insurer or insurance adjuster or other person 
shall provide to the beneficiary or third-party claimant notice of 
the provisions of this article.  The commissioner shall adopt a rule 
establishing the method or methods insurers shall use to comply 
with the notice provisions in this subsection.
	(f)  Any beneficiary, third-party claimant, or repair person 
or facility may submit a written, documented complaint to the 
department with respect to an alleged violation of this article.
	(g)  In the settlement of liability claims by a third party 
against an insured for property damage claimed by the third party, 
an insurer may not require the third-party claimant to have repairs 
made by a particular repair person or facility or to use a 
particular brand, type, kind, age, vendor, supplier, or condition 
of parts or products.
	(h)  The commissioner may exercise the rule-making authority 
under Article 21.21-2 of this code with respect to any fraudulent 
activity of any party to an agreement described by Subsection (c) of 
this article.
	(i)  Any rules adopted by the commissioner to implement this 
article shall include, but not be limited to, requirements that:
	(1)  any limitation described in Subsection (a) of this 
section is clearly and prominently displayed on the face of the 
policy or certificate in lieu of a policy;  and
	(2)  the insured give written consent to such a limitation, 
following both oral and written notification of any limitation at 
the time the policy is purchased.

Added by Acts 1991, 72nd Leg., ch. 242, Sec. 2.11, eff. Sept. 1, 
1991.  Amended by Acts 1997, 75th Leg., ch. 399, Sec. 1, eff. Sept. 
1, 1997.


	Art. 5.08. SPECIAL FAVORS AND PROFIT SHARING.                                  

Article repealed effective April 1, 2007
	(a) Except as provided by this article, it shall be unlawful 
for any insurer, as defined in this subchapter, or its officers, 
directors, general agent, state agents, special agents, local 
agents or other representatives, to grant to or contract with 
insured for any special favor or advantage in dividends or other 
profits, or any commissions or dividends of commissions or profits 
to accrue thereon, or any compensation or any valuable 
consideration not specified in the policy contract, or any 
inducement not specified in the policy contract, for the purpose of 
writing the insurance of any insured.
	(b)  Nothing in this article, however, shall be construed to 
prohibit an insurer from sharing its profits after the same have 
been earned with its policyholders under and in accordance with an 
agreement as to such profit sharing contained in its policy 
contract.  Any profit sharing under any policy with insured shall be 
uniform as between such insured, and shall consist only and solely 
of an equitable distribution under and in accordance with the terms 
of the policy of earnings between such insured, and no such insurer 
shall discriminate in any distribution of profits between insured 
of a class, and no classes for such distribution shall be made or 
established except on the approval of the commissioner.  No part of 
any profit shall be distributed to any insured under any such policy 
until the expiration of the policy contract.  Any violation of the 
terms of this subsection shall constitute unjust discrimination and 
shall constitute rebating, and shall be sufficient grounds for the 
revocation of the permit of the insurer or of the license of the 
agent being guilty of such unjust discrimination and rebating.
	(c)  This article does not prohibit an insurer, on approval 
by the commissioner, from distributing to policyholders who are on 
active duty in the United States Armed Forces any estimated profits 
resulting from service by those policyholders in any foreign 
country in a combat theater of operations at any time after January 
1, 1990.  An insurer that elects to make such distributions shall 
file a written description of its distribution program with the 
commissioner for approval by the commissioner and shall notify the 
commissioner in writing of each distribution made under the 
program.  The insurer may distribute the estimated profits among 
those policyholders based on the length of time served by a 
policyholder in a combat theater of operations, the location of the 
military service, the duration of the applicable insurance policy, 
or any other reasonable basis.  The commissioner shall act on the 
insurer's distribution program within five business days of receipt 
of the insurer's distribution program, otherwise the distribution 
program shall be deemed approved.
	(d)  This article does not prohibit an insurer, on approval 
by the commissioner, from sharing profits with policyholders who 
are part of a group program established by a nonprofit business 
association and who participate in the group program because of 
membership in the association.  An insurer that elects to make 
distributions under this subsection shall file a written 
description of its distribution program with the commissioner for 
approval by the commissioner and shall notify the commissioner in 
writing of each distribution made under the program.  The 
commissioner shall act on the insurer's distribution program within 
five business days of receipt of the insurer's distribution 
program, otherwise the distribution program shall be deemed 
approved.  For purposes of this subsection, "nonprofit business 
association" means a business association that is a nonprofit 
corporation exempt from federal income tax under Section 501(a) of 
the Internal Revenue Code of 1986, and its subsequent amendments, 
by being listed as an exempt organization under Section 501(c)(6) 
of that code.

Acts 1951, 52nd Leg., ch. 491.                                                

Amended by Acts 1991, 72nd Leg., ch. 6, Sec. 1, eff. March 19, 1991;  
Acts 1999, 76th Leg., ch. 1240, Sec. 1, eff. June 18, 1999.


	Art. 5.09. DISCRIMINATIONS OR DISTINCTIONS.                                    

Article repealed effective April 1, 2007
	(a) Except as provided by Subsection (b) of this article, no 
insurer coming within the terms of this subchapter shall, in its 
business in this State, make or permit any distinction or 
discrimination in favor of the insured having a like hazard, in the 
matter of the charge of premiums for insurance, or in dividends or 
other benefits payable under any policy, nor shall any such insurer 
or agent make any contract of insurance, or agreement as to such 
insurance, other than expressed in the policy, nor shall any such 
insurer or its agents or representatives pay, allow or give, or 
offer to pay, allow or give, directly or indirectly, as an 
inducement to insured, any rebate payable upon the policy or any 
special favor or advantage in dividends or other benefits to 
accrue, or anything of value whatsoever, not specified in the 
policy;  provided that nothing in this subchapter shall be 
construed to prohibit the modification of rates by rating plans 
designed to encourage the prevention of accidents, and to take 
account of the peculiar hazards and experience of individual risks, 
past and prospective, within and outside the State, and of all other 
relevant factors, within and outside the State, provided such plan 
shall have been approved by the Board.
	(b)  This article does not prohibit an insurer, on approval 
by the Board, from distributing to policyholders who are on active 
duty in the United States Armed Forces any estimated profits 
resulting from service by those policyholders in any foreign 
country in a combat theater of operations at any time after January 
1, 1990.  An insurer that elects to make such distributions shall 
file a written description of its distribution program with the 
Board for approval by the Board and shall notify the Board in 
writing of each distribution made under the program.  The insurer 
may distribute the estimated profits among those policyholders 
based on the length of time served by a policyholder in a combat 
theater of operations, the location of the military service, the 
duration of the applicable insurance policy, or any other 
reasonable basis.  The Board shall act on the insurer's 
distribution program within five business days of receipt of the 
insurer's distribution program, otherwise the distribution program 
shall be deemed approved.
	(c)  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 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. 5.

Amended by Acts 1991, 72nd Leg., ch. 6, Sec. 2, eff. March 19, 1991;  
Acts 1991, 72nd Leg., ch. 242, Sec. 2.12, eff. Sept. 1, 1991;  
Subsec. (b) amended by Acts 1991, 72nd Leg., 2nd C.S., ch. 12, Sec. 
8.07, eff. Jan. 1, 1992.  Amended by Acts 1995, 74th Leg., ch. 984, 
Sec. 6, eff. Sept. 1, 1995;  Subsec. (c) amended by Acts 2003, 78th 
Leg., ch. 206, Sec. 21.10, eff. June 11, 2003.


	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.


	Art. 5.12-1. PENALTY FOR VIOLATION OF ACT.                                     

Article repealed effective April 1, 2007
	Any insurer or officer or representative thereof which shall 
violate any provision of this Act  shall be subject to a revocation 
of his or its license by the Board of Insurance Commissioners and in 
addition shall be deemed guilty of a misdemeanor and, upon 
conviction thereof, shall be punished by a fine of not less than One 
Hundred ($100.00) Dollars nor more than Five Hundred ($500.00) 
Dollars for each such offense.

Acts 1927, 40th Leg., p. 373, ch. 253, Sec. 12.  Amended by Acts 
1937, 45th Leg., p. 671, ch. 335, Sec. 3.

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;  Acts 2005, 79th Leg., ch. 631, Sec. 1, eff. Sept. 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.

Scope

Text of Sec. 2 effective until April 1, 2007
	Sec. 2. (a) This article applies to all lines of the following 
insurance written under policies or contracts of insurance issued 
by an insurer authorized to engage in the business of insurance in 
this state:
	(1)  general liability insurance;                                              
	(2)  residential and commercial property insurance, 
including farm and ranch insurance and farm and ranch owners 
insurance;
	(3)  personal and commercial casualty insurance, except as 
provided by Subsection (b) of this section;
	(4)  medical professional liability insurance;                                 
	(5)  fidelity, guaranty, and surety bonds other than 
criminal court appearance bonds;
	(6)  personal umbrella insurance;                                              
	(7)  personal liability insurance;                                             
	(8)  guaranteed auto protection (GAP) insurance;                               
	(9)  involuntary unemployment insurance;                                       
	(10)  financial guaranty insurance;                                            
	(11)  inland marine insurance;                                                 
	(12)  rain insurance;                                                          
	(13)  hail insurance on farm crops;                                            
	(14)  personal and commercial automobile insurance;  and                       

Text of Subsec. (a)(15) as added by Acts 2005, 79th Leg., ch. 71, 
Sec. 1.
	(15)  multi-peril insurance.                                                   

Text of Subsec. (a)(15) as added by Acts 2005, 79th Leg., ch. 102, 
Sec. 4.
	(15)  identity theft insurance coverage issued under Chapter 
706.            
	(b)  The commissioner shall adopt rules governing the manner 
in which forms and rates for the various classifications of risks 
insured under inland marine insurance, as determined by the 
commissioner, are regulated.

Definitions

Text of Sec. 3 effective until April 1, 2007
	Sec. 3. (a) In this article:                                                   
	(1)  "Disallowed expenses" includes:                                           
	(A)  administrative expenses, not including acquisition, 
loss control, and safety engineering expenses, that exceed 110 
percent of the industry median for those expenses;
	(B)  lobbying expenses;                                                        
	(C)  advertising expenses, other than for advertising:                         
	(i)  directly related to the services or products provided by 
the insurer;  or
	(ii)  designed and directed at loss prevention;                                
	(D)  amounts paid by an insurer:                                               
	(i)  as damages in an action brought against the insurer for 
bad faith, fraud, or any matters other than payment under the 
insurance contract;  or
	(ii)  as fees, fines, penalties, or exemplary damages for a 
civil or criminal violation of law;
	(E)  contributions to:                                                         
	(i)  social, religious, political, or fraternal 
organizations;  or           
	(ii)  organizations engaged in legislative advocacy;                           
	(F)  except as authorized by rule by the commissioner, fees 
and assessments paid to advisory organizations;
	(G)  any amount determined by the commissioner to be excess 
premiums charged by the insurer;  and
	(H)  any unreasonably incurred expenses, as determined by 
the commissioner after notice and hearing.
	(2)  "Filer" means an insurer that files rates, prospective 
loss costs, or supplementary rating information under this article.
	(3)  "Insurer" means an insurer to which Article 5.13 of this 
code applies, but does not include the Texas Windstorm Insurance 
Association or the Texas FAIR Plan Association, or the Texas 
Automobile Insurance Plan Association.  All provisions of this 
article shall apply to Lloyd's plans, reciprocals and 
interinsurance exchanges, and county mutual insurance companies 
with respect to the lines of insurance described in Section 2 of 
this article, except that the provisions of Sections 4, 5, 6, and 7 
of this article shall not apply to Lloyd's or reciprocals with 
respect to commercial property insurance, and the provisions of 
Sections 4, 5, 6, 7, and 8 of this article shall not apply to Lloyd's 
or reciprocals with respect to inland marine insurance, rain 
insurance, or hail insurance on farm crops.
	(4)  "Prospective loss costs" means that portion of a rate 
that does not include provisions for profit or expenses, other than 
loss adjustment expenses, that is based on historical aggregate 
losses and loss adjustment expenses projected by development to 
their ultimate value and through trending to a future point in time.
	(5)  "Rate" means the cost of insurance per exposure unit, 
whether expressed as a single number or as a prospective loss cost, 
with an adjustment to account for the treatment of expenses, 
profit, and individual insurer variation in loss experience, before 
any application of individual risk variations based on loss or 
expense considerations.
	(6)  "Rating manual" means a publication or schedule that 
lists rules, classifications, territory codes and descriptions, 
rates, premiums, and other similar information used by an insurer 
to determine the applicable premium charged an insured.
	(7)  "Residential property insurance" means insurance 
coverage against loss to real or tangible personal property at a 
fixed location that is provided through a homeowners policy, 
including a tenants policy, a condominium owners policy, or a 
residential fire and allied lines policy.
	(8)  "Supplementary rating information" means any manual, 
rating schedule, plan of rules, rating rules, classification 
systems, territory codes and descriptions, rating plans, and other 
similar information used by the insurer to determine the applicable 
premium for an insured.  The term includes factors and 
relativities, including increased limits factors, classification 
relativities, deductible relativities, premium discount, and other 
similar factors and rating plans such as experience, schedule, and 
retrospective rating.
	(9)  "Supporting information" means:                                           
	(A)  the experience and judgment of the filer and the 
experience or information of other insurers or advisory 
organizations relied on by the filer;
	(B)  the interpretation of any other information relied on by 
the filer;     
	(C)  descriptions of methods used in making the rates;  and                    
	(D)  any other information required by the department to be 
filed.           
	(b)  For purposes of this article, a rate is:                                  
	(1)  excessive if the rate is likely to produce a long-term 
profit that is unreasonably high in relation to the insurance 
coverage provided;
	(2)  inadequate if the rate is insufficient to sustain 
projected losses and expenses to which the rate applies, and 
continued use of the rate:
	(A)  endangers the solvency of an insurer using the rate;  or                  
	(B)  has the effect of substantially lessening competition 
or creating a monopoly within any market;  or
	(3)  unfairly discriminatory if the rate:                                      
	(A)  is not based on sound actuarial principles;                               
	(B)  does not bear a reasonable relationship to the expected 
loss and expense experience among risks;  or
	(C)  is based wholly or partly on the race, creed, color, 
ethnicity, or national origin of the policyholder or an insured.

Rate standards

Text of Sec. 4 effective until April 1, 2007
	Sec. 4. (a) Rates under this article shall be made in 
accordance with the provisions of this section.
	(b)  In setting rates, an insurer shall consider:                              
	(1)  past and prospective loss experience inside this state, 
and outside this state if the state data are not credible;
	(2)  the peculiar hazards and experiences of individual 
risks, past and prospective, inside and outside this state;
	(3)  the insurer's actuarially credible historical premium, 
exposure, loss, and expense experience;
	(4)  catastrophe hazards within this state;                                    
	(5)  operating expenses, excluding disallowed expenses;                        
	(6)  investment income;                                                        
	(7)  a reasonable margin for profit;  and                                      
	(8)  any other factors inside and outside this state 
determined to be relevant by the insurer and not disallowed by the 
commissioner.
	(c)  The insurer may group risks by classifications for the 
establishment of rates and minimum premiums and may modify 
classification rates to produce rates for individual risks in 
accordance with rating plans that establish standards for measuring 
variations in those risks on the basis of any factor listed in 
Subsection (b) of this section.
	(d)  Rates established under this article may not be 
excessive, inadequate, unreasonable, or unfairly discriminatory 
for the risks to which they apply.
	(e)  In setting rates applicable solely to policyholders in 
this state, an insurer shall use available premium, loss, claim, 
and exposure information from this state to the full extent of the 
actuarial credibility of that information.  The insurer may use 
experience from outside this state as necessary to supplement 
information from this state that is not actuarially credible.
	(f)  In determining rating territories and territorial 
rates, an insurer shall use methods based on sound actuarial 
principles.

Rate filings;  legislative report

Text of Sec. 5 effective until April 1, 2007
	Sec. 5. (a) Except as provided by Section 5A of this article, 
each insurer shall file with the commissioner all rates, applicable 
rating manuals, supplementary rating information, and additional 
information as required by the commissioner for risks written in 
this state.
	(a-1)  The commissioner by rule shall determine the 
information required to be provided in the filing, including:
	(1)  the categories of supporting information;                                 
	(2)  the categories of supplementary rating information;                       
	(3)  any statistics or other information to support the rates 
to be used by the insurer, including information necessary to 
evidence that the computation of the rate does not include 
disallowed expenses;  and
	(4)  information concerning policy fees, service fees, and 
other fees that are charged or collected by the insurer under 
Article 21.35A or 21.35B of this code.
	(a-2)  For an insurer with less than five percent of the 
market, the commissioner shall consider insurer and 
market-specific attributes, as applicable, and shall promulgate 
filing requirements accordingly to accommodate premium volume and 
loss experience, targeted markets, limitations on coverage, and any 
potential barriers to market entry or growth.
	(b)  Repealed by Acts 2003, 78th Leg., ch. 206, Sec. 21.47.                    
	(c)  An insured that is aggrieved with respect to any filing 
in effect, or the public insurance counsel, may make a written 
application to the commissioner for a hearing on the filing.  The 
application must specify the grounds on which the applicant bases 
the grievance.  If the commissioner finds that the application is 
made in good faith, that the applicant would be so aggrieved if the 
grounds in the application are established, and that those grounds 
otherwise justify holding the hearing, the commissioner shall hold 
a hearing not later than the 30th day after the date of receipt of 
the application.  The commissioner must give at least 10 days' 
written notice to the applicant and to each insurer that made the 
filing in question.
	(d)  If, after the hearing, the commissioner finds that the 
filing does not meet the requirements of this article, the 
commissioner shall issue an order specifying how the filing fails 
to meet the requirements of this article and stating the date on 
which, within a reasonable period after the order date, the filing 
is no longer in effect.  The commissioner shall send copies of the 
order to the applicant and to each affected insurer.
	(e)  The commissioner shall require each insurer subject to 
this article to file information with the commissioner on a 
quarterly basis.  Each insurer shall provide the commissioner with 
information relating to changes in losses, premiums, and market 
share since January 1, 1993.  The commissioner shall report to the 
governor, lieutenant governor, and speaker of the house of 
representatives on a quarterly basis, relating to the information 
provided by the insurers' reports and to market conduct, especially 
consumer complaints.

Prior Approval Required for Certain Insurers

Text of Sec. 5A effective until April 1, 2007
	Sec. 5A. (a) The commissioner by order may require an insurer 
to file with the commissioner all rates, supplementary rate 
information, and any supporting information as prescribed by this 
section if the commissioner determines that:
	(1)  an insurer's rates require supervision because of the 
insurer's financial condition;
	(2)  an insurer's rates require supervision because of the 
insurer's rating practices;  or
	(3)  a statewide insurance emergency exists.                                   
	(b)  Except as provided by Subsection (k) of this section, an 
insurer may not use a rate until the rate has been filed with the 
department and approved by the commissioner as provided by this 
section.  For purposes of this section, a rate is filed with the 
department on the date the rate filing is received by the 
department.
	(c)  Not later than the 30th day after the date the rate is 
filed with the department, the commissioner shall:
	(1)  approve the rate if the commissioner determines that the 
rate complies with the requirements of this article;  or
	(2)  disapprove the rate if the commissioner determines that 
the rate does not comply with the requirements of this article.
	(d)  Except as provided by Subsection (f) of this section, if 
the rate has not been approved or disapproved by the commissioner 
before the expiration of the 30-day period described by Subsection 
(c) of this section, the rate is considered approved and the insurer 
may use the rate unless the rate proposed in the filing represents 
an increase of 12.5 percent or more from the insurer's prior filed 
rate.
	(e)  The commissioner and the insurer may not by agreement 
extend the 30-day period described by Subsection (c) of this 
section.
	(f)  For good cause, the commissioner may extend the period 
for approval or disapproval of a rate for one additional 30-day 
period on the expiration of the 30-day period described by 
Subsection (c) of this section.
	(g)  If the department determines that the information filed 
by the insurer under this article is incomplete or otherwise 
deficient, the department may request additional information from 
the insurer.  If the department requests additional information 
from the insurer during the first 30-day review period provided 
under Subsection (c) of this section or under the second 30-day 
review period provided under Subsection (f) of this section, the 
period of time between the date of the department's submission of 
the request for additional information to the insurer and the date 
of the receipt of the additional information by the department from 
the insurer is not counted to determine what constitutes the first 
30-day review period or the second 30-day review period.  For 
purposes of this subsection, the date of the department's 
submission of the request for additional information is the date of 
the electronic mailing or telephone call or the postmarked date on 
the department's letter relating to the request for additional 
information.
	(h)  The commissioner shall approve the rate filing if the 
proposed rate is adequate, not excessive, and not unfairly 
discriminatory.
	(i)  If the commissioner approves a rate filing, the 
commissioner shall provide written or electronic notification of 
the approval to the insurer.  On receipt of the notice of the 
commissioner's approval of a rate, the insurer may use the rate.
	(j)  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.
	(k)  After approval of a rate filing under this section, an 
insurer may use any rate subsequently filed by the insurer, without 
prior approval of the commissioner, if the subsequently filed rate 
does not exceed the lesser of 107.5 percent of the rate approved by 
the commissioner or 110 percent of any rate used by the insurer 
within the previous 12-month period.  Filed rates under this 
subsection take effect on the date specified by the insurer.
	(l)  If the commissioner disapproves a rate filing under 
Subsection (c)(2) of this section, the commissioner shall issue an 
order in the manner prescribed by Section 7(b) of this article.  The 
insurer is entitled to a hearing in accordance with Section 7(b) of 
this article.
	(m)  The commissioner may require an insurer to file the 
insurer's rates under this section until the commissioner 
determines that the conditions described by Subsection (a) of this 
section no longer exist.

Public information

Text of Sec. 6 effective until April 1, 2007
	Sec. 6. Each filing and any supporting information filed 
under this article is open to public inspection as of the date of 
the filing.

Disapproval

Text of Sec. 7 effective until April 1, 2007
	Sec. 7. (a) The commissioner shall disapprove a rate if the 
commissioner determines that the rate filing made under this 
article does not meet the standards established under that section.
	(b)  If the commissioner disapproves a filing, the 
commissioner shall issue an order specifying in what respects the 
filing fails to meet the requirements of this article.  The filer is 
entitled to a hearing on written request made to the commissioner 
not later than the 30th day after the effective date of the 
disapproval order.
	(c)  If the commissioner disapproves a rate that is in 
effect, the commissioner may issue a disapproval order only after a 
hearing held after at least 20 days' written notice to the insurer 
that made the filing.  The disapproval order must be issued not 
later than the 15th day after the close of the hearing and must 
specify how the rate fails to meet the requirements of this article.  
The disapproval order must state the date on which the further use 
of that rate is prohibited.  The commissioner shall set the date not 
earlier than the 45th day after the date on which the hearing 
closes.

Forms

Text of Sec. 8 effective until April 1, 2007
	Sec. 8. (a) An insurance policy or printed endorsement form 
for use in writing the types of insurance subject to this article 
may not be delivered or issued for delivery in this state unless the 
form has been filed with and approved by the commissioner.
	(b)  Each filing 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 is approved unless, before the 
expiration of the 60 days, the commissioner approves or disapproves 
the form by order.  Approval of a form 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 10 days 
the period during which it may approve or disapprove a form 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 shall be 
considered approved.  For good cause shown, the commissioner may 
withdraw the commissioner's approval at any time after notice and a 
hearing.
	(c)  A commissioner's order disapproving any form 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 approved form takes effect on the 
expiration of the prescribed period, but not sooner than the 30th 
day after the effective date of the withdrawal order, as prescribed 
by the commissioner.
	(d)  An insurer may not use in this state any form after 
disapproval of the form or withdrawal of approval by the 
commissioner.
	(e)  The commissioner may promulgate standard insurance 
policy forms, endorsements, and other related forms that may be 
used, at the discretion of the insurer, by an insurer instead of the 
insurer's own forms in writing insurance subject to this article.  
The commissioner may disapprove a form or endorsement filed under 
this section, or withdraw any previous approval thereof, if the 
form or endorsement:
	(1)  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
	(2)  contains provisions or has any titles or headings which 
are unjust, encourage misrepresentation, are deceptive, or violate 
public policy. 
	(f)  Policy forms for use with large risks are exempt from 
the requirements of Subsections (a), (b), and (e) of this section.  
For purposes of this subsection, "large risk" means:
	(1)  an insured that has total insured property values of $5 
million or more;
	(2)  an insured that has total annual gross revenues of $10 
million or more;  or
	(3)  an insured that has a total premium of $25,000 or more 
for property insurance, $25,000 or more for general liability 
insurance, or $50,000 or more for multiperil insurance.

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.

Administrative Procedure Act applicable

Text of Sec. 10 effective until April 1, 2007
	Sec. 10. Chapter 2001, Government Code (the Administrative 
Procedure Act), applies to all rate hearings conducted under this 
article.

Standard Rate Index for Personal Automobile Insurance;  Exemption

Text of Sec. 13 effective until April 1, 2007
	Sec. 13. (a) This section governs rate regulation of personal 
automobile insurance issued by a county mutual insurance company as 
prescribed by this section.
	(b)  Using standard and generally accepted actuarial 
techniques, the commissioner shall annually compute and publish a 
statewide standard rate index that accurately reflects the average 
statewide rates for classifications for each of the following 
coverages for personal automobile insurance policies:
	(1)  bodily injury liability;                                                  
	(2)  property damage liability;                                                
	(3)  personal injury protection;                                               
	(4)  medical payments;                                                         
	(5)  uninsured and underinsured motorists;                                     
	(6)  physical damage--collision;  and                                          
	(7)  physical damage--other than collision.                                    
	(c)  The commissioner shall compute the rate index using the 
benchmark rate in effect for personal automobile insurance under 
Article 5.101 of this code on the effective date of S.B. No. 14, 
Acts of the 78th Legislature, Regular Session, 2003, and adjusted 
annually thereafter by the commissioner to reflect average changes 
in claims costs in the personal automobile insurance market in this 
state.  After the effective date of S.B. No. 14, Acts of the 78th 
Legislature, Regular Session, 2003, and before the first annual 
adjustment by the commissioner, the commissioner may adjust the 
computation of the rate index under this section as the 
commissioner determines necessary.
	(d)  The commissioner may compute and establish standard 
rate indexes other than the rate index required under Subsection 
(b) of this section for any of the personal automobile insurance 
coverages listed under that subsection as necessary to implement 
this section.
	(e)  For purposes of this section, "nonstandard rates" means 
rates that are 30 percent or more above the standard rate index as 
determined by the commissioner under this section.
	(f)  A county mutual insurance company that issues personal 
automobile insurance policies only at nonstandard rates is subject 
to filing requirements as determined by the commissioner by rule if 
the insurer and the insurer's affiliated companies or group have a 
market share of less than 3.5 percent.  In setting rates, an 
insurance company subject to this subsection must comply with the 
rating standards established by this article.  Not later than the 
first day on which any change in the rates becomes effective, the 
company shall for informational purposes file the rates and any 
additional information required by the department.  The 
commissioner by rule shall determine the information required to be 
provided in the filing under this subsection.  The commissioner may 
inspect the books and records of the company at any time to ensure 
compliance with the rating standards.  An insurance company 
described by this subsection is subject to Article 5.144 of this 
code.  A county mutual insurance company not described by this 
section is subject to Article 21.81 of this code and is required to 
comply with the filing requirements of this article and any other 
provision of this code applicable to a county mutual insurance 
company.
	(g)  The commissioner by rule may designate other types of 
insurers that historically and as of the effective date of S.B. No. 
14, Acts of the 78th Legislature, Regular Session, 2003, have 
served exclusively or are serving exclusively the high-risk, 
nonstandard market and meet capitalization and solvency 
requirements set by the commissioner.  An insurer designated by the 
commissioner under this subsection is governed by this section.
	(h)  An insurer is subject to the filing requirements 
determined by the commissioner by rule under Subsection (f) of this 
section if:
	(1)  the insurer, along with the insurer's affiliated 
companies or group, issues personal automobile liability insurance 
policies only below 101 percent of the minimum limits required by 
Chapter 601, Transportation Code;  and
	(2)  the insurer, along with the insurer's affiliated 
companies or group, has a market share of less than 3.5 percent of 
the personal automobile insurance market in this state.

Review of Rates

Text of Sec. 14 effective until April 1, 2007
	Sec. 14. In reviewing rates under this article, the 
commissioner shall consider any state or federal legislation that 
has been enacted and that may impact rates for liability coverage 
included in a policy subject to this article.

Notice of Rate Increase

Text of Sec. 15 effective until April 1, 2007
	Sec. 15. (a) An insurer shall send a policyholder of a policy 
of residential property insurance issued by the insurer notice of 
any rate increase scheduled to take effect on the renewal of the 
policy that will result in an increase in the premium amount to be 
paid by the policyholder that is at least 10 percent greater than 
the lesser of the premium amount paid by the policyholder for 
coverage under the policy during:
	(1)  the 12-month period preceding the renewal date of the 
policy;  or       
	(2)  the policy period preceding the renewal date of the 
policy.             
	(b)  An insurer shall send the notice required by Subsection 
(a) of this section before the renewal date but not later than the 
30th day before the date the rate increase is scheduled to take 
effect.
	(c)  In addition to the mandatory notice under Subsection (a) 
of this section, the insurer may send the notice required by 
Subsection (a) of this section to any policyholder of residential 
property insurance issued by the insurer, regardless of whether 
that policyholder's premium amount to be paid will increase as a 
result of the scheduled rate change.
	(d)  The commissioner by rule may exempt an insurer from the 
notice requirements under this section for a short-term policy, as 
defined by the commissioner, that is written by the insurer.

Rights of Public Insurance Counsel

Text of Sec. 16 effective until April 1, 2007
	Sec. 16. (a) On request to the commissioner, the public 
insurance counsel may review all rate filings and additional 
information provided by an insurer under this article.  
Confidential information reviewed under this subsection remains 
confidential. 
	(b)  The public insurance counsel, not later than the 30th 
day after the date of a rate filing under this article, may object 
to an insurer's rate filing or the criteria relied on by the insurer 
to determine the rate by filing a written objection with the 
commissioner.  The written objection must contain the reasons for 
the objection.

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, eff. June 11, 
2003, and Acts 2003, 78th Leg., ch. 206, Sec. 6.02, eff. Dec. 1, 
2004;  Secs. 1, 2 amended by Acts 2003, 78th Leg., ch. 206, Sec. 
5.03, eff. June 11, 2003, and ch. 206, Sec. 6.03, eff. Dec. 1, 2004.  
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 and Secs. 5(a-1), (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;  Sec. 
2(a) amended by Acts 2005, 79th Leg., ch.102, Sec. 4, eff. Sept. 1, 
2005;  Sec. 2(a) amended by Acts 2005, 79th Leg., ch. 70, Sec. 1, 
eff. Sept. 1, 2005;  Sec. 2(a) amended by Acts 2005, 79th Leg., ch. 
71, Sec. 1, eff. Sept. 1, 2005;  Sec. 13(h) added by Acts 2005, 79th 
Leg., ch. 1118, Sec. 1, eff. June 18, 2005;  Secs. 2 to 8 and 10 to 16 
are repealed by Acts 2005, 79th Leg., ch. 727 Sec. 18(d), eff. April 
1, 2007.


	Art. 5.13-2C. EXEMPTIONS FORM RATE FILING AND APPROVAL 
REQUIREMENTS.         

Article repealed effective April 1, 2007
	                                                                               

Definitions
	Sec. 1. In this article:                                                       
	(1)  "Insurer" means an insurance company, reciprocal or 
interinsurance exchange, mutual insurance company, capital stock 
company, county mutual insurance company, Lloyd's plan, or other 
legal entity authorized to write residential property insurance in 
this state.  The term includes an affiliate, as described by this 
code, if that affiliate is authorized to write residential property 
insurance.
	(2)  "Residential property insurance" means insurance 
coverage against loss to real or tangible personal property at a 
fixed location that is provided through a homeowners policy, 
including a tenants policy, a condominium owners policy, or a 
residential fire and allied lines policy.

Applicability
	Sec. 2. (a) Except as provided by Subsection (b) of this 
section, this article applies only to an insurer that, during the 
calendar year preceding the date filing is otherwise required under 
Article 5.13-2 or 5.142 of this code, issued residential property 
insurance policies in this state that accounted for less than two 
percent of the total amount of premiums collected by insurers for 
residential property insurance policies issued in this state, more 
than 50 percent of which cover property:
	(1)  valued at less than $100,000;  and                                        
	(2)  located in an area designated by the commissioner as 
underserved for residential property insurance under Article 
5.35-3 of this code.
	(b)  If an insurer described by Subsection (a) of this 
section is a member of an affiliated insurance group, this article 
applies to the insurer only if the total aggregate premium 
collected by the group accounts for less than two percent of the 
total amount of premiums collected by insurers for residential 
property insurance policies issued in this state.

Exemption
	Sec. 3. (a) Except as provided by Subsection (b) of this 
section, an insurer described by Section 2 of this article is exempt 
from the rate filing and approval requirements of Article 5.142 and 
of Article 5.13-2 of this code.
	(b)  An insurer described by Section 2 of this article that 
proposes to increase the premium rates charged policyholders for a 
residential property insurance product by 10 percent or more than 
the amount the insurer charged policyholders for the same or an 
equivalent residential property insurance product during the 
preceding calendar year must file the insurer's proposed rates in 
accordance with Article 5.142 or 5.13-2 of this code, as 
applicable, and obtain approval of the proposed rates as provided 
by the applicable article.
	(c)  Except as provided by Subsection (b) of this section, 
Article 5.142 of this code does not apply to an insurer described by 
Section 2 of this article.

Added by Acts 2003, 78th Leg., ch. 206, Sec. 7.01, eff. June 11, 
2003.      


	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. Sept. 1, 2005.          


	Art. 5.15-1. PROFESSIONAL LIABILITY INSURANCE FOR PHYSICIANS 
AND HEALTH CARE PROVIDERS.  

Scope of Article

Text of Sec. 1 effective until April 1, 2007
	Sec. 1. This article shall apply to the making and use of 
insurance rates by every insurer licensed to write or engaged in 
writing professional liability insurance for any physician or any 
health care provider including rating organizations, acting on 
behalf of insurers.

Definitions

Text of Sec. 2 effective until April 1, 2007
	Sec. 2. In this article:                                                       
	(1)  "Physician" means a person licensed to practice 
medicine in this state. 
	(2)  "Health care provider" means any person, partnership, 
professional association, corporation, facility, or institution 
licensed or chartered by the State of Texas to provide health care 
as a registered nurse, hospital, dentist, podiatrist, 
chiropractor, optometrist, pharmacist, veterinarian, 
not-for-profit kidney dialysis center, blood bank that is a 
nonprofit corporation chartered to operate a blood bank and which 
is accredited by the American Association of Blood Banks, 
for-profit nursing home or not-for-profit nursing home, for-profit 
assisted living facility or not-for-profit assisted living 
facility, or an officer, employee, or agent of any of them acting in 
the course and scope of his employment, or a health care 
practitioner or facility that the commissioner, in accordance with 
Section 3B(b), Article 21.49-3, of this code, determines is 
eligible for coverage under this article.
	(3)  "Hospital" means a licensed public or private 
institution as defined in Chapter 241, Health and Safety Code, or in 
Section 88, Chapter 243, Acts of the 55th Legislature, Regular 
Session, 1957 (Article 5547-88, Vernon's Texas Civil Statutes).

Rate Standards

Text of Sec. 3 effective until April 1, 2007
	Sec. 3. 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 o