Texas Insurance Code - Not Codified - Article 1.02. Rating
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Art. 1.02. RATING. (a) In this article, "insurer" means an
insurance company, reciprocal or interinsurance exchange, mutual
insurance company, farm mutual insurance company, capital stock
company, county mutual insurance company, Lloyd's plan, a surplus
lines insurer, or other legal entity engaged in the business of
insurance in this state. The term includes:
(1) an affiliate as described by Section 2, Article 21.49-1
of this code, or Section 823.003(a) of this code;
(2) the Texas Windstorm Insurance Association created and
operated under Article 21.49 of this code;
(3) the FAIR Plan Association under Article 21.49A of this
code; and
(4) the Texas Automobile Insurance Plan Association under
Article 21.81 of this code.
(b) Rates used under this code must be just, fair,
reasonable, adequate, not confiscatory and not excessive for the
risks to which they apply, and not unfairly discriminatory. An
insurer may not use rates that violate this article.
(c) 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 in whole or in part on the race, creed, color,
ethnicity, or national origin of the policyholder or an insured.
Added by Acts 2003, 78th Leg., ch. 206, Sec. 13.01, eff. June 11,
2003.
Article: 1.01 1.02 1.04A 1.04D 1.09-1 1.10 1.12 1.13 1.14-3 1.15 1.15A 1.15B 1.16 1.17 1.17A
Last modified: August 11, 2007
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