Texas Insurance Code - Not Codified - Article 5.03. Promulgated Rates As Controlling
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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.
Article: 4.73 5.01 5.01B 5.01C 5.01-1 5.01-3 5.02 5.03 5.03-1 5.04 5.04-1 5.05 5.06 5.06-1 5.06-2
Last modified: August 11, 2007
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