Bill Caption

Relating to certain premium discounts and rating programs for certain residential property insurance policies.

Fiscal Notes

No fiscal implication to the State is anticipated.

Bill Analysis

HB 2776 would allow the commissioner of insurance to approve an insurer’s rating program filed with the department that is based on an insured’s claim or loss experience and is proven to be actuarially sound. 

Vote Recommendation Notes

Currently, only the commissioner of insurance may approve a premium discount. Property insurers apply premium discounts to a customer’s contract that is up for renewal; however, this discount is only provided to customers that have not made a claim. Yet, current laws restrict the commissioner from approving other types of actuarially sound claim-free discounts and rating programs. Ultimately, consumers are hurt by these restrictions because they cannot enjoy discounts that they are eligible for.  

Unfortunately, the heavy hand of government is ever present in the insurance industry. The situation above is illustrative of just how far away this industry operates from any free market principles. It is problematic that the government prevents insurers from offering their clients discounts without approval. Moreover, it is problematic that these insurers may only offer one type of discount to its customers.

We support HB 2276 because it would open up more discount options for an insurer to offer to its customers that have demonstrated a claim-free experience. Insurers would still be required to prove to the commissioner that their rating program is actuarially sound but it would at least allow different discount plans to be approved. This legislation bolsters our free market principle and individual liberty principle.

The second chamber sponsor is Senator Estes.