HB398 By Representative Hill (M) RFD Insurance Rd 1 02-APR-15

SYNOPSIS: Under existing law, title insurance companies are required to seek prior approval of their rates by the Commissioner of Insurance.

This bill would authorize title insurers to form a rating bureau for the purpose of filing rates on behalf of its member insurers.

A BILL TO BE ENTITLED AN ACT

Relating to insurance; to provide for the establishment of a rating bureau for title insurance; and for this purpose to amend Section 27-13-2, Code of Alabama 1975, and to add Sections 27-13-130, 27-13-131, 27-13-132, 27-13-133, 27-13-134, 27-13-135, and 27-13-136 to the Code of Alabama 1975.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:Section 1. Section 27-13-2, Code of Alabama 1975, is amended to read as follows:

§27-13-2.

"The commissioner is charged with the duty of the administration of all laws now relating, or hereafter relating, to insurance rates and rating systems of all companies authorized to do business in the State of Alabama, with the exception of rates of life and health and accident business and rates of title insurance."

Section 2. A new Article 6 is added to Chapter 13 of Title 27 of the Code of Alabama 1975, consisting of Sections 27-13-130, 27-13-131, 27-13-132, 27-13-133, 27-13-134, 27-13-135, and 27-13-136 to read as follows:

Article 6. Title Insurance.

§27-13-130.

The commissioner may authorize a rating organization to engage in the business of rate-making on behalf of its subscriber or member insurers for purposes of Section 27-25-6 upon finding that the organization has complied with the provisions of this article and is otherwise qualified to function as a rating organization. Upon being so authorized, the rating organization may file premium rates as required by Section 27-25-6 on behalf of its member or subscriber insurers authorized to write title insurance in this state.

§27-13-131.

A rating organization requesting such authority shall pay a fee set by the commissioner not to exceed two hundred dollars ($200) and shall provide the commissioner with such information as the commissioner may prescribe to include the following:

(1) A copy of the organization's constitution, articles of agreement or association, or articles of incorporation, and of its bylaws or rules governing the conduct of its business.

(2) A list of insurers which are, or which have agreed to become, members of or subscribers to the organization.

(3) The name and address of a person or persons in this state upon whom notices or orders of the commissioner affecting the organization may be served.

(4) A description of the manner in which the organization will determine the premium rates to be filed as required by Section 27-25-6.

(5) Such other information as the commissioner may require.

§27-13-132.

After being initially granted such authority to act as a rating organization, the organization shall thereafter renew its authority on an annual basis by filing a request for renewal in a form prescribed by the commissioner by December 31 of each year and paying a renewal fee set by the commissioner not to exceed two hundred dollars ($200).

§27-13-133.

As a condition for obtaining and retaining authority to act as a rating organization, the organization shall make reasonable provision in its constitution, articles of agreement or association, articles of incorporation, bylaws, or otherwise for the following:

(1) Any insurer engaged in writing title insurance in this state may become a member or subscriber of the rating organization upon application therefor by the insurer. The rating organization shall not unfairly discriminate between insurers in the conditions imposed for admission as members or subscribers.

(2) Any insurer which has been denied or refused membership or admission as a subscriber by the rating organization may petition the commissioner for a hearing on the denial or refusal. The hearing shall be conducted as provided in Section 27-2-30 and the regulations of the commissioner, and the commissioner's order may be appealed as provided in Section 27-2-32.

§27-13-134.

(a) As a condition for obtaining and retaining authority to act as a rating organization, the organization shall notify the commissioner within 10 days of the withdrawal or expulsion of any member or subscriber.

(b) If a member or subscriber is expelled or excluded due to failure to pay an agreed upon membership or subscription fee, the member or subscriber shall be readmitted upon payment of any delinquent fees or charges to the rating organization.

(c) An insurer which has been expelled or has withdrawn as a member or subscriber of a rating organization shall not use any rate or rating system made by the rating organization during the period that the expulsion or withdrawal continues.

§27-13-135.

An insurer shall not use any rate or rating system made by a rating organization of which the insurer is not a member or subscriber.

§27-13-136.

All fees collected pursuant to this article shall be deposited in the State Treasury to the credit of the Insurance Department Fund.

Section 3. This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.

Insurance

Insurance Department

Title Insurance

Business and Commerce

Insurance Commissioner

Code Amended