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Texas Insurance Code - INS § 560.002. Use of Certain Rates Prohibited; Rate Requirements

Current as of January 01, 2024 | Updated by FindLaw Staff

(a) An insurer may not use a rate that violates this chapter.

(b) A rate used under this code:

(1) must be just, fair, reasonable, and adequate; and

(2) may not be:

(A) confiscatory;

(B) excessive for the risks to which the rate applies; or

(C) unfairly discriminatory.

(c) For purposes of this section, a rate is:

(1) 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 in any market;

(2) excessive if the rate is likely to produce a long-term profit that is unreasonably high in relation to the insurance coverage provided; 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.

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Cite this article: FindLaw.com - Texas Insurance Code - INS § 560.002. Use of Certain Rates Prohibited; Rate Requirements - last updated January 01, 2024 | https://codes.findlaw.com/tx/insurance-code/ins-sect-560-002/

Read this complete Texas Insurance Code - INS § 560.002. Use of Certain Rates Prohibited; Rate Requirements on Westlaw

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