CHAPTER 2153.  GROUP MARKETING OF AUTOMOBILE INSURANCE
FOR PERSONS OVER 55 YEARS OF AGE

SUBCHAPTER A.  GENERAL PROVISIONS

Revised Law

Sec. 2153.001.  DEFINITIONS.  In this chapter:

     (1)  "Group marketing" means the marketing of group automobile insurance to an eligible group under Section 2153.052.

     (2)  "Group automobile insurance" means automobile insurance that:

          (A)  covers individuals who are over 55 years of age; and

          (B)  is offered under a group marketing plan.  (V.T.I.C. Art. 21.77, Secs. 2(1) (part), (2) (part).)

Source Law

Sec. 2.  As used in this article:

     (1)  "Group motor vehicle insurance" means all motor vehicle insurance covering persons over 55 years of age that is offered … on a group marketing plan to an eligible group as defined in this article.

     (2)  "Group marketing" means the marketing of group motor vehicle insurance … to an eligible group … .

Revisor's Note

Section 2(1), V.T.I.C. Article 21.77, defines "group motor vehicle insurance" in part as insurance "offered … on a group marketing plan to an eligible group as defined in this article."  The revised law substitutes for the quoted language "offered under a group marketing plan" to avoid duplicating language included in Section 2(2), V.T.I.C. Article 21.77, revised in relevant part in this chapter in Section 2153.054.  The revised law also substitutes "automobile insurance" for "motor vehicle insurance" in this section and throughout this chapter for consistency of terminology in this code.

Revised Law

Sec. 2153.002.  APPLICABILITY OF CERTAIN PROVISIONS. Sections 4001.051 and 4001.053 do not apply to a group participating in a group marketing plan under this chapter.  (V.T.I.C. Art. 21.77, Sec. 10.)

Source Law

Sec. 10.  The provisions of Article 21.02 of this code may not be construed to apply to groups participating in group plans approved under this article.

Revisor's Note

(1)  Section 10, V.T.I.C. Article 21.77, refers to the provisions of "Article 21.02 of this code."  Article 21.02 is revised in various sections of Chapter 4001 of this code.  The relevant provisions are revised in Sections 4001.051 and 4001.053 of this code, and the revised law is drafted accordingly.

(2)  Section 10, V.T.I.C. Article 21.77, refers to "group plans approved under this article."  The revised law omits "approved" because the article does not grant any approval authority.

Revisor's Note

(End of Subchapter)

(1)  Section 1, V.T.I.C. Article 21.77, contains a statement of the legislature's purpose in enacting that article. The revised law omits the statement of legislative purpose because that provision is nonsubstantive and because the legislature's purpose in enacting that article is clear from the substantive provisions of the article, which are revised as this chapter.  The omitted law reads:

Sec. 1.  The purpose of this article is to authorize the writing of motor vehicle insurance covering persons over 55 years of age in this state on a group marketing basis subject to the conditions stated in this article and to set forth the terms and conditions under which insurance covering persons over 55 years of age on a group marketing basis may be written.

(2)  Section 9, V.T.I.C. Article 21.77, provides that the "board," meaning the State Board of Insurance, may make rules to carry out V.T.I.C. Article 21.77, revised as this chapter.  Chapter 685, Acts of the 73rd Legislature, Regular Session, 1993, abolished the board and transferred its functions to the commissioner of insurance and the Texas Department of Insurance.  Throughout this chapter, references to the board have been changed appropriately.  In addition, the revised law omits Section 9 as unnecessary.  For the reason stated in this revisor's note, the commissioner has the authority with respect to rulemaking that was formerly granted to the board.  Section 36.001 of this code authorizes the commissioner to adopt any rules necessary to implement the powers and duties of the department under this code.  The omitted law reads:

Sec. 9.  The board may make any rules necessary to carry out the provisions of this article.

[Sections 2153.003-2153.050 reserved for expansion]

SUBCHAPTER B.  CONDITIONS FOR ISSUANCE
OF GROUP AUTOMOBILE INSURANCE

Revised Law

Sec. 2153.051.  AUTHORIZATION FOR ISSUANCE OF GROUP AUTOMOBILE INSURANCE.  An insurer may issue group automobile insurance in this state if the conditions of Sections 2153.054(b), 2153.055-2153.059, and 2153.103 are met.  (V.T.I.C. Art. 21.77, Sec. 5(a).)

Source Law

Sec. 5.  (a)  Group motor vehicle insurance may be issued in this state provided the conditions in this section are met.

Revised Law

Sec. 2153.052.  ELIGIBILITY OF GROUP.  (a)  To be eligible for group marketing, a group must:

     (1)  have existed for at least six months before the date the group automobile insurance is purchased; and

     (2)  be organized for a purpose other than to become an insurance group under this chapter.

(b)  The group may include any group that is actuarially credible for underwriting purposes.  (V.T.I.C. Art. 21.77, Sec. 3.)

Source Law

Sec. 3.  Any group, to be eligible for group marketing, must have been in existence for at least six months before the purchase of the insurance and must be a group organized for a purpose other than to become an insurance group under this Act, and the group may include any group that will be actuarially credible for underwriting purposes.

Revised Law

Sec. 2153.053.  ELIGIBILITY OF GROUP MEMBER.  A member of a group described by Section 2153.052 is eligible to participate in a group marketing plan if the member is:

     (1)  in good standing with the group;

     (2)  over 55 years of age; and

     (3)  authorized to operate a motor vehicle in this state.  (V.T.I.C. Art. 21.77, Sec. 4.)

Source Law

Sec. 4. Eligible members of a group shall include all members in good standing in the group who are over 55 years of age and lawful drivers.

Revisor's Note

Section 4, V.T.I.C. Article 21.77, refers to certain group members who are "lawful drivers."  The revised law substitutes "authorized to operate a motor vehicle in this state" for "lawful driver" because to be a lawful driver, a person must be authorized to operate a motor vehicle in this state.

Revised Law

Sec. 2153.054.  GUARANTEED ISSUE.  (a)  An insurer shall issue group automobile insurance:

     (1)  on a guaranteed basis under a single insurance   program; and

     (2)  without individual underwriting selection or  individual proof of insurability.

(b)  An  insurer that issues group automobile insurance and the insured group shall accept for participation in the group marketing plan any member of the group who is eligible under Section 2153.053 and who wants to participate.  (V.T.I.C. Art. 21.77, Secs. 2(2) (part), 5(b).)

Source Law

[Sec. 2]

     (2)  ["Group  marketing" means the marketing of group motor vehicle insurance] … on a guaranteed basis under a single  insurance program without individual underwriting selection or  individual proof of insurability.

[Sec. 5]

(b)  The insurer and the group insured must accept all members who are eligible and wish to participate in the plan.

Revised Law

Sec. 2153.055.  INSURER QUALIFICATIONS.  To qualify to write group automobile insurance, an insurer:

     (1)  must be authorized to engage in the business of insurance in this state;

     (2)  must also be engaged in the business of writing automobile insurance for individuals to insure independent individual risks; and

     (3)  may not be organized solely to provide group automobile insurance.  (V.T.I.C. Art. 21.77, Secs. 2(1) (part), (2) (part), 5(c).)

Source Law

[Sec. 2]

     (1)  ["Group motor vehicle insurance" means all motor vehicle insurance … offered] by a licensed insurer in this state … .

     (2)  ["Group marketing" means the marketing of group motor vehicle insurance] by a licensed insurer otherwise engaged in insuring independent individual risks … .

[Sec. 5]

(c)  To qualify to write the group insurance defined in this article, an insurer must also be engaged in the business of writing the type of coverage offered for insureds other than group and may not be organized solely for the purpose of furnishing coverage to such groups.

Revisor's Note

(1)  Sections 2(1) and (2), V.T.I.C. Article 21.77, refer to a "licensed insurer."  The revised law substitutes "authorized" for "licensed" because "certificate of authority" is the term used throughout this code in relation to an entity's authority to engage in business.

(2)  Section 5(c), V.T.I.C. Article 21.77, provides that an insurer that writes group insurance must also be engaged in the business of writing "the type of coverage offered."  The revised law substitutes "automobile insurance" for the quoted language because automobile insurance is the only kind of insurance the article addresses.  Section 5(c), V.T.I.C. Article 21.77, also refers to "insureds other than group."  The revised law substitutes "independent individual risks" for the quoted language to be consistent with similar terminology used in the definition of "group marketing" in Section 2(2), V.T.I.C. Article 21.77, revised in pertinent part as this section and Section 2153.054 of this chapter.

Revised Law

Sec. 2153.056.  VEHICLES COVERED.  A group marketing plan must provide that a motor vehicle is eligible for group automobile insurance coverage only if the vehicle is owned by a group member or the member's spouse jointly or severally.  (V.T.I.C. Art. 21.77, Sec. 5(g).)

Source Law

(g)  The plan shall provide that only those motor vehicles owned by members of the group or their spouses jointly or severally shall be eligible for coverage.

Revised Law

Sec. 2153.057.  INDIVIDUAL POLICIES.  An insurer shall issue an individual policy to each participating group member.  (V.T.I.C. Art. 21.77, Secs. 5(d) (part), (e) (part).)

Source Law

(d)  Each member of the group shall be issued a policy [on forms prescribed for issue in this state by the State Board of Insurance].

(e)  Insurance must be provided by individual policies to each member of the group … .

Revised Law

Sec. 2153.058.  GROUP PAYMENT OF PREMIUMS.  An insurer shall provide group automobile insurance under an agreement under which the group periodically pays the premiums on the policies to the insurer.  (V.T.I.C. Art. 21.77, Sec. 5(e) (part).)

Source Law

(e)  Insurance must be provided … under an agreement whereby the premiums on the policies will be paid to the insurer periodically by the group.

Revised Law

Sec. 2153.059.  LIMITATIONS ON CANCELING INSURANCE.  (a)  An insurer may not cancel the insurance of a group member unless:

     (1)  the member fails to pay the premiums; or

     (2)  the insurance for the entire group is canceled.

(b)  An insurer who cancels insurance under Subsection (a) shall provide to each group member whose insurance is canceled the same notice of cancellation the insurer provides for cancellation of individual automobile insurance policies.  (V.T.I.C. Art. 21.77, Sec. 5(f).)

Source Law

(f)  An insurer may not cancel the insurance of an individual member of the group except for the nonpayment of premiums by the member or unless the insurance for the entire group is cancelled, and in such cases, notice of cancellation as provided in like nongroup policies shall be given to each member.

Revisor's Note

Section 5(f), V.T.I.C. Article 21.77, states that when a group member's insurance is canceled notice of cancellation shall be provided as in "like nongroup policies."  The revised law substitutes "individual automobile insurance policies" for the quoted language because referring to "individual" insurance rather than "nongroup" is consistent with terminology used elsewhere in this chapter.

[Sections 2153.060-2153.100 reserved for expansion]

SUBCHAPTER C.  RECORDS, RATES, AND FORMS

Revised Law

Sec. 2153.101.  MAINTENANCE OF RECORDS.  An insurer that writes insurance under a group marketing plan shall maintain separate experience data on the group marketing plan business, including complete records of premium income, losses, and expenses, so that the experience may be fairly ascertained.  (V.T.I.C. Art. 21.77, Sec. 6.)

Source Law

Sec. 6.  Every insurer writing insurance under a group marketing plan shall keep and maintain separate experience data on this type of business, including complete records of premium income, losses, and expenses so that the experience may be fairly ascertained.

Revisor's Note

Section 6, V.T.I.C. Article 21.77, states that an insurer shall "keep and maintain" certain experience data.  The revised law omits "keep" because "keep" is included in the meaning of "maintain."

Revised Law

Sec. 2153.102.  RATES.  Rates for group automobile insurance are determined in the manner provided by Chapter ____  [[[V.T.I.C.  Art. 5.13-2]]], to the extent that that chapter applies.  (V.T.I.C. Art. 21.77, Sec. 7.)

Source Law

Sec. 7.  Rates for the type of business authorized under this article shall be determined, fixed, prescribed, and promulgated in the manner provided in Article 5.01, Insurance Code, as amended, so far as it is applicable.

Revisor's Note

Section 7, V.T.I.C. Article 21.77, states that insurance rates under the article shall be "determined, fixed, prescribed, and promulgated" in the manner provided by V.T.I.C. Article 5.01, "as amended."  The revised law substitutes a reference to Chapter ____ [[[V.T.I.C. Art. 5.13-2]]] for the reference to Article 5.01 because Article 5.01(f) provides that, on and after December 1, 2004, rates for "personal automobile insurance" are determined as provided by V.T.I.C. Article 5.13-2, revised in this code as Chapter ____.  The kind of insurance offered under this chapter is a kind of personal automobile insurance.  In addition, the revised law omits the reference to "fixed, prescribed, and promulgated" because those terms do not accurately describe the procedures for determining rates under Article 5.13-2.  The revised law also omits the reference to "as amended" because Section 311.027, Government Code (Code Construction Act), applicable to the revised law, provides that unless expressly provided otherwise, a reference to a statute applies to all reenactments, revisions, or amendments of the statute.

Revised Law

Sec. 2153.103.  POLICY FORMS.  An insurer that writes group automobile insurance shall use policy forms:

     (1)  prescribed by the commissioner and authorized for use by Section ____ [[[V.T.I.C. Art. 5.145, Sec. 2(b)]]]; or

     (2)  filed and in effect as provided by Section ___ [[[V.T.I.C. Article 5.145, Sec. 2(a)]]].  (V.T.I.C. Art. 21.77, Secs. 5(d) (part), 8.)

Source Law

[Sec. 5]

(d)  [Each member of the group shall be issued a policy] on forms prescribed for issue in this state by the State Board of Insurance.

Sec. 8.  All policy forms for insurance written under this article shall be prescribed by the commissioner as provided in Article 5.06 of this code or filed and in effect as provided in Article 5.145 of this code.

Revisor's Note

Section 5(d), V.T.I.C. Article 21.77, refers to "forms prescribed for issue … by the State Board of Insurance," meaning the commissioner of insurance, and Section 8 of that article refers to forms "prescribed by the commissioner as provided in Article 5.06 of this code or filed and in effect as provided in Article 5.145 of this code."  Under V.T.I.C. Article 5.06, policy forms for automobile insurance were adopted or approved by the commissioner.  The 78th Legislature enacted Chapter 206, Acts of the 78th Legislature, Regular Session, 2003, which took effect June 11, 2003.  Section 21.07 of that act amended V.T.I.C. Article 5.06 to provide that policy forms for automobile insurance are now regulated under V.T.I.C. Article 5.13-2.  However, under Section 2(b), V.T.I.C. Article 5.145, enacted by Section 2.01 of Chapter 206, an insurer may continue to use policy forms previously promulgated, approved, or adopted under Article 5.06. For clarity and to fully reflect the changes made by Chapter 206, the revised law substitutes "prescribed by the commissioner and authorized for use by Section ____," the revision of Section 2(b), Article 5.145, for the quoted phrases.