Texas Statutes
Subchapter A. Rate Filings
Section 2053.002. Rate Standards

Sec. 2053.002. RATE STANDARDS. (a) In setting rates, an insurance company shall consider:
(1) past and prospective loss cost experience;
(2) operation expenses;
(3) investment income;
(4) a reasonable margin for profit and contingencies;
(5) the effect on premiums of individual risk variations based on loss or expense considerations; and
(6) any other relevant factor.
(b) A rate or premium established under this subchapter may not be excessive, inadequate, or unfairly discriminatory.
(c) An insurance company may:
(1) group risks by classification to establish rates and minimum premiums; and
(2) modify classification rates to produce rates for individual risks in accordance with rating plans that establish standards for measuring variations in those risks on the basis of any factor listed in Subsection (a).
(d) In setting rates that apply only to policyholders in this state, an insurance company shall use available premium, loss, claim, and exposure information from this state to the full extent that the information is actuarially credible. The insurance company may use experience from outside this state as necessary to supplement information from this state that is not actuarially credible.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 2, eff. April 1, 2007.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636), Sec. 3B.043(a), eff. September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch. 921 (H.B. 3167), Sec. 9.043(a), eff. September 1, 2007.