Sec. 560.002. USE OF CERTAIN RATES PROHIBITED; RATE REQUIREMENTS. (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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