Legislation has been introduced into the Texas House of Representatives and Senate that would return the state to a prior approval system for rates for personal automobile and residential property insurance policies. Texas previously had a prior approval system in place until it changed to a file and use system in 2003.

House Bill 1594 and Senate Bill 91 were introduced because some Texas legislators believe that the legislation will lead to lower rates for consumers, which they contend were not realized as was expected from the previous change to a file and use system. A significant difference between the bills is that the Senate Bill calls for a 30-day approval/disapproval decision from the Texas Insurance Commissioner, while the House Bill has a 120-day deemer provision. Insurers contend that a prior approval systems reduce their incentive to compete in the marketplace and that Texas’ high rates are due to the state’s vulnerability to natural disasters, especially windstorms.

Both bills are currently being reviewed in committee meetings.