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June 25, 2003 at 08:00 PM
NU Online News Service, June 25, 2003, 6:35 p.m. EDT — New York
Texas Gov. Rick Perry has signed S.B. 14, a bill that includes an amendment that makes criminally negligent use of race-based insurance pricing and some other types of discriminatory insurance pricing a “state jail felony.”
Under the new law, a covered person commits a felony if that person, with criminal negligence, collects an insurance premium or offers insurance coverage using a premium “based on a rate that is, because of race, color, religion, ethnicity, or national origin, different from another premium rate offered or used by the person for the same coverage, other than for classifications applicable alike to persons of every race, color, religion, ethnicity, or national origin.”
The new race-based pricing law, which originally was introduced as S.B. 1061, a stand-alone bill, by state Sen. Rodney Ellis, D-Houston, applies to the officers and directors of insurance companies as well as to the companies, according to the bill text.
The law is scheduled to take effect Sept. 30
The new race-based pricing law gives Texas district attorneys the authority to convene a grand jury after finding one plaintiff who accuses an insurer of violating the law, Ellis says.
