(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.
Official text of the Texas Insurance Code as published by the Texas Legislative Council.