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A BILL TO BE ENTITLED
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AN ACT
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relating to cancellation of certain property and casualty insurance |
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policies for the insured's failure to cooperate in a claim |
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investigation, settlement, or defense. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter C, Chapter 551, Insurance Code, is |
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amended by adding Section 551.1045 to read as follows: |
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Sec. 551.1045. MANDATORY CANCELLATION OF POLICIES. (a) If |
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an insured fails or refuses to cooperate with an insurer in the |
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investigation, settlement, or defense of a claim or action or the |
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insurer is unable to contact the insured using reasonable efforts |
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for those purposes, the insurer shall provide written notice to the |
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named insured that states: |
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(1) how the insured failed or refused to cooperate, |
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including failure as a result of the insurer's inability to contact |
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the insured; |
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(2) the claim or action for which the insurer is |
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requesting cooperation; and |
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(3) the insurer will cancel the policy on the 10th day |
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after the date the insured receives the notice if the insured |
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continues to fail or refuse to cooperate. |
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(b) An insurer shall cancel a policy on the 10th day after |
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the date the insured receives notice under Subsection (a) if the |
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named insured fails or refuses to cooperate with the insurer in the |
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investigation, settlement, or defense of the claim or action |
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described by the notice. |
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SECTION 2. Section 551.1045, Insurance Code, as added by |
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this Act, applies only to an insurance policy delivered, issued for |
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delivery, or renewed on or after January 1, 2022. |
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SECTION 3. This Act takes effect September 1, 2021. |