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A BILL TO BE ENTITLED
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AN ACT
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relating to the refund of premiums on the cancellation of Texas |
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Windstorm Insurance Association policies by insureds. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 2210.204, Insurance Code, is amended by |
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amending Subsections (d) and (e) and adding Subsections (d-1), |
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(d-2), and (d-3) to read as follows: |
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(d) If an insured requests cancellation of the insurance |
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coverage, the association shall refund the unearned premium only if |
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the cancellation was for one of the following reasons: |
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(1) the purchase of similar coverage in the voluntary |
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market; |
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(2) sale of the insured property to an unrelated |
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party; |
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(3) total loss of the insured property; or |
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(4) a determination by the association that the |
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insured property is no longer insurable under the association's |
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rules and procedures[, less any minimum retained premium set forth |
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in the plan of operation, payable to the insured and the holder of |
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an unpaid balance]. |
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(d-1) The property and casualty agent who received a |
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commission as the result of the issuance of an association policy |
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providing the [canceled] coverage canceled under Subsection (d) |
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shall refund the agent's commission on any unearned premium in the |
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same manner. |
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(d-2) An insured must provide proof in the form and manner |
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prescribed by the association of a cancellation reason described by |
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Subsection (d)(1), (2), or (3) to be eligible for a refund under |
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that subsection. |
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(d-3) If an insured requests cancellation for a reason other |
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than a reason described by Subsection (d) or fails to provide proof |
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under Subsection (d-2), the insured's premium is considered earned |
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and is not refundable. |
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(e) For cancellation of insurance coverage under this |
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section, the minimum retained premium in the plan of operation must |
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be for a period of not less than the full annual policy term [90 |
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days], except for events specified in the plan of operation that |
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reflect a significant change in the exposure or the policyholder |
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concerning the insured property, including: |
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(1) the purchase of similar coverage in the voluntary |
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market; |
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(2) sale of the property to an unrelated party; |
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(3) death of the policyholder; or |
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(4) total loss of the property. |
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SECTION 2. The change in law made by this Act applies only |
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to a Texas windstorm and hail insurance policy that is delivered, |
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issued for delivery, or renewed by the Texas Windstorm Insurance |
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Association on or after the effective date of this Act. A policy |
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delivered, issued for delivery, or renewed before the effective |
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date of this Act is governed by the law as it existed immediately |
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before that date, and that law is continued in effect for that |
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purpose. |
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SECTION 3. This Act takes effect September 1, 2023. |
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