1-1 By: Madla S.B. No. 984 1-2 (In the Senate - Filed March 8, 1999; March 9, 1999, read 1-3 first time and referred to Committee on Economic Development; 1-4 April 9, 1999, reported favorably by the following vote: Yeas 6, 1-5 Nays 0; April 9, 1999, sent to printer.) 1-6 A BILL TO BE ENTITLED 1-7 AN ACT 1-8 relating to insurers' written statements of the reasons for 1-9 cancellation, declination, or nonrenewal of certain insurance 1-10 policies. 1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-12 SECTION 1. Chapter 21, Insurance Code, is amended by adding 1-13 Article 21.49-2E to read as follows: 1-14 Art. 21.49-2E. REQUIREMENTS FOR WRITTEN STATEMENT OF REASON 1-15 FOR CANCELLATION, DECLINATION, OR NONRENEWAL. (a) An insurer's 1-16 written statement giving the reason or reasons for cancellation, 1-17 declination, or nonrenewal of an insurance policy required by 1-18 Articles 21.49-2, 21.49-2A, and 21.49-2B of this code shall fully 1-19 explain a decision which adversely affects an applicant or 1-20 policyholder by denying the applicant or policyholder coverage or 1-21 continued coverage, and such statements shall: 1-22 (1) refer to a specific underwriting guideline or 1-23 guidelines on file with or available to the department and the 1-24 office of public insurance counsel under Article 1.24D of this 1-25 code; 1-26 (2) state the precise risk factor or factors of the 1-27 applicant or policyholder that violate the guideline or guidelines; 1-28 (3) state the source of information the insurer relied 1-29 on regarding the risk factor or factors; and 1-30 (4) specify any other information deemed relevant by 1-31 the commissioner. 1-32 (b) The commissioner is authorized and directed to issue 1-33 rules necessary to implement this article. 1-34 SECTION 2. This Act takes effect September 1, 1999, and 1-35 applies to a cancellation, declination, or nonrenewal of an 1-36 insurance policy under Article 21.49-2E, Insurance Code, as added 1-37 by this Act, that occurs on or after January 1, 2000. A 1-38 cancellation, declination, or nonrenewal that occurs before January 1-39 1, 2000, is governed by the law as it existed immediately before 1-40 the effective date of this Act, and that law is continued in effect 1-41 for that purpose. 1-42 SECTION 3. The importance of this legislation and the 1-43 crowded condition of the calendars in both houses create an 1-44 emergency and an imperative public necessity that the 1-45 constitutional rule requiring bills to be read on three several 1-46 days in each house be suspended, and this rule is hereby suspended. 1-47 * * * * *