By Junell                                             H.B. No. 1408
         77R4864 AJA-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the refund of unearned premiums by an insurer.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1. Subchapter E, Chapter 21, Insurance Code, is
 1-5     amended by adding Article 21.29 to read as follows:
 1-6           Art. 21.29.  REFUND OF UNEARNED PREMIUM REQUIRED. (a)  In
 1-7     this article, "insurer" means an insurance company or other entity
 1-8     that is authorized to engage in the business of insurance in this
 1-9     state, including:
1-10                 (1)  a domestic or foreign, stock or mutual, life,
1-11     health, or accident insurance company;
1-12                 (2)  a domestic or foreign, stock or mutual, fire and
1-13     casualty insurance company;
1-14                 (3)  a Mexican casualty company;
1-15                 (4)  a farm mutual insurance company;
1-16                 (5)  a county mutual insurance company;
1-17                 (6)  a domestic or foreign Lloyd's plan insurer;
1-18                 (7)  a domestic or foreign reciprocal or insurance
1-19     exchange;
1-20                 (8)  a domestic or foreign fraternal benefit society;
1-21                 (9)  a stipulated premium insurance company;
1-22                 (10)  a nonprofit legal service corporation;
1-23                 (11)  a statewide mutual assessment company;
1-24                 (12)  a local mutual aid association;
 2-1                 (13)  a local mutual burial association;
 2-2                 (14)  an association exempt under Article 14.17 of this
 2-3     code;
 2-4                 (15)  a nonprofit hospital, medical, or dental service
 2-5     corporation, including a company subject to Chapter 20 of this
 2-6     code;
 2-7                 (16)  a risk retention group;
 2-8                 (17)  a purchase group;
 2-9                 (18)  a surplus lines carrier; and
2-10                 (19)  a guaranty association created and operating
2-11     under Article 21.28-C or 21.28-D of this code.
2-12           (b)  An insurer shall promptly refund to an insurance
2-13     policyholder or contract holder any unearned premium for the policy
2-14     or contract.
2-15           (c)  The commissioner shall adopt rules necessary to
2-16     implement this article.
2-17           SECTION 2. (a)  This Act takes effect September 1, 2001.
2-18           (b)  The change in law made by Article 21.29, Insurance Code,
2-19     as added by this Act, applies only to an insurance premium paid to
2-20     an insurer on or after January 1, 2002.  An insurance premium paid
2-21     before January 1, 2002, is governed by the law in effect
2-22     immediately before the effective date of this Act, and that law is
2-23     continued in effect for that purpose.