77R10851 DLF-F
By Junell H.B. No. 2527
Substitute the following for H.B. No. 2527:
By Brimer C.S.H.B. No. 2527
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to certificates of insurance used to evidence the
1-3 existence of certain insurance coverage.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subchapter E, Chapter 21, Insurance Code, is
1-6 amended by adding Article 21.29 to read as follows:
1-7 Art. 21.29. CERTIFICATES OF INSURANCE. (a) In this article,
1-8 "insurance company" means any insurer, including reciprocal or
1-9 interinsurance exchange, county mutual insurance company, Lloyd's
1-10 plan and surplus lines insurer, authorized to write or eligible to
1-11 provide insurance in this state for the types of policies subject
1-12 to this article.
1-13 (b) The commissioner shall by rule establish requirements
1-14 for a certificate of insurance issued by an insurance company or
1-15 the company's authorized representative to be used as evidence of
1-16 the existence of a workers' compensation policy or commercial
1-17 liability policy, including commercial automobile and general
1-18 liability. The rules must include requirements to assist an
1-19 individual relying on a certificate of insurance as proof of
1-20 insurance to verify the accuracy of the information contained in
1-21 the certificate of insurance.
1-22 (c) The certificate of insurance must include any
1-23 information required by the commissioner and, at minimum, must
1-24 include:
2-1 (1) the name of each insured covered under the policy;
2-2 (2) the name, the mailing address, and the toll-free
2-3 telephone number of the insurance company providing the coverage
2-4 required to be maintained under Article 21.71 of this code;
2-5 (3) each policy number;
2-6 (4) each policy effective date;
2-7 (5) each policy expiration date;
2-8 (6) the name and address of the certificate holder;
2-9 (7) the printed name of the individual issuing the
2-10 certificate of insurance;
2-11 (8) the signature of the individual issuing the
2-12 certificate of insurance;
2-13 (9) the name and mailing address of the company or
2-14 agency for whom the individual that is issuing the certificate of
2-15 insurance is employed;
2-16 (10) the license number issued by the department for
2-17 the individual or the agency, if the individual issuing the
2-18 certificate of insurance is employed by an insurance agency; and
2-19 (11) the National Association of Insurance
2-20 Commissioners number for the insurance company, if the individual
2-21 issuing the certificate of insurance is employed by an insurance
2-22 company.
2-23 (d) An insurance company that cancels a policy subject to
2-24 this article or that does not renew the policy on or before the
2-25 anniversary date of the policy shall deliver notice of the
2-26 cancellation or nonrenewal to the insured and each certificate
2-27 holder who makes a written or electronic request to the insurance
3-1 company or agency for notice of the cancellation or nonrenewal.
3-2 (e) For commercial liability policies, the notice to the
3-3 certificate holder under Subsection (d) of this section must be
3-4 provided in accordance with the notice requirements of Article
3-5 21.49-2A of this code. For a policy provided by an eligible
3-6 surplus lines insurer, the notice to the certificate holder must be
3-7 provided in accordance with Section 6(d), Article 1.14-2 of this
3-8 code. For workers' compensation policies, the notice to the
3-9 certificate holder must be provided in accordance with the notice
3-10 requirements of Section 406.008(a), Labor Code.
3-11 SECTION 2. Section 406.008(a), Labor Code, is amended to read
3-12 as follows:
3-13 (a) An insurance company that cancels a policy of workers'
3-14 compensation insurance or that does not renew the policy by the
3-15 anniversary date of the policy shall deliver notice of the
3-16 cancellation or nonrenewal [by certified mail or in person] to the
3-17 employer, [and] the commission, and each person who requests notice
3-18 of the cancellation or nonrenewal in writing. The notice must be
3-19 provided by certified mail or in person not later than:
3-20 (1) the 30th day before the date on which the
3-21 cancellation or nonrenewal takes effect; or
3-22 (2) the 10th day before the date on which the
3-23 cancellation or nonrenewal takes effect if the insurance company
3-24 cancels or does not renew because of:
3-25 (A) fraud in obtaining coverage;
3-26 (B) misrepresentation of the amount of payroll
3-27 for purposes of premium calculation;
4-1 (C) failure to pay a premium when due;
4-2 (D) an increase in the hazard for which the
4-3 employer seeks coverage that results from an act or omission of the
4-4 employer and that would produce an increase in the rate, including
4-5 an increase because of a failure to comply with:
4-6 (i) reasonable recommendations for loss
4-7 control; or
4-8 (ii) recommendations designed to reduce a
4-9 hazard under the employer's control within a reasonable period; or
4-10 (E) a determination made by the commissioner of
4-11 insurance that the continuation of the policy would place the
4-12 insurer in violation of the law or would be hazardous to the
4-13 interest of subscribers, creditors, or the general public.
4-14 SECTION 3. (a) This Act takes effect September 1, 2001.
4-15 (b) The commissioner of insurance shall adopt rules as
4-16 required by Article 21.29, Insurance Code, as added by this Act,
4-17 not later than December 1, 2001.
4-18 (c) Article 21.29, Insurance Code, as added by this Act,
4-19 applies only to a certificate of insurance issued on or after
4-20 January 1, 2002.