1-1 By: Carona S.B. No. 431
1-2 (In the Senate - Filed January 29, 2001; January 30, 2001,
1-3 read first time and referred to Committee on Business and Commerce;
1-4 March 8, 2001, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 6, Nays 0; March 8, 2001,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 431 By: Carona
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to a specialty insurance agent license for certain persons
1-11 who rent real property for residential use.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Subsection (a), Section 1, Article 21.09,
1-14 Insurance Code, is amended to read as follows:
1-15 (a) The commissioner may issue a specialty license to an
1-16 applicant who has complied with the requirements of this article.
1-17 A specialty license authorizes the license holder to act as an
1-18 agent for the types of insurance specified in this article for any
1-19 insurer authorized to write these types of insurance in this state.
1-20 A person who holds a license under this article is known as a
1-21 "specialty license holder." The commissioner may adopt rules
1-22 necessary to implement this article and to meet the minimum
1-23 requirements of federal law and regulations.
1-24 SECTION 2. Section 6, Article 21.09, Insurance Code, is
1-25 amended to read as follows:
1-26 Sec. 6. RESIDENTIAL RENTER LICENSE. (a) In this section:
1-27 (1) "Residential landlord" means a person engaged in
1-28 the business of leasing residential rental property. The term
1-29 includes an affiliate of that person.
1-30 (2) "Residential rental agreement" means a written
1-31 agreement that sets forth the terms and conditions governing the
1-32 use and habitation of residential rental property.
1-33 (3) "Residential rental property" means a unit of real
1-34 property that is rented on a periodic basis to a residential renter
1-35 for use as a habitation. The term includes any common areas used
1-36 by the person.
1-37 (4) "Residential renter" means a person who obtains
1-38 the right under a residential rental agreement to use and inhabit
1-39 residential rental property.
1-40 (b) Notwithstanding any other provision of this article or
1-41 this code, the commissioner may issue a specialty license under
1-42 Section 1 of this article to a residential landlord, or to the
1-43 property manager of a residential landlord, who complies with this
1-44 section only for the limited purposes set forth in this section.
1-45 (c) A residential landlord or property manager licensed
1-46 under Section 1 of this article may act as an agent for any
1-47 authorized insurer only in connection with the rental of
1-48 residential rental property that the landlord or property manager
1-49 leases and only with respect to:
1-50 (1) insurance that provides hazard insurance coverage
1-51 to residential renters for loss of, or damage to, tangible personal
1-52 property during the term of the residential rental agreement;
1-53 (2) insurance that provides liability insurance
1-54 coverage to residential renters for bodily injury or property
1-55 damage during the term of the residential rental agreement; or
1-56 (3) any other coverage the commissioner may approve as
1-57 meaningful and appropriate in connection with the lease of the
1-58 residential rental property.
1-59 (d) Insurance may not be issued under this section unless
1-60 the brochures or other written materials containing the disclosures
1-61 required by Section 1(g) of this article are prominently displayed
1-62 and readily available to the prospective residential renter.
1-63 (e) A license holder under this section must include in each
1-64 lease agreement under which the license holder offers insurance
2-1 under this section a conspicuous disclaimer, in the format
2-2 prescribed by the commissioner, that states substantially the
2-3 following:
2-4 (1) purchase of insurance from the license holder is
2-5 not required as a condition of entering into the lease agreement;
2-6 (2) the insurance coverage is available from other
2-7 insurers and agents;
2-8 (3) the insurance coverage offered by the license
2-9 holder may be offered at rates that are not filed with, or approved
2-10 by, the commissioner; and
2-11 (4) the consumer is advised to seek and obtain the
2-12 best rates and coverage. [RULES. The commissioner may adopt rules
2-13 necessary to implement this article and to meet the minimum
2-14 requirements of federal law and regulations.]
2-15 SECTION 3. (a) This Act takes effect September 1, 2001.
2-16 (b) A residential landlord or property manager for a
2-17 residential landlord is not required to be licensed as provided by
2-18 Section 6, Article 21.09, Insurance Code, as amended by this Act,
2-19 before January 1, 2002.
2-20 * * * * *