78R5888 AJA-D

By:  Taylor                                                       H.B. No. 1705



A BILL TO BE ENTITLED

AN ACT

relating to underwriting guidelines for residential property 
insurance.     
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 7(a), Article 21.49-2B, Insurance Code, 
is amended to read as follows:
	(a)  This section applies only to standard fire, 
homeowners', and farm or ranch owners' insurance policies.  A claim 
under this section does not include:
		(1)  a claim resulting from a loss caused by natural 
causes; [or]
		(2)  a claim that is filed but is not paid or payable 
under the policy; or
		(3)  the first water damage claim not arising out of the 
negligence of the policyholder in:
			(A)  a one-year period for the purposes of 
Subsection (b) of this section; or
			(B)  a three-year period for the purposes of 
Subsections (c) and (e) of this section.
	SECTION 2.  Section 21.29-2B, Insurance Code, is amended by 
adding Section 7A to read as follows:
	Sec. 7A.  ISSUANCE OF RESIDENTIAL PROPERTY INSURANCE POLICY.  
(a) This section applies only to standard fire, homeowners', and 
farm or ranch owners' insurance policies.
	(b)  An insurer may not refuse to issue a policy described by 
Subsection (a) based on a single water damage claim by the applicant 
if the claim does not arise out of the negligence of the applicant.
	SECTION 3.  This Act applies only to the issuance of an 
insurance policy on or after the effective date of this Act or the 
renewal or nonrenewal of an insurance policy on or after the 45th 
day after the effective date of this Act.  The issuance of an 
insurance policy before the effective date of this Act or the 
renewal or nonrenewal of an insurance policy before the 45th day 
after the effective date of this Act is governed by the law in 
effect immediately before the effective date of this Act, and that 
law is continued in effect for that purpose.
	SECTION 4.  This Act takes effect immediately if it receives 
a vote of two-thirds of all the members elected to each house, as 
provided by Section 39, Article III, Texas Constitution.  If this 
Act does not receive the vote necessary for immediate effect, this 
Act takes effect September 1, 2003.