2003S0455-1 03/03/03


By:  Williams                                                     S.B. No. 942


A BILL TO BE ENTITLED

AN ACT

relating to a specialty insurance agent license for landlords who 
sell renter's insurance to residential tenants.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Article 21.09, Insurance Code, is amended by 
adding Section 6 to read as follows:
	Sec. 6.  RESIDENTIAL RENTER'S INSURANCE LICENSE.  (a)  In 
this section:
		(1)  "Landlord" means:                                                 
			(A)  a person engaged in the business of leasing 
residential rental property owned by that person; or
			(B)  a person who leases or collects rent on 
residential rental property on behalf of the owner of the property, 
including a property management company.
		(2)  "Lease" means a written agreement that contains 
the terms and conditions governing the use and habitation of 
residential rental property.
		(3)  "Renter's insurance" means:                                       
			(A)  hazard insurance coverage provided to a 
tenant for loss of or damage to the tenant's tangible personal 
property during the term of the lease; and
			(B)  liability insurance coverage provided to a 
tenant for bodily injury or property damage during the term of the 
lease.
		(4)  "Residential rental property" means a unit of real 
property that is rented on a periodic basis to a tenant for use as a 
habitation.
		(5)  "Tenant" means a person who under a residential 
lease obtains the right to use and inhabit residential rental 
property.
	(b)  Notwithstanding any other provision of this article or 
this code, the commissioner may issue a specialty license under 
Section 1 of this article to a landlord who complies with this 
section only for the limited purposes set forth in this section.
	(c)  A landlord licensed under Section 1 of this article may 
act as an agent for any authorized insurer only in connection with 
the rental of residential rental property that the landlord leases 
and only with respect to:
		(1)  providing written information about renter's 
insurance to a prospective or existing tenant;
		(2)  assisting a tenant in the completion of an 
application for renter's insurance;
		(3)  transmitting a tenant's completed application for 
renter's insurance to a licensed insurance agent or insurer; or
		(4)  collecting and transmitting a tenant's premium for 
renter's insurance to a licensed insurance agent or an insurer 
authorized to engage in business under this code.
	(d)  A landlord who requires a tenant to have renter's 
insurance as a condition of leasing residential rental property is 
not authorized by Subsection (c) of this section to act as an agent 
in the capacity described.
	(e)  Subsection (c) of this section authorizes a landlord to 
act as an agent in the capacity describe only if:
		(1)  the renter's insurance is written through a 
general property and casualty insurance agent licensed under this 
code; and
		(2)  the tenant's lease includes statements, in 
boldface type conspicuously located in the lease:
			(A)  indicating that renter's insurance is not 
required in order to enter into the lease;
			(B)  indicating that renter's insurance is 
available from other insurers and agents;
			(C)  indicating that renter's insurance purchased 
by the tenant may be canceled at any time at the tenant's option and 
the tenant will receive any refund to which the tenant is entitled;
			(D)  indicating that rates for renter's insurance 
are not necessarily filed with or approved by the commissioner of 
insurance; and
			(E)  advising the tenant to seek and obtain the 
best rates and coverage for renter's insurance.
	(f)  If the landlord collects premiums from a tenant for 
renter's insurance, the amount of the premium must be specifically 
stated in the tenant's lease.
	(g)  A landlord who engages in the activities described by 
Subsection (c) of this section in relation to a renter's insurance 
policy may receive an administrative fee from the insurer who 
writes the coverage that does not exceed 15 percent of the premium 
charged for the policy.
	SECTION 2.  (a)  This Act takes effect September 1, 2003.                      
	(b)  A person who engages in the business of leasing 
residential rental property is not required to be licensed in 
accordance with Section 6, Article 21.09, Insurance Code, as added 
by this Act, before January 1, 2004.