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79R498 KCR-D

By:  Hegar                                                        H.B. No. 363



A BILL TO BE ENTITLED

AN ACT

relating to the declination of certain property and casualty 
insurance policies.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  The heading to Subchapter C, Chapter 551, 
Insurance Code, as effective April 1, 2005, is amended to read as 
follows:
	SUBCHAPTER C.  DECLINATION, CANCELLATION, AND NONRENEWAL OF

CERTAIN PROPERTY AND CASUALTY POLICIES
	SECTION 2.  Subchapter C, Chapter 551, Insurance Code, as 
effective April 1, 2005, is amended by adding Section 551.113 to 
read as follows:
	Sec. 551.113.  DECLINATION PROHIBITED; CONSIDERATION OF 
CERTAIN CLAIMS.  (a)  This section applies only to a standard fire, 
homeowners, or farm and ranch owners insurance policy.
	(b)  When deciding to issue or to decline to issue an 
insurance policy to an applicant for insurance, an insurer may not 
consider the following prior conduct of the applicant:
		(1)  filing a claim under an insurance policy that was 
not paid or payable under that policy; or
		(2)  informing an insurer, other than the insurer to 
whom the applicant has applied for insurance, of circumstances that 
potentially give rise to a claim but for which a claim is not filed.
	SECTION 3.  The change in law made by this Act applies only 
to an application for insurance coverage that is made on or after 
the effective date of this Act.  An application for insurance 
coverage that is made before the effective date of this Act is 
governed by the law in effect at the time the application was made, 
and that law is continued in effect for that purpose.
	SECTION 4.  This Act takes effect September 1, 2005.