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A BILL TO BE ENTITLED
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AN ACT
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relating to the nature of certain promotional event prize programs. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle A, Title 10, Insurance Code, is amended |
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by adding Chapter 1810 to read as follows: |
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CHAPTER 1810. PROMOTIONAL EVENT PRIZE PROGRAMS |
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Sec. 1810.001. DEFINITION. In this chapter, "promotional |
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event prize program" means a written contract entered into in this |
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state for commercial marketing or promotional purposes: |
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(1) under which a monetary risk is transferred from |
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one or more parties to the contract to another party to the |
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contract; |
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(2) that does not require as a condition precedent to |
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the imposition of contractual liability on the part of the person |
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accepting the risk: |
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(A) actual economic loss by the person who |
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transfers the risk; or |
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(B) submission of proof of economic loss by the |
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person transferring the risk; and |
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(3) that specifically states that the contract is not |
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for insurance and performance under the contract is not covered by |
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any state guaranty association. |
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Sec. 1810.002. PROGRAM NOT INSURANCE; NOT COVERED BY |
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GUARANTY ASSOCIATION. A promotional event prize program does not |
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constitute the business of insurance in this state. A person's |
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claim for performance under a contract for a promotional event |
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prize program is not a covered claim under Chapter 462 and a |
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promotional event prize program is not covered by the Texas |
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Property and Casualty Insurance Guaranty Association or any other |
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state guaranty association. |
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Sec. 1810.003. CERTAIN MARKETING PROHIBITED. A promotional |
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event prize program may not be marketed or described as insurance. |
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SECTION 2. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2007. |