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A BILL TO BE ENTITLED
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AN ACT
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relating to contractual limitations periods in property insurance |
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policies. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter B, Chapter 2301, Insurance Code, is |
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amended by adding Section 2301.0525 to read as follows: |
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Sec. 2301.0525. CONTRACTUAL LIMITATIONS PERIOD IN PROPERTY |
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INSURANCE FORMS. (a) An insurer may file and the department shall |
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approve policy forms or endorsements that provide for a contractual |
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limitations period for filing suit for first party claims under the |
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policy. |
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(b) The contractual limitations period in a residential |
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property or commercial property insurance policy for a first party |
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claim must not be less than two (2) years from the date of the loss. |
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(c) Any limitation, condition, stipulation, or agreement in |
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a policy in violation of this Section shall be void, but such |
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voiding shall not affect the validity of the other provisions of the |
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policy. |
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(d) To the extent there is any conflict with Section 16.070 |
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of the Civil Practices & Remedies Code or other law, this Section |
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shall prevail. |
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SECTION 2. Section 16.070, Civil Practices & Remedies Code, |
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is amended to read as follows: |
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Sec. 16.070. CONTRACTUAL LIMITATIONS PERIOD. (a) Except as |
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provided by [Subsection] Subsections (b) and c, a person may not |
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enter a stipulation, contract, or agreement that purports to limit |
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the time in which to bring suit on the stipulation, contract, or |
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agreement to a period shorter than two years. A stipulation, |
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contract, or agreement that establishes a limitations period that |
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is shorter than two years is void in this state. |
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(b) This section does not apply to a stipulation, contract, |
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or agreement relating to the sale or purchase of a business entity |
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if a party to the stipulation, contract, or agreement pays or |
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receives or is obligated to pay or entitled to receive |
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consideration under the stipulation, contract, or agreement having |
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an aggregate value of not less than $500,000. |
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(c) This section does not apply to insurance policies |
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insuring residential or commercial property located in this state |
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containing stipulations, contracts, or agreements establishing a |
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limitations period in the policy. The stipulations, contracts, or |
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agreements in such insurance policies may not limit the time to |
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bring suit for a first party claim under the policy to a period |
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shorter than two years from the date of loss. |
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SECTION 3. This Act applies to all policies issued or |
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renewed on or after the effective date of this Act. This Act is |
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effective September 1, 2011. |