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A BILL TO BE ENTITLED
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AN ACT
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relating to the transparency and propagation of information |
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regarding personal automobile and residential property insurance |
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rates, policies, and complaints. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. This Act shall be known as the Texas Insurance |
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Consumer Awareness and Affordability Act. |
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SECTION 2. Subchapter B, Chapter 32, Insurance Code, is |
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amended by adding Sections 32.024 and 32.025 to read as follows: |
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Sec. 32.024. TEXAS RESIDENTIAL PROPERTY INSURANCE STUDY. |
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(a) In this section, "residential property insurance" means |
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insurance against loss to real or tangible personal property at a |
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fixed location that is provided through a homeowners insurance |
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policy, residential fire and allied lines insurance policy, or farm |
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and ranch owners insurance policy. |
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(b) The department and the office of public insurance |
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counsel shall study: |
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(1) residential property insurance rates in this |
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state; |
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(2) regulatory changes with the potential to lower |
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residential property insurance rates; |
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(3) practices by individual companies that have the |
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effect of lowering residential property insurance rates or |
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increasing customer satisfaction; |
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(4) other states' laws that have the effect of lowering |
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residential property insurance rates; |
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(5) the impact of weather events on residential |
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property insurance rates in this state; |
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(6) in an effort to identify practices that lower |
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rates, the similarities and differences between the residential |
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property insurance market and the commercial property insurance |
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market in this state; |
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(7) practices that encourage policyholders to shop the |
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market; |
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(8) practices that encourage mid-level and small |
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carriers to increase their market share; |
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(9) the role of general economic factors such as |
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inflation and changes in the costs of certain products and services |
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in the setting of insurance rates; |
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(10) the effects of fraud on insurance rates and |
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strategies to reduce fraud in this state; and |
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(11) practices that increase efficiency and decrease |
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administrative costs in the requests for information and data by |
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the department and the conveyance of information and data by |
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companies. |
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(c) Not later than December 1, 2012, the department and the |
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office of public insurance counsel shall submit to the governor, |
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the lieutenant governor, the speaker of the house of |
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representatives, and the appropriate standing committees of the |
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legislature a report regarding the results of the study conducted |
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under Subsection (b), together with any recommendations for |
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legislation. If joint recommendations cannot be made, the |
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department and the office shall list their recommendations |
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separately. |
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(d) This section expires January 1, 2013. |
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Sec. 32.025. TEXAS PERSONAL AUTOMOBILE INSURANCE STUDY. |
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(a) In this section, "personal automobile insurance" means motor |
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vehicle insurance coverage for the ownership, maintenance, or use |
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of a private passenger, utility, or miscellaneous type motor |
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vehicle, including a motor home, mobile home, trailer, or |
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recreational vehicle, that is: |
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(1) owned or leased by one or more individuals; and |
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(2) not primarily used for the delivery of goods, |
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materials, or services, other than for use in farm or ranch |
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operations. |
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(b) The department and the office of public insurance |
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counsel shall study: |
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(1) personal automobile insurance rates in this state; |
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(2) regulatory changes with the potential to lower |
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personal automobile insurance rates; |
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(3) practices by individual companies that have the |
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effect of lowering personal automobile insurance rates; |
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(4) other states' laws that have the effect of lowering |
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personal automobile insurance rates; |
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(5) in an effort to identify practices that lower |
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rates, the similarities and differences between the personal |
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automobile insurance market and the commercial automobile |
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insurance market in this state; |
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(6) practices that encourage policyholders to shop the |
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market; |
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(7) practices that encourage mid-level and small |
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carriers to increase their market share; |
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(8) the role of general economic factors such as |
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inflation and changes in the costs of certain products and services |
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in the setting of personal automobile insurance rates; |
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(9) the effects of fraud on insurance rates and |
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strategies to reduce fraud in this state; |
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(10) the number of uninsured drivers in this state, |
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the effects they have on personal automobile insurance rates and |
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strategies for reducing the number of uninsured drivers; and |
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(11) practices that increase efficiency and decrease |
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administrative costs in the requests for information and data by |
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the department and conveyance of information and data by companies. |
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(c) Not later than December 1, 2012, the department and the |
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office of public insurance counsel shall submit to the governor, |
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the lieutenant governor, the speaker of the house of |
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representatives, and the appropriate standing committees of the |
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legislature a report regarding the results of the study conducted |
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under Subsection (b), together with any recommendations for |
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legislation. If joint recommendations cannot be made, the |
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department and the office shall list their recommendations |
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separately. |
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(d) This section expires January 1, 2013. |
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SECTION 3. Section 32.102, Insurance Code, is amended by |
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adding Subsection (d) to read as follows: |
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(d) The commissioner by rule shall establish procedures for |
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an insurer to dispute the accuracy of rate information shown for the |
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insurer on the Internet website established under this section and |
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to promptly identify and correct inaccurate information disputed |
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through those procedures. |
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SECTION 4. Section 32.104, Insurance Code, is amended by |
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amending Subsection (b) and adding Subsections (c) and (d) to read |
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as follows: |
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(b) An insurer shall provide in a conspicuous manner with |
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each residential property insurance or personal automobile |
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insurance policy issued in this state and on any correspondence |
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sent from the insurer to an insured notice of the Internet website |
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required by this subchapter. The commissioner shall determine the |
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form and content of the notice. |
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(c) To the extent possible, an insurance agent who sells a |
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residential property insurance or personal automobile insurance |
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policy in person must, before the policy is sold, have the customer |
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view from the agent's computer the Internet website maintained |
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under this subchapter and the relevant complaint data related to |
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residential property insurance and personal automobile insurance |
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maintained on the department's website. |
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(d) To the extent possible, an insurance agent who sells a |
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residential property insurance or personal automobile insurance |
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policy over the telephone must, before the policy is sold, notify |
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the customer of the website and give the customer the website |
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address. |
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SECTION 5. Section 521.052, Insurance Code, is amended to |
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read as follows: |
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Sec. 521.052. INFORMATION PROVIDED. (a) The department |
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shall provide to the public through the department's toll-free |
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telephone number only the following information: |
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(1) information collected or maintained by the |
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department relating to the number and disposition of complaints |
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received against an insurer that are justified, verified as |
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accurate, and documented as valid, expressed as a percentage of the |
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total number of insurance policies written by the insurer and in |
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force on December 31 of the preceding year; |
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(2) the rating of an insurer, if any, as published by a |
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nationally recognized rating organization; |
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(3) the kinds of coverage available to a consumer |
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through any insurer writing insurance in this state; |
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(4) an insurer's admitted assets-to-liabilities |
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ratio; and |
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(5) other appropriate information collected and |
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maintained by the department. |
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(b) The department shall make the information described by |
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Subsection (a)(1) available to the public through the department's |
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Internet website. |
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SECTION 6. Subchapter B, Chapter 2301, Insurance Code, is |
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amended by adding Sections 2301.0535, 2301.0536, and 2301.0537 to |
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read as follows: |
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Sec. 2301.0535. REQUIRED INFORMATION IN RENEWAL POLICY. |
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(a) At the time a residential property insurance policy or a |
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personal automobile insurance policy is renewed, the insurer shall |
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provide a copy of the renewal policy to the insured. The policy |
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must contain on the first page: |
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(1) a table that clearly lists the premium charged |
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under the policy before renewal, the new premium charged under the |
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renewal policy, and the percentage change, if any, between those |
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amounts; and |
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(2) an explanation, in plain language, of any changes |
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in the coverage under the renewal policy. |
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(b) If there is an increase in the premium or change in the |
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coverage under the renewal policy, the first page of the renewal |
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policy must contain a statement advising the consumer of the |
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department's Internet website that is designated by the department |
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to help consumers compare premiums and coverages of different |
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insurers' policies. |
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(c) The commissioner shall adopt appropriate wording for |
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notices under this section. |
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Sec. 2301.0536. UPDATED POLICY REQUIRED. At any time there |
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is a change in the coverage of a residential property insurance |
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policy or personal automobile insurance policy, the insurer shall |
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provide the insured with an updated copy of the policy that marks |
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the changes. |
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Sec. 2301.0537. STATEMENT OF DEDUCTIBLE. A residential |
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property insurance policy, personal automobile insurance policy, |
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or other document that expresses a deductible as a percentage of the |
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coverage amount must state the actual dollar amount of the |
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deductible next to the percentage. |
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SECTION 7. Chapter 561, Insurance Code, as added by this |
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Act, and Sections 2301.0535, 2301.0536, and 2301.0537, Insurance |
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Code, as added by this Act, apply only to an insurance policy or |
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contract that is delivered, issued for delivery, or renewed on or |
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after January 1, 2012. An insurance policy or contract delivered, |
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issued for delivery, or renewed before January 1, 2012, is governed |
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by the law as it existed immediately before the effective date of |
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this Act, and that law is continued in effect for that purpose. |
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SECTION 8. This Act takes effect September 1, 2011. |