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A BILL TO BE ENTITLED
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AN ACT
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relating to an insurance policyholders' bill of rights in |
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connection with policies issued by the Texas Windstorm Insurance |
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Association. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter E, Chapter 2210, Insurance Code, is |
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amended by adding Section 2210.2051 to read as follows: |
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Sec. 2210.2051. REQUIRED POLICY PROVISIONS: POLICYHOLDER |
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BILL OF RIGHTS. (a) The association must include in each windstorm |
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and hail insurance policy issued by the association a |
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policyholders' bill of rights. The bill of rights must be printed on |
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the declarations page of the policy and must include a statement |
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disclosing as of the date of issuance of the policy: |
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(1) the sources of funds, including cash reserves, the |
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catastrophe reserve trust fund balance, and public securities |
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proceeds, immediately available to pay claims during the policy |
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period; |
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(2) the estimated total exposure of the association |
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during the policy period; |
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(3) the amount of reinsurance purchased or that the |
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association intends to purchase to cover losses occurring during |
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the policy period; |
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(4) a projection by the Texas Public Finance Authority |
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regarding the marketability of public securities issued or that may |
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be issued under this chapter to fund payment of claims during the |
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policy period; |
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(5) any outstanding risk that may financially impact |
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the association's ability to pay claims; |
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(6) an estimate of probable maximum loss exposure for |
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the association in the event of a 100-year storm occurring during |
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the policy period; and |
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(7) an explanation of the claims payment process if |
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financial resources available to the association are insufficient |
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to pay claims during the policy period. |
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(b) The association must disclose on the declarations page |
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of each windstorm and hail insurance policy issued by the |
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association that in the event financial resources available to the |
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association are insufficient to pay claims under policies issued by |
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the association during the policy period: |
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(1) the state is not legally obligated to pay the |
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claims; and |
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(2) the payment of the claims is not guaranteed by the |
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state. |
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SECTION 2. This Act applies only to an insurance policy that |
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is delivered, issued for delivery, or renewed on or after January 1, |
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2014. A policy delivered, issued for delivery, or renewed before |
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January 1, 2014, is governed by the law as it existed immediately |
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before the effective date of this Act, and that law is continued in |
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effect for that purpose. |
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SECTION 3. This Act takes effect September 1, 2013. |