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A BILL TO BE ENTITLED
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AN ACT
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relating to certain binding arbitration provisions in certain |
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insurance and health benefit plan coverage documents. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter B, Chapter 1271, Insurance Code, is |
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amended by adding Section 1271.058 to read as follows: |
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Sec. 1271.058. PRE-DISPUTE BINDING ARBITRATION CLAUSE |
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PROHIBITED. (a) An evidence of coverage may not contain a provision |
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that requires the enrollee to arbitrate a controversy that arises |
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between the health maintenance organization or other entity |
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described by Section 1271.002(c) and the enrollee. |
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(b) This section does not prohibit an agreement between a |
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health maintenance organization and an enrollee to arbitrate a |
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controversy that exists at the time of the agreement. |
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SECTION 2. Subchapter B, Chapter 1701, Insurance Code, is |
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amended by adding Section 1701.063 to read as follows: |
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Sec. 1701.063. PRE-DISPUTE BINDING ARBITRATION CLAUSE |
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PROHIBITED. (a) An insurer may not use a document described by |
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Section 1701.002 if the document contains a provision that requires |
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the insured to arbitrate a controversy that arises between the |
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insurer and the insured. |
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(b) This section does not prohibit an agreement between an |
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insurer and insured to arbitrate a controversy that exists at the |
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time of the agreement. |
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SECTION 3. Subchapter B, Chapter 2301, Insurance Code, is |
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amended by adding Section 2301.0541 to read as follows: |
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Sec. 2301.0541. PRE-DISPUTE BINDING ARBITRATION CLAUSE |
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PROHIBITED. (a) Except as provided by Subsection (c), an insurer |
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may not use a form for personal automobile or residential property |
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insurance if the form contains a provision that requires the |
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insured to arbitrate a controversy that arises between the insurer |
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and the insured. |
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(b) This section does not prohibit an agreement between an |
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insurer and insured to arbitrate a controversy that exists at the |
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time of the agreement. |
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(c) This section does not apply to a binding arbitration |
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endorsement under Section 2210.554. |
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SECTION 4. Chapter 3501, Insurance Code, is amended by |
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adding Section 3501.004 to read as follows: |
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Sec. 3501.004. PRE-DISPUTE BINDING ARBITRATION CLAUSE |
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PROHIBITED. (a) An insurer may not use a form for credit |
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involuntary unemployment insurance if the form contains a provision |
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that requires the insured to arbitrate a controversy that arises |
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between the insurer and the insured. |
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(b) This section does not prohibit an agreement between an |
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insurer and insured to arbitrate a controversy that exists at the |
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time of the agreement. |
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SECTION 5. Subchapter C, Chapter 3502, Insurance Code, is |
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amended by adding Section 3502.1061 to read as follows: |
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Sec. 3502.1061. PRE-DISPUTE BINDING ARBITRATION CLAUSE |
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PROHIBITED. (a) An insurer may not use a form for mortgage |
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guaranty insurance if the form contains a provision that requires |
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the insured to arbitrate a controversy that arises between the |
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insurer and the insured. |
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(b) This section does not prohibit an agreement between an |
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insurer and insured to arbitrate a controversy that exists at the |
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time of the agreement. |
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SECTION 6. The change in law made by this Act applies only |
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to a policy, contract, certificate, evidence of coverage, rider, or |
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endorsement delivered, issued for delivery, or renewed on or after |
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January 1, 2014. A policy, contract, certificate, evidence of |
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coverage, rider, or endorsement delivered, issued for delivery, or |
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renewed before January 1, 2014, is governed by the law applicable to |
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the policy, contract, certificate, evidence of coverage, rider, or |
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endorsement immediately before the effective date of this Act, and |
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that law is continued in effect for that purpose. |
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SECTION 7. This Act takes effect September 1, 2013. |