By: Hancock S.B. No. 839
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the provision of insurance coverage for certain
  portable electronic devices.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Chapter 551, Insurance Code, is amended by
  adding Subchapter E to read as follows:
  SUBCHAPTER E.  PORTABLE ELECTRONICS INSURANCE
         Sec. 551.201.  DEFINITIONS.  In this subchapter, "customer," 
  "portable electronic devices," and "vendor" have the meanings
  assigned by Section 4055.251.
         Sec. 551.202.  REQUIRED NOTICE OF TERMINATION OR CHANGE TO
  POLICY.  (a)  Except as otherwise provided by this subchapter, an
  insurer may terminate or change the terms and conditions of a policy
  of portable electronics insurance only after notice to the master
  or group policyholder and each enrolled customer.  Notice under
  this section must be provided not later than the 30th day before the
  date of the termination or change.
         (b)  If the insurer changes the terms and conditions of the
  policy, the insurer shall:
               (1)  provide to the master or group policyholder a
  revised policy or endorsement; and
               (2)  provide to each enrolled customer:
                     (A)  a revised certificate, revised endorsement,
  updated brochure, or other document indicating that a change in the
  terms and conditions has occurred; and
                     (B)  a summary of the material changes.
         Sec. 551.203.  TERMINATION FOR FRAUD OR MISREPRESENTATION.  
  (a)  An insurer may terminate the coverage of an enrolled customer
  under a portable electronics insurance policy for fraud or material
  misrepresentation in obtaining coverage or in the presentation of a
  claim under the coverage.
         (b)  Termination of coverage under this section may not be
  effective before the 15th day after the date the insurer provides
  the customer notice of the termination.
         Sec. 551.204.  TERMINATION WITHOUT NOTICE.  (a)  An insurer
  may terminate the coverage of an enrolled customer under a portable
  electronics insurance policy without notice:
               (1)  for nonpayment of premium;
               (2)  if the enrolled customer ceases to have an active
  service with the vendor of portable electronics; or
               (3)  if the enrolled customer exhausts the aggregate
  limit of liability, if any, under the terms of the portable
  electronics insurance policy.
         (b)  If a portable electronics insurance policy is
  terminated under Subsection (a)(3), the insurer must send notice of
  termination to the enrolled customer not later than the 30th day
  after the date of exhaustion of the limit.  If the notice is not
  timely sent, the insurer shall continue the customer's coverage,
  and the aggregate limit of liability is waived, until the insurer
  sends the notice of termination to the enrolled customer.
         Sec. 551.205.  TERMINATION BY POLICYHOLDER.  A master or
  group policyholder who terminates a portable electronics insurance
  policy shall provide notice to each enrolled customer advising the
  enrolled customer of the termination of the policy and the
  effective date of termination.  The notice must be provided to the
  enrolled customer not later than the 30th day before the date the
  termination becomes effective.
         Sec. 551.206.  FORM OF NOTICE OR CORRESPONDENCE.  (a)  A
  notice required by this subchapter, or another notice or
  correspondence with respect to a portable electronics insurance
  policy that is required by law, must be:
               (1)  in writing; and
               (2)  sent within the notice period, if any, specified
  by the statute or rule requiring the notice or correspondence.
         (b)  Notwithstanding any other law, the notice or
  correspondence may be sent by mail or by electronic means.
         (c)  If the notice or correspondence is mailed:
               (1)  it must be sent to the master or group policyholder
  at the policyholder's mailing address specified for this purpose
  and to each affected enrolled customer's last known mailing address
  on file with the insurer; and
               (2)  the insurer or master or group policyholder shall
  maintain proof of mailing in a form authorized or accepted by the
  United States Postal Service or other commercial mail delivery
  service.
         (d)  If the notice or correspondence is sent by electronic
  means:
               (1)  it must be sent to the master or group policyholder
  at the policyholder's e-mail address specified for this purpose and
  to each affected enrolled customer's last known e-mail address as
  provided by the customer to the insurer or master or group
  policyholder; and
               (2)  the insurer or master or group policyholder shall
  maintain proof that the notice or correspondence was sent.
         (e)  For purposes of Subsection (d), an enrolled customer's
  provision of an e-mail address to the insurer or master or group
  policyholder is considered consent to receive notices and
  correspondence by electronic means.
         (f)  A notice or correspondence described by this section may
  be sent on behalf of an insurer or master or group policyholder by a
  licensed agent or agency appointed by the insurer.
         SECTION 2.  Section 4055.253, Insurance Code, is amended to
  read as follows:
         Sec. 4055.253.  AUTHORITY OF VENDOR OF PORTABLE ELECTRONIC
  DEVICES. (a)  A vendor licensed under this subchapter and the
  vendor's employee and authorized representative may act as an agent
  for an authorized insurer in connection with the sale and use of
  portable electronic devices and related services only with respect
  to:
               (1)  insurance coverage provided to customers that
  covers portable electronic devices against one or more of the
  following:
                     (A)  loss;
                     (B)  theft;
                     (C)  mechanical failure;
                     (D)  malfunction;
                     (E)  damage; or
                     (F)  other applicable perils; or
               (2)  the provision of any other coverage the
  commissioner approves as meaningful and appropriate in connection
  with the use of portable electronic devices or related services.
         (b)  A vendor licensed under this subchapter may bill a
  customer for, and collect from a customer payment for, insurance
  coverage provided to the customer under this subchapter.
         (c)  An insurer issuing a policy to a licensed vendor is
  considered to have received a premium from a vendor's customer
  enrolled in coverage on the customer's payment of the premium to the
  vendor.
         SECTION 3.  Subchapter F, Chapter 4055, Insurance Code, is
  amended by adding Section 4055.256 to read as follows:
         Sec. 4055.256.  REQUIRED DISCLOSURES. (a)  A licensed
  vendor must separately itemize on a customer's bill any charge to
  the customer for insurance coverage provided under this subchapter
  that is not included in the cost associated with the purchase or
  lease of the covered portable electronic device or related
  services.
         (b)  If insurance coverage provided under this subchapter is
  included in the cost associated with the purchase or lease of a
  covered portable electronic device or related services, a licensed
  vendor shall, at the time of the purchase or lease, clearly and
  conspicuously disclose the inclusion of that coverage to the
  customer.
         SECTION 4.  This Act takes effect September 1, 2013.