By: Hegar S.B. No. 1074
 
  (Bonnen of Galveston)
 
   
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to electronic transmission of documentation involved in
  certain insurance transactions.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 35.001, Insurance Code, is amended by
  amending Subdivision (2) and adding Subdivisions (3), (4), and (5)
  to read as follows:
               (2)  "Regulated entity" means each insurer, [or other]
  organization, person, or program regulated by the department,
  including:
                     (A)  a domestic or foreign, stock or mutual, life,
  health, or accident insurance company;
                     (B)  a domestic or foreign, stock or mutual, fire
  or casualty insurance company;
                     (C)  a Mexican casualty company;
                     (D)  a domestic or foreign Lloyd's plan;
                     (E)  a domestic or foreign reciprocal or
  interinsurance exchange;
                     (F)  a domestic or foreign fraternal benefit
  society;
                     (G)  a domestic or foreign title insurance
  company;
                     (H)  an attorney's title insurance company;
                     (I)  a stipulated premium company;
                     (J)  a nonprofit legal service corporation;
                     (K)  a health maintenance organization;
                     (L)  a statewide mutual assessment company;
                     (M)  a local mutual aid association;
                     (N)  a local mutual burial association;
                     (O)  an association exempt under Section 887.102;
                     (P)  a nonprofit hospital, medical, or dental
  service corporation, including a company subject to Chapter 842;
                     (Q)  a county mutual insurance company; [and]
                     (R)  a farm mutual insurance company; and
                     (S)  an agency or agent of an insurer,
  organization, person, or program described by this subdivision.
               (3)  "Deliver by electronic means" means:
                     (A)  deliver to an e-mail address at which a party
  has consented to receive notices, documents, or information; or
                     (B)  post on an electronic network or Internet
  website accessible by an electronic device, including a computer,
  mobile device, or tablet, and deliver notice of the posting to an
  e-mail address at which the party has consented to receive notices.
               (4)  "Party" means a recipient, including an applicant,
  insured, policyholder, enrollee, or annuity contract holder, of a
  notice or document or of information required as part of an
  insurance transaction.
               (5)  "Written communication" means a notice or document
  or other information provided in writing.
         SECTION 2.  Section 35.004, Insurance Code, is amended to
  read as follows:
         Sec. 35.004.  MINIMUM STANDARDS FOR REGULATED ENTITIES
  ELECTRONICALLY CONDUCTING BUSINESS WITH CONSUMERS. (a)  This
  section does not apply to a notice of cancellation or termination of
  health insurance or benefits or life insurance or benefits,
  excluding annuities.
         (b)  Subject to Subsection (d), a notice to a party or other
  written communication with a party required in an insurance
  transaction or that is to serve as evidence of insurance coverage
  may be delivered, stored, and presented by electronic means only if
  the delivery, storage, or presentment complies with Chapter 322,
  Business & Commerce Code.
         (c)  Delivery of a written communication in compliance with
  this section is equivalent to any delivery method required by law,
  including delivery by first class mail, first class mail, postage
  prepaid, or certified mail.
         (d)  A written communication may be delivered by electronic
  means to a party by a regulated entity under this section if:
               (1)  the party affirmatively consented to delivery by
  electronic means and has not withdrawn the consent;
               (2)  the party, before giving consent, is provided with
  a clear and conspicuous statement informing the party of:
                     (A)  any right or option the party may have for the
  written communication to be provided or made available in paper or
  another nonelectronic form;
                     (B)  the right of the party to withdraw consent
  under this section and any conditions or consequences imposed if
  consent is withdrawn;
                     (C)  whether the party's consent applies:
                           (i)  only to a specific transaction for
  which the written communication must be given; or
                           (ii)  to identified categories of written
  communications that may be delivered by electronic means during the
  course of the relationship between the party and the regulated
  entity;
                     (D)  the means, after consent is given, by which a
  party may obtain a paper copy of a written communication delivered
  by electronic means; and
                     (E)  the procedure a party must follow to:
                           (i)  withdraw consent under this section;
  and
                           (ii)  update information needed for the
  regulated entity to contact the party electronically; and
               (3)  the party:
                     (A)  before giving consent, is provided with a
  statement identifying the hardware and software requirements for
  the party's access to and retention of a written communication
  delivered by electronic means; and
                     (B)  consents electronically or confirms consent
  electronically in a manner that reasonably demonstrates that the
  party can access a written communication in the electronic form
  used to deliver the communication.
         (e)  After consent of the party is given, in the event a
  change in the hardware or software requirements to access or retain
  a written communication delivered by electronic means creates a
  material risk that the party may not be able to access or retain a
  subsequent written communication to which the consent applies, the
  regulated entity shall:
               (1)  provide the party with a statement:
                     (A)  identifying the revised hardware and
  software requirements for access to and retention of a written
  communication delivered by electronic means; and
                     (B)  disclosing the right of the party to withdraw
  consent without the imposition of any condition or consequence that
  was not disclosed under Subsection (d)(2)(B); and
               (2)  comply with Subsection (d)(3).
         (f)  This section does not affect requirements for content or
  timing of any required written communication.
         (g)  If a written communication provided to a party expressly
  requires verification or acknowledgment of receipt, the written
  communication may be delivered by electronic means only if the
  method used provides for verification or acknowledgment of receipt.
         (h)  The legal effectiveness, validity, or enforceability of
  any contract or policy of insurance executed by a party may not be
  denied solely due to the failure to obtain electronic consent or
  confirmation of consent of the party in accordance with Subsection
  (d)(3)(B).
         (i)  A withdrawal of consent by a party does not affect the
  legal effectiveness, validity, or enforceability of a written
  communication delivered by electronic means to the party before the
  withdrawal of consent is effective.  A withdrawal of consent is
  effective within a reasonable period of time after the date of the
  receipt by the regulated entity of the withdrawal. Failure by a
  regulated entity to comply with Subsection (e) may be treated by the
  party as a withdrawal of consent.
         (j)  If the consent of a party to receive a written
  communication by electronic means is on file with a regulated
  entity before January 1, 2014, and if the entity intends to deliver
  to the party written communications under this section, then before
  the entity may deliver by electronic means additional written
  communications, the entity must notify the party of:
               (1)  the written communications that may be delivered
  by electronic means that were not previously delivered by
  electronic means; and
               (2)  the party's right to withdraw consent to have
  written communications delivered by electronic means.
         (k)  Except as otherwise provided by law, an oral
  communication or a recording of an oral communication may not
  qualify as a written communication delivered by electronic means
  for purposes of this chapter.
         (l)  If a signature on a written communication is required by
  law to be notarized, acknowledged, verified, or made under oath,
  the requirement is satisfied if the electronic signature of the
  notary public or other authorized person and the other required
  information are attached to or logically associated with the
  signature or written communication. [RULES. (a)     The commissioner
  shall adopt rules necessary to implement and enforce this chapter.
         [(b)     The rules adopted by the commissioner under this
  section must include rules that establish minimum standards with
  which a regulated entity must comply in the entity's electronic
  conduct of business with other regulated entities and consumers.]
         SECTION 3.  Chapter 35, Insurance Code, is amended by adding
  Section 35.005 to read as follows:
         Sec. 35.005.  EXEMPTION FROM CERTAIN FEDERAL LAWS.  This
  chapter modifies, limits, or supersedes the provisions of the
  federal Electronic Signatures in Global and National Commerce Act
  (15 U.S.C. Section 7001 et seq.) as authorized by Section 102 of
  that Act (15 U.S.C. Section 7002).
         SECTION 4.  This Act applies only to a written communication
  that is delivered by electronic means on or after January 1, 2014.
  A written communication delivered by electronic means before
  January 1, 2014, is governed by the law as it existed immediately
  before the effective date of this Act, and that law is continued in
  effect for that purpose.
         SECTION 5.  This Act takes effect September 1, 2013.