83R7981 PMO-F

By: Hegar S.B. No. 1074

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. Chapter 35, Insurance Code, is amended by designating Sections 35.001 through 35.004 as Subchapter A and adding a subchapter heading to read as follows:

SUBCHAPTER A. ELECTRONIC TRANSACTIONS GENERALLY

SECTION 2. Section 35.003, Insurance Code, is amended to read as follows:

Sec. 35.003. ELECTRONIC TRANSACTIONS AUTHORIZED. Subject to Subchapter B, a [A] regulated entity may conduct business electronically to the same extent that the entity is authorized to conduct business otherwise if before the conduct of business each party to the business agrees to conduct the business electronically.

SECTION 3. Chapter 35, Insurance Code, is amended by adding Subchapter B to read as follows:

SUBCHAPTER B. ELECTRONIC DELIVERY OF NOTICES, DOCUMENTS, AND

INFORMATION

Sec. 35.051. DEFINITIONS. In this subchapter:

(1) "Delivered by electronic means" includes:

(A) delivery to an e-mail address at which a party consented to receive notices, documents, or information; and

(B) posting on an electronic network or Internet website accessible by an electronic device, including a computer, mobile device, or tablet, or a software application, including a mobile device application.

(2) "Party" means a recipient, including an applicant, insured, policyholder, or annuity contract holder, of a notice or a document or information required as part of an insurance transaction.

(3) "Written communication" means a notice, document, or other information provided in writing.

Sec. 35.052. CONSENT. (a) Subject to Subsection (c), 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 the Uniform Electronic Transactions Act (Chapter 322, Business & Commerce Code).

(b) 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.

(c) 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 fees, 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 the amount of the fee, if any, for a paper copy; 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.

(d) 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 insurer shall:

(A) provide the party with a statement:

(i) identifying the revised hardware and software requirements for access to and retention of a written communication delivered by electronic means; and

(ii) disclosing the right of the party to withdraw consent without the imposition of any fee, condition, or consequence that was not disclosed under Subsection (c)(2)(B); and

(B) comply with Subsection (c)(3).

(e) This section does not affect requirements for content or timing of any required written communication.

(f) 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.

(g) 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 (c)(3)(B).

(h) 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 after the date of the receipt by the insurer of the withdrawal. Failure by an insurer to comply with Subsection (d) may be treated by the party as a withdrawal of consent.

(i) 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 subchapter, then before the entity may deliver by electronic means additional written communications, the insurer 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.

(j) 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 subchapter.

(k) 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.

(l) This section may not be construed to modify, limit, or supersede the provisions of the federal Electronic Signatures in Global and National Commerce Act (15 U.S.C. Section 7001 et seq.).

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.