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A BILL TO BE ENTITLED
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AN ACT
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relating to the disclosure of certain information under a |
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consolidated insurance program. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 151.002, Insurance Code, is amended to |
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read as follows: |
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Sec. 151.002. RULES. The commissioner shall adopt rules as |
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necessary to implement and enforce Subchapters A and [Subchapter] |
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B. |
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SECTION 2. Subchapter A, Chapter 151, Insurance Code, is |
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amended by adding Sections 151.003 through 151.008 to read as |
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follows: |
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Sec. 151.003. INFORMATION REQUIRED TO BE PROVIDED BY A |
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PRINCIPAL PRIOR TO ENTERING INTO A CONSTRUCTION CONTRACT. Not less |
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than 10 days before the date a principal enters into a construction |
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contract with a person, and the contract contains a requirement for |
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the person to enroll in a consolidated insurance program, the |
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principal shall provide to the person the following information |
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about the consolidated insurance program: |
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(1) contact information, including phone and email |
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addresses for the program administrator, the principal's risk |
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manager, and the insurance company's contact person for filing a |
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claim for each type of insurance coverage provided in the program; |
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(2) criteria for eligibility of enrollment into the |
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program; |
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(3) a description of the project site to which the |
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program coverages apply; |
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(4) a summary of insurance coverages to be provided to |
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the contractor under the program, including: |
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(A) the policy form number and issuing |
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organization name for a standardized insurance policy or a sample |
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policy form if not a standardized form; |
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(B) per occurrence and aggregate limits of |
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insurance coverage and any sublimits that may apply; |
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(C) term of coverage for each limit and sublimit; |
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and |
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(D) material endorsements to the policy |
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described in Paragraph (A); |
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(5) a summary of insurance coverages to be provided by |
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the contractor; |
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(6) instructions to a person on how to include or |
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exclude costs of insurance provided by the program in the person's |
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proposal for work on the construction project; |
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(7) a description of the audit or claims procedures |
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related to the program that could result in a contractor's |
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responsibility for any additional costs, including the calculation |
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for any assessment to a contractor related to the principal's |
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payment of a policy deductible, and including specific monetary |
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amounts related to those costs; and |
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(8) a description of a contractor's duties related to: |
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(A) reporting of payroll and retention of |
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documentation; and |
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(B) reporting of claims and participation in |
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safety inspections and incident reporting. |
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Sec. 151.004. INFORMATION REQUIRED TO BE PROVIDED BY A |
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CONTRACTOR PRIOR TO ENTERING INTO A CONSTRUCTION CONTRACT WITH A |
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PERSON. Not less than 10 days before the date a contractor enters |
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into a construction contract with a person, and the contract |
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contains a requirement for the person to enroll in a consolidated |
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insurance program, the contractor shall provide to the person the |
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information about the consolidated insurance program listed in |
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Section 151.003. |
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Sec. 151.005. RELIANCE ON INFORMATION PROVIDED PRIOR TO |
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ENTERING INTO CONTRACT; FAILURE TO FURNISH. (a) The information |
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that is required to be provided under Section 151.003 shall |
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accurately reflect those terms of the consolidated insurance |
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program. A contractor providing information to a person under |
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Section 151.004 shall accurately provide the information that the |
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contractor received regarding the terms of the consolidated |
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insurance program. A person receiving the information under |
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Section 151.003 or 151.004 may justifiably rely on the information |
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to guide its decision on whether to enter into a contract that |
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requires the person to enroll in the consolidated insurance |
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program. |
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(b) If a person is not timely provided the information |
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required to be provided under Section 151.003 or 151.004, the |
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person may elect not to enroll in the consolidated insurance |
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program. |
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(c) If a person elects not to enroll under Subsection (b), a |
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principal or contractor may provide to that person the information |
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about the consolidated insurance program listed in Section 151.003 |
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and the person will then have 10 days after the date the information |
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is provided to elect to enter into the construction contract. |
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(d) If the person elects not to enroll in the consolidated |
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insurance program under Subsection (b) or (c) and the person enters |
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into a construction contract for the construction project, the |
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person shall furnish insurance coverage for its work on the |
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construction project in substantial compliance with what is |
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required for a person that is not covered by an insurance policy |
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under the consolidated insurance program. |
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(e) A person that provides insurance coverage under |
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Subsection (d) shall be compensated by the party with which the |
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person has entered into the construction contract for the person's |
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actual cost of its insurance coverage. |
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(f) A person may not be required to enter into a |
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construction contract that contains a requirement for the person to |
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enroll in the consolidated insurance program unless the person has |
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been provided the information about the consolidated insurance |
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program listed in Section 151.003 at least 10 days prior to the date |
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the agreement is entered into. |
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Sec. 151.006. REQUEST FOR INSURANCE POLICY; DEADLINE TO |
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PROVIDE. A contractor may request in writing from the principal, or |
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from the party with which it has a direct contractual relationship, |
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a complete copy of the insurance policy that provides coverage for |
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the contractor under the consolidated insurance program. A |
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complete copy of the insurance policy must be provided to the |
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requesting contractor by the later of the: |
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(1) 30th day after the date the request was sent; or |
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(2) 60th day after the date work covered by the |
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consolidated insurance program commences on the construction |
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project. |
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Sec. 151.007. FAILURE TO PROVIDE INSURANCE POLICY. If the |
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requesting contractor has made a request under Section 151.006 of |
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the party with which it has a direct contractual relationship, it |
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shall be a material breach of the requesting contractor's |
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construction contract under this chapter if the requesting |
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contractor is not provided the information under Section 151.006 by |
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the later of the: |
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(1) 75th day after the date of the request; or |
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(2) 60th day after the date work covered by the |
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consolidated insurance program commences on the construction |
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project. |
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Sec. 151.008. ELECTRONIC DELIVERY. (a) If the contractor |
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requesting information under this subchapter expressly requests |
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that the information be provided in written form, the principal or |
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contractor shall provide the items in written form to the |
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requesting contractor. |
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(b) If the contractor requesting information has not made an |
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express request for the information under this subchapter to be |
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provided in written form and a principal or contractor chooses to |
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provide the information required under this subchapter by |
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electronic delivery, the principal or contractor may comply with |
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the information delivery requirements in this subchapter by: |
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(1) electronic transmission by facsimile or email; or |
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(2) providing access to the required information on |
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the principal's, or its agent's, Internet website. |
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SECTION 3. Sections 151.003 through 151.008, Insurance |
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Code, as added by this Act, apply only to a construction contract |
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that is entered into on or after January 1, 2016. A construction |
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contract that is entered into before January 1, 2016, is governed by |
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the law as it existed immediately before the effective date of this |
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Act, and that law is continued in effect for that purpose. |
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SECTION 4. This Act takes effect January 1, 2016. |