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A BILL TO BE ENTITLED
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AN ACT
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relating to notice to policyholders and agents of certain changes |
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to property and casualty insurance policies. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter C, Chapter 551, Insurance Code, is |
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amended by adding Section 551.1055 to read as follows: |
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Sec. 551.1055. CHANGES TO POLICY ON RENEWAL. (a) |
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Notwithstanding Section 551.103, a change to a policy provision on |
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renewal is not a nonrenewal or cancellation under this subchapter |
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if the insurer provides the insured with written notice in |
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accordance with this section of any difference between each form of |
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the policy offered to the insured on renewal and the form of the |
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policy held immediately before renewal. |
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(b) Notice provided under Subsection (a) must: |
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(1) appear in a conspicuous place in the renewal |
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notice; |
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(2) clearly indicate each change to the policy being |
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made on renewal; |
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(3) be written in plain language; and |
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(4) be provided to the insured not later than the 30th |
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day before the renewal date. |
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(c) If an insurer elects to change a policy form on renewal, |
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not later than the 30th day before the earliest renewal date on |
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which the new policy form is used, the insurer shall provide written |
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notice to each agent of the insurer that clearly indicates each |
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change being made to the policy. |
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SECTION 2. Section 2002.001, Insurance Code, is amended to |
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read as follows: |
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Sec. 2002.001. ENDORSEMENTS REDUCING AMOUNT OF COVERAGE. |
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(a) An insurer may not use an endorsement to a policy form to which |
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Article 5.35, Subchapter B of this chapter, or Subchapter B, |
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Chapter 2301, applies that reduces coverage that would otherwise be |
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provided under the policy unless: |
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(1) the insured requests the endorsement; or |
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(2) the insurer provides the policyholder in a written |
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notice an [with a written] explanation of [the change made by] the |
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endorsement that: |
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(A) appears in a conspicuous place on the notice |
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of the endorsement; |
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(B) clearly indicates each change to the policy |
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made by the endorsement; |
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(C) is written in plain language; and |
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(D) is provided to the insured not later than the |
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30th day before the date on which the policy expires. |
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(b) Notice required by Subsection (a) may be provided to the |
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insured in a renewal notice. |
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(c) If an insurer elects to use an endorsement described by |
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Subsection (a), not later than the 30th day before the earliest date |
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on which the endorsement is used, the insurer shall provide written |
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notice to each agent of the insurer that clearly indicates each |
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change made to the policy form by the endorsement. |
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SECTION 3. The heading to Subchapter C, Chapter 2002, |
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Insurance Code, is amended to read as follows: |
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SUBCHAPTER C. ITEMS PROVIDED [TO POLICYHOLDER] IN CONNECTION WITH |
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INSURANCE POLICY |
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SECTION 4. Section 2002.102, Insurance Code, is amended to |
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read as follows: |
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Sec. 2002.102. NOTICE OF RENEWAL. (a) An insurer, |
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including a farm mutual insurance company, county mutual insurance |
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company, Lloyd's plan, or reciprocal or interinsurance exchange, |
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that renews a homeowners insurance policy, fire and residential |
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allied lines insurance policy, farm and ranch owners insurance |
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policy, or farm and ranch insurance policy must provide the |
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policyholder with written notice in accordance with this section of |
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any difference between each form of the policy offered to the |
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policyholder on renewal and the form of the policy held immediately |
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before renewal. |
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(b) A notice provided under this section must: |
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(1) appear in a conspicuous place in the renewal |
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notice; |
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(2) clearly indicate each change to the policy being |
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made on renewal; |
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(3) be written in plain language; and |
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(4) be provided to the policyholder not later than the |
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30th day before the renewal date. |
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(c) If an insurer elects to change a policy form on renewal, |
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not later than the 30th day before the renewal date, the insurer |
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shall provide written notice to each agent of the insurer that |
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clearly indicates each change being made to the policy. |
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(d) The commissioner may adopt rules as necessary to |
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implement this section. |
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SECTION 5. The change in law made by this Act applies only |
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to an insurance policy delivered, issued for delivery, or renewed |
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on or after January 1, 2018. A policy delivered, issued for |
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delivery, or renewed before that date is governed by the law as it |
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existed immediately before the effective date of this Act, and that |
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law is continued in effect for that purpose. |
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SECTION 6. This Act takes effect September 1, 2017. |