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A BILL TO BE ENTITLED
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AN ACT
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relating to the payment of insurance deductibles related to |
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property insurance policies; creating criminal offenses. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle F, Title 5, Insurance Code, is amended |
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by adding Chapter 707 to read as follows: |
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CHAPTER 707. PAYMENT OF INSURANCE DEDUCTIBLE |
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Sec. 707.001. DEFINITIONS. In this chapter: |
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(1) "Person" means an individual, corporation, |
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association, partnership, limited liability company, or other |
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legal entity. |
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(2) "Property insurance" means insurance that |
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provides coverage for loss of or damage to real or personal |
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property. |
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Sec. 707.002. PAYMENT OF DEDUCTIBLE REQUIRED. A person |
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insured under a property insurance policy shall pay any deductible |
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applicable to a first-party claim made under the policy. |
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Sec. 707.003. CONSUMER EDUCATION. The department shall |
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develop and implement an education program related to the payment |
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of property insurance deductibles. The program must: |
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(1) provide reasonable methods to educate insurance |
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consumers and providers of goods or services that are regularly |
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paid for from proceeds of property insurance claims; and |
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(2) include materials regarding: |
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(A) the requirements of this chapter; and |
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(B) the conduct prohibited by Section 707.006. |
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Sec. 707.004. REQUIRED CONTRACT NOTICE. A contract to |
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provide a good or service that is reasonably expected to be paid |
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wholly or partly from the proceeds of a claim under a property |
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insurance policy and that has a contract price of $1,000 or more |
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must contain the following notice in at least 12-point boldfaced |
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type: "Texas law requires a person insured under a property |
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insurance policy to pay any deductible applicable to a claim made |
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under the policy. It is a violation of Texas law for a person or |
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business paid wholly or partly from proceeds of a property |
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insurance claim to knowingly allow the policyholder to fail to pay, |
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or assist the policyholder's failure to pay, the applicable |
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insurance deductible." |
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Sec. 707.005. PROOF OF PAYMENT. (a) This section applies |
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to any insurer that issues a policy providing coverage for loss of |
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or damage to real or personal property, including a county mutual |
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insurance company, a farm mutual insurance company, a reciprocal or |
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interinsurance exchange, or a Lloyd's plan. |
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(b) An insurer that issues a property insurance policy with |
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replacement cost coverage may refuse to pay a claim for replacement |
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cost under the policy until the insurer receives reasonable proof |
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of payment by the policyholder of any deductible applicable to the |
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claim. |
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Sec. 707.006. OFFENSES. (a) A person who sells goods or |
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services commits an offense if the person: |
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(1) advertises or promises to provide a good or |
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service to an insured under a property insurance policy in a |
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transaction in which: |
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(A) the good or service will be paid for by the |
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insured from the proceeds of a property insurance claim; and |
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(B) the person selling the good or service will, |
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without the insurer's consent: |
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(i) pay, waive, absorb, or otherwise |
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decline to charge or collect the amount of the insured's |
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deductible; |
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(ii) provide a rebate or credit in |
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connection with the sale of the good or service that will offset all |
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or part of the amount paid by the insured as a deductible; or |
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(iii) in any other manner assist the |
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insured in avoiding monetary payment of the required insurance |
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deductible; or |
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(2) provides a good or service to an insured under a |
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property insurance policy knowing that the insured will pay for the |
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good or service with the proceeds of a claim under the policy and, |
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without the insurer's consent: |
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(A) pays, waives, absorbs, or otherwise declines |
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to charge or collect the amount of the insured's deductible; |
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(B) provides a rebate or credit in connection |
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with the sale of the good or service that offsets all or part of the |
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amount paid by the insured as a deductible; or |
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(C) in any other manner assists the insured in |
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avoiding monetary payment of the required insurance deductible. |
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(b) A person insured under a property insurance policy |
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commits an offense if the person, in connection with a first-party |
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claim under the policy for loss of or damage to real or personal |
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property, knowingly: |
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(1) pays for a good or service with proceeds of the |
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claim; and |
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(2) without the insurer's consent: |
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(A) fails to pay a required insurance deductible |
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in connection with the claim; or |
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(B) accepts a rebate or credit in connection with |
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the purchase that offsets all or part of the amount paid by the |
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insured as a deductible. |
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(c) An offense under this section is a Class A misdemeanor. |
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SECTION 2. Section 27.02, Business & Commerce Code, is |
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repealed. |
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SECTION 3. The repeal by this Act of Section 27.02, Business & |
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Commerce Code, applies only to an offense committed on or after |
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the effective date of this Act. An offense committed before the |
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effective date of this Act is governed by the law in effect on the |
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date the offense was committed, and the former law is continued in |
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effect for that purpose. For purposes of this section, an offense |
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was committed before the effective date of this Act if any element |
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of the offense occurred before that date. |
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SECTION 4. Section 707.004, Insurance Code, as added by |
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this Act, applies only to a contract entered into on or after the |
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effective date of this Act. |
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SECTION 5. This Act takes effect September 1, 2019. |