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  H.B. No. 1040
 
 
 
 
AN ACT
  relating to the authority of entities regulated by the Texas
  Department of Insurance to conduct business electronically.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 35.003, Insurance Code, is amended to
  read as follows:
         Sec. 35.003.  ELECTRONIC TRANSACTIONS AUTHORIZED. (a)  
  Subject to Section 35.004, 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:
               (1)  each party to the business agrees to conduct the
  business electronically; or
               (2)  each other party to the business has been given
  notice by the entity that the business will be conducted
  electronically and has not requested that the business be conducted
  in nonelectronic form.
         (b)  If a regulated entity provides notice under Subsection
  (a)(2) and the other party does not opt out of conducting business
  electronically, the other party is considered to have agreed to
  conduct business electronically for the purposes of Chapter 322,
  Business & Commerce Code.
         SECTION 2.  Section 35.004, Insurance Code, is amended by
  amending Subsections (c) and (d) and adding Subsection (l) to read
  as follows:
         (c)  A written communication may be delivered by electronic
  means to a party by a regulated entity under this section if:
               (1)  the party:
                     (A)  affirmatively consented to delivery by
  electronic means and has not withdrawn the consent; or
                     (B)  if affirmative consent is not sought, has not
  requested that written communication be delivered to the party in
  paper or another nonelectronic form instead of by electronic means;
               (2)  the party, before giving consent or receiving
  written communication by electronic means, 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 or to request written communication be delivered
  to the party in nonelectronic form, if the party's affirmative
  consent is not sought, and any conditions or consequences imposed
  if consent is withdrawn or delivery in nonelectronic form is
  requested;
                     (C)  whether the party's consent to delivery by
  electronic means or the party's request or the absence of the
  party's request for delivery in nonelectronic form 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 or
  to otherwise request delivery of written communication in
  nonelectronic form, as applicable; and
                           (ii)  update information needed for the
  regulated entity to contact the party electronically; and
               (3)  the party:
                     (A)  before giving consent or receiving written
  communication by electronic means, 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)  if affirmative consent is sought, 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 or the opportunity
  to request delivery of written communication in nonelectronic form
  is given, as applicable, 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 or to otherwise request delivery in nonelectronic form, as
  applicable, without the imposition of any condition or consequence
  that was not disclosed under Subsection (c)(2)(B); and
               (2)  comply with Subsection (c)(3).
         (l)  A notice of the cancellation or termination of a policy
  to which this section applies must be:
               (1)  a written communication; and
               (2)  delivered to a party:
                     (A)  by electronic means; and
                     (B)  in paper or another nonelectronic form.
         SECTION 3.  Section 35.0041(a), Insurance Code, is amended
  to read as follows:
         (a)  The plan sponsor of a health benefit plan, including a
  vision or dental benefit plan, may, on behalf of a party enrolled in
  the plan, give [the] consent under [required by] Section
  35.004(c)(1)(A) [35.004(c)(1)].
         SECTION 4.  Sections 35.003 and 35.004, Insurance Code, as
  amended by this Act, apply only to business conducted on or after
  the effective date of this Act. Business conducted before the
  effective date of this Act is governed by the law in effect on the
  date the business was conducted, and that law is continued in effect
  for that purpose.
         SECTION 5.  This Act takes effect September 1, 2023.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 1040 was passed by the House on April
  14, 2023, by the following vote:  Yeas 140, Nays 3, 2 present, not
  voting.
 
  ______________________________
  Chief Clerk of the House   
 
 
         I certify that H.B. No. 1040 was passed by the Senate on May
  16, 2023, by the following vote:  Yeas 31, Nays 0.
 
  ______________________________
  Secretary of the Senate    
  APPROVED:  _____________________
                     Date          
   
            _____________________
                   Governor