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A BILL TO BE ENTITLED
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AN ACT
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relating to notice of certain provisions in insurance policies |
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issued by surplus lines insurers. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter C, Chapter 981, Insurance Code, is |
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amended by adding Section 981.106 to read as follows: |
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Sec. 981.106. NOTICE REQUIREMENTS FOR CERTAIN PROVISIONS IN |
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SURPLUS LINES POLICIES. (a) A surplus lines insurer must provide |
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written notice to an insured if the surplus lines insurance policy: |
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(1) subjects the insured to the jurisdiction or laws |
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of another state or country; |
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(2) requires the insured to submit to arbitration in |
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another state or country or under the laws of another state or |
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country; |
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(3) includes a deductible that exceeds the replacement |
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cost of any structural component of the covered property; or |
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(4) provides that the insurer will only pay the actual |
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cash value for the repair or replacement of a structural component |
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of the covered property. |
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(b) A notice provided under Subsection (a) must be: |
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(1) signed and notarized by the surplus lines agent |
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and the insured; and |
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(2) retained by the insurer until the fifth |
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anniversary of the date the insured's policy terminates. |
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(c) An insured is entitled to void a provision described by |
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Subsection (a) in a surplus lines insurance policy if the insurer |
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does not disclose or retain documentation of the notice provided to |
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the insured regarding the provision in accordance with this |
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section. |
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SECTION 2. The changes in law made by this Act apply only to |
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a surplus lines insurance policy delivered, issued for delivery, or |
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renewed on or after January 1, 2024. |
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SECTION 3. This Act takes effect September 1, 2023. |