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A BILL TO BE ENTITLED
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AN ACT
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relating to declination, cancellation, or nonrenewal of insurance |
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policies. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 551.001(a), Insurance Code, is amended |
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to read as follows: |
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(a) The commissioner may, as necessary, adopt and enforce |
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reasonable rules, including notice requirements, relating to: |
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(1) the cancellation and nonrenewal of any insurance |
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policy regulated by the department under: |
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(A) [(1)] Chapter 5; |
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(B) [(2)] Chapter 1804, 1805, 2171, or 2301; or |
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(C) [(3)] Subtitle C, D, E, or F, Title 10; and |
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(2) the declination of any insurance policy regulated |
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by the department under a provision of this code listed in |
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Subdivision (1) other than a workers' compensation insurance |
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policy. |
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SECTION 2. Section 551.002, Insurance Code, is amended by |
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amending Subsection (a) and adding Subsections (a-1) and (a-2) to |
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read as follows: |
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(a) The commissioner shall require an insurer that |
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declines, cancels, or refuses to renew an insurance policy to which |
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Section 551.001 applies, other than a workers' compensation |
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insurance policy [on request by an applicant for insurance or a |
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policyholder], to provide [to the applicant or policyholder] a |
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written statement of the reasons for the declination, cancellation, |
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or nonrenewal of the [an insurance] policy to: |
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(1) the applicant or policyholder if Subdivision (2) |
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does not apply; or |
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(2) if the applicant or policyholder uses a property |
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and casualty agent who is licensed under this code and is not a |
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captive agent, the agent [which Section 551.001 applies]. |
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(a-1) If an applicant for or policyholder of an insurance |
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policy described by Subsection (a) uses an agent described by |
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Subsection (a)(2), the agent shall: |
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(1) provide a written disclosure to the applicant or |
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policyholder that any notice provided under this section will be |
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sent to the agent; and |
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(2) provide the applicant or policyholder with a |
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declination, cancellation, or nonrenewal statement for the |
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applicant's or policyholder's insurance policy that was provided to |
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the agent under Subsection (a). |
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(a-2) The commissioner shall require an insurer that writes |
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workers' compensation insurance, on request by an applicant for |
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workers' compensation insurance or a policyholder, to provide to |
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the applicant or policyholder a written statement of the reasons |
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for the declination, cancellation, or nonrenewal of a workers' |
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compensation insurance policy. |
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SECTION 3. Subchapter A, Chapter 551, Insurance Code, is |
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amended by adding Section 551.006 to read as follows: |
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Sec. 551.006. REPORT REQUIRED. (a) An insurer shall |
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provide to the department at least once each quarter a written |
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report summarizing the insurer's written statements of reasons for |
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declination, cancellation, or nonrenewal provided to applicants |
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for insurance or policyholders as required by this chapter. The |
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report must be: |
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(1) in the form and manner prescribed by the |
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commissioner; and |
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(2) organized by the zip code of the applicant or |
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policyholder that received the statement. |
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(b) This section does not apply to written statements of |
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reasons for declination, cancellation, or nonrenewal provided to |
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applicants for or policyholders of workers' compensation insurance |
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policies. |
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SECTION 4. The heading to Subchapter B, Chapter 551, |
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Insurance Code, is amended to read as follows: |
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SUBCHAPTER B. DECLINATION, CANCELLATION, AND NONRENEWAL OF CERTAIN |
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LIABILITY AND COMMERCIAL PROPERTY INSURANCE POLICIES |
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SECTION 5. Subchapter B, Chapter 551, Insurance Code, is |
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amended by adding Section 551.0521 to read as follows: |
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Sec. 551.0521. WRITTEN NOTICE OF DECLINATION REQUIRED. An |
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insurer that declines an application for a liability insurance or |
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commercial property insurance policy shall deliver or mail written |
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notice of the declination to the applicant. |
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SECTION 6. Section 551.055, Insurance Code, is amended to |
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read as follows: |
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Sec. 551.055. REASON FOR DECLINATION, CANCELLATION, OR |
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NONRENEWAL REQUIRED. In a notice to an applicant or insured |
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relating to declination, cancellation, or refusal to renew, an |
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insurer must state the reason for the declination, cancellation, or |
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nonrenewal. The statement must comply with: |
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(1) Sections 551.002(b) and (c); and |
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(2) rules adopted under Section 551.002(d). |
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SECTION 7. Section 551.109, Insurance Code, is amended to |
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read as follows: |
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Sec. 551.109. INSURER STATEMENT. An insurer shall[, at the |
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request of an applicant for insurance or an insured,] provide a |
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written statement of the reason for a declination, cancellation, or |
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nonrenewal of an insurance policy. The statement must comply with: |
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(1) Sections 551.002(b) and (c); and |
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(2) rules adopted under Section 551.002(d). |
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SECTION 8. (a) Except as provided by Subsection (b) of this |
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section, the changes in law made by this Act apply only to an |
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application for insurance that is made or an insurance policy that |
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is delivered, issued for delivery, or renewed on or after March 1, |
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2026. An application made or policy delivered, issued for |
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delivery, or renewed before March 1, 2026, is governed by the law as |
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it existed immediately before that date, and that law is continued |
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in effect for that purpose. |
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(b) Subsection (a) of this section does not apply to Section |
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551.006, Insurance Code, as added by this Act. |
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SECTION 9. This Act takes effect September 1, 2025. |