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A BILL TO BE ENTITLED
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AN ACT
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relating to group 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. Section 2171.001, Insurance Code, is amended to |
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read as follows: |
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Sec. 2171.001. DEFINITIONS [DEFINITION]. In this chapter: |
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(1) "Large [, "large] risk" means an insured described |
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by Section 2301.004. |
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(2) "Member" means an owner or person with an |
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insurable interest in a property covered under a policy issued |
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under Section 2171.002. |
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SECTION 2. Chapter 2171, Insurance Code, is amended by |
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adding Sections 2171.006, 2171.007, 2171.008, and 2171.009 to read |
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as follows: |
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Sec. 2171.006. DISCLOSURES REQUIRED. (a) During an |
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application for an insurance policy issued under Section 2171.002, |
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an insurer must provide to each applicant a written disclosure of |
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whether the policy has a shared aggregate limit and, if applicable, |
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the amount of the limit. |
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(b) Not later than the 30th day after the date an insurer |
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issues, delivers, or renews an insurance policy under Section |
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2171.002, the insurer must deliver the following documents to each |
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member covered by the policy: |
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(1) a copy of the certificate of insurance; and |
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(2) a copy of the policy. |
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Sec. 2171.007. INCIDENTAL CASUALTY AND LIABILITY COVERAGE. |
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An insurance policy issued under Section 2171.002 may contain |
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casualty and liability coverage that is incidental to the property |
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risk covered under the policy. |
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Sec. 2171.008. APPLICABILITY TO SURPLUS LINES. (a) |
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Eligible surplus lines insurers are subject to this chapter, other |
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than Sections 2171.003, 2171.004, and 2171.005. |
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(b) A surplus lines agent is required to make a diligent |
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effort, as described by Section 981.004(a)(1), only with respect to |
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a group policy issued under Section 2171.002 and only on an annual |
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basis, rather than individually for each group member added during |
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the policy period. |
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(c) Notwithstanding Section 981.213, a surplus lines agent |
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is required to report to and file with the Surplus Lines Stamping |
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Office of Texas only the group policy issued under Section |
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2171.002, rather than each certificate or evidence of insurance |
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issued to the group members. |
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Sec. 2171.009. RULES. The commissioner may adopt rules to |
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implement and administer this chapter. |
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SECTION 3. Subtitle G, Title 10, Insurance Code, is amended |
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by adding Chapter 2172 to read as follows: |
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CHAPTER 2172. PERSONAL LINES GROUP PROPERTY AND CASUALTY INSURANCE |
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Sec. 2172.001. DEFINITION. In this chapter, "permitted |
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group" means a group of 10 or more certificate holders who have a |
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preexisting relationship to each other through: |
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(1) a common trade; |
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(2) an association; |
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(3) an affiliation; or |
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(4) any other relationship that is separate and |
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distinct from any group insurance arrangement of the group. |
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Sec. 2172.002. APPLICABILITY OF CHAPTER. (a) This |
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chapter, other than Section 2172.005, applies to an eligible |
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surplus lines insurer. |
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(b) This chapter does not apply to an insurance policy |
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issued under and in accordance with: |
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(1) Chapter 2153, 2171, or 2201; or |
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(2) Section 706.002, 2152.003, or 4055.154. |
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Sec. 2172.003. GROUP INSURANCE. (a) An insurer may provide |
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a personal lines property and casualty insurance policy to a |
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permitted group, on a group basis, provided that: |
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(1) the issuance of the policy results in economies of |
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scale in administrative, marketing, or brokerage costs; |
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(2) the benefits provided under the policy are |
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reasonable to the premiums charged; and |
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(3) the policy does not contain a shared aggregate |
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limit. |
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(b) An insurance policy that provides group coverage under |
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this chapter may not include a provision under which the payment of |
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a certificate holder's claims is limited by the claims or losses |
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incurred by another certificate holder. |
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(c) An insurer may not renew an insurance policy that |
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provides group coverage under this chapter to a group that includes |
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fewer than 10 certificate holders as part of the group at the time |
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of renewal. |
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Sec. 2172.004. APPLICABILITY OF INSURANCE LAWS. (a) |
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Except as otherwise provided by this chapter, a provision of this |
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code applies to each certificate issued under a group policy issued |
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under Section 2172.003 as if the certificate is an insurance policy |
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and the certificate holder is an insured, if the provision would |
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apply to the policy if the policy was issued on an individual basis. |
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(b) Insurance laws applicable under Subsection (a) include: |
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(1) Section 525.002; |
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(2) Section 542.003; |
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(3) Section 542.059; |
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(4) Section 551.002; |
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(5) Section 551.107; |
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(6) Section 558.002; |
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(7) Section 2002.001; |
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(8) Section 2002.102; |
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(9) Section 2251.005; and |
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(10) Section 2254.003. |
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Sec. 2172.005. RATE AND FORM FILINGS. An insurer shall |
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comply with all applicable rate and form filing requirements of |
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this title for an insurance policy issued under Section 2172.003. |
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Sec. 2172.006. INCIDENTAL LIABILITY COVERAGE. An insurance |
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policy issued under Section 2172.003 may contain liability coverage |
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that is incidental to the property risk covered under the policy. |
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Sec. 2172.007. SURPLUS LINES REQUIREMENTS. (a) A surplus |
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lines agent is required to make a diligent effort, as described by |
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Section 981.004(a)(1), only with respect to a group policy issued |
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under Section 2172.003 and only on an annual basis, rather than |
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individually for each group member added during the policy period. |
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(b) Notwithstanding Section 981.213, a surplus lines agent |
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is required to report to and file with the Surplus Lines Stamping |
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Office of Texas only the group policy issued under Section |
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2172.003, rather than each certificate or evidence of insurance |
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issued to the group members. |
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Sec. 2172.008. DISCLOSURES REQUIRED. Not later than the |
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30th day after the date an insurer issues, delivers, or renews an |
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insurance policy under Section 2172.003, the insurer must deliver |
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the following documents to each member covered by the policy: |
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(1) a copy of the certificate of insurance; and |
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(2) a copy of the policy. |
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Sec. 2172.009. GROUP ENROLLER EXEMPTION. Notwithstanding |
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the requirements of Chapter 4001, a person who secures and |
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furnishes information for the purpose of enrolling entities or |
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individuals under an insurance policy issued under Section |
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2172.003, issues certificates or evidences of insurance under the |
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policy, or otherwise assists in administering the policy, including |
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by collecting and remitting premiums, is not required to be |
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licensed as an insurance agent under Chapter 4001, provided that |
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the person does not receive a commission with respect to the sale of |
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the policy or any related enrollments. |
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Sec. 2172.010. RULES. The commissioner may adopt rules to |
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implement and administer this chapter. |
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SECTION 4. The changes in law made by this Act apply only to |
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an insurance policy delivered, issued for delivery, or renewed on |
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or after the effective date of this Act. |
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SECTION 5. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2025. |