83R10496 PMO-D
By: Smithee H.B. No. 2785
A BILL TO BE ENTITLED
AN ACT
relating to an insurance policyholders' bill of rights in
connection with policies issued by the Texas Windstorm Insurance
Association.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter E, Chapter 2210, Insurance Code, is
amended by adding Section 2210.2051 to read as follows:
Sec. 2210.2051. REQUIRED POLICY PROVISIONS: POLICYHOLDER
BILL OF RIGHTS. (a) The association must include in each windstorm
and hail insurance policy issued by the association a
policyholders' bill of rights. The bill of rights must be printed on
the declarations page of the policy and must include a statement
disclosing as of the date of issuance of the policy:
(1) the sources of funds, including cash reserves, the
catastrophe reserve trust fund balance, and public securities
proceeds, immediately available to pay claims during the policy
period;
(2) the estimated total exposure of the association
during the policy period;
(3) the amount of reinsurance purchased or that the
association intends to purchase to cover losses occurring during
the policy period;
(4) a projection by the Texas Public Finance Authority
regarding the marketability of public securities issued or that may
be issued under this chapter to fund payment of claims during the
policy period;
(5) any outstanding risk that may financially impact
the association's ability to pay claims;
(6) an estimate of probable maximum loss exposure for
the association in the event of a 100-year storm occurring during
the policy period; and
(7) an explanation of the claims payment process if
financial resources available to the association are insufficient
to pay claims during the policy period.
(b) The association must disclose on the declarations page
of each windstorm and hail insurance policy issued by the
association that in the event financial resources available to the
association are insufficient to pay claims under policies issued by
the association during the policy period:
(1) the state is not legally obligated to pay the
claims; and
(2) the payment of the claims is not guaranteed by the
state.
SECTION 2. This Act applies only to an insurance policy that
is delivered, issued for delivery, or renewed on or after January 1,
2014. A policy delivered, issued for delivery, or renewed before
January 1, 2014, is governed by the law as it existed immediately
before the effective date of this Act, and that law is continued in
effect for that purpose.
SECTION 3. This Act takes effect September 1, 2013.