83R7981 PMO-F
By: Hegar S.B. No. 1074
A BILL TO BE ENTITLED
AN ACT
relating to electronic transmission of documentation involved in
certain insurance transactions.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 35, Insurance Code, is amended by
designating Sections 35.001 through 35.004 as Subchapter A and
adding a subchapter heading to read as follows:
SUBCHAPTER A. ELECTRONIC TRANSACTIONS GENERALLY
SECTION 2. Section 35.003, Insurance Code, is amended to
read as follows:
Sec. 35.003. ELECTRONIC TRANSACTIONS AUTHORIZED. Subject
to Subchapter B, 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 each
party to the business agrees to conduct the business
electronically.
SECTION 3. Chapter 35, Insurance Code, is amended by adding
Subchapter B to read as follows:
SUBCHAPTER B. ELECTRONIC DELIVERY OF NOTICES, DOCUMENTS, AND
INFORMATION
Sec. 35.051. DEFINITIONS. In this subchapter:
(1) "Delivered by electronic means" includes:
(A) delivery to an e-mail address at which a
party consented to receive notices, documents, or information; and
(B) posting on an electronic network or Internet
website accessible by an electronic device, including a computer,
mobile device, or tablet, or a software application, including a
mobile device application.
(2) "Party" means a recipient, including an applicant,
insured, policyholder, or annuity contract holder, of a notice or a
document or information required as part of an insurance
transaction.
(3) "Written communication" means a notice, document,
or other information provided in writing.
Sec. 35.052. CONSENT. (a) Subject to Subsection (c), a
notice to a party or other written communication with a party
required in an insurance transaction or that is to serve as evidence
of insurance coverage may be delivered, stored, and presented by
electronic means only if the delivery, storage, or presentment
complies with the Uniform Electronic Transactions Act (Chapter 322,
Business & Commerce Code).
(b) Delivery of a written communication in compliance with
this section is equivalent to any delivery method required by law,
including delivery by first class mail, first class mail, postage
prepaid, or certified mail.
(c) A written communication may be delivered by electronic
means to a party by a regulated entity under this section if:
(1) the party affirmatively consented to delivery by
electronic means and has not withdrawn the consent;
(2) the party, before giving consent, 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 and any fees, conditions, or consequences
imposed if consent is withdrawn;
(C) whether the party's consent 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 the amount of the fee, if any, for a paper
copy; and
(E) the procedure a party must follow to:
(i) withdraw consent under this section;
and
(ii) update information needed for the
regulated entity to contact the party electronically; and
(3) the party:
(A) before giving consent, 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) 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, 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
insurer shall:
(A) provide the party with a statement:
(i) identifying the revised hardware and
software requirements for access to and retention of a written
communication delivered by electronic means; and
(ii) disclosing the right of the party to
withdraw consent without the imposition of any fee, condition, or
consequence that was not disclosed under Subsection (c)(2)(B); and
(B) comply with Subsection (c)(3).
(e) This section does not affect requirements for content or
timing of any required written communication.
(f) If a written communication provided to a party expressly
requires verification or acknowledgment of receipt, the written
communication may be delivered by electronic means only if the
method used provides for verification or acknowledgment of receipt.
(g) The legal effectiveness, validity, or enforceability of
any contract or policy of insurance executed by a party may not be
denied solely due to the failure to obtain electronic consent or
confirmation of consent of the party in accordance with Subsection
(c)(3)(B).
(h) A withdrawal of consent by a party does not affect the
legal effectiveness, validity, or enforceability of a written
communication delivered by electronic means to the party before the
withdrawal of consent is effective. A withdrawal of consent is
effective after the date of the receipt by the insurer of the
withdrawal. Failure by an insurer to comply with Subsection (d) may
be treated by the party as a withdrawal of consent.
(i) If the consent of a party to receive a written
communication by electronic means is on file with a regulated
entity before January 1, 2014, and if the entity intends to deliver
to the party written communications under this subchapter, then
before the entity may deliver by electronic means additional
written communications, the insurer must notify the party of:
(1) the written communications that may be delivered
by electronic means that were not previously delivered by
electronic means; and
(2) the party's right to withdraw consent to have
written communications delivered by electronic means.
(j) Except as otherwise provided by law, an oral
communication or a recording of an oral communication may not
qualify as a written communication delivered by electronic means
for purposes of this subchapter.
(k) If a signature on a written communication is required by
law to be notarized, acknowledged, verified, or made under oath,
the requirement is satisfied if the electronic signature of the
notary public or other authorized person and the other required
information are attached to or logically associated with the
signature or written communication.
(l) This section may not be construed to modify, limit, or
supersede the provisions of the federal Electronic Signatures in
Global and National Commerce Act (15 U.S.C. Section 7001 et seq.).
SECTION 4. This Act applies only to a written communication
that is delivered by electronic means on or after January 1, 2014.
A written communication delivered by electronic means 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 5. This Act takes effect September 1, 2013.