By: Davis S.B. No. 1566
A BILL TO BE ENTITLED
AN ACT
relating to the use by insurers of a standard residential property
insurance policy form.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 2002.051 and 2002.052, Insurance Code,
are amended to read as follows:
Sec. 2002.051. POLICY FORMS AND ENDORSEMENTS FOR
RESIDENTIAL PROPERTY INSURANCE. Notwithstanding Subsections
(a)-(j), Article 5.35, policy forms and endorsements for
residential property insurance in this state are regulated under
[Subchapter A,] Chapter 2301[,] and Article 5.13-2.
Sec. 2002.052. APPLICABILITY OF OTHER LAW TO RESIDENTIAL
PROPERTY INSURANCE. Subject to Section 2301.0525, an [An] insurer
may continue to use a policy form or endorsement promulgated,
approved, or adopted by the commissioner under Article 5.35 before
June 11, 2003, on notification in writing to the commissioner that
the insurer will continue to use the policy form or endorsement.
SECTION 2. Section 2301.008, Insurance Code, is amended to
read as follows:
Sec. 2301.008. ADOPTION AND USE OF STANDARD FORMS.
(a) The commissioner shall [may] adopt standard insurance policy
forms, printed endorsement forms, and related forms other than
insurance policy forms and printed endorsement forms, that an
insurer shall [may] use in addition to [instead of] the insurer's
own forms in writing insurance subject to this subchapter.
(b) The commissioner shall adopt a standard residential
property insurance policy form that provides as much coverage in
all respects as the HO-B policy form adopted by the department and
in effect on January 1, 2002.
SECTION 3. Subsection (b), Section 2301.052, Insurance
Code, is amended to read as follows:
(b) Subject to Section 2301.0525, an [An] insurer may
continue to use an insurance policy form or endorsement
promulgated, approved, or adopted under Article 5.06 or 5.35 before
June 11, 2003, on written notification to the commissioner that the
insurer will continue to use the form or endorsement.
SECTION 4. Subchapter B, Chapter 2301, Insurance Code, is
amended by adding Section 2301.0525 to read as follows:
Sec. 2301.0525. USE OF MINIMUM STANDARD INSURANCE POLICY
FORMS REQUIRED. (a) Each insurer that writes residential property
insurance in this state shall use the standard insurance policy
form adopted by the commissioner under Section 2301.008(b) for
residential property insurance. Subject to Subsections (b) and (d)
of this section, an insurer may also use alternative policy forms
approved by the commissioner under Section 2301.006.
(b) An insurer may not deliver or issue for delivery in this
state a residential property insurance policy unless the insurer
informs each applicant for that insurance coverage, in the manner
prescribed by commissioner rule, that an applicant otherwise
qualified for that insurance coverage under this code may elect to
obtain residential property insurance coverage under the standard
insurance policy forms adopted by the commissioner under Section
2301.008.
(c) An insurer that offers coverage under the standard
insurance policy forms shall disclose to the applicant or insured,
at the time of the initial application and each renewal, each policy
limit and type of coverage available to the insured and the
respective costs for each coverage. The form of the disclosure
shall be specified by the commissioner, subject to Section
2301.053(c).
(d) An insurer that offers coverage under approved forms
other than the standard insurance policy forms shall disclose to
the applicant or insured, at the time of the initial application and
each renewal, in comparison to the standard insurance policy forms,
each additional coverage that is provided and the additional cost,
each reduction in coverage or exclusion of coverage and the reduced
cost, and each policy limit and type of coverage available to the
insured and the respective costs for each coverage. The form of the
disclosure shall be specified by the commissioner, subject to
Section 2301.053(c). At a minimum, the disclosure must refer the
applicant or insured to the Internet website described by Section
32.102 and state that the applicant may compare the rates of
insurers at that site.
SECTION 5. The change in law made by this Act applies only
to a residential property insurance policy 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 in effect immediately before the effective
date of this Act, and that law is continued in effect for that
purpose.
SECTION 6. This Act takes effect September 1, 2013.