By: Creighton S.B. No. 1081
(In the Senate - Filed March 9, 2015; March 16, 2015, read
first time and referred to Committee on Business and Commerce;
April 20, 2015, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 8, Nays 1; April 20, 2015,
sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR S.B. No. 1081 By: Creighton
A BILL TO BE ENTITLED
AN ACT
relating to the disclosure of certain information under a
consolidated insurance program.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 151.002, Insurance Code, is amended to
read as follows:
Sec. 151.002. RULES. The commissioner shall adopt rules as
necessary to implement and enforce Subchapters A and [Subchapter]
B.
SECTION 2. Subchapter A, Chapter 151, Insurance Code, is
amended by adding Sections 151.003 through 151.008 to read as
follows:
Sec. 151.003. INFORMATION REQUIRED TO BE PROVIDED BY A
PRINCIPAL PRIOR TO ENTERING INTO A CONSTRUCTION CONTRACT. Not less
than 10 days before the date a principal enters into a construction
contract with a person, and the contract contains a requirement for
the person to enroll in a consolidated insurance program, the
principal shall provide to the person the following information
about the consolidated insurance program:
(1) contact information, including phone and email
addresses for the program administrator, the principal's risk
manager, and the insurance company's contact person for filing a
claim for each type of insurance coverage provided in the program;
(2) criteria for eligibility of enrollment into the
program;
(3) a description of the project site to which the
program coverages apply;
(4) a summary of insurance coverages to be provided to
the contractor under the program, including:
(A) the policy form number and issuing
organization name for a standardized insurance policy or a sample
policy form if not a standardized form;
(B) per occurrence and aggregate limits of
insurance coverage and any sublimits that may apply;
(C) term of coverage for each limit and sublimit;
and
(D) material endorsements to the policy
described in Paragraph (A);
(5) a summary of insurance coverages to be provided by
the contractor;
(6) instructions to a person on how to include or
exclude costs of insurance provided by the program in the person's
proposal for work on the construction project;
(7) a description of the audit or claims procedures
related to the program that could result in a contractor's
responsibility for any additional costs, including the calculation
for any assessment to a contractor related to the principal's
payment of a policy deductible, and including specific monetary
amounts related to those costs; and
(8) a description of a contractor's duties related to:
(A) reporting of payroll and retention of
documentation; and
(B) reporting of claims and participation in
safety inspections and incident reporting.
Sec. 151.004. INFORMATION REQUIRED TO BE PROVIDED BY A
CONTRACTOR PRIOR TO ENTERING INTO A CONSTRUCTION CONTRACT WITH A
PERSON. Not less than 10 days before the date a contractor enters
into a construction contract with a person, and the contract
contains a requirement for the person to enroll in a consolidated
insurance program, the contractor shall provide to the person the
information about the consolidated insurance program listed in
Section 151.003.
Sec. 151.005. RELIANCE ON INFORMATION PROVIDED PRIOR TO
ENTERING INTO CONTRACT; FAILURE TO FURNISH. (a) The information
that is required to be provided under Section 151.003 shall
accurately reflect those terms of the consolidated insurance
program. A contractor providing information to a person under
Section 151.004 shall accurately provide the information that the
contractor received regarding the terms of the consolidated
insurance program. A person receiving the information under
Section 151.003 or 151.004 may justifiably rely on the information
to guide its decision on whether to enter into a contract that
requires the person to enroll in the consolidated insurance
program.
(b) If a person is not timely provided the information
required to be provided under Section 151.003 or 151.004, the
person may elect not to enroll in the consolidated insurance
program.
(c) If a person elects not to enroll under Subsection (b), a
principal or contractor may provide to that person the information
about the consolidated insurance program listed in Section 151.003
and the person will then have 10 days after the date the information
is provided to elect to enter into the construction contract.
(d) If the person elects not to enroll in the consolidated
insurance program under Subsection (b) or (c) and the person enters
into a construction contract for the construction project, the
person shall furnish insurance coverage for its work on the
construction project in substantial compliance with what is
required for a person that is not covered by an insurance policy
under the consolidated insurance program.
(e) A person that provides insurance coverage under
Subsection (d) shall be compensated by the party with which the
person has entered into the construction contract for the person's
actual cost of its insurance coverage.
(f) A person may not be required to enter into a
construction contract that contains a requirement for the person to
enroll in the consolidated insurance program unless the person has
been provided the information about the consolidated insurance
program listed in Section 151.003 at least 10 days prior to the date
the agreement is entered into.
Sec. 151.006. REQUEST FOR INSURANCE POLICY; DEADLINE TO
PROVIDE. A contractor may request in writing from the principal, or
from the party with which it has a direct contractual relationship,
a complete copy of the insurance policy that provides coverage for
the contractor under the consolidated insurance program. A
complete copy of the insurance policy must be provided to the
requesting contractor by the later of the:
(1) 30th day after the date the request was sent; or
(2) 60th day after the date work covered by the
consolidated insurance program commences on the construction
project.
Sec. 151.007. FAILURE TO PROVIDE INSURANCE POLICY. If the
requesting contractor has made a request under Section 151.006 of
the party with which it has a direct contractual relationship, it
shall be a material breach of the requesting contractor's
construction contract under this chapter if the requesting
contractor is not provided the information under Section 151.006 by
the later of the:
(1) 75th day after the date of the request; or
(2) 60th day after the date work covered by the
consolidated insurance program commences on the construction
project.
Sec. 151.008. ELECTRONIC DELIVERY. (a) If the contractor
requesting information under this subchapter expressly requests
that the information be provided in written form, the principal or
contractor shall provide the items in written form to the
requesting contractor.
(b) If the contractor requesting information has not made an
express request for the information under this subchapter to be
provided in written form and a principal or contractor chooses to
provide the information required under this subchapter by
electronic delivery, the principal or contractor may comply with
the information delivery requirements in this subchapter by:
(1) electronic transmission by facsimile or email; or
(2) providing access to the required information on
the principal's, or its agent's, Internet website.
SECTION 3. Sections 151.003 through 151.008, Insurance
Code, as added by this Act, apply only to a construction contract
that is entered into on or after January 1, 2016. A construction
contract that is entered into before January 1, 2016, 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 4. This Act takes effect January 1, 2016.
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