Texas 2017 - 85th Regular

Texas House Bill HB647 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	85R20976 BEE-F
2	2	By: Lucio III, Vo H.B. No. 647
3	3	Substitute the following for H.B. No. 647:
4	4	By: Phillips C.S.H.B. No. 647
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to notice to policyholders and agents of certain changes
10	10	to property and casualty insurance policies.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Section 551.103, Insurance Code, is amended to
13	13	read as follows:
14	14	Sec. 551.103. CANCELLATION. For the purposes of this
15	15	subchapter, an insurer has canceled an insurance policy if the
16	16	insurer, without the consent of the insured:
17	17	(1) terminates coverage provided under the policy;
18	18	(2) refuses to provide additional coverage to which
19	19	the insured is entitled under the policy; or
20	20	(3) except as provided by Section 551.1055, reduces or
21	21	restricts coverage under the policy by endorsement or other means.
22	22	SECTION 2. Subchapter C, Chapter 551, Insurance Code, is
23	23	amended by adding Section 551.1055 to read as follows:
24	24	Sec. 551.1055. CHANGES TO POLICY ON RENEWAL. (a) In this
25	25	section, "material change" means a change to a policy that, with
26	26	respect to a prior or existing policy:
27	27	(1) reduces coverage;
28	28	(2) changes conditions of coverage; or
29	29	(3) changes the duties of the insured.
30	30	(b) Notwithstanding Section 551.103, a change to a policy
31	31	provision on renewal is not a nonrenewal or cancellation under this
32	32	subchapter if the insurer provides the insured with written notice
33	33	in accordance with this section of any material change in each form
34	34	of the policy offered to the insured on renewal from the form of the
35	35	policy held immediately before renewal.
36	36	(c) Notice provided under Subsection (b) must:
37	37	(1) appear in a conspicuous place in the notice of
38	38	renewal;
39	39	(2) clearly indicate each material change to the
40	40	policy being made on renewal;
41	41	(3) be written in plain language; and
42	42	(4) be provided to the insured not later than the 30th
43	43	day before the renewal date.
44	44	(d) In addition to the notice to the insured provided under
45	45	Subsection (b), if an insurer elects to make a material change to a
46	46	policy form on renewal, not later than the 30th day before the
47	47	earliest renewal date on which the new policy form is used, the
48	48	insurer shall provide written notice to each agent of the insurer
49	49	that clearly indicates each material change being made to the
50	50	policy form. An insurer may provide the notice to the agents in a
51	51	single notice given to each agent of the insurer that summarizes
52	52	substantially similar material changes to more than one policy
53	53	form.
54	54	(e) Notwithstanding this section, for a personal automobile
55	55	insurance policy, an insurer must comply with Sections 551.105 and
56	56	551.106(b).
57	57	SECTION 3. Section 551.110, Insurance Code, is amended to
58	58	read as follows:
59	59	Sec. 551.110. LIABILITY FOR DISCLOSURE. An insurer or
60	60	agent or an employee of an insurer or agent is not liable for a
61	61	notice, statement, or disclosure made in good faith under this
62	62	subchapter unless the notice, statement, or disclosure was:
63	63	(1) known to be false; or
64	64	(2) made with malice or wilful intent to injure any
65	65	person.
66	66	SECTION 4. Section 2002.001, Insurance Code, is amended to
67	67	read as follows:
68	68	Sec. 2002.001. POLICY FORM OR ENDORSEMENT MAKING MATERIAL
69	69	CHANGE TO POLICY [ENDORSEMENTS REDUCING AMOUNT OF COVERAGE]. (a)
70	70	In this section, "material change" means a change to a policy that,
71	71	with respect to a prior or existing policy:
72	72	(1) reduces coverage;
73	73	(2) changes conditions of coverage; or
74	74	(3) changes the duties of the insured.
75	75	(b) An insurer may not use a policy form or [an] endorsement
76	76	to a policy form to which Article 5.35, Subchapter B of this
77	77	chapter, or Subchapter B, Chapter 2301, applies that makes a
78	78	material change to [reduces coverage that would otherwise be
79	79	provided under] the policy unless:
80	80	(1) the insured requests the material change
81	81	[endorsement]; or
82	82	(2) the insurer provides the policyholder in a written
83	83	notice an [with a written] explanation of [the change made by] the
84	84	material change that:
85	85	(A) appears in a conspicuous place on the notice
86	86	of the material change;
87	87	(B) clearly indicates each material change to the
88	88	policy;
89	89	(C) is written in plain language; and
90	90	(D) is provided to the policyholder
91	91	[endorsement] not later than the 30th day before the date on which
92	92	the policy expires.
93	93	(c) Notice required by Subsection (b) may be provided to the
94	94	policyholder in a notice of renewal.
95	95	(d) In addition to the notice to the policyholder provided
96	96	under Subsection (b), if an insurer elects to make a material change
97	97	to a policy form or use an endorsement to make a material change to a
98	98	policy form, not later than the 30th day before the earliest date on
99	99	which the new policy form or endorsement is used, the insurer shall
100	100	provide written notice to each agent of the insurer that clearly
101	101	indicates each material change being made to the policy form. An
102	102	insurer may provide the notice to the agents in a single notice
103	103	given to each agent of the insurer that summarizes substantially
104	104	similar material changes to more than one policy form.
105	105	SECTION 5. The heading to Subchapter C, Chapter 2002,
106	106	Insurance Code, is amended to read as follows:
107	107	SUBCHAPTER C. ITEMS PROVIDED [TO POLICYHOLDER] IN CONNECTION WITH
108	108	INSURANCE POLICY
109	109	SECTION 6. Section 2002.102, Insurance Code, is amended to
110	110	read as follows:
111	111	Sec. 2002.102. NOTICE OF RENEWAL. (a) In this section,
112	112	"material change" means a change to a policy that, with respect to a
113	113	prior or existing policy:
114	114	(1) reduces coverage;
115	115	(2) changes conditions of coverage; or
116	116	(3) changes the duties of the policyholder.
117	117	(b) An insurer, including a farm mutual insurance company,
118	118	county mutual insurance company, Lloyd's plan, or reciprocal or
119	119	interinsurance exchange, that renews a homeowners insurance
120	120	policy, fire and residential allied lines insurance policy, farm
121	121	and ranch owners insurance policy, or farm and ranch insurance
122	122	policy must provide the policyholder with written notice in
123	123	accordance with this section of any material change in [difference
124	124	between] each form of the policy offered to the policyholder on
125	125	renewal from [and] the form of the policy held immediately before
126	126	renewal.
127	127	(c) [(b)] A notice provided under this section must:
128	128	(1) appear in a conspicuous place in the notice of
129	129	renewal;
130	130	(2) clearly indicate each material change to the
131	131	policy being made on renewal;
132	132	(3) be written in plain language; and
133	133	(4) be provided to the policyholder not later than the
134	134	30th day before the renewal date.
135	135	(d) In addition to the notice to the policyholder provided
136	136	under this section, if an insurer elects to make a material change
137	137	to a policy form on renewal, not later than the 30th day before the
138	138	earliest renewal date on which the new policy form is used, the
139	139	insurer shall provide written notice to each agent of the insurer
140	140	that clearly indicates each material change being made to the
141	141	policy form. An insurer may provide the notice to the agents in a
142	142	single notice given to each agent of the insurer that summarizes
143	143	substantially similar material changes to more than one policy
144	144	form.
145	145	(e) [(c)] The commissioner may adopt rules as necessary to
146	146	implement this section.
147	147	SECTION 7. The change in law made by this Act applies only
148	148	to an insurance policy delivered, issued for delivery, or renewed
149	149	on or after January 1, 2018. A policy delivered, issued for
150	150	delivery, or renewed before that date is governed by the law as it
151	151	existed immediately before the effective date of this Act, and that
152	152	law is continued in effect for that purpose.
153	153	SECTION 8. This Act takes effect September 1, 2017.