Texas 2017 - 85th Regular

Texas Senate Bill SB417 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	By: Watson S.B. No. 417
2		-	(Lucio III, Vo)
	1	+	S.B. No. 417
3	2
4	3
5		-	A BILL TO BE ENTITLED
6	4		AN ACT
7	5		relating to notice to policyholders and agents of certain changes
8	6		to property and casualty insurance policies.
9	7		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	8		SECTION 1. Section 551.103, Insurance Code, is amended to
11	9		read as follows:
12	10		Sec. 551.103. CANCELLATION. For the purposes of this
13	11		subchapter, an insurer has canceled an insurance policy if the
14	12		insurer, without the consent of the insured:
15	13		(1) terminates coverage provided under the policy;
16	14		(2) refuses to provide additional coverage to which
17	15		the insured is entitled under the policy; or
18	16		(3) except as provided by Section 551.1055, reduces or
19	17		restricts coverage under the policy by endorsement or other means.
20	18		SECTION 2. Subchapter C, Chapter 551, Insurance Code, is
21	19		amended by adding Section 551.1055 to read as follows:
22	20		Sec. 551.1055. CHANGES TO POLICY ON RENEWAL. (a) In this
23	21		section, "material change" means a change to a policy that, with
24	22		respect to a prior or existing policy:
25	23		(1) reduces coverage;
26	24		(2) changes conditions of coverage; or
27	25		(3) changes the duties of the insured.
28	26		(b) Notwithstanding Section 551.103, a change to a policy
29	27		provision on renewal is not a nonrenewal or cancellation under this
30	28		subchapter if the insurer provides the insured with written notice
31	29		in accordance with this section of any material change in each form
32	30		of the policy offered to the insured on renewal from the form of the
33	31		policy held immediately before renewal.
34	32		(c) Notice provided under Subsection (b) must:
35	33		(1) appear in a conspicuous place in the notice of
36	34		renewal;
37	35		(2) clearly indicate each material change to the
38	36		policy being made on renewal;
39	37		(3) be written in plain language; and
40	38		(4) be provided to the insured not later than the 30th
41	39		day before the renewal date.
42	40		(d) In addition to the notice to the insured provided under
43	41		Subsection (b), if an insurer elects to make a material change to a
44	42		policy form on renewal, not later than the 30th day before the
45	43		earliest renewal date on which the new policy form is used, the
46	44		insurer shall provide written notice to each agent of the insurer
47	45		that clearly indicates each material change being made to the
48	46		policy form. An insurer may provide the notice to the agents in a
49	47		single notice given to each agent of the insurer that summarizes
50	48		substantially similar material changes to more than one policy
51	49		form.
52	50		(e) Notwithstanding this section, for a personal automobile
53	51		insurance policy, an insurer must comply with Sections 551.105 and
54	52		551.106(b).
55	53		SECTION 3. Section 551.110, Insurance Code, is amended to
56	54		read as follows:
57	55		Sec. 551.110. LIABILITY FOR DISCLOSURE. An insurer or
58	56		agent or an employee of an insurer or agent is not liable for a
59	57		notice, statement, or disclosure made in good faith under this
60	58		subchapter unless the notice, statement, or disclosure was:
61	59		(1) known to be false; or
62	60		(2) made with malice or wilful intent to injure any
63	61		person.
64	62		SECTION 4. Section 2002.001, Insurance Code, is amended to
65	63		read as follows:
66	64		Sec. 2002.001. POLICY FORM OR ENDORSEMENT MAKING MATERIAL
67	65		CHANGE TO POLICY [ENDORSEMENTS REDUCING AMOUNT OF COVERAGE].
68	66		(a) In this section, "material change" means a change to a policy
69	67		that, with respect to a prior or existing policy:
70	68		(1) reduces coverage;
71	69		(2) changes conditions of coverage; or
72	70		(3) changes the duties of the insured.
73	71		(b) An insurer may not use a policy form or [an] endorsement
74	72		to a policy form to which Article 5.35, Subchapter B of this
75	73		chapter, or Subchapter B, Chapter 2301, applies that makes a
76	74		material change to [reduces coverage that would otherwise be
77	75		provided under] the policy unless:
78	76		(1) the insured requests the material change
79	77		[endorsement]; or
80	78		(2) the insurer provides the policyholder in a written
81	79		notice an [with a written] explanation of [the change made by] the
82	80		material change that:
83	81		(A) appears in a conspicuous place on the notice
84	82		of the material change;
85	83		(B) clearly indicates each material change to the
86	84		policy;
87	85		(C) is written in plain language; and
88	86		(D) is provided to the policyholder
89	87		[endorsement] not later than the 30th day before the date on which
90	88		the policy expires.
91	89		(c) Notice required by Subsection (b) may be provided to the
92	90		policyholder in a notice of renewal.
93	91		(d) In addition to the notice to the policyholder provided
94	92		under Subsection (b), if an insurer elects to make a material change
95	93		to a policy form or use an endorsement to make a material change to a
96	94		policy form, not later than the 30th day before the earliest date on
97	95		which the new policy form or endorsement is used, the insurer shall
98	96		provide written notice to each agent of the insurer that clearly
99	97		indicates each material change being made to the policy form. An
100	98		insurer may provide the notice to the agents in a single notice
101	99		given to each agent of the insurer that summarizes substantially
102	100		similar material changes to more than one policy form.
103	101		SECTION 5. The heading to Subchapter C, Chapter 2002,
104	102		Insurance Code, is amended to read as follows:
105	103		SUBCHAPTER C. ITEMS PROVIDED [TO POLICYHOLDER] IN CONNECTION WITH
106	104		INSURANCE POLICY
107	105		SECTION 6. Section 2002.102, Insurance Code, is amended to
108	106		read as follows:
109	107		Sec. 2002.102. NOTICE OF RENEWAL. (a) In this section,
110	108		"material change" means a change to a policy that, with respect to a
111	109		prior or existing policy:
112	110		(1) reduces coverage;
113	111		(2) changes conditions of coverage; or
114	112		(3) changes the duties of the policyholder.
115	113		(b) An insurer, including a farm mutual insurance company,
116	114		county mutual insurance company, Lloyd's plan, or reciprocal or
117	115		interinsurance exchange, that renews a homeowners insurance
118	116		policy, fire and residential allied lines insurance policy, farm
119	117		and ranch owners insurance policy, or farm and ranch insurance
120	118		policy must provide the policyholder with written notice in
121	119		accordance with this section of any material change in [difference
122	120		between] each form of the policy offered to the policyholder on
123	121		renewal from [and] the form of the policy held immediately before
124	122		renewal.
125	123		(c) [(b)] A notice provided under this section must:
126	124		(1) appear in a conspicuous place in the notice of
127	125		renewal;
128	126		(2) clearly indicate each material change to the
129	127		policy being made on renewal;
130	128		(3) be written in plain language; and
131	129		(4) be provided to the policyholder not later than the
132	130		30th day before the renewal date.
133	131		(d) In addition to the notice to the policyholder provided
134	132		under this section, if an insurer elects to make a material change
135	133		to a policy form on renewal, not later than the 30th day before the
136	134		earliest renewal date on which the new policy form is used, the
137	135		insurer shall provide written notice to each agent of the insurer
138	136		that clearly indicates each material change being made to the
139	137		policy form. An insurer may provide the notice to the agents in a
140	138		single notice given to each agent of the insurer that summarizes
141	139		substantially similar material changes to more than one policy
142	140		form.
143	141		(e) [(c)] The commissioner may adopt rules as necessary to
144	142		implement this section.
145	143		SECTION 7. The change in law made by this Act applies only
146	144		to an insurance policy delivered, issued for delivery, or renewed
147	145		on or after January 1, 2018. A policy delivered, issued for
148	146		delivery, or renewed before that date is governed by the law as it
149	147		existed immediately before the effective date of this Act, and that
150	148		law is continued in effect for that purpose.
151	149		SECTION 8. This Act takes effect September 1, 2017.
	150	+	______________________________ ______________________________
	151	+	President of the Senate Speaker of the House
	152	+	I hereby certify that S.B. No. 417 passed the Senate on
	153	+	April 19, 2017, by the following vote: Yeas 31, Nays 0.
	154	+	______________________________
	155	+	Secretary of the Senate
	156	+	I hereby certify that S.B. No. 417 passed the House on
	157	+	May 9, 2017, by the following vote: Yeas 143, Nays 2, two present
	158	+	not voting.
	159	+	______________________________
	160	+	Chief Clerk of the House
	161	+	Approved:
	162	+	______________________________
	163	+	Date
	164	+	______________________________
	165	+	Governor