Texas 2019 - 86th Regular

Texas House Bill HB1411 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	~~86R22062~~ SMT-F
	1	+	86R6401 SMT-F
2	2		By: Lucio III H.B. No. 1411
3		-	Substitute the following for H.B. No. 1411:
4		-	By: Lucio III C.S.H.B. No. 1411
5	3
6	4
7	5		A BILL TO BE ENTITLED
8	6		AN ACT
9	7		relating to the cancellation and nonrenewal of certain liability
10	8		and commercial property insurance policies.
11	9		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	10		SECTION 1. The heading to Subchapter B, Chapter 551,
13	11		Insurance Code, is amended to read as follows:
14	12		SUBCHAPTER B. CANCELLATION AND NONRENEWAL OF CERTAIN LIABILITY AND
15	13		COMMERCIAL PROPERTY INSURANCE POLICIES
16	14		SECTION 2. Section 551.051, Insurance Code, is amended by
17	15		amending Subdivision (1) and adding Subdivision (1-a) to read as
18	16		follows:
19	17		(1) "Commercial property insurance" has the meaning
20	18		assigned by Section 2251.002.
21	19		(1-a) "Insurer" means an insurance company or other
22	20		entity admitted to engage in business and authorized to write
23	21		liability insurance or commercial property insurance in this state,
24	22		including a county mutual insurance company, a Lloyd's plan, and a
25	23		reciprocal or interinsurance exchange. The term does not include a
26	24		county mutual fire insurance company that writes exclusively
27	25		industrial fire insurance as described by Section 912.310 or a farm
28	26		mutual insurance company.
29	27		SECTION 3. Sections 551.052 and 551.053, Insurance Code,
30	28		are amended to read as follows:
31	29		Sec. 551.052. CANCELLATION PROHIBITED; EXCEPTIONS. (a) An
32	30		insurer may not cancel a liability insurance or commercial property
33	31		insurance policy that is a renewal or continuation policy.
34		-	(b) An insurer may not cancel a liability insurance or
35		-	commercial property insurance ~~policy~~ during the initial policy term
	32	+	(b) An insurer may not cancel a liability insurance policy
	33	+	or commercial property insurance during the initial policy term
36	34		after the 60th day following the date on which the policy was
37	35		issued.
38	36		(c) Notwithstanding Subsections (a) and (b), an insurer may
39	37		cancel a liability insurance or commercial property insurance
40	38		policy at any time during the term of the policy for:
41	39		(1) fraud in obtaining coverage;
42	40		(2) failure to pay premiums when due;
43	41		(3) an increase in hazard within the control of the
44	42		insured that would produce a rate increase; or
45	43		(4) loss of the insurer's reinsurance covering all or
46	44		part of the risk covered by the policy.
47	45		(d) Notwithstanding Subsections (a) and (b), an insurer may
48	46		cancel a liability insurance or commercial property insurance
49	47		policy at any time during the term of the policy if the insurer is
50	48		placed in supervision, conservatorship, or receivership and the
51	49		cancellation or nonrenewal is approved or directed by the
52	50		supervisor, conservator, or receiver.
53	51		Sec. 551.053. WRITTEN NOTICE OF CANCELLATION REQUIRED. Not
54	52		later than the 10th day before the date on which the cancellation of
55	53		a liability insurance or commercial property insurance policy takes
56	54		effect, an insurer must deliver or mail written notice of the
57	55		cancellation to the first-named insured under the policy at the
58	56		address shown on the policy.
59	57		SECTION 4. Section 551.054(a), Insurance Code, is amended
60	58		to read as follows:
61	59		(a) An insurer may refuse to renew a liability insurance or
62	60		commercial property insurance policy if the insurer delivers or
63	61		mails written notice of the nonrenewal to the first-named insured
64	62		under the policy at the address shown on the policy.
65	63		SECTION 5. Subchapter B, Chapter 551, Insurance Code, is
66	64		amended by adding Section 551.056 to read as follows:
67	65		Sec. 551.056. CHANGES TO POLICY ON RENEWAL. (a) In this
68	66		section, "material change" means a change to a policy that, with
69	67		respect to a previous 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) A change to a liability insurance or commercial property
74	72		insurance policy provision on renewal is not a nonrenewal or
75	73		cancellation under this subchapter if the insurer provides the
76	74		insured with written notice in accordance with this section of any
77	75		material change in each form of the policy offered to the insured on
78	76		renewal from the form of the policy held immediately before
79	77		renewal.
80	78		(c) Notice provided under Subsection (b) must:
81	79		(1) appear in a conspicuous place in the notice of
82	80		renewal;
83	81		(2) clearly indicate each material change to the
84	82		policy being made on renewal;
85	83		(3) be written in plain language; and
86	84		(4) be provided to the insured not later than the 30th
87	85		day before the renewal date.
88	86		(d) In addition to the notice to the insured provided under
89	87		Subsection (b), if an insurer elects to make a material change to a
90	88		policy form on renewal, not later than the 30th day before the
91	89		earliest renewal date on which the new policy form is used, the
92	90		insurer shall provide written notice to each agent of the insurer
93	91		that clearly indicates each material change being made to the
94	92		policy form. An insurer may provide the notice to the agents in a
95	93		single notice given to each agent of the insurer that summarizes
96	94		substantially similar material changes to more than one policy
97	95		form.
98		-	(e) This section does not apply if:
99		-	(1) the policy form meets at least one of the
100		-	conditions in Section 2301.004 both before and after renewal of the
101		-	policy; or
102		-	(2) before the renewal date:
103		-	(A) the insured requests the change; or
104		-	(B) the insured and the insurer agree to the
105		-	change.
106	96		SECTION 6. The change in law made by this Act applies only
107	97		to an insurance policy delivered, issued for delivery, or renewed
108	98		on or after January 1, 2020. A policy delivered, issued for
109	99		delivery, or renewed before that date is governed by the law as it
110	100		existed immediately before the effective date of this Act, and that
111	101		law is continued in effect for that purpose.
112	102		SECTION 7. This Act takes effect September 1, 2019.