H.B. No. 2102
AN ACT
relating to the payment of insurance deductibles related to
property insurance policies; creating a criminal offense.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle F, Title 5, Insurance Code, is amended
by adding Chapter 707 to read as follows:
CHAPTER 707. PAYMENT OF INSURANCE DEDUCTIBLE
Sec. 707.001. DEFINITIONS. In this chapter:
(1) "Person" means an individual, corporation,
association, partnership, limited liability company, or other
legal entity.
(2) "Property insurance policy" means an insurance
policy issued by an insurer, including a county mutual insurance
company, farm mutual insurance company, Lloyd's plan, or reciprocal
or interinsurance exchange, that provides first-party coverage for
loss of or damage to real property.
Sec. 707.002. PAYMENT OF DEDUCTIBLE REQUIRED. A person
insured under a property insurance policy shall pay any deductible
applicable to a first-party claim made under the policy.
Sec. 707.003. CONSUMER EDUCATION. The department, in
coordination with other state agencies and stakeholders as
necessary, shall develop and implement an education program related
to the payment of property insurance policy deductibles. The
program must:
(1) provide reasonable methods to educate insurance
consumers and providers of goods or services that are regularly
paid for from proceeds of property insurance claims; and
(2) include information regarding:
(A) the requirements of this chapter and Section
27.02, Business & Commerce Code; and
(B) the conduct prohibited by Section 27.02,
Business & Commerce Code.
Sec. 707.004. REASONABLE PROOF OF PAYMENT. An insurer that
issues a property insurance policy with replacement cost coverage
may refuse to pay a claim for withheld recoverable depreciation or a
replacement cost holdback under the policy until the insurer
receives reasonable proof of payment by the policyholder of any
deductible applicable to the claim. Reasonable proof of payment
includes a canceled check, money order receipt, credit card
statement, or copy of an executed installment plan contract or
other financing arrangement that requires full payment of the
deductible over time.
Sec. 707.005. RULEMAKING. The commissioner may adopt rules
as necessary to implement this chapter. Section 2001.0045,
Government Code, does not apply to rules adopted under this
section.
SECTION 2. Section 27.02, Business & Commerce Code, is
amended to read as follows:
Sec. 27.02. GOODS OR SERVICES PAID FOR BY INSURANCE
PROCEEDS: PAYMENT OF DEDUCTIBLE REQUIRED [CERTAIN INSURANCE CLAIMS
FOR EXCESSIVE CHARGES]. (a) In this section, "property insurance
policy" has the meaning assigned by Section 707.001, Insurance
Code.
(b) A contract to provide a good or service that is
reasonably expected to be paid wholly or partly from the proceeds of
a claim under a property insurance policy and that has a contract
price of $1,000 or more must contain the following notice in at
least 12-point boldfaced type: "Texas law requires a person
insured under a property insurance policy to pay any deductible
applicable to a claim made under the policy. It is a violation of
Texas law for a seller of goods or services who reasonably expects
to be paid wholly or partly from the proceeds of a property
insurance claim to knowingly allow the insured person to fail to
pay, or assist the insured person's failure to pay, the applicable
insurance deductible."
(c) A person who sells goods or services commits an offense
if the person:
(1) advertises or promises to provide a good or
service to an insured under a property insurance policy in a
transaction in which:
(A) the good or service will be paid for by the
insured from the proceeds of a property insurance claim; and
(B) the person selling the good or service will,
without the insurer's consent:
(i) pay, waive, absorb, or otherwise
decline to charge or collect the amount of the insured's
deductible;
(ii) provide a rebate or credit in
connection with the sale of the good or service that will offset all
or part of the amount paid by the insured as a deductible; or
(iii) in any other manner assist the
insured in avoiding monetary payment of the required insurance
deductible; or
(2) provides a good or service to an insured under a
property insurance policy knowing that the insured will pay for the
good or service with the proceeds of a claim under the policy and,
without the insurer's consent:
(A) pays, waives, absorbs, or otherwise declines
to charge or collect the amount of the insured's deductible;
(B) provides a rebate or credit in connection
with the sale of the good or service that offsets all or part of the
amount paid by the insured as a deductible; or
(C) in any other manner assists the insured in
avoiding monetary payment of the required insurance deductible. [A
person who sells goods or services commits an offense if:
[(1) the person advertises or promises to provide the
good or service and to pay:
[(A) all or part of any applicable insurance
deductible; or
[(B) a rebate in an amount equal to all or part of
any applicable insurance deductible;
[(2) the good or service is paid for by the consumer
from proceeds of a property or casualty insurance policy; and
[(3) the person knowingly charges an amount for the
good or service that exceeds the usual and customary charge by the
person for the good or service by an amount equal to or greater than
all or part of the applicable insurance deductible paid by the
person to an insurer on behalf of an insured or remitted to an
insured by the person as a rebate.
[(b) A person who is insured under a property or casualty
insurance policy commits an offense if the person:
[(1) submits a claim under the policy based on charges
that are in violation of Subsection (a) of this section; or
[(2) knowingly allows a claim in violation of
Subsection (a) of this section to be submitted, unless the person
promptly notifies the insurer of the excessive charges.]
(d) [(c)] An offense under this section is a Class B [A]
misdemeanor.
SECTION 3. The changes in law made by this Act to Section
27.02, Business & Commerce Code, apply only to an offense committed
on or after the effective date of this Act. An offense committed
before the effective date of this Act is governed by the law in
effect on the date the offense was committed, and the former law is
continued in effect for that purpose. For purposes of this section,
an offense was committed before the effective date of this Act if
any element of the offense occurred before that date.
SECTION 4. Section 27.02(b), Business & Commerce Code, as
amended by this Act, applies only to a contract entered into on or
after the effective date of this Act.
SECTION 5. This Act takes effect September 1, 2019.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2102 was passed by the House on May 3,
2019, by the following vote: Yeas 136, Nays 4, 2 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 2102 on May 24, 2019, by the following vote: Yeas 82, Nays 50,
2 present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 2102 was passed by the Senate, with
amendments, on May 22, 2019, by the following vote: Yeas 31, Nays
0.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor