H.B. No. 1040
AN ACT
relating to the authority of entities regulated by the Texas
Department of Insurance to conduct business electronically.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 35.003, Insurance Code, is amended to
read as follows:
Sec. 35.003. ELECTRONIC TRANSACTIONS AUTHORIZED. (a)
Subject to Section 35.004, a [A] regulated entity may conduct
business electronically to the same extent that the entity is
authorized to conduct business otherwise if before the conduct of
business:
(1) each party to the business agrees to conduct the
business electronically; or
(2) each other party to the business has been given
notice by the entity that the business will be conducted
electronically and has not requested that the business be conducted
in nonelectronic form.
(b) If a regulated entity provides notice under Subsection
(a)(2) and the other party does not opt out of conducting business
electronically, the other party is considered to have agreed to
conduct business electronically for the purposes of Chapter 322,
Business & Commerce Code.
SECTION 2. Section 35.004, Insurance Code, is amended by
amending Subsections (c) and (d) and adding Subsection (l) to read
as follows:
(c) A written communication may be delivered by electronic
means to a party by a regulated entity under this section if:
(1) the party:
(A) affirmatively consented to delivery by
electronic means and has not withdrawn the consent; or
(B) if affirmative consent is not sought, has not
requested that written communication be delivered to the party in
paper or another nonelectronic form instead of by electronic means;
(2) the party, before giving consent or receiving
written communication by electronic means, is provided with a clear
and conspicuous statement informing the party of:
(A) any right or option the party may have for the
written communication to be provided or made available in paper or
another nonelectronic form;
(B) the right of the party to withdraw consent
under this section or to request written communication be delivered
to the party in nonelectronic form, if the party's affirmative
consent is not sought, and any conditions or consequences imposed
if consent is withdrawn or delivery in nonelectronic form is
requested;
(C) whether the party's consent to delivery by
electronic means or the party's request or the absence of the
party's request for delivery in nonelectronic form applies:
(i) only to a specific transaction for
which the written communication must be given; or
(ii) to identified categories of written
communications that may be delivered [by electronic means] during
the course of the relationship between the party and the regulated
entity;
(D) the means[, after consent is given,] by which
a party may obtain a paper copy of a written communication delivered
by electronic means; and
(E) the procedure a party must follow to:
(i) withdraw consent under this section or
to otherwise request delivery of written communication in
nonelectronic form, as applicable; and
(ii) update information needed for the
regulated entity to contact the party electronically; and
(3) the party:
(A) before giving consent or receiving written
communication by electronic means, is provided with a statement
identifying the hardware and software requirements for the party's
access to and retention of a written communication delivered by
electronic means; and
(B) if affirmative consent is sought, consents
electronically or confirms consent electronically in a manner that
reasonably demonstrates that the party can access a written
communication in the electronic form used to deliver the
communication.
(d) After consent of the party is given or the opportunity
to request delivery of written communication in nonelectronic form
is given, as applicable, in the event a change in the hardware or
software requirements to access or retain a written communication
delivered by electronic means creates a material risk that the
party may not be able to access or retain a subsequent written
communication to which the consent applies, the regulated entity
shall:
(1) provide the party with a statement:
(A) identifying the revised hardware and
software requirements for access to and retention of a written
communication delivered by electronic means; and
(B) disclosing the right of the party to withdraw
consent or to otherwise request delivery in nonelectronic form, as
applicable, without the imposition of any condition or consequence
that was not disclosed under Subsection (c)(2)(B); and
(2) comply with Subsection (c)(3).
(l) A notice of the cancellation or termination of a policy
to which this section applies must be:
(1) a written communication; and
(2) delivered to a party:
(A) by electronic means; and
(B) in paper or another nonelectronic form.
SECTION 3. Section 35.0041(a), Insurance Code, is amended
to read as follows:
(a) The plan sponsor of a health benefit plan, including a
vision or dental benefit plan, may, on behalf of a party enrolled in
the plan, give [the] consent under [required by] Section
35.004(c)(1)(A) [35.004(c)(1)].
SECTION 4. Sections 35.003 and 35.004, Insurance Code, as
amended by this Act, apply only to business conducted on or after
the effective date of this Act. Business conducted before the
effective date of this Act is governed by the law in effect on the
date the business was conducted, and that law is continued in effect
for that purpose.
SECTION 5. This Act takes effect September 1, 2023.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 1040 was passed by the House on April
14, 2023, by the following vote: Yeas 140, Nays 3, 2 present, not
voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 1040 was passed by the Senate on May
16, 2023, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor