| 1 | 1 | | H.B. No. 3208 |
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| 2 | 2 | | |
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| 3 | 3 | | |
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| 4 | 4 | | AN ACT |
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| 5 | 5 | | relating to the refund of premiums on the cancellation of Texas |
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| 6 | 6 | | Windstorm Insurance Association policies by insureds. |
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| 7 | 7 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 8 | 8 | | SECTION 1. Section 2210.204, Insurance Code, is amended by |
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| 9 | 9 | | amending Subsections (d) and (e) and adding Subsections (d-1), |
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| 10 | 10 | | (d-2), and (d-3) to read as follows: |
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| 11 | 11 | | (d) If an insured requests cancellation of the insurance |
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| 12 | 12 | | coverage, the association shall refund the unearned premium only if |
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| 13 | 13 | | the cancellation was for one of the following reasons: |
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| 14 | 14 | | (1) the purchase of similar coverage in the voluntary |
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| 15 | 15 | | market; |
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| 16 | 16 | | (2) sale of the insured property to an unrelated |
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| 17 | 17 | | party; |
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| 18 | 18 | | (3) total loss of the insured property; or |
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| 19 | 19 | | (4) a determination by the association that the |
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| 20 | 20 | | insured property is no longer insurable under the association's |
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| 21 | 21 | | rules and procedures[, less any minimum retained premium set forth |
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| 22 | 22 | | in the plan of operation, payable to the insured and the holder of |
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| 23 | 23 | | an unpaid balance]. |
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| 24 | 24 | | (d-1) The property and casualty agent who received a |
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| 25 | 25 | | commission as the result of the issuance of an association policy |
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| 26 | 26 | | providing the [canceled] coverage canceled under Subsection (d) |
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| 27 | 27 | | shall refund the agent's commission on any unearned premium in the |
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| 28 | 28 | | same manner. |
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| 29 | 29 | | (d-2) An insured must provide proof in the form and manner |
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| 30 | 30 | | prescribed by the association of a cancellation reason described by |
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| 31 | 31 | | Subsection (d)(1), (2), or (3) to be eligible for a refund under |
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| 32 | 32 | | that subsection. |
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| 33 | 33 | | (d-3) If an insured requests cancellation for a reason other |
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| 34 | 34 | | than a reason described by Subsection (d) or fails to provide proof |
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| 35 | 35 | | under Subsection (d-2), the insured's premium is considered earned |
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| 36 | 36 | | and is not refundable. |
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| 37 | 37 | | (e) For cancellation of insurance coverage under this |
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| 38 | 38 | | section, the minimum retained premium in the plan of operation must |
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| 39 | 39 | | be for a period of not less than the full annual policy term [90 |
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| 40 | 40 | | days], except for events specified in the plan of operation that |
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| 41 | 41 | | reflect a significant change in the exposure or the policyholder |
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| 42 | 42 | | concerning the insured property, including: |
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| 43 | 43 | | (1) the purchase of similar coverage in the voluntary |
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| 44 | 44 | | market; |
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| 45 | 45 | | (2) sale of the property to an unrelated party; |
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| 46 | 46 | | (3) death of the policyholder; or |
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| 47 | 47 | | (4) total loss of the property. |
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| 48 | 48 | | SECTION 2. The change in law made by this Act applies only |
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| 49 | 49 | | to a Texas windstorm and hail insurance policy that is delivered, |
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| 50 | 50 | | issued for delivery, or renewed by the Texas Windstorm Insurance |
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| 51 | 51 | | Association on or after the effective date of this Act. A policy |
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| 52 | 52 | | delivered, issued for delivery, or renewed before the effective |
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| 53 | 53 | | date of this Act is governed by the law as it existed immediately |
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| 54 | 54 | | before that date, and that law is continued in effect for that |
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| 55 | 55 | | purpose. |
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| 56 | 56 | | SECTION 3. This Act takes effect September 1, 2023. |
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| 57 | 57 | | ______________________________ ______________________________ |
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| 58 | 58 | | President of the Senate Speaker of the House |
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| 59 | 59 | | I certify that H.B. No. 3208 was passed by the House on May 6, |
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| 60 | 60 | | 2023, by the following vote: Yeas 117, Nays 17, 2 present, not |
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| 61 | 61 | | voting. |
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| 62 | 62 | | ______________________________ |
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| 63 | 63 | | Chief Clerk of the House |
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| 64 | 64 | | I certify that H.B. No. 3208 was passed by the Senate on May |
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| 65 | 65 | | 19, 2023, by the following vote: Yeas 26, Nays 5. |
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| 66 | 66 | | ______________________________ |
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| 67 | 67 | | Secretary of the Senate |
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| 68 | 68 | | APPROVED: _____________________ |
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| 69 | 69 | | Date |
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| 70 | 70 | | _____________________ |
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| 71 | 71 | | Governor |
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