H.B. No. 3208
AN ACT
relating to the refund of premiums on the cancellation of Texas
Windstorm Insurance Association policies by insureds.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2210.204, Insurance Code, is amended by
amending Subsections (d) and (e) and adding Subsections (d-1),
(d-2), and (d-3) to read as follows:
(d) If an insured requests cancellation of the insurance
coverage, the association shall refund the unearned premium only if
the cancellation was for one of the following reasons:
(1) the purchase of similar coverage in the voluntary
market;
(2) sale of the insured property to an unrelated
party;
(3) total loss of the insured property; or
(4) a determination by the association that the
insured property is no longer insurable under the association's
rules and procedures[, less any minimum retained premium set forth
in the plan of operation, payable to the insured and the holder of
an unpaid balance].
(d-1) The property and casualty agent who received a
commission as the result of the issuance of an association policy
providing the [canceled] coverage canceled under Subsection (d)
shall refund the agent's commission on any unearned premium in the
same manner.
(d-2) An insured must provide proof in the form and manner
prescribed by the association of a cancellation reason described by
Subsection (d)(1), (2), or (3) to be eligible for a refund under
that subsection.
(d-3) If an insured requests cancellation for a reason other
than a reason described by Subsection (d) or fails to provide proof
under Subsection (d-2), the insured's premium is considered earned
and is not refundable.
(e) For cancellation of insurance coverage under this
section, the minimum retained premium in the plan of operation must
be for a period of not less than the full annual policy term [90
days], except for events specified in the plan of operation that
reflect a significant change in the exposure or the policyholder
concerning the insured property, including:
(1) the purchase of similar coverage in the voluntary
market;
(2) sale of the property to an unrelated party;
(3) death of the policyholder; or
(4) total loss of the property.
SECTION 2. The change in law made by this Act applies only
to a Texas windstorm and hail insurance policy that is delivered,
issued for delivery, or renewed by the Texas Windstorm Insurance
Association on or after the effective date of this Act. A policy
delivered, issued for delivery, or renewed before the effective
date of this Act is governed by the law as it existed immediately
before that date, and that law is continued in effect for that
purpose.
SECTION 3. This Act takes effect September 1, 2023.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 3208 was passed by the House on May 6,
2023, by the following vote: Yeas 117, Nays 17, 2 present, not
voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 3208 was passed by the Senate on May
19, 2023, by the following vote: Yeas 26, Nays 5.
______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor