| 1 | 1 | | 89R9569 DNC-D |
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| 2 | 2 | | By: Morgan H.B. No. 3983 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | |
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| 6 | 6 | | |
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| 7 | 7 | | A BILL TO BE ENTITLED |
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| 8 | 8 | | AN ACT |
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| 9 | 9 | | relating to the regulation of risk pools primarily consisting of |
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| 10 | 10 | | political subdivisions. |
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| 11 | 11 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 12 | 12 | | SECTION 1. Subtitle C, Title 5, Local Government Code, is |
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| 13 | 13 | | amended by adding Chapter 172A to read as follows: |
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| 14 | 14 | | CHAPTER 172A. GENERAL PROVISIONS FOR RISK POOLS PRIMARILY |
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| 15 | 15 | | CONSISTING OF POLITICAL SUBDIVISIONS |
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| 16 | 16 | | Sec. 172A.001. APPLICABILITY OF CHAPTER. This chapter |
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| 17 | 17 | | applies only to a risk pool that primarily consists of political |
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| 18 | 18 | | subdivisions. |
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| 19 | 19 | | Sec. 172A.002. CONFLICT OF LAWS. To the extent of a |
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| 20 | 20 | | conflict between this chapter and other law, this chapter controls. |
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| 21 | 21 | | Sec. 172A.003. RULES. The commissioner of insurance may |
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| 22 | 22 | | adopt rules to implement this chapter. |
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| 23 | 23 | | Sec. 172A.004. APPLICABILITY OF INSURANCE LAWS. The |
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| 24 | 24 | | following insurance laws apply to coverage provided by a risk pool |
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| 25 | 25 | | subject to this chapter: |
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| 26 | 26 | | (1) Title 4, Insurance Code; |
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| 27 | 27 | | (2) Subtitle C, Title 5, Insurance Code; and |
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| 28 | 28 | | (3) Chapter 830, Insurance Code. |
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| 29 | 29 | | Sec. 172A.005. REQUIRED DISCLOSURES. A risk pool that |
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| 30 | 30 | | provides health or property and casualty coverage to the members of |
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| 31 | 31 | | the pool must annually provide to risk pool members: |
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| 32 | 32 | | (1) a written disclosure that the risk pool is not |
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| 33 | 33 | | insurance and is not regulated in the same manner as insurers |
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| 34 | 34 | | providing similar coverage; |
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| 35 | 35 | | (2) a copy of the declarations page of the coverage |
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| 36 | 36 | | provided under the risk pool that: |
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| 37 | 37 | | (A) lists and identifies each type of coverage |
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| 38 | 38 | | provided under the risk pool; and |
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| 39 | 39 | | (B) describes the process for filing claims and |
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| 40 | 40 | | appeals; |
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| 41 | 41 | | (3) a copy of the risk pool's budget for the preceding |
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| 42 | 42 | | risk pool year; |
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| 43 | 43 | | (4) a report stating the financial status of the risk |
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| 44 | 44 | | pool; and |
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| 45 | 45 | | (5) a report with a written explanation of each claim |
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| 46 | 46 | | denial made by the risk pool in the preceding risk pool year. |
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| 47 | 47 | | Sec. 172A.006. ENFORCEMENT. (a) The commissioner of |
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| 48 | 48 | | insurance and the Texas Department of Insurance may enforce this |
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| 49 | 49 | | chapter against a risk pool in the same manner as the department |
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| 50 | 50 | | enforces an insurance law against an insurer under Subtitle B, |
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| 51 | 51 | | Title 2, Insurance Code. |
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| 52 | 52 | | (b) A person may bring an action against a risk pool in |
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| 53 | 53 | | accordance with a law authorizing a private action under Subtitle |
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| 54 | 54 | | C, Title 5, Insurance Code. Governmental immunity of a risk pool to |
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| 55 | 55 | | suit and from liability is waived to the extent of liability created |
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| 56 | 56 | | by this subsection. |
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| 57 | 57 | | SECTION 2. Section 172A.004, Local Government Code, as |
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| 58 | 58 | | added by this Act, applies only to a contract entered into on or |
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| 59 | 59 | | after January 1, 2026. |
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| 60 | 60 | | SECTION 3. This Act takes effect September 1, 2025. |
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