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Review Requirements Checklist – Farm and Ranch, Farm and Ranch Owners

Updated 11/16/2021 - Return to Index

Refer to Property & Casualty Filings Made Easy for required documentation.

Forms

Filing Standards
Review requirements Reference Comments
Policy Forms and Endorsements §2301.001(2), Insurance Code Policy forms and endorsements may not be unjust, unfair, inequitable, misleading or deceptive.
Prior Approval  Chapter 2301, Insurance Code An insurance policy form or endorsement may not be delivered or issued for delivery in this state unless the form has been filed with and approved by the commissioner. Each filing shall be made not later than the 60th day before the date of any use or delivery for use.
Large Risk Exemption §2301.004, Insurance Code Policy forms for use with large risks are exempt from filing for prior approval if the forms are to be used with a "large risk." "Large Risk" is defined as an insured that has total insured property values of $5 million or more; an insured that has total annual gross revenues of $10 million or more; or an insured that has a total premium of $25,000 or more for property insurance, $25,000 or more for general liability insurance, or $50,000 or more for multiperil insurance.
Disapproval of Forms; Withdrawal of Approval §2301.007, Insurance Code The commissioner may disapprove a form filed under §2301.006 or withdraw approval of a form if the form (1) violates any law, including a rule adopted under the Texas Insurance Code, or (2) contains a provision or has a title or heading that is unjust or deceptive, encourages misrepresentation, or violates public policy.
Applications   Not Required to be Filed For Approval Unless Being Made a Part of the Policy
Arbitration
Review requirements Reference Comments
Arbitration Chapter 2301, Insurance Code Voluntary, post dispute arbitration only. May be either binding or non-binding.
Cancellation & Nonrenewal
Review requirements Reference Comments
Elected Officials §§551.151 & 551.152, Insurance Code An insurer may not cancel or refuse to renew an insurance policy based solely on the fact that the policyholder is an elected official.
Cancellation & Nonrenewal of Certain Property and Casualty Policies §§551.101 - 551.112, Insurance Code Applies to one or two unit dwellings and/or their contents which includes residences on farm and ranch properties.
Cancellation & Nonrenewal of Certain Property and Casualty Policies §551.107, Insurance Code Renewal of certain policies; surcharge authorized.
Consumer Inquiries §551.113, Insurance Code
(SB 736, 83rd Regular Session)		 An insurer may not consider a customer inquiry as a basis for nonrenewal or cancellation of an insurance policy.
Insured's Right to Cancel Chapter 2301, Insurance Code Insurance company cannot limit or restrict the insured's right to cancel a policy.
Notice of Renewal of Certain Products §2002.102, Insurance Code An insurer must provide the policy holder with written notice of any changes or difference in
coverage(s) being provided on renewal.
Voiding Coverage Chapter 705, Insurance Code "Void Coverage" language must comply with Chapter 705, Subchapter A, and the misrepresentation must be material.
Choice of Law
Review requirements Reference Comments
Texas Laws Govern Policies Article 21.42, Insurance Code Texas must be choice if filing contains choice of law provision.
Claims Settlement
Review requirements Reference Comments
Prompt Payment of Claims §§542.051 - 542.061, Insurance Code Prompt payment of claims.
Contractual Limitations Period - Suits §16.070, Civil Practice & Remedies Except as provided by Subsection (b), a person may not enter a stipulation, contract, or agreement that purports to limit the time in which to bring suit on the stipulation, contract, or agreement to a period shorter than two years. A stipulation, contract, or agreement that establishes a limitations period that is shorter than two years is void in this state. The Texas Third Court of Appeals issued an opinion that acknowledges that the language providing 2 years and 1 day from the date the cause of action first accrues satisfies the statutory requirement of §16.070, Civil Practices and Remedy Code. (www.search.txcourts.gov/Case.aspx?cn=03-08-00408-CV) Case #03-08-00408-CV
Contractual Limitations Period and Claim Filing Period in Certain Property Insurance Forms §2301.010, Insurance Code Filings made pursuant to Insurance Code, Sec. 2301.010 (as enacted by HB 3, Legislative Session 82 (1)) must comply with Sec. 2301.010 and companies must submit a copy of the disclosure required in (f).
Notice Requirements §16.071, Civil Practice & Remedies A contract stipulation that requires a claimant to give notice of a claim for damages as a condition precedent to the right to sue on the contract is not valid unless the stipulation is reasonable. A stipulation that requires notification within less than 90 days is void.
Jewelry - Loss Settlement §2002.004, Insurance Code Election of stated value or actual replacement of the jewelry item with one of like kind and quality.
Notice of Settlement of Liability Claims §§542.151 - 542.154, Insurance Code Applies to Farm Liability under Commercial Property (including Employer Liability under Farm Liability coverage). The inclusion of Farm Umbrella and Commercial General Liability in a farm and ranch policy would make the policy (or filing) a CMP.
Providing Certain Claims Information On Request §§542.101-542.104, Insurance Code; and Commissioner's Bulletin No. B-0043-05 If a policy form or endorsement contains language addressing the request or furnishing of claims information, it would need to comply with the applicable statute(s).
Appraisal Chapter 2301,  Insurance Code Must specify a number of days, cannot be open-ended and insured must retain their right to bring legal action against insurer, but only if the insurer retains their right to deny the claim (i.e., CP 01 42).
Public Adjuster

§4102.007,
Insurance Code

88(R) HB 1706 - Enrolled version (texas.gov)

 An insurance policy delivered, issued for delivery, or renewed on or after January 1, 2024, may not prohibit an insured from contracting with a public insurance adjuster. Effective September 1, 2023.
Coverage Issues
Review requirements Reference Comments
Anti-Stacking Provisions Chapter 2301, Insurance Code
  • "Other insurance" clauses or similar provisions should not contain "anti-stacking" or "non-cumulation" language that excludes or limits coverage in other separate but applicable policies that are issued by the same company, affiliated companies, or by other unaffiliated companies.
  • It is permissible to state whether the coverage in one policy is primary or excess over other applicable policies, or to coordinate limits in proportion to total limits available in applicable policies.
  • TDI will consider for approval anti-stacking language if:
    • the anti-stacking provision is limited to the same "occurrence" and the other coverages are in the same policy or package issued by the same company.
      OR
    • the anti-stacking provision is on a separate endorsement, is limited to the same "occurrence," and
      • the company issued the policy for different operations or locations, and intended that only one policy limit apply to prevent unintended duplication of coverage for which no premium has been paid, and the applicable operations and locations are scheduled on the endorsement; or
      • the company or affiliated companies issued separate policies and the applicable policies are scheduled on the endorsement.
  • Before TDI can approve anti-stacking language, the company must provide appropriate rate consideration and rate analysis. A "rate analysis" is the company's actuarial justification for the rate consideration given, or not given, for use of the exclusion or limitation. This would include the reasons for the amount of any rate credit or the justification for the position that no rate credit is given.
Examination Under Oath Chapter 2301,  Insurance Code
 §151.001(a)(7), Family code		 If policy language requires examination under oath, the provision must also state that a parent or guardian may be present during any examination of a minor.
Foundations Chapter 2301, Insurance Code Foundations may be added to property not covered, but must provide coverage for specified cause of loss and debris removal. Must not be used on a blanket basis or "roll-out" basis.
Mobile Equipment Redefined Chapter 2301, Insurance Code If Mobile Equipment redefined to include self propelled vehicles with certain types of permanently attached equipment (i.e. snow removal, street cleaning) of less than 1,000 pounds of gross weight, must include statement that the intent is to cover vehicles not designated for use on a highway.
Roofs Chapter 2301, Insurance Code Actual cash value for roofs has been allowed provided the cause of loss is limited to wind and hail and will not be used on a blanket or "roll-out" basis. Also, cosmetic damage exclusion is acceptable with appropriate premium credit.
Tie-In Sales Article 5.41, Insurance Code & 6/1/78 Board Letter Tie-in sales may violate state law.
Exclusions
Review requirements Reference Comments
Abuse, Physical Abuse or Molestation Exclusions Chapter 2301, Insurance Code Definition of "abuse" in abuse, physical abuse, or molestation exclusion must be included. Must include wording, "For purposes of this endorsement, abuse means an act which is committed with the intent to cause harm".
Transmissible Spongiform Encephalopathy (TSE) Exclusions Chapter 2301, Insurance Code Exclusions for TSE, including all variations of the disease, must be limited to the following: Insureds that 1) import or distribute imported meat, meat by-products or any other bovine part or products containing bovine parts for resale; 2) utilize imported meat, meat by-products, blood or any other bovine part in their manufacturing or processing, or in any product that is injected, applied topically or ingested by humans or any other animal; or 3) operate in the chain of commerce (including but not limited to handling, processing, distributing, selling, or serving) for deer or elk, whether imported or not.
Exclusions - Disclosure Form Required Chapter 2301, Insurance Code Required for subsidence, tobacco, electromagnetic field, and PCB exclusions. Must attach a disclosure form to every policy to which the exclusion is attached. Disclosure form does not have to be signed by the insured.
Fully Earned Premium/Retention of Minimum Earned Premium
Review requirements Reference Comments
Fully Earned Premium / Retention of Minimum Earned Premium Chapter 2251 & Chapter 2301, Insurance Code and 28 TAC §5.9320, Texas Administrative Code TDI will consider approving fully earned premium only for risks with exposure during a period certain, such as special events and weather policies.

TDI will consider approving minimum earned premium only if it is a nominal amount.

The company must file appropriate rates associated with a minimum or fully earned premium.
General Change Endorsements
Review requirements Reference Comments
May Not Manuscript Coverage Once Approved Chapter 2301, Insurance Code Coverage forms are prior approval. Change endorsements may be used to change insured address, etc. but may not be used to change, alter or "clarify" coverage in any way. Company must provide verification that the endorsement will not be used to change, alter, or clarify coverage.
Notice To Mortgagee
Review requirements Reference Comments
Interest of Mortgagee or Trustee §862.055, Insurance Code The policy must require the insurer provide notice to the mortgagee (mortgage holder) if the policy is cancelled, regardless of who initiates cancellation. (See Commissioner's Bulletin B-0003-00.)
Rebating or Discrimination
Review requirements Reference Comments
Rebating or Discrimination Chapter 1806 & Article 5.41, Insurance Code Inducements prohibited.
Indicates new addition since last update.Political Affiliation and Expression Chapter 544, Subchapter M, Insurance Code Except as provided by Section 544.603, a person may not refuse to insure or provide coverage to an individual, refuse to continue to insure or provide coverage to an individual, limit the amount, extent, or kind of coverage available for an individual, or charge an individual a rate that is different from the rate charged to other individuals for the same coverage because of the individual's political affiliation or expression.
Toll Free Information
Review requirements Reference Comments
Notice of Policyholder Complaint Procedures §521.005, Insurance Code A brief written notice of suggested procedure to be followed by the policyholder in the event of a dispute concerning a policyholder's claim or premium.
Toll-Free Information & Complaint Number §§521.051 - 521.056, Insurance Code Toll-Free number for the Texas Department of Insurance.
Insurer's Toll-Free Information & Complaint Number §§521.101 - 521.103, Insurance Code Insurer's requirement to maintain toll-free number to provide information concerning policies issued by the insurer and to accept complaints from policyholder. Article contains an exception for insurers whose gross initial premium receipts collected in this state are less than $2 million a year or to an insurer with regard to fidelity, surety, or guaranty bonds.
Notice of Toll-Free Telephone Numbers and Information & Complaint Procedures 28 TAC §1.601 & §1.602, Texas Administrative Code and Commissioner’s Order 3952 To satisfy requirements for §521.005, §§521.051 - 521.056, and §§521.101 - 521.103 noted above.
Valued Policy
Review requirements Reference Comments
Policy a Liquidated Demand §862.053, Insurance Code In case of a total loss by fire of property insured, a fire insurance policy will be considered a liquidated demand against the company for the full amount of such policy.
Windstorm, Hurricane, or Hail
Review requirements Reference Comments
Windstorm, Hurricane or Hail Exclusion Chapter 2301,  Insurance Code Windstorm, hurricane, or hail may only be excluded in the catastrophe area as designated by the Texas Department of Insurance. The endorsement must limit the exclusion to the catastrophe areas as designated by the Texas Department of Insurance and the windstorm, hurricane, or hail exclusion endorsement must be signed by the insured. In lieu of the signature being required on the endorsement, the Department will consider a signed disclosure form that clearly explains coverage for windstorm, hurricane or hail is excluded from the policy. The Department will also consider optional windstorm, hurricane, or hail exclusions outside the designated catastrophe area only if there is proper rate consideration for the exclusion and the insured signs the endorsement or disclosure form as noted above. Must be optional from the insureds perspective and this should be reflected in the endorsement or in a rule. The Department will also consider windstorm, hurricane, or hail exclusions in the policy itself if such coverage is made available to the consumer through a buy-back option and there is proper rate consideration for the exclusion and the buy-back option.

Insurers are responsible for maintaining documentation in their underwriting files that supports that the coverage was made available to the insured. Forms and/or endorsements will not be approved until P&C Actuarial acknowledges that the rates are acceptable.

Rates

Filing Standards
Review requirements Reference Comments
File & Use With Exception Chapter 2251, Insurance Code Each insurer shall file with the Commissioner all rates, supplementary rating information, and reasonable and pertinent supporting information for risks written in this state. Exception: Lloyd's or reciprocals are not required to file rates.
Consumer Inquiries §544.553, Insurance Code (SB 736, 83rd Regular Session) An insurer may not charge a rate that is different from the rate charged to other individuals for the same coverage or increase a rate charged to an insured based solely on whether a consumer inquiry has been made by or on behalf of the applicant or insured.

Rules

Filing Standards
Review requirements Reference Comments
File & Use Chapter 2301 & Chapter 2251, Insurance Code Manual rules should reflect specific requirements for usage of policy forms, endorsements, and disclosures.

Fees

Filing Standards
Review requirements Reference Comments
Fees for Paper Checks Prohibited §116.002, Business and Commerce Code An insurer or agent may not charge a fee for issuing payment via a paper check.

For more information, contact: PropertyCasualty@tdi.texas.gov

Last updated: 2/22/2024