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Review Requirements Checklist Residential Property

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. An insurer may continue to use the policy forms and endorsements promulgated, approved, or adopted under Article 5.35 on notification to the commissioner in writing that the insurer will continue to use those forms.
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.
Explanatory Memorandum Filings Made Easy Guide A detailed explanatory memorandum must be attached to describe a new or revised product, its application and any changes in coverage, limits, exclusions, etc., from that provided by the previously promulgated/approved/adopted forms.
Comparative Evaluation Filings Made Easy Guide A side-by-side comparison must be attached showing any differences between the filed forms and the previously promulgated, approved, or adopted forms to which the filed form is being compared. Differences must be clearly indicated and explained. When a previously promulgated, approved, or adopted form is being amended, companies must use underlining to denote any new language added and bracketing to remove existing language from a form.
Flesch Scoring §§2301.051 - 2301.055,
Insurance Code and Commissioner Order No. 92-0573		 Filings must include the Flesch Score indicating the filed forms meet the minimum readability standards established by the Commissioner of Insurance under Commissioner Order No. 92-0573. Forms that fail to meet a minimum Flesch Score of "40" cannot be approved.
Coverage Issues
Review requirements Reference Comments
Coverages for Spouses and Former Spouses §2002.003, Insurance Code Statutory requirement that a homeowner's policy or fire policy must contain a provision with the language quoted in §2002.003.
Jewelry Coverage §2002.004, Insurance Code An insurer that provides personal jewelry coverage has the option to elect either to pay the stated value or actual replacement of the jewelry item with one of like kind and quality.
Lien on Insured Property §2002.002, Insurance Code Any provision in a residential property policy stating that property is encumbered by a lien of any character or shall after the issuance of such policy become encumbered by a lien of any character; then such encumbrance shall render such policy void, shall be of no force and effect. Any such provision within or placed upon such policy shall be null and void.
Fire Insurance: Total Loss of Real Property §862.053, Insurance Code A fire insurance policy, in case of total loss by fire of property insured, shall be held and considered to be a liquidated demand against the company for the full amount of such policy. This subsection does not apply to personal property.
Interest of Mortgagee or Trustee §862.055, Insurance Code

Commissioner's Bulletin B-0003-00 - Notification of Mortgagee When Insured Cancels Policy		 The interest of a mortgagee or trustee under a fire insurance contract covering property located in the state of Texas may not be invalidated by an act or neglect of the mortgagor or owner of the property; or the occurrence of a condition beyond the mortgagor's or owner's control.
Prohibited Practices Relating to Property Insurance §549.003, Insurance Code Use language contained in the Texas policy.
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.
Defense Chapter 2301, Insurance Code Cost of defense within limits is not permitted.
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.
Special Conditions for Lloyds, Mutuals, Reciprocals, & Participating Stock Companies General Casualty Bulletins Nos. 276, 443, and 446 When a policy is issued by a Lloyds, a mutual company, a reciprocal association or a participating stock company having special provisions applicable to its membership, dividends and/or policyholders, such provisions, when approved, in accordance with the provisions of the Texas Insurance Code, of 1951, as amended must be inserted in the policy.
Arbitration
Review requirements Reference Comments
Limited to Coverage Disputes Chapter 2301, Insurance Code Voluntary, post dispute arbitration only. May be either binding or non-binding.
Toll Free Information
Review requirements Reference Comments
Notice of Policyholder Complaint Procedures §521.005, Insurance Code Texas Insurance Code requires 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. The notice must include the name and address of the department and the toll-free telephone number maintained under §§521.051 - 521.056 of the Texas Insurance Code.
Toll-Free Information & Complaint Number §§521.051 - 521.056, Insurance Code The Texas Department of Insurance shall maintain a toll-free telephone number to facilitate distribution of information to be made available to aid in resolving complaints against insurers. Each insurer must include with the policy an information bulletin including the toll-free telephone number and describing the services offered through the number.
Insurer's Toll-Free Information & Complaint Number §§521.101 - 521.103, Insurance Code Insurer's requirement to maintain a toll-free number to provide information concerning policies issued by the insurer and to accept complaints from the policyholder. Article contains an exception for insurers whose gross initial premium receipts collected in this state are less than $2 million a year.
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 as noted above.
Cancellation, Nonrenewal and Other Termination Provisions
Review requirements Reference Comments
Authorized Cancellation and Nonrenewal of Policies §§551.101 - 551.112, Insurance Code Applies to an insurance policy delivered, issued for delivery, or renewed on or after January 1, 2024. Cancellation and Nonrenewal of Certain Property and Casualty Policies:
Note: Unless the insurer has mailed written notice of nonrenewal to the insured not later than the 60th day before the date on which the insurance policy expires, the insurer must renew an insurance policy, at the request of the insured, on the expiration of the policy. Effective September 1, 2023.
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.
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.
Refund of Unearned Premium §558.002, Insurance Code (SB 698, 83rd Regular Session) An insurer must return unearned premium to the policyholder not later than the 15th business day after the effective date of cancellation or termination of a policy.
Voiding Coverage Chapter 705, Insurance Code "Void Coverage" language must comply with Chapter 705, Subchapter A, and the misrepresentation must be material.
Claims Settlement
Review requirements Reference Comments
Prompt Payment of Claims §§542.051 - 542.061, Insurance Code Prompt payment of claim requirements. When the term "Business Day" is used, the definition must be in the policy.
Notice of Settlement of Liability Claims §§542.151 - 542.154, Insurance Code Notice of settlement of claim under casualty insurance policy. EXCEPTION - This article does not apply to a casualty policy that requires the insured's consent to settlement of a claim against the insured or to fidelity, surety, or guaranty bonds.
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.
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.
Damages
Review requirements Reference Comments
Punitive / Exemplary Damages Chapter 2301, Insurance Code Exclusions may be considered with 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. This would include the reasons for the amount of any rate credit or the justification for the position that no rate credit is given. Endorsements will not be approved until P&C Actuarial acknowledges that the rates are acceptable. NOTE: Approval of a punitive/exemplary damage exclusion does not relieve an insurer of any contractual obligation to defend which may otherwise exist in the policy.
Compensatory Damages Chapter 2301, Insurance Code If insuring agreement specifies policy pays for only compensatory damages, rate consideration may be necessary as policy may not cover non-compensatory damages such as punitive exemplary damages.
Declarations Page
Review requirements Reference Comments
Deductibles §2301.056, Insurance Code (SB 112, 83rd Regular Session)
28 TAC §5.9327 and §5.9700		 A declarations page for a residential property policy must contain information about each type of deductible.
Specimen Policies §1812.003, Insurance Code (SB 852, 83rd Regular Session) The policy must disclose certain information on the declarations page if the insurer elects to post a specimen policy on its website.
Exclusions
Review requirements Reference Comments
Abuse, Physical Abuse or Molestation Exclusions Chapter 2301, Insurance Code If policy or endorsement contains this type exclusion, 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."
Asbestos, Silica, Lead and Total Pollution Exclusions Chapter 2301, Insurance Code These type exclusions will only be considered for approval if the request for approval of the coverage form/endorsement is accompanied by corresponding 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. This would include the reasons for the amount of any rate credit or the justification for the position that no rate credit is given. Forms/endorsements will not be approved until P&C Actuarial acknowledges that rates are acceptable. Must attach a disclosure form to every policy to which a total pollution exclusion is attached. The disclosure form does not have to be signed by the insured.
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 area 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 that 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 insured's 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.
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.
Rebating or Discrimination
Review requirements Reference Comments
Prohibited Practices and Rebates Relating to Policies Chapter 1806, Subchapters A & D, 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.
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.

Rates

Filing Standards
Review requirements Reference Comments
File & Use Chapter 2251, Insurance Code Each insurer shall file with the Commissioner all rates, applicable rating manuals, supplementary rating information, and additional information as required by the commissioner for risks written in this state.
Consumer Inquiries Section 544.553, Insurance Code (SB 736, 83rd Regular Session;
SB 188, 84th 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