This bulletin provides summaries of selected bills that apply to property and casualty insurance. Please refer to the actual bills for the complete legislation. See www.capitol.state.tx.us. Regulated individuals and entities are responsible for complying with all enacted legislation affecting the business they conduct.
Insurers should review each bill listed in this bulletin and make the appropriate filings to amend rates, policy forms, or underwriting guidelines. All regulated individuals and entities should make appropriate changes to internal policies and procedures to comply with the new legislation and should monitor TDI's website for rules implementing the new legislation.
If you have questions concerning this bulletin, please contact the following offices, as applicable:
Property and casualty product and form issues: Property and Casualty Lines Office at 512-676-6710 or CommercialPC@tdi.texas.gov;
Property and casualty rate and data collection issues: Property and Casualty Actuarial Office at 512-676-6700 or PCActuarial@tdi.texas.gov; or
Windstorm inspection and certificate of compliance (WPI-8) issues: Windstorm Inspections Office at 800-248-6032 or Windstorm@tdi.texas.gov.
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House and Senate Bills Relating to Property and Casualty Insurers
(This list may not include all bills affecting your insurance business.)
House Bills
HB 1298 Definition of Commercial Property Insurance
Creates a definition of commercial property insurance that includes combinations of certain coverages that have previously been construed as creating a commercial multi-peril policy. For example, a commercial property policy can now include inland marine coverage, as well as other lines that may be authorized by commissioner rule.
Effective immediately.
HB 1559 Surplus Lines Insurance for Certain Commercial Insureds
Defines "industrial insured" as a commercial buyer that employs or retains a qualified risk manager, and either:
- pays annual premiums of at least $25,000, or
- employs at least 25 employees and it creates an exemption to the diligent effort requirement for them.
Effective September 1, 2017. Applies only to an insurance policy delivered, issued for delivery, or renewed on or after January 1, 2018.
HB 1774 Certain Consumer Actions Related to Claims for Property Damage
Concerns lawsuits against insurance companies or agents on claims arising from property damage caused by a force of nature.
Effective September 1, 2017.
HB 2501 Insurance Requirements for Certain Nonemergency Medical Transportation
Allows certain entities arranging nonemergency medical transportation to operate as transportation network companies. This applies to those entities that operate under a contract with the state or a managed care organization for individuals qualifying for Medicaid or Medicare.
Effective September 1, 2017.
HB 3018 Reciprocity Requirements for Nonresident Insurance Agents to Offer or Sell TWIA Insurance Policies
Requires TWIA to amend its plan of operation to allow a licensed nonresident agent to offer windstorm and hail insurance in Texas only if that agent's home state allows a Texas resident agent to act as an agent for the home state's residual insurer of last resort for windstorm and hail insurance.
Effective January 1, 2018.
HB 3496 Farm Mutual Insurance Companies
Allows a farm mutual insurance company to provide in its constitution or bylaws that a policyholder may vote electronically or by mail without making a personal appearance at a policyholders' meeting.
The bill also subjects a farm mutual that is considered a "fronting insurer" to premium taxes, maintenance taxes, and TWIA assessments. The bill defines a fronting insurer as a farm mutual that writes for a nonaffiliated insurance company or one that cedes at least 85 percent of its direct written premium to nonaffiliated reinsurers.
Effective September 1, 2017.
Senate Bills
SB 417 Notice to Policyholders and Agents of Certain Changes to Property and Casualty Insurance Policies
Provides that a material change on renewal is not a nonrenewal or cancellation if the insurer provides the insured with written notice of any material change in each form of the policy offered to the insured on renewal from the form of the policy held immediately before renewal. A "material change" is a change to a policy that, with respect to a prior or existing policy, reduces coverage, changes conditions of coverage, or changes the duties of the insured.
The insurer must provide notice of material changes to each of the insurer's agents. The insurer may give notice to the agents in a single notice that summarizes substantially similar material changes to more than one policy form.
The notice must be clear, conspicuous, in plain language, and must be provided not later than 30 days before the change goes into effect.
In addition, the bill requires an insurer to continue to comply with statutes related to:
- notice required for nonrenewal of certain property and casualty policies, and
- required renewal of personal automobile insurance policies written for a term of less than one year.
Effective September 1, 2017. Applies only to an insurance policy delivered, issued for delivery, or renewed on or after January 1, 2018.
SB 718 Regulation of Insurance Adjusters
Allows claims to be adjusted by someone other than a licensed adjuster if:
- the person adjusting the claim is employed by an insurer or affiliate; and
- the losses at issue are $500 or less, and part of a first-party claim under a property and casualty policy.
Effective September 1, 2017.
SB 1450 Regulatory Authority of the Commissioner and the Department; Insurer Notice to Lienholders of Personal Auto Policy Cancellation
Requires the commissioner to adopt rules requiring personal auto insurers to notify known lienholders before canceling a policy with comprehensive or collision coverage.
The bill also includes requirements related to National Association of Insurance Commissioners rules and standards.
Effective September 1, 2017.
SB 1490 Premium Surcharges against Insureds Convicted of Certain Offenses
Requires insurers to assess premium surcharges related to convictions in an amount that is stated in the insurer's rating plan, as opposed to being an amount prescribed by TDI.
Effective September 1, 2017.