Key Insurance Legislation from the 86th Session

SB 590 by Sen. Watson I Rep. Lucio III - Commercial Change Notification SB 590 was the second part of modernization of the notification by an insurer when coverage is changed on a policy. Last session, we revised the requirement for Personal Lines policies and this session, SB 590 changed the requirement for Commercial Lines policies. Besides a plain-language notification of change now being required, this also ended the requirement of a company to send a nonrenewal notice to an insured simply because the coverage changed. One important exception is for policies that meet the "large risk exemption". This bill has been signed by the Governor and is effective 9/1/19.

 SB 442 by Sen. Hancock / Rep. Perez - Flood Notification After the massive flooding caused by Hurricane Harvey in 2017, and the realization that many were without flood coverage, SB 442 was passed and will require insurers to add a plain-language notice to every commercial and residential policy. The notice will advise that the policy does not cover flood and the insured should discuss purchasing flood coverage with their agent or insurer. This bill has been signed by the Governor and is effective 9/1/19.

 SB 615 by Sen. Buckingham/ Rep. Paddie - TWIA Sunset Every governmental agency must undergo the sunset process. This session, the Texas Windstorm Insurance Association completed the process and IIAT offered some significant recommendations. In SB 615, many statutory roadblocks were removed which will allow TWIA to improve their payment processes and their renewal processes. TWIA will now be required to offer payment options, direct bill policies and accept credit card payments. Also included is an automatic renewal option. All of the improvements will make dealing with TWIA much easier for consumers and agents alike. ot her changes include revisions to and requirements of the board of TWIA as well as changes in the inspection process. This bill has been signed by the Governor. It will be effective 9/1/19 but many of the modernizations will not occur until 1/1/20.

 HB 259 by Rep. Ed Thompson I Sen. Hancock - Named Driver Policies    ''HB 259 eliminates what is known as named driver policies. While these policies were marketed as a low cost option for minimum limit personal auto policies, the number of uncovered claims on named driver policies far exceeded those of the "standard" auto policies. These policies were a result of form freedom that was allowed after the mold crisis, but due to the confusion of who could or could not drive, it became a contentious issue that led to the total elimination. HB 259 has been signed by the Governor. The bill is effective 9/1/19 and will affect policies written or renewed on or after 1/1/20.

 SB 1264 by Sen. Hancock/ Rep. Oliverson - Surprise or Balance Billing    Balance or surprise billing occurs when an insured follows all requirements of insurance policy as it relates to in-network health care providers and physicians, yet later finds out that certain providers were not in-network. This problem has been addressed in each of the past three sessions, but the practice continued. SB 1264 removes the insured from responsibility of charges, other than deductible and coinsurance, if they are treated at an in-network facility. The health care provider cannot bill the insured, but can submit to the insurer for payment. The disputed charges will be between the provider and the insurer, not the insured.

Baseball style arbitration will be used to settle disputes between the two parties. The bill has been signed by the Governor. It is effective 9/1/19 and will apply to health care or service provided on or after 1/1/20.

Other Insurance-Related Bills of Interest:

 HB 1306 by Rep Frullo / Sen Hancock- Flood Coverage by Surplus Lines Insurers The statute was amended to allow Surplus Lines insurers to provide flood coverage without a diligent effort and removing the requirement of only being allowed to provide what exceeds the available coverage from authorized Insurers. Signed by the Governor and effective 9/1/19.

HB 1554 by Rep Smithee/ Sen. Zaffirini- Language of Personal Policies This legislation allows companies' to provide personal auto and residential policies in languages other than English. This also provides that the English version of the policy controls in a dispute or complaint. Signed by the Governor and effective Immediately.

 HB 1555 by Rep Smithee/ Sen. Zaffirini - Summary of policy documents There has been a concern as to whether a summary of coverage modifies coverage or can be used as evidence in a court case. HB 1555 clarifies that a summary of a policy or an endorsement does not modify coverage provided by the policy and is not admissible as evidence. Signed by the Governor and effective immediately.

HB 1900 by Rep Bonnen /Sen.Taylor- Omnibus TWIA Bill As originally filed, this bill sought to change the determination of when replacement cost was made. Under this bill, RC Is now determined at the time of issuance rather than time of loss. This bill became the vehicle for many other changes including the prohibition of using future premiums to pay for previous losses. It also requires that payments from CRTF only be made from funds available prior to the loss. HB 1900 also moves the inspection of properties away from 1WIA, back to TDI. In addition, before the board acts on any proposed rate change, the information must be provided to the public at least 14 days before the board takes action. Signed by the Governor and effective Immediately.

HB 1902 by Rep Bonnen / Sen, Taylor -TWIA Limit Changes This bill merely adds a provision to1WIA statute that states any increase in the maximum limits available under 1WIA Is approved if the Commissioner does not change or disapprove a requested change within 30 days of the filing. ,Signed by the Governor and effective on 9/1/19.

HB 1940 by Rep Lucio Ill/ Sen. Creighton - Surplus Lines Providing Wind and Hail This bill merely clarifies that the surplus lines statute does not preclude an eligible surplus lines carrier from providing wind and hail coverage in Tier 1 nor does it limit the amount of insurance it may provide. Signed by the Governor and effective immediately.

HS 2102 by Rep Capriglione / Sen Zaffirini This legislation is an attempt to strengthen the requirement that an insured pay property deductibles on the policy. Unscrupulous contractors have developed a pattern of "waiving" or absorbing the deductible in order to get the job. HB 2102 requires the Insured to offer proof that the deductible was paid by the insured. Agents will need to help educate the consumers as to the new requirement. Signed by the Governor and effective 9/1/19.

HB 3420 by Rep. Lambert/ Sen. Menendez - Coverage for Temporary Substitute Vehicle Some companies have amended their personal auto policies to make the PAP excess coverage over any other insurance. Auto dealers are often required by the manufacturers to provide loaner cars and their policies are excess policies. When this occurs, the consumer is stuck between the dealer and their own policy, both denying coverage. This bill would require PAP to provide primary liability insurance for temporary vehicle. Signed by the Governor and effective 9/1/19