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Texas Insurance Bills on the Move; Commercial Property Measure Heads to Governor

The Insurance Council of Texas has reported several insurance bills of interest are moving in the Texas Legislature as the end of the session draws closer.

SB 590/HB 1411, which addresses amendments, cancellations and renewal provisions in commercial property insurance policies, is headed to the desk of Gov. Greg Abbott after passing the House of Representatives, the ICT said.

According to the legislative analysis of SB 590, it “establishes that a change to a liability insurance or commercial property insurance policy provision 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.”

The notice required by the bill must “appear in a conspicuous place” in the renewal notice and “clearly indicate each material change to the policy being made on renewal, be written in plain language, and be provided to the insured not later than the 30th day before the renewal date.”

The bill also requires that the insurer give notice to its agents “that clearly indicates each material change being made to the policy form in addition to the notice to the insured under the bill’s provisions.” The notice to agents also must be made “not later than the 30th day before the earliest renewal date on which the new policy form is used.”

The insurer may “provide the notice to the agents in a single notice given to each agent of the insurer that summarizes substantially similar material changes to more than one policy form.”

“Material change” is defined by the bill “as a change to a policy that, with respect to a previous or existing policy, reduces coverage, changes conditions of coverage, or changes the duties of the insured.”

An insurer is exempted from the written notice requirement “if the policy form meets at least one of the conditions for exemptions for large risks before and after renewal of the policy or, before the renewal date, the insured requests the change or the insured and the insurer agree to the change.”

SB 590 applies only to an insurance policy delivered, issued for delivery, or renewed on or after January 1, 2020.

If signed into law, it becomes effective on Sept. 1, 2019.

Other insurance bills the ICT noted include:

• HB 3306, adding corporate governance structure and annual disclosures provisions in chapter 831 of the Insurance Code, has passed the House and is in the Senate.
• HB 1739, the UM/UIM bill that creates a procedure to make a claim and provides that a legal determination is not a pre-requisite to recovery, passed the House and is headed to the Senate.
• HB 4534, the Texas Windstorm Insurance Association (TWIA) funding bill that would enact several changes to how TWIA pays claims and funds the CRTF, passed the house and is headed to the Senate.
• SB 615, the TWIA Sunset bill, was voted out of the House Insurance committee last week and is expected to be heard on the House floor soon.
• HB 2686, the TWIA bill related to denial of TWIA claims, failed to pass the House.

The state’s 86th legislative regular session ends on May 27.