bill on group property and casualty policies

The text as introduced · 623 words

89R9631 DNC-F

By: Middleton
S.B. No. 2596

A BILL TO BE ENTITLED

AN ACT

relating to group property and casualty insurance policies.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 2171.001, Insurance Code, is amended to

read as follows:

Sec. 2171.001. DEFINITIONS [ DEFINITION ]. In this chapter :

(1) "Large [ , "large ] risk" means an insured described

by Section 2301.004.

(2) "Member" means an owner or person with an

insurable interest in a property covered under a policy issued

under Section 2171.002.

SECTION 2. Chapter 2171, Insurance Code, is amended by

adding Sections 2171.006, 2171.007, 2171.008, and 2171.009 to read

as follows:

Sec. 2171.006. DISCLOSURES REQUIRED. (a) During an

application for an insurance policy issued under Section 2171.002,

an insurer must provide to each applicant a written disclosure of

whether the policy has a shared aggregate limit and, if applicable,

the amount of the limit.

(b) Not later than the 30th day after the date an insurer

issues, delivers, or renews an insurance policy under Section

2171.002, the insurer must deliver the following documents to each

member covered by the policy:

(1) a copy of the certificate of insurance; and

(2) a copy of the policy.

Sec. 2171.007. INCIDENTAL CASUALTY COVERAGE. An insurance

policy issued under Section 2171.002 may contain casualty coverage

that is incidental to the property risk covered under the policy.

Sec. 2171.008. APPLICABILITY TO SURPLUS LINES. Eligible

surplus lines insurers are subject to this chapter, other than

Sections 2171.003, 2171.004, and 2171.005.

Sec. 2171.009. RULES. The commissioner may adopt rules to

implement and administer this chapter.

SECTION 3. Subtitle G, Title 10, Insurance Code, is amended

by adding Chapter 2172 to read as follows:

CHAPTER 2172. PERSONAL LINES GROUP PROPERTY AND CASUALTY INSURANCE

Sec. 2172.001. DEFINITION. In this chapter, "permitted

group" means a group of 10 or more insureds who have a preexisting

relationship to each other through:

(1) a common trade;

(2) an association;

(3) an affiliation; or

(4) any other relationship that is separate and

distinct from any group insurance arrangement of the group.

Sec. 2172.002. APPLICABILITY OF CHAPTER. (a) This

chapter, other than Section 2172.004, applies to an eligible

surplus lines insurer.

(b) This chapter does not apply to an insurance policy

issued under and in accordance with:

(1) Chapter 2153, 2171, or 2201; or

(2) Section 706.002, 2152.003, or 4055.154.

Sec. 2172.003. GROUP INSURANCE. (a) An insurer may provide

a personal lines property and casualty insurance policy to a

permitted group, on a group basis, provided that:

(1) the issuance of the policy results in economies of

scale in administrative, marketing, or brokerage costs;

(2) the benefits provided under the policy are

reasonable to the premiums charged; and

(3) the policy does not contain a shared aggregate

limit.

(b) An insurer may not renew an insurance policy that

provides group coverage under this chapter to a group that includes

fewer than 10 insureds as part of the group at the time of renewal.

Sec. 2172.004. RATE AND FORM FILINGS. An insurer shall

comply with all applicable rate and form filing requirements of

this title for an insurance policy issued under Section 2172.003.

Sec. 2172.005. RULES. The commissioner may adopt rules to

implement and administer this chapter.

SECTION 4. The changes in law made by this Act apply only to

an insurance policy delivered, issued for delivery, or renewed on

or after the effective date of this Act.

SECTION 5. This Act takes effect immediately if it receives

a vote of two-thirds of all the members elected to each house, as

provided by Section 39, Article III, Texas Constitution. If this

Act does not receive the vote necessary for immediate effect, this

Act takes effect September 1, 2025.