82R9878 KCR-D
	By: Smithee	H.B. No. 3060

	A BILL TO BE ENTITLED
	AN ACT
	relating to arbitration of certain claims under residential
	property insurance policies.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Subtitle D, Title 10, Insurance Code, is amended
	by adding Chapter 2009 to read as follows:
	CHAPTER 2009.  ARBITRATION OF DISPUTES RELATING TO
	CERTAIN STORM CLAIMS
	Sec. 2009.001.  DEFINITIONS. In this chapter:
	(1)  "Arbitration endorsement" means an endorsement to
	a residential property insurance policy that requires an insured
	and an insurer to submit certain disputes to binding arbitration in
	accordance with this chapter.
	(2)  "Insurer" has the meaning assigned by Section
	2301.051 but does not include the Texas Windstorm Association.
	(3)  "Residential property insurance" has the meaning
	assigned by Section 2301.051.
	(4)  "Seacoast territory" has the meaning assigned by
	Section 2210.003.
	(5)  "Storm claim" means a claim for:
	(A)  direct loss to property incurred as a result
	of windstorm or hail occurring during a storm system that has been
	declared and named by the National Weather Service; and
	(B)  indirect losses resulting from the direct
	loss.
	Sec. 2009.002.  ENDORSEMENT AUTHORIZED. (a)  Subject to the
	requirements of this section, an insurer authorized to write
	residential property insurance in this state may issue a
	residential property insurance policy providing coverage for a
	structure in the seacoast territory that includes an endorsement
	requiring binding arbitration of a dispute between the insured and
	the insurer relating to the payment of, the amount of, or the denial
	of a particular storm claim.
	(b)  An insurer may issue a policy to an applicant for
	residential property insurance that includes an arbitration
	endorsement only if:
	(1)  the insurer also offers and makes available to the
	applicant, without the arbitration endorsement, the standard
	policy form promulgated under Articles 5.06 and 5.35 or a
	substantially equivalent form, as determined by the commissioner;
	and
	(2)  before the issuance of the residential insurance
	policy that contains the arbitration endorsement, the insurer
	provides to the applicant a notice, substantially in the form
	required by the commissioner, that explains the legal effect of the
	endorsement.
	Sec. 2009.003.  ARBITRATION ENDORSEMENT. (a)  The form of an
	arbitration endorsement must be filed and approved in accordance
	with Subchapter A, Chapter 2301.
	(b)  An arbitration endorsement must provide that, at the
	election of the insurer or the insured, a dispute relating to the
	payment of, the amount of, or the denial of a particular storm claim
	under the residential property insurance policy must be resolved
	through binding arbitration in accordance with this section.
	(c)  The commissioner by rule may establish procedures for
	the conduct of the arbitration in accordance with an arbitration
	endorsement. The rules may address matters such as:
	(1)  procedures for requesting and conducting the
	arbitration;
	(2)  procedures for selecting one or more arbitrators
	to conduct the arbitration;
	(3)  the qualifications of arbitrators authorized to
	conduct the arbitrations; and
	(4)  payment of the costs of arbitration, including
	payment of an arbitrator's fees, the amount of those fees, and which
	party or parties are liable for the payment of those fees.
	Sec. 2009.004.  LAW GOVERNING ARBITRATION. Except to the
	extent of any conflict with this chapter and the rules adopted under
	this chapter, Chapter 171, Civil Practice and Remedies Code,
	applies to an arbitration conducted in accordance with an
	arbitration endorsement.
	Sec. 2009.005.  RIGHT TO SUE AND RECOVER EXEMPLARY DAMAGES
	WAIVED. (a)  Except as provided by Chapter 171, Civil Practice and
	Remedies Code, an insured that elects to purchase a residential
	property insurance policy that includes an arbitration endorsement
	waives the right to bring against the insurer a suit relating to the
	payment of, the amount of, or the denial of a storm claim and, with
	respect to the claim, is not entitled to exemplary damages under any
	law, including Chapter 541 and the Deceptive Trade
	Practices-Consumer Protection Act (Subchapter E, Chapter 17,
	Business & Commerce Code).
	(b)  Except as provided by Chapter 171, Civil Practice and
	Remedies Code, an insurer that elects to issue a residential
	property insurance policy that includes an arbitration endorsement
	waives the right to bring against the insured a suit relating to a
	storm claim and, with respect to the claim, is not entitled to
	exemplary damages under any law.
	Sec. 2009.006.  PREMIUM DISCOUNT REQUIRED. An insured that
	elects to purchase a residential property insurance policy that
	includes an arbitration endorsement is entitled to a premium
	discount in an amount approved by the commissioner. The rate
	charged, after application of the discount required by this
	section, must satisfy the requirements of Section 2251.051.
	SECTION 2.  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, 2011.