85R20976 BEE-F
	By: Lucio III, Vo	H.B. No. 647
	Substitute the following for H.B. No. 647:
	By:  Phillips	C.S.H.B. No. 647

	A BILL TO BE ENTITLED
	AN ACT
	relating to notice to policyholders and agents of certain changes
	to property and casualty insurance policies.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 551.103, Insurance Code, is amended to
	read as follows:
	Sec. 551.103.  CANCELLATION. For the purposes of this
	subchapter, an insurer has canceled an insurance policy if the
	insurer, without the consent of the insured:
	(1)  terminates coverage provided under the policy;
	(2)  refuses to provide additional coverage to which
	the insured is entitled under the policy; or
	(3)  except as provided by Section 551.1055, reduces or
	restricts coverage under the policy by endorsement or other means.
	SECTION 2.  Subchapter C, Chapter 551, Insurance Code, is
	amended by adding Section 551.1055 to read as follows:
	Sec. 551.1055.  CHANGES TO POLICY ON RENEWAL. (a) In this
	section, "material change" means a change to a policy that, with
	respect to a prior or existing policy:
	(1)  reduces coverage;
	(2)  changes conditions of coverage; or
	(3)  changes the duties of the insured.
	(b)  Notwithstanding Section 551.103, a change to a policy
	provision on renewal is not a nonrenewal or cancellation under this
	subchapter if the insurer provides the insured with written notice
	in accordance with this section 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.
	(c)  Notice provided under Subsection (b) must:
	(1)  appear in a conspicuous place in the notice of
	renewal;
	(2)  clearly indicate each material change to the
	policy being made on renewal;
	(3)  be written in plain language; and
	(4)  be provided to the insured not later than the 30th
	day before the renewal date.
	(d)  In addition to the notice to the insured provided under
	Subsection (b), if an insurer elects to make a material change to a
	policy form on renewal, not later than the 30th day before the
	earliest renewal date on which the new policy form is used, the
	insurer shall provide written notice to each agent of the insurer
	that clearly indicates each material change being made to the
	policy form. An 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.
	(e)  Notwithstanding this section, for a personal automobile
	insurance policy, an insurer must comply with Sections 551.105 and
	551.106(b).
	SECTION 3.  Section 551.110, Insurance Code, is amended to
	read as follows:
	Sec. 551.110.  LIABILITY FOR DISCLOSURE. An insurer or
	agent or an employee of an insurer or agent is not liable for a
	notice, statement, or disclosure made in good faith under this
	subchapter unless the notice, statement, or disclosure was:
	(1)  known to be false; or
	(2)  made with malice or wilful intent to injure any
	person.
	SECTION 4.  Section 2002.001, Insurance Code, is amended to
	read as follows:
	Sec. 2002.001.  POLICY FORM OR ENDORSEMENT MAKING MATERIAL
	CHANGE TO POLICY [ENDORSEMENTS REDUCING AMOUNT OF COVERAGE]. (a)
	In this section, "material change" means a change to a policy that,
	with respect to a prior or existing policy:
	(1)  reduces coverage;
	(2)  changes conditions of coverage; or
	(3)  changes the duties of the insured.
	(b)  An insurer may not use a policy form or [an] endorsement
	to a policy form to which Article 5.35, Subchapter B of this
	chapter, or Subchapter B, Chapter 2301, applies that makes a
	material change to [reduces coverage that would otherwise be
	provided under] the policy unless:
	(1)  the insured requests the material change
	[endorsement]; or
	(2)  the insurer provides the policyholder in a written
	notice an [with a written] explanation of [the change made by] the
	material change that:
	(A)  appears in a conspicuous place on the notice
	of the material change;
	(B)  clearly indicates each material change to the
	policy;
	(C)  is written in plain language; and
	(D)  is provided to the policyholder
	[endorsement] not later than the 30th day before the date on which
	the policy expires.
	(c)  Notice required by Subsection (b) may be provided to the
	policyholder in a notice of renewal.
	(d)  In addition to the notice to the policyholder provided
	under Subsection (b), if an insurer elects to make a material change
	to a policy form or use an endorsement to make a material change to a
	policy form, not later than the 30th day before the earliest date on
	which the new policy form or endorsement is used, the insurer shall
	provide written notice to each agent of the insurer that clearly
	indicates each material change being made to the policy form. An
	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.
	SECTION 5.  The heading to Subchapter C, Chapter 2002,
	Insurance Code, is amended to read as follows:
	SUBCHAPTER C. ITEMS PROVIDED [TO POLICYHOLDER] IN CONNECTION WITH
	INSURANCE POLICY
	SECTION 6.  Section 2002.102, Insurance Code, is amended to
	read as follows:
	Sec. 2002.102.  NOTICE OF RENEWAL. (a) In this section,
	"material change" means a change to a policy that, with respect to a
	prior or existing policy:
	(1)  reduces coverage;
	(2)  changes conditions of coverage; or
	(3)  changes the duties of the policyholder.
	(b)  An insurer, including a farm mutual insurance company,
	county mutual insurance company, Lloyd's plan, or reciprocal or
	interinsurance exchange, that renews a homeowners insurance
	policy, fire and residential allied lines insurance policy, farm
	and ranch owners insurance policy, or farm and ranch insurance
	policy must provide the policyholder with written notice in
	accordance with this section of any material change in [difference
	between] each form of the policy offered to the policyholder on
	renewal from [and] the form of the policy held immediately before
	renewal.
	(c) [(b)]  A notice provided under this section must:
	(1)  appear in a conspicuous place in the notice of
	renewal;
	(2)  clearly indicate each material change to the
	policy being made on renewal;
	(3)  be written in plain language; and
	(4)  be provided to the policyholder not later than the
	30th day before the renewal date.
	(d)  In addition to the notice to the policyholder provided
	under this section, if an insurer elects to make a material change
	to a policy form on renewal, not later than the 30th day before the
	earliest renewal date on which the new policy form is used, the
	insurer shall provide written notice to each agent of the insurer
	that clearly indicates each material change being made to the
	policy form. An 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.
	(e) [(c)]  The commissioner may adopt rules as necessary to
	implement this section.
	SECTION 7.  The change in law made by this Act applies only
	to an insurance policy delivered, issued for delivery, or renewed
	on or after January 1, 2018. A policy delivered, issued for
	delivery, or renewed before that date is governed by the law as it
	existed immediately before the effective date of this Act, and that
	law is continued in effect for that purpose.
	SECTION 8.  This Act takes effect September 1, 2017.