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A BILL TO BE ENTITLED
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AN ACT
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relating to the provision of insurance coverage for certain |
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portable electronic devices. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 551, Insurance Code, is amended by |
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adding Subchapter E to read as follows: |
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SUBCHAPTER E. PORTABLE ELECTRONICS INSURANCE |
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Sec. 551.201. DEFINITIONS. In this subchapter, "customer," |
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"portable electronic devices," and "vendor" have the meanings |
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assigned by Section 4055.251. |
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Sec. 551.202. REQUIRED NOTICE OF TERMINATION OR CHANGE TO |
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POLICY. (a) Except as otherwise provided by this subchapter, an |
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insurer may terminate or change the terms and conditions of a policy |
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of portable electronics insurance only after notice to the master |
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or group policyholder and each enrolled customer. Notice under |
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this section must be provided not later than the 30th day before the |
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date of the termination or change. |
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(b) If the insurer changes the terms and conditions of the |
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policy, the insurer shall: |
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(1) provide to the master or group policyholder a |
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revised policy or endorsement; and |
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(2) provide to each enrolled customer: |
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(A) a revised certificate, revised endorsement, |
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updated brochure, or other document indicating that a change in the |
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terms and conditions has occurred; |
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(B) a summary of the material changes; and |
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(C) a disclosure, in a font that is capitalized, |
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boldfaced, italicized, or underlined or is larger than or set off |
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from the remainder of the document, that enrollment in coverage is |
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optional and that provides information on how to discontinue |
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enrollment. |
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Sec. 551.203. TERMINATION FOR FRAUD OR MISREPRESENTATION. |
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(a) An insurer may terminate the coverage of an enrolled customer |
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under a portable electronics insurance policy for fraud or material |
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misrepresentation in obtaining coverage or in the presentation of a |
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claim under the coverage. |
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(b) Termination of coverage under this section may not be |
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effective before the 15th day after the date the insurer provides |
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the customer notice of the termination. |
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Sec. 551.204. TERMINATION WITHOUT NOTICE. (a) An insurer |
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may terminate the coverage of an enrolled customer under a portable |
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electronics insurance policy without notice: |
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(1) for nonpayment of premium; |
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(2) if the enrolled customer ceases to have an active |
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service with the vendor of portable electronics; or |
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(3) if the enrolled customer exhausts the aggregate |
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limit of liability, if any, under the terms of the portable |
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electronics insurance policy. |
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(b) If a portable electronics insurance policy is |
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terminated under Subsection (a)(3), the insurer must send notice of |
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termination to the enrolled customer not later than the 30th day |
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after the date of exhaustion of the limit. If the notice is not |
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timely sent, the insurer shall continue the customer's coverage, |
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and the aggregate limit of liability is waived, until the insurer |
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sends the notice of termination to the enrolled customer. |
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Sec. 551.205. TERMINATION BY POLICYHOLDER. A master or |
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group policyholder who terminates a portable electronics insurance |
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policy shall provide notice to each enrolled customer advising the |
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enrolled customer of the termination of the policy and the |
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effective date of termination. The notice must be provided to the |
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enrolled customer not later than the 30th day before the date the |
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termination becomes effective. |
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Sec. 551.206. FORM OF NOTICE OR CORRESPONDENCE. (a) A |
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notice required by this subchapter, or another notice or |
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correspondence with respect to a portable electronics insurance |
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policy that is required by law, must be: |
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(1) in writing; and |
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(2) sent within the notice period, if any, specified |
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by the statute or rule requiring the notice or correspondence. |
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(b) Notwithstanding any other law, the notice or |
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correspondence may be sent by mail or by electronic means. |
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(c) If the notice or correspondence is mailed: |
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(1) it must be sent to the master or group policyholder |
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at the policyholder's mailing address specified for this purpose |
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and to each affected enrolled customer's last known mailing address |
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on file with the insurer; and |
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(2) the insurer or master or group policyholder shall |
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maintain proof of mailing in a form authorized or accepted by the |
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United States Postal Service or other commercial mail delivery |
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service. |
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(d) If the notice or correspondence is sent by electronic |
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means: |
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(1) it must be sent to the master or group policyholder |
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at the policyholder's e-mail address specified for this purpose and |
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to each affected enrolled customer's last known e-mail address as |
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provided by the customer to the insurer or master or group |
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policyholder; and |
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(2) the insurer or master or group policyholder shall |
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maintain proof that the notice or correspondence was sent. |
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(e) For purposes of Subsection (d), an enrolled customer's |
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provision of an e-mail address to the insurer or master or group |
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policyholder is considered consent to receive notices and |
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correspondence by electronic means. |
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(f) A notice or correspondence described by this section may |
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be sent on behalf of an insurer or master or group policyholder by a |
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licensed agent or agency appointed by the insurer. |
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SECTION 2. Section 4055.253, Insurance Code, is amended to |
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read as follows: |
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Sec. 4055.253. AUTHORITY OF VENDOR OF PORTABLE ELECTRONIC |
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DEVICES. (a) A vendor licensed under this subchapter and the |
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vendor's employee and authorized representative may act as an agent |
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for an authorized insurer in connection with the sale and use of |
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portable electronic devices and related services only with respect |
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to: |
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(1) insurance coverage provided to customers that |
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covers portable electronic devices against one or more of the |
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following: |
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(A) loss; |
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(B) theft; |
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(C) mechanical failure; |
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(D) malfunction; |
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(E) damage; or |
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(F) other applicable perils; or |
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(2) the provision of any other coverage the |
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commissioner approves as meaningful and appropriate in connection |
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with the use of portable electronic devices or related services. |
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(b) A vendor licensed under this subchapter may bill a |
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customer for, and collect from a customer payment for, insurance |
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coverage provided to the customer under this subchapter. |
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(c) An insurer issuing a policy to a licensed vendor is |
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considered to have received a premium from a vendor's customer |
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enrolled in coverage on the customer's payment of the premium to the |
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vendor. |
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SECTION 3. Subchapter F, Chapter 4055, Insurance Code, is |
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amended by adding Section 4055.256 to read as follows: |
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Sec. 4055.256. REQUIRED DISCLOSURES. (a) A licensed |
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vendor must separately itemize on a customer's bill any charge to |
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the customer for insurance coverage provided under this subchapter |
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that is not included in the cost associated with the purchase or |
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lease of the covered portable electronic device or related |
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services. |
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(b) If insurance coverage provided under this subchapter is |
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included in the cost associated with the purchase or lease of a |
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covered portable electronic device or related services, a licensed |
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vendor shall, at the time of the purchase or lease, clearly and |
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conspicuously disclose the inclusion of that coverage to the |
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customer. |
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SECTION 4. This Act takes effect September 1, 2013. |