Read the full stored bill text
89(R) HB 3388 - Enrolled version - Bill Text
H.B. No. 3388
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 AND LIABILITY COVERAGE.
An insurance policy issued under Section 2171.002 may contain
casualty and liability coverage that is incidental to the property
risk covered under the policy.
Sec.
2171.008.
APPLICABILITY TO SURPLUS LINES. (a)
Eligible surplus lines insurers are subject to this chapter, other
than Sections 2171.003, 2171.004, and 2171.005.
(b)
A surplus lines agent is required to make a diligent
effort, as described by Section 981.004(a)(1), only with respect to
a group policy issued under Section 2171.002 and only on an annual
basis, rather than individually for each group member added during
the policy period.
(c)
Notwithstanding Section 981.213, a surplus lines agent
is required to report to and file with the Surplus Lines Stamping
Office of Texas only the group policy issued under Section
2171.002, rather than each certificate or evidence of insurance
issued to the group members.
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 certificate holders 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 2172.005, 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 insurance policy that provides group coverage under
this chapter may not include a provision under which the payment of
a certificate holder's claims is limited by the claims or losses
incurred by another certificate holder.
(c)
An insurer may not renew an insurance policy that
provides group coverage under this chapter to a group that includes
fewer than 10 certificate holders as part of the group at the time
of renewal.
Sec.
2172.004.
APPLICABILITY OF INSURANCE LAWS. (a)
Except as otherwise provided by this chapter, a provision of this
code applies to each certificate issued under a group policy issued
under Section 2172.003 as if the certificate is an insurance policy
and the certificate holder is an insured, if the provision would
apply to the policy if the policy was issued on an individual basis.
(b) Insurance laws applicable under Subsection (a) include:
(1) Section 525.002;
(2) Section 542.003;
(3) Section 542.059;
(4) Section 551.002;
(5) Section 551.107;
(6) Section 558.002;
(7) Section 2002.001;
(8) Section 2002.102;
(9) Section 2251.005; and
(10) Section 2254.003.
Sec.
2172.005.
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.
2172.006.
INCIDENTAL LIABILITY COVERAGE. An insurance
policy issued under Section 2172.003 may contain liability coverage
that is incidental to the property risk covered under the policy.
Sec.
2172.007.
SURPLUS LINES REQUIREMENTS. (a) A surplus
lines agent is required to make a diligent effort, as described by
Section 981.004(a)(1), only with respect to a group policy issued
under Section 2172.003 and only on an annual basis, rather than
individually for each group member added during the policy period.
(b)
Notwithstanding Section 981.213, a surplus lines agent
is required to report to and file with the Surplus Lines Stamping
Office of Texas only the group policy issued under Section
2172.003, rather than each certificate or evidence of insurance
issued to the group members.
Sec.
2172.008.
DISCLOSURES REQUIRED. Not later than the
30th day after the date an insurer issues, delivers, or renews an
insurance policy under Section 2172.003, 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.
2172.009.
GROUP ENROLLER EXEMPTION. Notwithstanding
the requirements of Chapter 4001, a person who secures and
furnishes information for the purpose of enrolling entities or
individuals under an insurance policy issued under Section
2172.003, issues certificates or evidences of insurance under the
policy, or otherwise assists in administering the policy, including
by collecting and remitting premiums, is not required to be
licensed as an insurance agent under Chapter 4001, provided that
the person does not receive a commission with respect to the sale of
the policy or any related enrollments.
Sec.
2172.010.
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.
______________________________
______________________________
President of the Senate
Speaker of the House
I certify that H.B. No. 3388 was passed by the House on May
12, 2025, by the following vote: Yeas 144, Nays 0, 1 present, not
voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 3388 was passed by the Senate on May
28, 2025, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor