HB3388 - Relating to group property and casualty insurance policies.

      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