Bill Text: TX HB3060 | 2011-2012 | 82nd Legislature | Introduced

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Bill Title: Relating to arbitration of certain claims under residential property insurance policies.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2011-03-18 - Referred to Insurance [HB3060 Detail]

Download: Texas-2011-HB3060-Introduced.html

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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.