Law:Title 5. Protection Of Consumer Interests. Subtitle B. Consumer Service Provisions from Chapter 523. Market Assistance Program For Residential Property Insurance (Texas)

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Subtitle B. Consumer Service Provisions

Contents

Chapter 523. Market Assistance Program For Residential Property Insurance

Subchapter A. General Provisions

Section  523.001.  Definition.

In this chapter, "residential property insurance" means insurance provided by a homeowners policy or residential fire and allied lines policy against loss incurred at a fixed location to real or tangible personal property. The term does not include insurance against loss provided by a farm and ranch owners policy.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.



Section  523.002.  Rules.

In addition to the plan of operation adopted under Subchapter B, the commissioner may adopt appropriate rules to accomplish the purposes of this chapter.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.



Section  523.003.  Immunity.

The market assistance program, the members of the executive committee, and participating insurers and agents are not personally liable for:

(1)  an act performed in good faith in the scope of the person's authority as determined under this chapter; or

(2)  damages arising from the person's official acts or omissions, other than a corrupt or malicious act or omission.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.



Subchapter B. Operation Of Market Assistance Program

Section  523.051.  Market Assistance Program. (a)

The market assistance program is a voluntary program designed to assist applicants for insurance and insureds in this state in obtaining residential property insurance coverage in underserved areas.  The commissioner by rule shall designate underserved areas using the standards described by Section 2004.002.

(b)  The commissioner shall establish the types of risks for which the market assistance program will provide assistance.

(c)  The market assistance program may not provide assistance regarding windstorm and hail insurance coverage for a risk eligible for that coverage under Chapter 2210.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch. 730, Sec. 2D.003, eff. April 1, 2009.



Section  523.052.  Market Assistance Program Division.

The department shall operate a market assistance program division.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.



Section  523.053.  Executive Committee.

(a) The market assistance program is administered by an executive committee.

(b)  The executive committee consists of 11 members appointed by the commissioner as follows:

(1)  five members who represent the interests of insurers;

(2)  four public members; and

(3)  two members who are general property and casualty agents.

(c)  Each member of the executive committee who represents the interests of insurers must be a full-time employee of an authorized insurer.

(d)  The commissioner or the commissioner's designated representative serves as an ex officio member of the executive committee and must be present at each executive committee meeting.

(e)  The executive committee shall be available to advise and consult with the commissioner regarding the administration of the market assistance program.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.



Section  523.054.  Plan Of Operation.

(a) The operation and management of the market assistance program is governed by a plan of operation adopted by rule by the commissioner.

(b)  In addition to the other requirements specified by this chapter, the plan of operation must include provisions regarding types of coverage, policy forms and terms, application forms, eligibility, and the overall operation of the market assistance program.

(c)  The plan of operation may provide for subcommittees necessary to administer the market assistance program.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.



Section  523.055.  Amendment Of Plan Of Operation.

(a) The executive committee may develop amendments to the plan of operation and submit the amendments to the commissioner for adoption by rule.

(b)  If the executive committee fails to submit suitable amendments to the plan of operation, the department shall develop and submit to the commissioner suitable amendments and the commissioner shall, after notice and hearing, adopt the amendments by rule.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.



Subchapter C. Participation In Market Assistance Program

Section  523.101.  Participation By Insurers.

(a) An insurer authorized to engage in the business of property or casualty insurance that writes residential property insurance in this state, including a Lloyd's plan or a reciprocal or interinsurance exchange, may voluntarily participate in the market assistance program. The commissioner may not permit an insurer to condition its participation in the program in a manner that is inequitable to the participants.

(b)  Notwithstanding Subsection (a), the commissioner may make insurer participation in the market assistance program mandatory. The plan of operation must contain the criteria under which the commissioner may make insurer participation in the market assistance program mandatory.

(c)  Each participating insurer is entitled to individually evaluate a risk and apply rates under the market assistance program in accordance with the provisions of this code applicable to the insurer.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.



Section  523.102.  Application Assistance And Referrals.

The department may:

(1)  assist an applicant for coverage through the market assistance program in completing an initial application; and

(2)  refer the applicant to one or more participating insurers.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.



Section  523.103.  Application For Assistance.

(a) An application for assistance must be addressed to the market assistance program at the department.

(b)  An application must be accompanied by a copy of a current notice of nonrenewal or cancellation of coverage and a current declination letter from at least one other insurer that writes the coverage sought, except that an applicant who does not have previous residential property insurance coverage must provide copies of current declination letters from at least two unaffiliated insurers that write the coverage sought.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.



Section  523.104.  Insurer Action On Application.

(a) Not later than the 30th day after the date an insurer receives an application, the insurer shall:

(1)  quote a premium;

(2)  indicate its refusal to quote a premium; or

(3)  request additional time to consider a premium quote.

(b)  If the insurer quotes a premium, the insurer shall notify the applicant or the applicant's agent, if an agent is used, so that the placement of the insurance may be completed if the applicant accepts the coverage at the quoted premium.

(c)  The insurer may provide a premium quote on the same coverage basis for which the insurer normally provides insurance in this state using the insurer's underwriting guidelines and applying rates determined in accordance with the provisions of this code applicable to the insurer.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.



Section  523.105.  Nonpayment Of Premium Or Submission Of Fraudulent Claim.

If an insurer cancels or does not renew coverage for nonpayment of premium or submission of a fraudulent claim, an applicant is ineligible to subsequently apply to the market assistance program for the same coverage for the same risk.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.



Subchapter D. Program Agents

Section  523.151.  Types Of Agents.

(a) Notwithstanding other law, the market assistance program may have both originating agents and issuing agents.

(b)  An originating agent may complete on behalf of an applicant an application for insurance to submit to the market assistance program. An applicant is not required to submit the application through an originating agent. If an originating agent is used, the originating agent is not required to be appointed to represent the ultimate insurer.

(c)  An issuing agent must be appointed to represent the ultimate insurer. The issuing agent shall perform the customary duties of a general property and casualty agent, including:

(1)  signing, executing, and delivering insurance policies;

(2)  maintaining a record of the business;

(3)  examining and inspecting the risk; and

(4)  receiving and collecting premiums.

(d)  A person may act as both the originating agent and the issuing agent. If the originating agent and the issuing agent are not the same person, the originating agent may not be held to be the agent of the insurer unless the agent is appointed as provided by Chapter 4051.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.



Section  523.152.  Sharing Of Agent Commissions.

(a) An originating agent shall share commissions with an issuing agent as required by the market assistance program plan of operation if the originating agent holds a license as:

(1)  a general property and casualty agent or a personal lines property and casualty agent; or

(2)  a salaried representative for one or more insurers whose plan of operation does not contemplate the use of general property and casualty agents or personal lines property and casualty agents.

(b)  The market assistance program may not share in commissions.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch. 548, Sec. 2.01, eff. September 1, 2007.



Subchapter E. Market Assistance Program Review; Program Termination

Section  523.201.  Collection Of Program Information.

Information concerning the number and type of applications received and placed by the market assistance program and other information about the program the executive committee or the commissioner considers appropriate shall be collected.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.



Section  523.202.  Periodic Review Of Program.

(a) The executive committee shall review the demand for and performance of the market assistance program at least annually, as necessary.

(b)  After each review, the executive committee shall report to the commissioner regarding:

(1)  the need to continue operating the voluntary market assistance program;

(2)  the need to establish a mandatory market assistance program;

(3)  the need to establish a FAIR (Fair Access to Insurance Requirements) Plan under Chapter 2211; or

(4)  other recommendations the executive committee considers appropriate.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch. 730, Sec. 2D.004, eff. April 1, 2009.



Section  523.203.  Termination Of Program.

The department may terminate the market assistance program only on the commissioner's approval.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.


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