| REVIEW REQUIREMENTS |
REFERENCE |
COMMENTS |
| FORMS |
| Filing Standards |
| Prior Approval of Policy Forms and Endorsements - Large Risk Exemption |
Article 5.13-2, §8, Texas Insurance Code |
An insurance policy form or endorsement may not be delivered or issued for delivery in this state unless the form has been filed with and approved by the commissioner. Each filing shall be made not later than the 60th day before the date of any use or delivery for use. Policy forms for use with large risks are exempt from filing for prior approval if the forms are to be used with a "large risk". "Large Risk" is defined as an insured that has total insured property values of $5 million or more; an insured that has total annual gross revenues of $10 million or more; or an insured that has a total premium of $25,000 or more for property insurance, $25,000 or more for general liability insurance, or $50,000 or more for multiperil insurance. |
| Applications |
| Not Required to be Filed For Approval |
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| Arbitration |
| Arbitration |
Article 5.13-2, §8, Texas Insurance Code |
Language used in arbitration agreements is to be consistent with that of the policy: to wit, don't use the word "parties" when you actually mean insured(s) and insurer. Binding arbitration is okay. Arbitration agreements may be mandatory. Arbitration must be held in Texas for Texas policyholders unless mutually agree on an alternate. In general, arbitration language cannot be unjust, misleading or deceptive. |
| Cancellation & Nonrenewal |
| Elected Officials |
§§551.151 & 551.152 (formerly Article 21.49-2D), Texas Insurance Code |
May not cancel or nonrenew based solely on the fact the insured is an elected official. |
| Cancellation & Nonrenewal of Certain Property and Casualty Policies |
§§551.101 - 551.112 (formerly Article 21.49-2B), Texas Insurance Code |
Cancellation requirements if the policy is issued to a "Governmental Unit" or one and two family dwellings. Governmental unit as defined includes the state, and agency of the state, a political subdivision of the state, including a municipality, county, school district, junior college district, levee improvement district, drainage district, irrigation district, water improvement district, water control and improvement district, water control and preservation district, freshwater supply district, navigation district, conservation and reclamation districts, soil conservation district, communication district, and river authority and any other agency of government whose authority is derived from the laws or constitution of the state. |
| Insured's Right to Cancel |
Article 5.13-2, §8, Texas Insurance Code |
Insurance company cannot limit or restrict the insured's right to cancel a policy. |
| Choice of Law |
| Texas Laws Govern Policies |
Article 21.42, Texas Insurance Code |
Texas must be choice if filing contains choice of law provision. |
| Claims Settlement |
| Prompt Payment of Claims |
§§542.051 - 542.061 (formerly Article 21.55), Texas Insurance Code |
Prompt payment of claims and catastrophe exception. |
| Loss Settlements |
§§542.151 - 542.154 (formerly Article 21.56), Texas Insurance Code |
Notice of Settlement of Liability Claims - Applicable to Crime forms that include Third Party Liability. |
| Contractual Limitations Period - Suits |
§16.070, Civil Practice & Remedies |
Except as provided by Subsection (b), a person may not enter a stipulation, contract, or agreement that purports to limit the time in which to bring suit on the stipulation, contract, or agreement to a period shorter than two years. A stipulation, contract, or agreement that establishes a limitations period that is shorter than two years is void in this state. |
| Coverage Issues |
| Aggregate Limits |
Article 5.13-2, Texas Insurance Code |
Rates should contemplate aggregate limits. |
| Discovery Period |
Article 5.13-2, Texas Insurance Code |
Discovery Period within the policy period or within 60 days from the termination of the policy (extended discovery period) require an Important Notice that losses must be discovered during the policy period or any extended period. (Note: If referencing Advisory Organization filing, verify how this requirement is complied with.) |
| Claims Reported Within Policy Period |
Article 5.13-2, Texas Insurance Code |
If the form contains language requiring the claim be reported within the policy period or contains an extended period to report claims, a warning to insured's is required in bold print or uppercase type on the Declaration Page. (Example Wording: "Claim must be reported within the policy period." This language is common to Fidelity forms where we can anticipate more sophisticated insureds.) |
| Tie-In Sales |
Article 5.20, Texas Insurance Code & 6/1/78 Board Letter |
Tie-in sales may violate state law. |
| Fully Earned Premium/Retention of Minimum Earned Premium |
| Fully Earned Premium / Retention of Minimum Earned Premium is unacceptable - Exceptions |
Article 5.13-2, Texas Insurance Code |
Fully earned premium or retention of minimum earned premium is unacceptable. However, a nominal amount is considered acceptable. Fully earned would be considered where coverage is being provided for risks such as special events and weather policies. |
| General Change Endorsements |
| May Not Manuscript Coverage Once Approved |
Article 5.13-2, §8, Texas Insurance Code |
Coverage forms are prior approval. Change endorsements may be used to change insured address, etc. but may not be used to change, alter or "clarify" coverage in any way. Company must provide verification that the endorsement will not be used to change, alter, or clarify coverage. |
| Rebating or Discrimination |
| Rebating or Discrimination |
Article 5.20, Texas Insurance Code |
Inducements prohibited. |
| Toll Free Information |
| Notice of Policyholder Complaint Procedures |
§521.005 (formerly Article 1.35), Texas Insurance Code |
A brief written notice of suggested procedure to be followed by the policyholder in the event of a dispute concerning a policyholder's claim or premium. |
| Toll-Free Information & Complaint Number |
§§521.051 - 521.056 (formerly Article 1.35D), Texas Insurance Code |
Toll-Free number for the Texas Department of Insurance. |
| Insurer's Toll-Free Information & Complaint Number |
§§521.101 - 521.103 (formerly Article 21.71), Texas Insurance Code |
Insurer's requirement to maintain toll-free number to provide information concerning policies issued by the insurer and to accept complaints from policyholder. Article contains an exception for insurers whose gross initial premium receipts collected in this state are less than $2 million a year or to an insurer with regard to fidelity, surety, or guaranty bonds. |
| Notice of Toll-Free Telephone Numbers and Information & Complaint Procedures |
28 TAC §1.601, Texas Administrative Code |
To satisfy requirements for §521.005, §§521.051 - 521.056, and §§521.101 - 521.103 (formerly Article 1.35, 1.35D and 21.71) noted above. |
| Texas Lloyds, Mutual, Reciprocals and Participating Stock Cos. |
| Special Policy Conditions |
General Casualty Bulletins Nos. 276, 443, and 446 |
Requiring specific language be contained in policies issued by Lloyds, Mutuals, Reciprocals, and Participating Stock Companies. |
| RATES |
| Filing Standards |
| File & Use |
Article 5.13-2, Texas Insurance Code |
Each insurer shall file with the Commissioner all rates, supplementary rating information, and reasonable and pertinent supporting information for risks written in this state. |
| Required Documentation |
| Refer to Property & Casualty Filings Made Easy |
Go to Property & Casualty Filings Made Easy now |
Texas Department of Insurance
