Recap from the
legislative session 86 th Texas
he 86th Texas Legislative Session ended on May 27 with a total of 10,877 bills filed during the five-month session and 4,581 of those being passed into law. Some of the most popular topics this session revolved around school finance reform and property tax relief. However, several bills related to insurance were also in play during the session. Germania was successful in working with several trade associations and other companies to help pass several bills that will have a positive impact across the state, including the following: • SB 442 – Flood Disclosure Requirement. This bill requires insurers include a separate disclosure with all property policies which do not cover flooding. This disclosure reminds policyholders who do not have flood coverage to visit with their independent insurance agent to obtain the appropriate coverages to protect their investment. • HB 2102 – Prohibition Against Waiving Deductibles. For many years in the state of Texas, it has been improper for a policyholder to forego paying their property insurance deductible by having a contractor either pay or waive the deductible. However, this has been a common practice over the years, due in large part to an existing statute that failed to clearly address the issue. HB 2102 adds Chapter 707 to the Texas Insurance Code and expresses in plain language that a contractor violates the law if they pay, waive, absorb, give a
rebate or credit for in lieu of charging and/or failing to collect the required amount paid by the insured as a deductible under their insurance policy. In addition, for contracts for goods or services related to a property claim of $1,000 or more, the contract must disclose that the law requires a person to pay a deductible under their Property insurance policy and that it is a violation of law to not do so. Insurance companies have the right to request reasonable proof that an insured has paid their deductible before paying the withheld depreciation or replacement cost holdback under a Property policy. This law will ensure that all contractors are competing fairly and that “deductible absorption” by contractors stops. • HB 2048 – Repeal of Driver Responsibility Program. Effective September 1, 2019, amends the Auto Burglary and Theft Prevention Authority (ABTPA) tax provision to increase the fee paid per motor vehicle year listed on automobile insurance policies from $2 to $4. This fee is for every motor vehicle on an automobile insurance policy and is collected by the insurer and then paid to the ABTPA. The bill requires the ABTPA fee to be allocated by the ABTPF as follows: 20% to be appropriated for ABTPA purposes; 20% to be deposited to the general revenue fund; and 60% allocated to the designated trauma and emergency medical services account under Sec. 780.003, Health and Safety Code.
Summer 2019 | 7
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