H.B. No. 1040

	AN ACT
	relating to the authority of entities regulated by the Texas
	Department of Insurance to conduct business electronically.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 35.003, Insurance Code, is amended to
	read as follows:
	Sec. 35.003.  ELECTRONIC TRANSACTIONS AUTHORIZED. (a)
	Subject to Section 35.004, a [A] regulated entity may conduct
	business electronically to the same extent that the entity is
	authorized to conduct business otherwise if before the conduct of
	business:
	(1)  each party to the business agrees to conduct the
	business electronically; or
	(2)  each other party to the business has been given
	notice by the entity that the business will be conducted
	electronically and has not requested that the business be conducted
	in nonelectronic form.
	(b)  If a regulated entity provides notice under Subsection
	(a)(2) and the other party does not opt out of conducting business
	electronically, the other party is considered to have agreed to
	conduct business electronically for the purposes of Chapter 322,
	Business & Commerce Code.
	SECTION 2.  Section 35.004, Insurance Code, is amended by
	amending Subsections (c) and (d) and adding Subsection (l) to read
	as follows:
	(c)  A written communication may be delivered by electronic
	means to a party by a regulated entity under this section if:
	(1)  the party:
	(A)  affirmatively consented to delivery by
	electronic means and has not withdrawn the consent; or
	(B)  if affirmative consent is not sought, has not
	requested that written communication be delivered to the party in
	paper or another nonelectronic form instead of by electronic means;
	(2)  the party, before giving consent or receiving
	written communication by electronic means, is provided with a clear
	and conspicuous statement informing the party of:
	(A)  any right or option the party may have for the
	written communication to be provided or made available in paper or
	another nonelectronic form;
	(B)  the right of the party to withdraw consent
	under this section or to request written communication be delivered
	to the party in nonelectronic form, if the party's affirmative
	consent is not sought, and any conditions or consequences imposed
	if consent is withdrawn or delivery in nonelectronic form is
	requested;
	(C)  whether the party's consent to delivery by
	electronic means or the party's request or the absence of the
	party's request for delivery in nonelectronic form applies:
	(i)  only to a specific transaction for
	which the written communication must be given; or
	(ii)  to identified categories of written
	communications that may be delivered [by electronic means] during
	the course of the relationship between the party and the regulated
	entity;
	(D)  the means[, after consent is given,] by which
	a party may obtain a paper copy of a written communication delivered
	by electronic means; and
	(E)  the procedure a party must follow to:
	(i)  withdraw consent under this section or
	to otherwise request delivery of written communication in
	nonelectronic form, as applicable; and
	(ii)  update information needed for the
	regulated entity to contact the party electronically; and
	(3)  the party:
	(A)  before giving consent or receiving written
	communication by electronic means, is provided with a statement
	identifying the hardware and software requirements for the party's
	access to and retention of a written communication delivered by
	electronic means; and
	(B)  if affirmative consent is sought, consents
	electronically or confirms consent electronically in a manner that
	reasonably demonstrates that the party can access a written
	communication in the electronic form used to deliver the
	communication.
	(d)  After consent of the party is given or the opportunity
	to request delivery of written communication in nonelectronic form
	is given, as applicable, in the event a change in the hardware or
	software requirements to access or retain a written communication
	delivered by electronic means creates a material risk that the
	party may not be able to access or retain a subsequent written
	communication to which the consent applies, the regulated entity
	shall:
	(1)  provide the party with a statement:
	(A)  identifying the revised hardware and
	software requirements for access to and retention of a written
	communication delivered by electronic means; and
	(B)  disclosing the right of the party to withdraw
	consent or to otherwise request delivery in nonelectronic form, as
	applicable, without the imposition of any condition or consequence
	that was not disclosed under Subsection (c)(2)(B); and
	(2)  comply with Subsection (c)(3).
	(l)  A notice of the cancellation or termination of a policy
	to which this section applies must be:
	(1)  a written communication; and
	(2)  delivered to a party:
	(A)  by electronic means; and
	(B)  in paper or another nonelectronic form.
	SECTION 3.  Section 35.0041(a), Insurance Code, is amended
	to read as follows:
	(a)  The plan sponsor of a health benefit plan, including a
	vision or dental benefit plan, may, on behalf of a party enrolled in
	the plan, give [the] consent under [required by] Section
	35.004(c)(1)(A) [35.004(c)(1)].
	SECTION 4.  Sections 35.003 and 35.004, Insurance Code, as
	amended by this Act, apply only to business conducted on or after
	the effective date of this Act. Business conducted before the
	effective date of this Act is governed by the law in effect on the
	date the business was conducted, and that law is continued in effect
	for that purpose.
	SECTION 5.  This Act takes effect September 1, 2023.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I certify that H.B. No. 1040 was passed by the House on April
	14, 2023, by the following vote:  Yeas 140, Nays 3, 2 present, not
	voting.
	______________________________
	Chief Clerk of the House
	I certify that H.B. No. 1040 was passed by the Senate on May
	16, 2023, by the following vote:  Yeas 31, Nays 0.
	______________________________
	Secretary of the Senate
	APPROVED:  _____________________
	Date
	_____________________
	Governor