H.B. No. 2102

	AN ACT
	relating to the payment of insurance deductibles related to
	property insurance policies; creating a criminal offense.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Subtitle F, Title 5, Insurance Code, is amended
	by adding Chapter 707 to read as follows:
	CHAPTER 707. PAYMENT OF INSURANCE DEDUCTIBLE
	Sec. 707.001.  DEFINITIONS. In this chapter:
	(1)  "Person" means an individual, corporation,
	association, partnership, limited liability company, or other
	legal entity.
	(2)  "Property insurance policy" means an insurance
	policy issued by an insurer, including a county mutual insurance
	company, farm mutual insurance company, Lloyd's plan, or reciprocal
	or interinsurance exchange, that provides first-party coverage for
	loss of or damage to real property.
	Sec. 707.002.  PAYMENT OF DEDUCTIBLE REQUIRED. A person
	insured under a property insurance policy shall pay any deductible
	applicable to a first-party claim made under the policy.
	Sec. 707.003.  CONSUMER EDUCATION. The department, in
	coordination with other state agencies and stakeholders as
	necessary, shall develop and implement an education program related
	to the payment of property insurance policy deductibles. The
	program must:
	(1)  provide reasonable methods to educate insurance
	consumers and providers of goods or services that are regularly
	paid for from proceeds of property insurance claims; and
	(2)  include information regarding:
	(A)  the requirements of this chapter and Section
	27.02, Business & Commerce Code; and
	(B)  the conduct prohibited by Section 27.02,
	Business & Commerce Code.
	Sec. 707.004.  REASONABLE PROOF OF PAYMENT.  An insurer that
	issues a property insurance policy with replacement cost coverage
	may refuse to pay a claim for withheld recoverable depreciation or a
	replacement cost holdback under the policy until the insurer
	receives reasonable proof of payment by the policyholder of any
	deductible applicable to the claim. Reasonable proof of payment
	includes a canceled check, money order receipt, credit card
	statement, or copy of an executed installment plan contract or
	other financing arrangement that requires full payment of the
	deductible over time.
	Sec. 707.005.  RULEMAKING. The commissioner may adopt rules
	as necessary to implement this chapter. Section 2001.0045,
	Government Code, does not apply to rules adopted under this
	section.
	SECTION 2.  Section 27.02, Business & Commerce Code, is
	amended to read as follows:
	Sec. 27.02.  GOODS OR SERVICES PAID FOR BY INSURANCE
	PROCEEDS: PAYMENT OF DEDUCTIBLE REQUIRED [CERTAIN INSURANCE CLAIMS
	FOR EXCESSIVE CHARGES].  (a)  In this section, "property insurance
	policy" has the meaning assigned by Section 707.001, Insurance
	Code.
	(b)  A contract to provide a good or service that is
	reasonably expected to be paid wholly or partly from the proceeds of
	a claim under a property insurance policy and that has a contract
	price of $1,000 or more must contain the following notice in at
	least 12-point boldfaced type: "Texas law requires a person
	insured under a property insurance policy to pay any deductible
	applicable to a claim made under the policy. It is a violation of
	Texas law for a seller of goods or services who reasonably expects
	to be paid wholly or partly from the proceeds of a property
	insurance claim to knowingly allow the insured person to fail to
	pay, or assist the insured person's failure to pay, the applicable
	insurance deductible."
	(c)  A person who sells goods or services commits an offense
	if the person:
	(1)  advertises or promises to provide a good or
	service to an insured under a property insurance policy in a
	transaction in which:
	(A)  the good or service will be paid for by the
	insured from the proceeds of a property insurance claim; and
	(B)  the person selling the good or service will,
	without the insurer's consent:
	(i)  pay, waive, absorb, or otherwise
	decline to charge or collect the amount of the insured's
	deductible;
	(ii)  provide a rebate or credit in
	connection with the sale of the good or service that will offset all
	or part of the amount paid by the insured as a deductible; or
	(iii)  in any other manner assist the
	insured in avoiding monetary payment of the required insurance
	deductible; or
	(2)  provides a good or service to an insured under a
	property insurance policy knowing that the insured will pay for the
	good or service with the proceeds of a claim under the policy and,
	without the insurer's consent:
	(A)  pays, waives, absorbs, or otherwise declines
	to charge or collect the amount of the insured's deductible;
	(B)  provides a rebate or credit in connection
	with the sale of the good or service that offsets all or part of the
	amount paid by the insured as a deductible; or
	(C)  in any other manner assists the insured in
	avoiding monetary payment of the required insurance deductible. [A
	person who sells goods or services commits an offense if:
	[(1)     the person advertises or promises to provide the
	good or service and to pay:
	[(A)     all or part of any applicable insurance
	deductible; or
	[(B)     a rebate in an amount equal to all or part of
	any applicable insurance deductible;
	[(2)     the good or service is paid for by the consumer
	from proceeds of a property or casualty insurance policy; and
	[(3)     the person knowingly charges an amount for the
	good or service that exceeds the usual and customary charge by the
	person for the good or service by an amount equal to or greater than
	all or part of the applicable insurance deductible paid by the
	person to an insurer on behalf of an insured or remitted to an
	insured by the person as a rebate.
	[(b)     A person who is insured under a property or casualty
	insurance policy commits an offense if the person:
	[(1)     submits a claim under the policy based on charges
	that are in violation of Subsection (a) of this section; or
	[(2)     knowingly allows a claim in violation of
	Subsection (a) of this section to be submitted, unless the person
	promptly notifies the insurer of the excessive charges.]
	(d) [(c)]  An offense under this section is a Class B [A]
	misdemeanor.
	SECTION 3.  The changes in law made by this Act to Section
	27.02, Business & Commerce Code, apply only to an offense committed
	on or after the effective date of this Act. An offense committed
	before the effective date of this Act is governed by the law in
	effect on the date the offense was committed, and the former law is
	continued in effect for that purpose. For purposes of this section,
	an offense was committed before the effective date of this Act if
	any element of the offense occurred before that date.
	SECTION 4.  Section 27.02(b), Business & Commerce Code, as
	amended by this Act, applies only to a contract entered into on or
	after the effective date of this Act.
	SECTION 5.  This Act takes effect September 1, 2019.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I certify that H.B. No. 2102 was passed by the House on May 3,
	2019, by the following vote:  Yeas 136, Nays 4, 2 present, not
	voting; and that the House concurred in Senate amendments to H.B.
	No. 2102 on May 24, 2019, by the following vote:  Yeas 82, Nays 50,
	2 present, not voting.
	______________________________
	Chief Clerk of the House
	I certify that H.B. No. 2102 was passed by the Senate, with
	amendments, on May 22, 2019, by the following vote:  Yeas 31, Nays
	0.
	______________________________
	Secretary of the Senate
	APPROVED: __________________
	Date
	__________________
	Governor