82R9878 KCR-D
 
  By: Smithee H.B. No. 3060
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to arbitration of certain claims under residential
  property insurance policies.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subtitle D, Title 10, Insurance Code, is amended
  by adding Chapter 2009 to read as follows:
  CHAPTER 2009.  ARBITRATION OF DISPUTES RELATING TO
  CERTAIN STORM CLAIMS
         Sec. 2009.001.  DEFINITIONS. In this chapter:
               (1)  "Arbitration endorsement" means an endorsement to
  a residential property insurance policy that requires an insured
  and an insurer to submit certain disputes to binding arbitration in
  accordance with this chapter.
               (2)  "Insurer" has the meaning assigned by Section
  2301.051 but does not include the Texas Windstorm Association.
               (3)  "Residential property insurance" has the meaning
  assigned by Section 2301.051.
               (4)  "Seacoast territory" has the meaning assigned by
  Section 2210.003.
               (5)  "Storm claim" means a claim for:
                     (A)  direct loss to property incurred as a result
  of windstorm or hail occurring during a storm system that has been
  declared and named by the National Weather Service; and
                     (B)  indirect losses resulting from the direct
  loss.
         Sec. 2009.002.  ENDORSEMENT AUTHORIZED. (a)  Subject to the
  requirements of this section, an insurer authorized to write
  residential property insurance in this state may issue a
  residential property insurance policy providing coverage for a
  structure in the seacoast territory that includes an endorsement
  requiring binding arbitration of a dispute between the insured and
  the insurer relating to the payment of, the amount of, or the denial
  of a particular storm claim.
         (b)  An insurer may issue a policy to an applicant for
  residential property insurance that includes an arbitration
  endorsement only if:
               (1)  the insurer also offers and makes available to the
  applicant, without the arbitration endorsement, the standard
  policy form promulgated under Articles 5.06 and 5.35 or a
  substantially equivalent form, as determined by the commissioner;
  and
               (2)  before the issuance of the residential insurance
  policy that contains the arbitration endorsement, the insurer
  provides to the applicant a notice, substantially in the form
  required by the commissioner, that explains the legal effect of the
  endorsement.
         Sec. 2009.003.  ARBITRATION ENDORSEMENT. (a)  The form of an
  arbitration endorsement must be filed and approved in accordance
  with Subchapter A, Chapter 2301.
         (b)  An arbitration endorsement must provide that, at the
  election of the insurer or the insured, a dispute relating to the
  payment of, the amount of, or the denial of a particular storm claim
  under the residential property insurance policy must be resolved
  through binding arbitration in accordance with this section.
         (c)  The commissioner by rule may establish procedures for
  the conduct of the arbitration in accordance with an arbitration
  endorsement. The rules may address matters such as:
               (1)  procedures for requesting and conducting the
  arbitration;
               (2)  procedures for selecting one or more arbitrators
  to conduct the arbitration;
               (3)  the qualifications of arbitrators authorized to
  conduct the arbitrations; and
               (4)  payment of the costs of arbitration, including
  payment of an arbitrator's fees, the amount of those fees, and which
  party or parties are liable for the payment of those fees.
         Sec. 2009.004.  LAW GOVERNING ARBITRATION. Except to the
  extent of any conflict with this chapter and the rules adopted under
  this chapter, Chapter 171, Civil Practice and Remedies Code,
  applies to an arbitration conducted in accordance with an
  arbitration endorsement.
         Sec. 2009.005.  RIGHT TO SUE AND RECOVER EXEMPLARY DAMAGES
  WAIVED. (a)  Except as provided by Chapter 171, Civil Practice and
  Remedies Code, an insured that elects to purchase a residential
  property insurance policy that includes an arbitration endorsement
  waives the right to bring against the insurer a suit relating to the
  payment of, the amount of, or the denial of a storm claim and, with
  respect to the claim, is not entitled to exemplary damages under any
  law, including Chapter 541 and the Deceptive Trade
  Practices-Consumer Protection Act (Subchapter E, Chapter 17,
  Business & Commerce Code).
         (b)  Except as provided by Chapter 171, Civil Practice and
  Remedies Code, an insurer that elects to issue a residential
  property insurance policy that includes an arbitration endorsement
  waives the right to bring against the insured a suit relating to a
  storm claim and, with respect to the claim, is not entitled to
  exemplary damages under any law.
         Sec. 2009.006.  PREMIUM DISCOUNT REQUIRED. An insured that
  elects to purchase a residential property insurance policy that
  includes an arbitration endorsement is entitled to a premium
  discount in an amount approved by the commissioner. The rate
  charged, after application of the discount required by this
  section, must satisfy the requirements of Section 2251.051.
         SECTION 2.  This Act takes effect immediately if it receives
  a vote of two-thirds of all the members elected to each house, as
  provided by Section 39, Article III, Texas Constitution.  If this
  Act does not receive the vote necessary for immediate effect, this
  Act takes effect September 1, 2011.