INSURANCE CODE
CHAPTER 523. MARKET ASSISTANCE PROGRAM FOR RESIDENTIAL PROPERTY
INSURANCE
SUBCHAPTER A. GENERAL PROVISIONS
§ 523.001. DEFINITION. In this chapter, "residential
property insurance" means insurance provided by a homeowners policy
or residential fire and allied lines policy against loss incurred
at a fixed location to real or tangible personal property. The term
does not include insurance against loss provided by a farm and ranch
owners policy.
Added by Acts 2003, 78th Leg., ch. 1274, § 2, eff. April 1, 2005.
§ 523.002. RULES. In addition to the plan of operation
adopted under Subchapter B, the commissioner may adopt appropriate
rules to accomplish the purposes of this chapter.
Added by Acts 2003, 78th Leg., ch. 1274, § 2, eff. April 1, 2005.
§ 523.003. IMMUNITY. The market assistance program,
the members of the executive committee, and participating insurers
and agents are not personally liable for:
(1) an act performed in good faith in the scope of the
person's authority as determined under this chapter; or
(2) damages arising from the person's official acts or
omissions, other than a corrupt or malicious act or omission.
Added by Acts 2003, 78th Leg., ch. 1274, § 2, eff. April 1, 2005.
SUBCHAPTER B. OPERATION OF MARKET ASSISTANCE PROGRAM
§ 523.051. MARKET ASSISTANCE PROGRAM. (a) The market
assistance program is a voluntary program designed to assist
applicants for insurance and insureds in this state in obtaining
residential property insurance coverage in underserved areas. The
commissioner by rule shall designate underserved areas using the
standards described by Section 1, Article 5.35-3.
(b) The commissioner shall establish the types of risks for
which the market assistance program will provide assistance.
(c) The market assistance program may not provide
assistance regarding windstorm and hail insurance coverage for a
risk eligible for that coverage under Article 21.49.
Added by Acts 2003, 78th Leg., ch. 1274, § 2, eff. April 1, 2005.
§ 523.052. MARKET ASSISTANCE PROGRAM DIVISION. The
department shall operate a market assistance program division.
Added by Acts 2003, 78th Leg., ch. 1274, § 2, eff. April 1, 2005.
§ 523.053. EXECUTIVE COMMITTEE. (a) The market
assistance program is administered by an executive committee.
(b) The executive committee consists of 11 members
appointed by the commissioner as follows:
(1) five members who represent the interests of
insurers;
(2) four public members; and
(3) two members who are general property and casualty
agents.
(c) Each member of the executive committee who represents
the interests of insurers must be a full-time employee of an
authorized insurer.
(d) The commissioner or the commissioner's designated
representative serves as an ex officio member of the executive
committee and must be present at each executive committee meeting.
(e) The executive committee shall be available to advise and
consult with the commissioner regarding the administration of the
market assistance program.
Added by Acts 2003, 78th Leg., ch. 1274, § 2, eff. April 1, 2005.
§ 523.054. PLAN OF OPERATION. (a) The operation and
management of the market assistance program is governed by a plan of
operation adopted by rule by the commissioner.
(b) In addition to the other requirements specified by this
chapter, the plan of operation must include provisions regarding
types of coverage, policy forms and terms, application forms,
eligibility, and the overall operation of the market assistance
program.
(c) The plan of operation may provide for subcommittees
necessary to administer the market assistance program.
Added by Acts 2003, 78th Leg., ch. 1274, § 2, eff. April 1, 2005.
§ 523.055. AMENDMENT OF PLAN OF OPERATION. (a) The
executive committee may develop amendments to the plan of operation
and submit the amendments to the commissioner for adoption by rule.
(b) If the executive committee fails to submit suitable
amendments to the plan of operation, the department shall develop
and submit to the commissioner suitable amendments and the
commissioner shall, after notice and hearing, adopt the amendments
by rule.
Added by Acts 2003, 78th Leg., ch. 1274, § 2, eff. April 1, 2005.
SUBCHAPTER C. PARTICIPATION IN MARKET ASSISTANCE PROGRAM
§ 523.101. PARTICIPATION BY INSURERS. (a) An insurer
authorized to engage in the business of property or casualty
insurance that writes residential property insurance in this state,
including a Lloyd's plan or a reciprocal or interinsurance
exchange, may voluntarily participate in the market assistance
program. The commissioner may not permit an insurer to condition
its participation in the program in a manner that is inequitable to
the participants.
(b) Notwithstanding Subsection (a), the commissioner may
make insurer participation in the market assistance program
mandatory. The plan of operation must contain the criteria under
which the commissioner may make insurer participation in the market
assistance program mandatory.
(c) Each participating insurer is entitled to individually
evaluate a risk and apply rates under the market assistance program
in accordance with the provisions of this code applicable to the
insurer.
Added by Acts 2003, 78th Leg., ch. 1274, § 2, eff. April 1, 2005.
§ 523.102. APPLICATION ASSISTANCE AND REFERRALS. The
department may:
(1) assist an applicant for coverage through the
market assistance program in completing an initial application;
and
(2) refer the applicant to one or more participating
insurers.
Added by Acts 2003, 78th Leg., ch. 1274, § 2, eff. April 1, 2005.
§ 523.103. APPLICATION FOR ASSISTANCE. (a) An
application for assistance must be addressed to the market
assistance program at the department.
(b) An application must be accompanied by a copy of a
current notice of nonrenewal or cancellation of coverage and a
current declination letter from at least one other insurer that
writes the coverage sought, except that an applicant who does not
have previous residential property insurance coverage must provide
copies of current declination letters from at least two
unaffiliated insurers that write the coverage sought.
Added by Acts 2003, 78th Leg., ch. 1274, § 2, eff. April 1, 2005.
§ 523.104. INSURER ACTION ON APPLICATION. (a) Not
later than the 30th day after the date an insurer receives an
application, the insurer shall:
(1) quote a premium;
(2) indicate its refusal to quote a premium; or
(3) request additional time to consider a premium
quote.
(b) If the insurer quotes a premium, the insurer shall
notify the applicant or the applicant's agent, if an agent is used,
so that the placement of the insurance may be completed if the
applicant accepts the coverage at the quoted premium.
(c) The insurer may provide a premium quote on the same
coverage basis for which the insurer normally provides insurance in
this state using the insurer's underwriting guidelines and applying
rates determined in accordance with the provisions of this code
applicable to the insurer.
Added by Acts 2003, 78th Leg., ch. 1274, § 2, eff. April 1, 2005.
§ 523.105. NONPAYMENT OF PREMIUM OR SUBMISSION OF
FRAUDULENT CLAIM. If an insurer cancels or does not renew coverage
for nonpayment of premium or submission of a fraudulent claim, an
applicant is ineligible to subsequently apply to the market
assistance program for the same coverage for the same risk.
Added by Acts 2003, 78th Leg., ch. 1274, § 2, eff. April 1, 2005.
SUBCHAPTER D. PROGRAM AGENTS
§ 523.151. TYPES OF AGENTS. (a) Notwithstanding other
law, the market assistance program may have both originating agents
and issuing agents.
(b) An originating agent may complete on behalf of an
applicant an application for insurance to submit to the market
assistance program. An applicant is not required to submit the
application through an originating agent. If an originating agent
is used, the originating agent is not required to be appointed to
represent the ultimate insurer.
(c) An issuing agent must be appointed to represent the
ultimate insurer. The issuing agent shall perform the customary
duties of a general property and casualty agent, including:
(1) signing, executing, and delivering insurance
policies;
(2) maintaining a record of the business;
(3) examining and inspecting the risk; and
(4) receiving and collecting premiums.
(d) A person may act as both the originating agent and the
issuing agent. If the originating agent and the issuing agent are
not the same person, the originating agent may not be held to be the
agent of the insurer unless the agent is appointed as provided by
Chapter 4051.
Added by Acts 2003, 78th Leg., ch. 1274, § 2, eff. April 1, 2005.
§ 523.152. SHARING OF AGENT COMMISSIONS. (a) An
originating agent shall share commissions with an issuing agent as
required by the market assistance program plan of operation if the
originating agent holds a license as:
(1) a general property and casualty agent; or
(2) a salaried representative for one or more insurers
whose plan of operation does not contemplate the use of general
property and casualty agents.
(b) The market assistance program may not share in
commissions.
Added by Acts 2003, 78th Leg., ch. 1274, § 2, eff. April 1, 2005.
SUBCHAPTER E. MARKET ASSISTANCE PROGRAM REVIEW; PROGRAM
TERMINATION
§ 523.201. COLLECTION OF PROGRAM
INFORMATION. Information concerning the number and type of
applications received and placed by the market assistance program
and other information about the program the executive committee or
the commissioner considers appropriate shall be collected.
Added by Acts 2003, 78th Leg., ch. 1274, § 2, eff. April 1, 2005.
§ 523.202. PERIODIC REVIEW OF PROGRAM. (a) The
executive committee shall review the demand for and performance of
the market assistance program at least annually, as necessary.
(b) After each review, the executive committee shall report
to the commissioner regarding:
(1) the need to continue operating the voluntary
market assistance program;
(2) the need to establish a mandatory market
assistance program;
(3) the need to establish a FAIR (Fair Access to
Insurance Requirements) Plan under Article 21.49A; or
(4) other recommendations the executive committee
considers appropriate.
Added by Acts 2003, 78th Leg., ch. 1274, § 2, eff. April 1, 2005.
§ 523.203. TERMINATION OF PROGRAM. The department may
terminate the market assistance program only on the commissioner's
approval.
Added by Acts 2003, 78th Leg., ch. 1274, § 2, eff. April 1, 2005.
