CHAPTER 523. MARKET ASSISTANCE PROGRAM FOR RESIDENTIAL PROPERTY INSURANCE - Texas Statutes

INSURANCE CODE

TITLE 5. PROTECTION OF CONSUMER INTERESTS

SUBTITLE B. CONSUMER SERVICE PROVISIONS

CHAPTER 523. MARKET ASSISTANCE PROGRAM FOR RESIDENTIAL PROPERTY

INSURANCE

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 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, Sec. 2, eff. April 1,

2005.

Sec. 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, Sec. 2, eff. April 1,

2005.

Sec. 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, Sec. 2, eff. April 1,

2005.

SUBCHAPTER B. OPERATION OF MARKET ASSISTANCE PROGRAM

Sec. 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 2004.002.

(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 Chapter 2210.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

730, Sec. 2D.003, eff. April 1, 2009.

Sec. 523.052. MARKET ASSISTANCE PROGRAM DIVISION. The

department shall operate a market assistance program division.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 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, Sec. 2, eff. April 1,

2005.

Sec. 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, Sec. 2, eff. April 1,

2005.

Sec. 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, Sec. 2, eff. April 1,

2005.

SUBCHAPTER C. PARTICIPATION IN MARKET ASSISTANCE PROGRAM

Sec. 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, Sec. 2, eff. April 1,

2005.

Sec. 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, Sec. 2, eff. April 1,

2005.

Sec. 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, Sec. 2, eff. April 1,

2005.

Sec. 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, Sec. 2, eff. April 1,

2005.

Sec. 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, Sec. 2, eff. April 1,

2005.

SUBCHAPTER D. PROGRAM AGENTS

Sec. 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, Sec. 2, eff. April 1,

2005.

Sec. 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 a personal lines

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 or personal lines property and

casualty agents.

(b) The market assistance program may not share in commissions.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

548, Sec. 2.01, eff. September 1, 2007.

SUBCHAPTER E. MARKET ASSISTANCE PROGRAM REVIEW; PROGRAM

TERMINATION

Sec. 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, Sec. 2, eff. April 1,

2005.

Sec. 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 Chapter 2211; or

(4) other recommendations the executive committee considers

appropriate.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

730, Sec. 2D.004, eff. April 1, 2009.

Sec. 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, Sec. 2, eff. April 1,

2005.