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Texas Department of Insurance
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Commissioner’s Bulletin # B-0037-06

September 20, 2006


To:   ALL INSURANCE COMPANIES, CORPORATIONS, EXCHANGES, MUTUALS RECIPROCALS, ASSOCIATIONS, LLOYDS, OR OTHER INSURERS WRITING PROPERTY AND CASUALTY INSURANCE IN THE STATE OF TEXAS AND TO OTHER AGENTS AND REPRESENTATIVES AND THE PUBLIC GENERALLY

Re:   Order No. 06-0756, adoption of amendments to 28 TAC Article 21.1007, Subchapter J, Prohibited Trade Practices and Order No. 06-0859, adoption of four optional endorsements providing coverage for additional living expenses.


By Commissioner's Order No. 06-0756 dated July 21, 2006, the Commissioner of Insurance adopted amendments to 28 TAC §21.1007. The rule concerns prohibitions on the use of unfair underwriting guidelines involving water damage claims, previous mold damage, or mold damage claims. The adopted amendments were necessary to implement changes enacted by the 79th Legislature, Regular Session, in House Bill 941 and House Bill 1328.

HB 941 amended Insurance Code Article 5.35-4 §2 by adding a definition of appliance in subdivision (4). The statute defines an appliance to include hoses directly attached to the appliance. The former §21.1007 included a definition of appliance that excluded hoses. Section 21.1007(b)(5) was amended to be consistent with the new statutory definition of appliance. Please note, as part of the non-substantive Insurance Code revision, Article 5.35-4 §2(4) is now §544.352(4).

HB 1328 amended Insurance Code Article 21.21-11 §3(4)(A) to be consistent with the Occupations Code §1958.154 by providing that the certificate of mold remediation issued to the property owner must establish with reasonable certainty that the underlying cause of the mold at the property has been remediated. Prior to HB 1328, under Insurance Code Article 21.21-11 §3(4)(A), the mold remediation certificate was required to certify that the underlying cause of mold had been remediated; HB 1328 amended the statute to add the with reasonable certainty standard. Section 21.1007(e)(1)(D)(i) was amended to incorporate the with reasonable certainty standard into the rule. Please note, as part of the non-substantive Insurance Code revision, Article 21.21-11 §3(4)(A) is now §544.303(4)(A).

Commissioner's Order No. 06-0756 is available on the Department's website at: www.tdi.state.tx.us/orders/pdf/tradepractices.pdf.

By Commissioner's Order No. 06-0859 dated August 18, 2006, the Commissioner promulgated four optional endorsements to provide coverage for additional living expenses. The optional endorsements are for use with homeowners, condominium, and tenant insurance policies. Endorsements HO-115 and HO-115A provide coverage for policyholders who incur additional living expenses when a civil authority orders a mandatory evacuation. Endorsements HO-116 and HO-116A provide coverage for policyholders who incur additional living expenses as a result of an extended loss of utilities. The optional endorsements are effective for use September 16, 2006 with the appropriate rate and rule filings.

Insurers may offer the following endorsements with the appropriate policy:

  • HO-115 Loss of Use Due to Mandatory Evacuation - Applicable to Texas Homeowners Policy Forms A, B, and C.
  • HO-115A Loss of Use Due to Mandatory Evacuation - Applicable to Texas Homeowners Tenant Policy Forms B and C and Texas Homeowners Condominium Policy Forms B and C.
  • HO-116 Loss of Use Due to Loss of Utilities - Applicable to Texas Homeowners Policy Forms A, B, and C.
  • HO-116A Loss of Use Due to Loss of Utilities - Applicable to Texas Homeowners Tenant Policy Forms B and C and Texas Homeowners Condominium Policy Forms B and C.

Insurers who wish to offer similar kinds of coverage may file policy forms and endorsements for the Commissioner's approval as provided for under Insurance Code Article 5.13-2 § 8.

Commissioner's Order No. 06-0859, including copies of the four optional endorsements, are available on the Department's website at: www.tdi.state.tx.us/orders/pdf/additional02.pdf.

Questions regarding this bulletin may be directed to:

Texas Department of Insurance
Attn: Gary Julian
Personal Lines Division, MC 104-1A
P.O. Box 149404
Austin, TX 78714-9104
512-322-2266

gary.julian@tdi.state.tx.us

Marilyn Hamilton, Associate Commissioner
Property & Casualty Program, MC 104-PC



For more information, contact: ChiefClerk@tdi.texas.gov

Last updated: 6/26/2018