(Policies for GAP, Residual Value, or Lenders Collateral Protection Blanket Policy)
Updated 12/27/2017 - Return to Index
Indicates new addition since last update.
| REVIEW REQUIREMENTS | REFERENCE | COMMENTS |
|---|---|---|
| FORMS | ||
| Filing Standards - Policy forms and endorsements may not be unjust, unfair, inequitable, misleading or deceptive. | ||
| Prior Approval of Policy Forms and Endorsements | Chapter 2301, Texas Insurance Code | An insurance policy form or endorsement may not be delivered or issued for delivery in this state unless the form has been filed with and approved by the commissioner. Each filing shall be made not later than the 60th day before the date of any use or delivery for use. |
| Large Risk Exemption | §2301.004, Texas Insurance Code | Policy forms for use with large risks are exempt from filing for prior approval if the forms are to be used with a "large risk". "Large Risk" is defined as an insured that has total insured property values of $5 million or more; an insured that has total annual gross revenues of $10 million or more; or an insured that has a total premium of $25,000 or more for property insurance, $25,000 or more for general liability insurance, or $50,000 or more for multiperil insurance. |
| Disapproval of Forms; Withdrawal of Approval | §2301.007, Texas Insurance Code | The commissioner may disapprove a form filed under §2301.006 or withdraw approval of a form if the form (1) violates any law, including a rule adopted under the Texas Insurance Code, or (2) contains a provision or has a title or heading that is unjust or deceptive, encourages misrepresentation, or violates public policy. |
| Applications | ||
| Not Required to be Filed For Approval Unless Being Made a Part of the Policy | ||
| Arbitration | ||
| Arbitration | Chapter 2301, Texas Insurance Code | Language used in arbitration agreements is to be consistent with that of the policy: to wit, don't use the word "parties" when you actually mean insured(s) and insurer. Binding arbitration is okay. Arbitration agreements may be mandatory. Arbitration must be held in Texas for Texas policyholders unless mutually agree on an alternate. In general, arbitration language cannot be unjust, misleading or deceptive. |
| Cancellation & Nonrenewal | ||
| Elected Officials | §§551.151 & 551.152, Texas Insurance Code | An insurer may not cancel or refuse to renew an insurance policy based solely on the fact that the policyholder is an elected official. |
| Insured's Right to Cancel | Chapter 2301, Texas Insurance Code | Insurance company cannot limit or restrict the insured's right to cancel a policy. |
| Voiding Coverage | Chapter 705, Texas Insurance Code | "Void Coverage" language must comply with Chapter 705, Subchapter A, and the misrepresentation must be material. |
| Choice of Law | ||
| Texas Laws Govern Policies | Article 21.42, Texas Insurance Code | Texas must be choice if filing contains choice of law provision. |
| Claims Settlement | ||
| Prompt Payment of Claims | §§542.051 - 542.061, Texas Insurance Code | Prompt payment of claims. |
| Contractual Limitations Period - Suits | §16.004, Civil Practice & Remedies | Legal action, 4 years. |
| Contractual Limitations Period - Suits | §16.070, Civil Practice & Remedies | Except as provided by Subsection (b), a person may not enter a stipulation, contract, or agreement that purports to limit the time in which to bring suit on the stipulation, contract, or agreement to a period shorter than two years. A stipulation, contract, or agreement that establishes a limitations period that is shorter than two years is void in this state. The Texas Third Court of Appeals issued an opinion that acknowledges that the language providing 2 years and 1 day from the date the cause of action first accrues satisfies the statutory requirement of §16.070, Civil Practices and Remedy Code. ( http://www.search.txcourts.gov/Case.aspx?cn=03-08-00408-CV) Case #03-08-00408-CV |
| Notice Requirements | §16.071, Civil Practice & Remedies | A contract stipulation that requires a claimant to give notice of a claim for damages as a condition precedent to the right to sue on the contract is not valid unless the stipulation is reasonable. A stipulation that requires notification within less than 90 days is void. |
| Appraisal | Chapter 2301, Texas Insurance Code | Must specify a number of days, cannot be open-ended and insured must retain their right to bring legal action against insurer, but only if the insurer retains their right to deny the claim (ie., CP 01 42). |
| Providing Certain Claims Information On Request | §§542.101-542.104, Texas Insurance Code; and Commissioner's Bulletin No. B-0043-05 | If a policy form or endorsement contains language addressing the request or furnishing of claims information, it would need to comply with the applicable statute(s). |
| Coverage Issues | ||
| Collateral Protection Insurance | Chapter 2301, Texas Insurance Code | If any coverage is combined with Collateral Protection Insurance, this must be filed as Commercial Multi-Peril. |
| Examination Under Oath | Chapter 2301, Texas Insurance Code §151.001(a)(7), Texas Family Code |
If policy language requires examination under oath, the provision must also state that a parent or guardian may be present during any examination of a minor. |
| Tie-In Sales | Chapter 1806, Texas Insurance Code & 6/1/78 Board Letter | Tie-in sales may violate state law. |
| Disclosure of Guaranty Fund Nonparticipation | ||
| Disclosure of Guaranty Fund Nonparticipation | 28 TAC §1.1001, Texas Administrative Code, Chapter 461, Texas Insurance Code | Disclosure of Guaranty Fund Nonparticipation. NOTE: Texas Property and Casualty Insurance Guaranty Act does not apply to credit insurance, vendors' single-interest insurance, collateral protection insurance, or similar insurance protecting a creditor's interest arising out of a creditor-debtor transaction in accordance with §462.007(b)(4). |
| Fully Earned Premium/Retention of Minimum Earned Premium | ||
| Fully Earned Premium / Retention of Minimum Earned Premium | Chapter 2251 & Chapter 2301, Texas Insurance Code and 28 TAC §5.9320, Texas Administrative Code | TDI will consider approving fully earned premium only for risks with exposure during a period certain, such as special events and weather policies. TDI will consider approving minimum earned premium only if it is a nominal amount. The company must file appropriate rates associated with a minimum or fully earned premium. |
| General Change Endorsements | ||
| May Not Manuscript Coverage Once Approved | Chapter 2301, Texas Insurance Code | Coverage forms are prior approval. Change endorsements may be used to change insured address, etc. but may not be used to change, alter or "clarify" coverage in any way. Company must provide verification that the endorsement will not be used to change, alter, or clarify coverage. Will be considered violation of prior approval laws. |
| Rebating or Discrimination | ||
| Rebating or Discrimination | Chapter 1806, Texas Insurance Code | Inducements prohibited. |
| Toll Free Information | ||
| Notice of Policyholder Complaint Procedures | §521.005, Texas Insurance Code | A brief written notice of suggested procedure to be followed by the policyholder in the event of a dispute concerning a policyholder's claim or premium. |
| Toll-Free Information & Complaint Number | §§521.051 - 521.056, Texas Insurance Code | Toll-Free number for the Texas Department of Insurance. |
| Insurer's Toll-Free Information & Complaint Number | §§521.101 - 521.103, Texas Insurance Code | Insurer's requirement to maintain toll-free number to provide information concerning policies issued by the insurer and to accept complaints from policyholder. Article contains an exception for insurers whose gross initial premium receipts collected in this state are less than $2 million a year or to an insurer with regard to fidelity, surety, or guaranty bonds. |
| Notice of Toll-Free Telephone Numbers and Information & Complaint Procedures | 28 TAC §1.601 & §1.602, Texas Administrative Code and Commissioner’s Order 3952 | To satisfy requirements for §521.005, §§521.051 - 521.056, and §§521.101 - 521.103 noted above. |
| RATES | ||
| Filing Standards | ||
| File & Use | Chapter 2251, Texas Insurance Code | Each insurer shall file with the Commissioner all rates, supplementary rating information, and reasonable and pertinent supporting information for risks written in this state. |
| RULES | ||
| Filing Standards | ||
| File & Use | Chapter 2301 & Chapter 2251, Texas Insurance Code | Manual rules should reflect specific requirements for usage of policy forms, endorsements, and disclosures. |
| Required Documentation | ||
| Refer to Property & Casualty Filings Made Easy | Go to Property & Casualty Filings Made Easy now | |