Relating to group property and casualty insurance policies, the official text

H.B. No. 3388

AN ACT

relating to group property and casualty insurance policies.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 2171.001, Insurance Code, is amended to

read as follows:

Sec. 2171.001. DEFINITIONS [DEFINITION]. In this chapter:

(1) "Large [, "large] risk" means an insured described

by Section 2301.004.

(2) "Member" means an owner or person with an

insurable interest in a property covered under a policy issued

under Section 2171.002.

SECTION 2. Chapter 2171, Insurance Code, is amended by

adding Sections 2171.006, 2171.007, 2171.008, and 2171.009 to read

as follows:

Sec. 2171.006. DISCLOSURES REQUIRED. (a) During an

application for an insurance policy issued under Section 2171.002,

an insurer must provide to each applicant a written disclosure of

whether the policy has a shared aggregate limit and, if applicable,

the amount of the limit.

(b) Not later than the 30th day after the date an insurer

issues, delivers, or renews an insurance policy under Section

2171.002, the insurer must deliver the following documents to each

member covered by the policy:

(1) a copy of the certificate of insurance; and

(2) a copy of the policy.

Sec. 2171.007. INCIDENTAL CASUALTY AND LIABILITY COVERAGE.

An insurance policy issued under Section 2171.002 may contain

casualty and liability coverage that is incidental to the property

risk covered under the policy.

Sec. 2171.008. APPLICABILITY TO SURPLUS LINES. (a)

Eligible surplus lines insurers are subject to this chapter, other

than Sections 2171.003, 2171.004, and 2171.005.

(b) A surplus lines agent is required to make a diligent

effort, as described by Section 981.004(a)(1), only with respect to

a group policy issued under Section 2171.002 and only on an annual

basis, rather than individually for each group member added during

the policy period.

(c) Notwithstanding Section 981.213, a surplus lines agent

is required to report to and file with the Surplus Lines Stamping

Office of Texas only the group policy issued under Section

2171.002, rather than each certificate or evidence of insurance

issued to the group members.

Sec. 2171.009. RULES. The commissioner may adopt rules to

implement and administer this chapter.

SECTION 3. Subtitle G, Title 10, Insurance Code, is amended

by adding Chapter 2172 to read as follows:

CHAPTER 2172. PERSONAL LINES GROUP PROPERTY AND CASUALTY INSURANCE

Sec. 2172.001. DEFINITION. In this chapter, "permitted

group" means a group of 10 or more certificate holders who have a

preexisting relationship to each other through:

(1) a common trade;

(2) an association;

(3) an affiliation; or

(4) any other relationship that is separate and

distinct from any group insurance arrangement of the group.

Sec. 2172.002. APPLICABILITY OF CHAPTER. (a) This

chapter, other than Section 2172.005, applies to an eligible

surplus lines insurer.

(b) This chapter does not apply to an insurance policy

issued under and in accordance with:

(1) Chapter 2153, 2171, or 2201; or

(2) Section 706.002, 2152.003, or 4055.154.

Sec. 2172.003. GROUP INSURANCE. (a) An insurer may provide

a personal lines property and casualty insurance policy to a

permitted group, on a group basis, provided that:

(1) the issuance of the policy results in economies of

scale in administrative, marketing, or brokerage costs;

(2) the benefits provided under the policy are

reasonable to the premiums charged; and

(3) the policy does not contain a shared aggregate

limit.

(b) An insurance policy that provides group coverage under

this chapter may not include a provision under which the payment of

a certificate holder's claims is limited by the claims or losses

incurred by another certificate holder.

(c) An insurer may not renew an insurance policy that

provides group coverage under this chapter to a group that includes

fewer than 10 certificate holders as part of the group at the time

of renewal.

Sec. 2172.004. APPLICABILITY OF INSURANCE LAWS. (a)

Except as otherwise provided by this chapter, a provision of this

code applies to each certificate issued under a group policy issued

under Section 2172.003 as if the certificate is an insurance policy

and the certificate holder is an insured, if the provision would

apply to the policy if the policy was issued on an individual basis.

(b) Insurance laws applicable under Subsection (a) include:

(1) Section 525.002;

(2) Section 542.003;

(3) Section 542.059;

(4) Section 551.002;

(5) Section 551.107;

(6) Section 558.002;

(7) Section 2002.001;

(8) Section 2002.102;

(9) Section 2251.005; and

(10) Section 2254.003.

Sec. 2172.005. RATE AND FORM FILINGS. An insurer shall

comply with all applicable rate and form filing requirements of

this title for an insurance policy issued under Section 2172.003.

Sec. 2172.006. INCIDENTAL LIABILITY COVERAGE. An insurance

policy issued under Section 2172.003 may contain liability coverage

that is incidental to the property risk covered under the policy.

Sec. 2172.007. SURPLUS LINES REQUIREMENTS. (a) A surplus

lines agent is required to make a diligent effort, as described by

Section 981.004(a)(1), only with respect to a group policy issued

under Section 2172.003 and only on an annual basis, rather than

individually for each group member added during the policy period.

(b) Notwithstanding Section 981.213, a surplus lines agent

is required to report to and file with the Surplus Lines Stamping

Office of Texas only the group policy issued under Section

2172.003, rather than each certificate or evidence of insurance

issued to the group members.

Sec. 2172.008. DISCLOSURES REQUIRED. Not later than the

30th day after the date an insurer issues, delivers, or renews an

insurance policy under Section 2172.003, the insurer must deliver

the following documents to each member covered by the policy:

(1) a copy of the certificate of insurance; and

(2) a copy of the policy.

Sec. 2172.009. GROUP ENROLLER EXEMPTION. Notwithstanding

the requirements of Chapter 4001, a person who secures and

furnishes information for the purpose of enrolling entities or

individuals under an insurance policy issued under Section

2172.003, issues certificates or evidences of insurance under the

policy, or otherwise assists in administering the policy, including

by collecting and remitting premiums, is not required to be

licensed as an insurance agent under Chapter 4001, provided that

the person does not receive a commission with respect to the sale of

the policy or any related enrollments.

Sec. 2172.010. RULES. The commissioner may adopt rules to

implement and administer this chapter.

SECTION 4. The changes in law made by this Act apply only to

an insurance policy delivered, issued for delivery, or renewed on

or after the effective date of this Act.

SECTION 5. 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, 2025.

______________________________
______________________________

President of the Senate
Speaker of the House

I certify that H.B. No. 3388 was passed by the House on May

12, 2025, by the following vote: Yeas 144, Nays 0, 1 present, not

voting.

______________________________

Chief Clerk of the House

I certify that H.B. No. 3388 was passed by the Senate on May

28, 2025, by the following vote: Yeas 31, Nays 0.

______________________________

Secretary of the Senate

APPROVED: _____________________

Date

_____________________

Governor