CHAPTER 523. MARKET ASSISTANCE PROGRAM FOR RESIDENTIAL PROPERTY INSURANCE
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.