TITLE: Relating to certain binding arbitration provisions in certain insurance and health benefit plan coverage documents.

SUMMARY: Relating to certain binding arbitration provisions in certain insurance and health benefit plan coverage documents.

FULL TEXT:
AN ACT relating to certain binding arbitration provisions in certain insurance and health benefit plan coverage documents. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Subchapter B, Chapter 1271, Insurance Code, is amended by adding Section 1271.058 to read as follows: Sec. 1271.058. PRE-DISPUTE BINDING ARBITRATION CLAUSE PROHIBITED. (a) An evidence of coverage may not contain a provision that requires the enrollee to arbitrate a controversy that arises between the health maintenance organization or other entity described by Section 1271.002(c) and the enrollee. (b) This section does not prohibit an agreement between a health maintenance organization and an enrollee to arbitrate a controversy that exists at the time of the agreement. SECTION 2. Subchapter B, Chapter 1701, Insurance Code, is amended by adding Section 1701.063 to read as follows: Sec. 1701.063. PRE-DISPUTE BINDING ARBITRATION CLAUSE PROHIBITED. (a) An insurer may not use a document described by Section 1701.002 if the document contains a provision that requires the insured to arbitrate a controversy that arises between the insurer and the insured. (b) This section does not prohibit an agreement between an insurer and insured to arbitrate a controversy that exists at the time of the agreement. SECTION 3. Subchapter B, Chapter 2301, Insurance Code, is amended by adding Section 2301.0541 to read as follows: Sec. 2301.0541. PRE-DISPUTE BINDING ARBITRATION CLAUSE PROHIBITED. (a) Except as provided by Subsection (c), an insurer may not use a form for personal automobile or residential property insurance if the form contains a provision that requires the insured to arbitrate a controversy that arises between the insurer and the insured. (b) This section does not prohibit an agreement between an insurer and insured to arbitrate a controversy that exists at the time of the agreement. (c) This section does not apply to a binding arbitration endorsement under Section 2210.554. SECTION 4. Chapter 3501, Insurance Code, is amended by adding Section 3501.004 to read as follows: Sec. 3501.004. PRE-DISPUTE BINDING ARBITRATION CLAUSE PROHIBITED. (a) An insurer may not use a form for credit involuntary unemployment insurance if the form contains a provision that requires the insured to arbitrate a controversy that arises between the insurer and the insured. (b) This section does not prohibit an agreement between an insurer and insured to arbitrate a controversy that exists at the time of the agreement. SECTION 5. Subchapter C, Chapter 3502, Insurance Code, is amended by adding Section 3502.1061 to read as follows: Sec. 3502.1061. PRE-DISPUTE BINDING ARBITRATION CLAUSE PROHIBITED. (a) An insurer may not use a form for mortgage guaranty insurance if the form contains a provision that requires the insured to arbitrate a controversy that arises between the insurer and the insured. (b) This section does not prohibit an agreement between an insurer and insured to arbitrate a controversy that exists at the time of the agreement. SECTION 6. The change in law made by this Act applies only to a policy, contract, certificate, evidence of coverage, rider, or endorsement delivered, issued for delivery, or renewed on or after January 1, 2014. A policy, contract, certificate, evidence of coverage, rider, or endorsement delivered, issued for delivery, or renewed before January 1, 2014, is governed by the law applicable to the policy, contract, certificate, evidence of coverage, rider, or endorsement immediately before the effective date of this Act, and that law is continued in effect for that purpose. SECTION 7. This Act takes effect September 1, 2013.