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Texas Insurance Code - Not Codified - Article 5.06. Policy Forms And Endorsements

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Art. 5.06. POLICY FORMS AND ENDORSEMENTS.  (1) The Board 
shall adopt a policy form and endorsements for each type of motor 
vehicle insurance subject to this subchapter.  The coverage 
provided by a policy form adopted under this subsection is the 
minimum coverage that may be provided under an insurance policy for 
that type of insurance in this State.  Each policy form must provide 
the coverages mandated under Articles 5.06-1 and 5.06-3 of this 
code, except that the coverages may be rejected by the named insured 
as provided by those articles.
	(2)  Except as provided by Subsections (3) and (4) of this 
article, an insurer may only use a form adopted by the Board under 
this section in writing motor vehicle insurance delivered, issued 
for delivery, or renewed in this State.  A contract or agreement not 
written into the application and policy is void and of no effect and 
in violation of the provisions of this subchapter, and is 
sufficient cause for revocation of license of such insurer to write 
automobile insurance within this State.
	(3)  The Board may approve the use of a policy form adopted by 
a national organization of insurance companies, or similar 
organization, if the form, with any endorsement to the form 
required and approved by the Board, provides coverage equivalent to 
the coverage provided by the form adopted by the Board under 
Subsection (1) of this section.
	(4)  An insurer may use an endorsement to the policy form 
adopted or approved by the Board under this article if the 
endorsement is approved by the Board.

Text of subsec (5) effective until April 1, 2007
	(5)  An insurer, if in compliance with applicable 
requirements and conditions, may issue and deliver a certificate of 
insurance as a substitute for the entire policy of insurance.  The 
certificate of insurance shall make reference to and identify the 
policy form adopted or approved by the Board for which the 
substitution of certificate is made.  The certificate shall be in 
such form as is prescribed by the Board.  The certificate will 
represent the policy of insurance, and when issued, shall be 
evidence that the certificate holder is insured under the 
identified policy form.  The certificate is subject to the same 
limitations, conditions, coverages, selection of options, and 
other provisions of the policy as are provided in the policy, and 
that insurance policy information is to be shown on and adequately 
referenced by the certificate of insurance issued by the insurer to 
the insured.  Reference shall be made in the certificate, or in 
subsequent attachments, to all endorsements to the policy of 
insurance.  The certificate shall be executed in the same manner as 
though a policy were issued.  When the certificate is substituted 
for the policy of insurance by an insurer, the insurer shall 
simultaneously furnish to the insured receiving the certificate an 
"outline of coverages", the form and content of which has been 
approved by the Board.  At the request of an insured at any time, an 
insurer which has substituted a certificate for a policy of 
insurance shall provide a copy of the policy.

Text of subsec (6) effective until April 1, 2007
	(6)  The Board may promulgate such rules as are necessary to 
implement the certificate in lieu of policy provision herein, 
including a rule limiting the application thereof to private 
passenger automobile policies.
	(7)  The Board may not adopt or approve a policy form for 
private passenger automobile insurance or any endorsement to the 
policy if the policy or endorsement is not in plain language.  For 
the purposes of this subsection, a policy or endorsement is written 
in plain language if it achieves the minimum score established by 
the commissioner on the Flesch reading ease test or an equivalent 
test selected by the commissioner, or, at the option of the 
commissioner, if it conforms to the language requirements in a 
National Association of Insurance Commissioners model act relating 
to plain language.  This subsection does not apply to policy 
language that is mandated by state or federal law.
	(8)  The Board may withdraw its approval of a policy or 
endorsement form at any time, after notice and hearing.

Text of subsec (9) effective until April 1, 2007
	(9)  An insurance policy or other document evidencing proof 
of purchase of a personal automobile insurance policy written for a 
term of less than 30 days if the policy premium is computed using a 
time-based rating plan, or written for less than 1,000 miles if the 
policy premium is computed using a mile-based rating plan, may not 
be used to obtain an original or renewal driver's license, an 
automobile registration or license plates, or a motor vehicle 
inspection certificate and must contain a statement as follows:
	"TEXAS LAW PROHIBITS USE OF THIS DOCUMENT TO OBTAIN A MOTOR 
VEHICLE INSPECTION CERTIFICATE, AN ORIGINAL OR RENEWAL DRIVER'S 
LICENSE, OR AN AUTOMOBILE REGISTRATION OR LICENSE PLATES."

Text of subsec (10) effective until April 1, 2007
	(10)  Before accepting any premium or fee for a personal 
automobile insurance policy or binder for a term of less than 30 
days if the policy premium is computed using a time-based rating 
plan, or written for less than 1,000 miles if the policy premium is 
computed using a mile-based rating plan, an agent or insurer must 
make the following written disclosure to the applicant or insured:
	"TEXAS LAW PROHIBITS USE OF THIS POLICY OR BINDER TO OBTAIN A 
MOTOR VEHICLE INSPECTION CERTIFICATE, AN ORIGINAL OR RENEWAL 
DRIVER'S LICENSE, OR AN AUTOMOBILE REGISTRATION OR LICENSE PLATES."

Text of subsec (11) effective until April 1, 2007
	(11)  In this article, the terms "time-based rating plan" and 
"mile-based rating plan" have the meanings assigned by Article 
5.01-4 of this code.
	(12)(a) Notwithstanding Subsections (1)-(10) of this 
article, policy forms and endorsements for automobile insurance in 
this state are regulated under Article 5.13-2 of this code.

Text of subsec (12)(b) effective until April 1, 2007
	(b)  An insurer may continue to use the policy forms and 
endorsements promulgated, approved, or adopted by the commissioner 
under this article before the effective date of S.B. No. 14, Acts of 
the 78th Legislature, Regular Session, 2003, on notification in 
writing to the commissioner that the insurer will continue to use 
the policy forms and endorsements promulgated, approved, or adopted 
by the commissioner under this article.

Acts 1951, 52nd Leg., ch. 491.  Amended by Acts 1981, 67th Leg., p. 
2700, ch. 736, Sec. 1, eff. Jan. 1, 1982.

Amended by Acts 1991, 72nd Leg., ch. 242, Sec. 2.07, eff. Sept. 1, 
1991;  Subsecs. (9), (10) added by Acts 1993, 73rd Leg., ch. 685, 
Sec. 14.04, eff. Sept. 1, 1993;  Subsecs. (9), (10) amended by and 
(11) added by Acts 2001, 77th Leg., ch. 971, Sec. 2, eff. Sept. 1, 
2001;  Subsec. (12) added by Acts 2003, 78th Leg., ch. 206, Sec. 
21.07, eff. June 11, 2003;  Subsecs. (5), (6), (9), (10), and 
(12)(b) are repealed by Acts 2005, 79th Leg., ch. 727, Sec. 18(c), 
eff. April 1, 2007.

Last modified: August 11, 2007