1. (a) A reimbursement insurance policy that a provider uses to comply with Section 1304.151(a)(1) must state that:

   1. (1) the insurer that issued the policy shall:

      1. (A) reimburse or pay on behalf of the provider any covered amount the provider is legally obligated to pay; or
      2. (B) provide the service that the provider is legally obligated to perform according to the provider's contractual obligations under the insured service contract; and
   2. (2) if the covered service is not provided to a service contract holder not later than the 60th day after the date of proof of loss, the insurer shall pay the covered amount directly to the service contract holder or provide the required service.
2. (b) The insurer may not cancel the policy until the insurer delivers to the provider a written notice of cancellation that complies with the notice requirements prescribed by Articles 21.49-2A and 21.49-2B, Insurance Code, for cancellation of an insurance policy under those articles. The provider shall forward a copy of the cancellation notice to the executive director not later than the 15th business day after the date the notice is delivered to the provider. Cancellation of the policy does not reduce the insurer's responsibility for a service contract issued by the provider and insured under the policy before the date of the cancellation.
3. (c) A provider is considered the agent of an insurer that issues a reimbursement insurance policy for purposes of obligating the insurer to the service contract holder in accordance with the service contract and this chapter.
4. (d) This chapter does not prevent or limit the right of the insurer to seek indemnification or subrogation against a provider for any amount the insurer pays or is obligated to pay to a service contract holder on behalf of the provider.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 3, eff. June 1, 2003.

Amended by Acts 2003, 78th Leg., ch. 816, Sec. 26.041, eff. Sept. 1, 2003;

Acts 2003, 78th Leg., ch. 1276, Sec. 14A.345, eff. Sept. 1, 2003.

Acts 2005, 79th Leg., Ch. 728 (H.B. 2018), Sec. 11.150, eff. September 1, 2005.