SECTION 1.1001. Disclosure of Guaranty Fund Nonparticipation

(a) With the exception enumerated in this section, each certificate or evidence of coverage and each insurance policy or contract or application that is delivered or issued for delivery in this state on or after January 1, 1990, and that is not covered by an insurance guaranty fund or other solvency protection arrangement authorized by the Insurance Code shall have the following notice affixed to the first page in no less than 10-point type. DISCLOSURE OF GUARANTY FUND NONPARTICIPATION: In the event the insurer is unable to fulfill its contractual obligation under this policy or contract or application or certificate or evidence of coverage, the policyholder or certificateholder is not protected by an insurance guaranty fund or other solvency protection arrangement.

(b) Mortgage guaranty insurers are required to make the disclosure contained in subsection (a) of this section only on all master policies, but not on individual certificates, delivered or issued for delivery in this state on or after January 1, 1990.

(c) Each surplus lines contract certificate, binder, cover note, or other confirmation of surplus lines insurance, including any application used to bind coverage, shall have affixed to its first page the notice prescribed by the Insurance Code, Article 1.14-2, §7(a), rather than the disclosure contained in subsection (a) of this section.

(d) Instead of the language contained in subsection (a) of this section, insurers issuing variable annuity contracts on or after January 1, 1990, may affix the following notice to the first page of such contracts in no less than 10-point type: "This contract is not covered by an insurance guaranty fund or other solvency protection arrangement because this contract is a contract under which the risk is borne by the policyholder."

(e) Fidelity, surety, and guaranty bonds delivered or issued for delivery in this state on or after September 1, 1991, need not bear the disclosure notice required by subsection (a) of this section.

Source Note: The provisions of this §1.1001 adopted to be effective May 28, 1990, 15 TexReg 2756; amended to be effective July 17, 1992, 17 TexReg 4769.