Inland marine insurance is defined and classified as follows.
(1) Imports (non-regulated). Imports may be insured
under inland marine policies, when such property is not subject to
import risk under marine (ocean) policies, as follows.
(A) Imports on consignment may be covered wherever
the property may be and without restriction as to time, provided the
coverage of the issuing companies includes hazards of transportation.
A shipment on consignment means property consigned and entrusted to
a factor or agent to be held in his or her care, or under his or her
control for sale, for account of another, or for exhibit or trial
or approval or auction, and if not disposed of, to be returned.
(B) Imports not on consignment in such places of storage
as are usually employed by importers, provided the coverage of the
issuing companies includes hazards of transportation. Such policies
may also include the same coverage in respect to property purchased
on cost-insurance-freight terms or spot purchases for inclusion with
or in substitution for bona fide importations. An import, as a proper
subject for inland marine insurance, is deemed to maintain its character
as such so long as the property remains segregated in the original
form or package in such a way that it can be identified and has not
become incorporated and mixed with the general mass of property in
the United States, and will be deemed to have been completed when
such property has been:
(i) sold and delivered by the importer, factor, or
consignee; or
(ii) removed from place of storage as described in
this subparagraph and placed on sale as part of importer's stock in
trade at a point of sales distribution; or
(iii) delivered and accepted for manufacture, processing,
or change in form to premises of the importer or of another used for
any such purposes.
(2) Exports (non-regulated). Inland marine policies
may cover property for export, when such property is not subject to
export risk under marine (ocean) policies, as follows.
(A) Export property may be covered wherever the property
may be without restriction as to time, provided the coverage of the
issuing companies includes hazards of transportation.
(B) Export property is deemed to acquire its character
as such when designated as such or while being prepared for export
and retains that character unless diverted for domestic trade, and
when so diverted, the provisions of these sections respecting domestic
shipment apply; provided, however, these provisions do not apply to
long-established methods of insuring certain commodities, e.g., cotton.
(3) Domestic shipments (non-regulated).
(A) Domestic shipments on consignment for consignor
and/or consignee may be written as follows, provided that in all events
the policy covers while in transit:
(i) on consignment for sale or distribution for account
of consignor, with no restriction as to time in storage or deposit,
while in the custody of others and including return shipments, provided
that in no event will the policy cover on premises owned, leased,
or controlled by the consignor;
(ii) on consignment for sale or distribution for account
of consignee while in the custody of others and including return shipments,
provided that in no event may coverage be granted in excess of 120
days at premises owned, leased, or controlled by consignee; further
provided that if coverage be issued jointly to consignee and consignor
the same limitation of 120 days for coverage at premises owned, leased,
or controlled by consignee will be applicable only with respect to
the interest of the consignee; and
(iii) on consignment for account of consignor and/or
consignee for exhibition, trial, approval, or auction, without restriction
as to time in storage or deposit or on exhibition and while in the
custody of others and including return shipments.
(B) Domestic shipments not on consignment may be written
as follows, provided that in all events the policy covers while in
transit:
(i) at premises of transportation companies or freight
forwarders pending transportation without restriction as to time in
storage or deposit. For purposes of insurance under this clause, a
"freight forwarder" is defined as a warehouse or transportation concern
who takes custody of the property of others for storage and transport
either by schedule or upon call;
(ii) furniture shipment policies without restriction
as to time in storage or deposit to cover only used household furniture
and used furniture and fixtures in course of transit while awaiting
determination or availability of final destination. Such policies
may not cover after delivery to final destination and may not include
merchandise held for sale; and
(iii) in all other situations provided the coverage
may not exceed 120 days at any place of storage or deposit operated
by the assured except coverage at points of sales distribution or
at manufacturing premises of the assured which may be written without
regard to such restriction of time in storage; provided, however,
that in no event will any policy cover the perils of fire and extended
coverage at such points of sales distribution or such manufacturing
premises.
(4) Bridges, tunnels and other instrumentalities of
transportation and communication (non-regulated). No policy may be
issued under this paragraph where the perils of fire and extended
coverage are the only hazards to be covered; provided further that
in all cases policies must exclude buildings, office furniture, and
supplies held in storage therein. Policies covering piers, wharves,
docks, and slips must exclude the hazards of fire and extended coverage.
Other aids to navigation and transportation, including dry docks and
marine railways, may be covered against any risks. Property insured
under this paragraph may include, but is not limited to:
(A) pipelines, including on-line propulsion, regulating,
and other equipment appurtenant to such pipelines, but excluding all
property at manufacturing, producing, refining, converting, treating,
or conditioning plants;
(B) power transmission and telephone and telegraph
lines, excluding all property at generating, converting, or transforming
stations, substations, and exchanges;
(C) radio and television communication equipment in
commercial use as such, including towers and antennae, auxiliary equipment,
electrical operating and control apparatus, and other property directly
used for transmitting and/or receiving; and
(D) outdoor cranes, loading bridges, and similar equipment
used to load, unload, and transport.
(5) Other inland marine risks.
(A) Accounts receivable (filed).
(B) Agricultural machinery and equipment (excluding
dealers) (filed).
(C) Bailee customers policies (non-regulated). Covering
property in the custody of bleacheries, throwsters, fumigatories,
dyers, cleaners, laundries, needle workers, and other bailees for
the purpose of storage or performing work thereon. Such policies may
include coverage while in transit but may not cover bailee's property
at his or her premises.
(D) Block policies. Block policies presently approved
under this section are:
(i) camera dealers (filed);
(ii) equipment dealers (filed);
(iii) furrier's block (non-regulated);
(iv) jeweler's block:
(I) retailers with average inventories of less than
$250,000 (filed); and
(II) all other classes (non-regulated);
(v) musical instrument dealers (filed).
(E) Cold storage locker plant policies (non-regulated).
Covering merchandise of customers such as meats, game, fish, poultry,
fruit, vegetables, and property of a similar nature.
(F) Cotton buyers transit policies (filed).
(G) Domestic bulk liquids policies (non-regulated).
Covering domestic bulk liquids stored in tanks, provided the risks
of fire and extended coverage are excluded therefrom.
(H) Exhibition policies covering property while on
exhibition and in transit to or from such exhibition (non-regulated).
(I) Film floaters, including builders' risk during
the production and coverage on completed negatives and positives and
sound records (filed).
(J) Fine arts policies covering objects of art such
as pictures, bronzes, and antiques, rare manuscripts and books, articles
of virtu, etc.:
(i) private collections (filed);
(ii) dealers (non-regulated); and
(iii) all other commercial risks (filed).
(K) Floor plan policies (filed). Covering property
for sale while in possession of dealers under a floor plan or any
similar plan under which the dealer borrows money from a bank or lending
institution with which to pay the manufacturer, provided:
(i) such merchandise is specifically identifiable as
encumbered to the bank or lending institution;
(ii) the dealer's right to sell or otherwise dispose
of such merchandise is conditioned upon its being released from encumbrance
by the bank or lending institution; and
(iii) that such policies cover the merchandise in transit
and do not extend beyond the termination of the dealer's interest
and may not cover merchandise for which the dealer's collateral is
the stock or inventory as distinguished from merchandise specifically
identifiable as encumbered to the lending institution.
(L) Furriers' customers policies (non-regulated). Policies
under which certificates or receipts are issued by furriers or fur
storers covering specified articles, the property of customers.
(M) Garment contractors floaters (non-regulated).
(N) Government service floaters (non-regulated).
(O) Home freezers and contents against loss resulting
from power failure and/or mechanical breakdown (non-regulated).
(P) Installation risks or builders' risks (non-regulated).
Covering loss to owner, seller, or contractor on account of physical
damage to machinery, equipment, building materials, or building supplies
being used with and during the course of installation, testing, building,
renovating, or repairing of dwelling, commercial, or industrial construction.
Such policies may cover at points or places where work is being performed,
while in transit, and during temporary storage or deposit of property
designated for and awaiting specific installation, building renovating,
or repairing. In no event may any policy cover such properties while
contained in stock of merchandise held for sale to the public by dealers
and such coverage must be limited to installation risks or builders'
risks where perils in addition to fire and extended coverage are to
be insured. If written for account of owner, the coverage must cease
upon completion and acceptance thereof or if written for account of
a seller or contractor, the coverage must terminate when the interest
of the seller or contractor ceases.
(Q) Inland marine insurance classes of coverage, commonly
referred to as consumer credit property insurance and commercial credit
property insurance, set out in clauses (i) and (ii), respectively,
as follows:
(i) Coverage resulting from an open- or closed-end
consumer credit transaction that is a retail installment transaction
(filed). For purposes of this subparagraph, "retail installment transaction"
has the meaning assigned in Finance Code, §345.001. The credit
property insurance addressed in this clause must comply with provisions
in subclauses (I) through (VIII) of this clause.
(I) Policies offering coverage addressed in this clause
must include coverage while in transit and may be extended to include
the interest of a vendee, mortgagor, or lessee, but in no event may
the policy cover the vendor's, mortgagee's, or lessor's interest beyond
the termination of that interest.
(II) All policies or certificates issued under this
clause must include a clear statement to the insured about the method
of payment allocation to all outstanding purchase obligations by reference
to the applicable lending documents to determine how the coverage
will be applied.
(III) Premium calculations for coverage addressed in
this clause involving a closed-end consumer transaction may not be
based on amounts paid for services, meals, entertainment, finance
or service fees, loan interest, delivery charges, or other insurance
premiums (e.g., credit life, credit disability, credit property, or
credit involuntary unemployment insurance coverage).
(IV) An offer to extend coverage for a closed-end consumer
transaction addressed in this clause must include, at the time of
the invitation to contract, the following prominent written disclosure
in no smaller than 10-point boldface type: "This coverage might duplicate
existing coverage if you have a residential property insurance policy.
This coverage ceases when you have fully paid the debt. This coverage
is primary, so it is the first source to be used in the event of a
loss on property it covers. You may cancel this coverage at any time
by calling the insurer at the toll-free telephone number provided
to you, or by writing to the insurer. This coverage costs (set out
the total identifiable credit property insurance charge)."
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