| |
| |
|
|
A BILL TO BE ENTITLED
|
|
|
AN ACT
|
|
|
relating to certain insurance practices with respect to repair of |
|
|
motor vehicles. |
|
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
|
SECTION 1. Subchapter G, Chapter 1952, Insurance Code, is |
|
|
amended by adding Section 1952.300 to read as follows: |
|
|
Sec. 1952.300. DEFINITIONS. (a) In this subchapter: |
|
|
(1) "Estimating system" means an automobile collision |
|
|
damage estimating system that is generally accepted by the |
|
|
automobile repair industry for use in writing an automobile repair |
|
|
estimate. |
|
|
(2) "Repair person or facility" does not include a |
|
|
person who exclusively provides automobile glass replacement, |
|
|
glass repair services, or glass products. |
|
|
(b) For purposes of enforcement of this subchapter: |
|
|
(1) "Prevailing rate" means the rate identified by a |
|
|
rate survey that is: |
|
|
(A) conducted by a third party; |
|
|
(B) designed to be transparent and unbiased; and |
|
|
(C) based on the posted retail labor rates and |
|
|
not direct repair program shop rates that operate under a contract |
|
|
with an insurer. |
|
|
(2) "Reasonable and necessary amount" means the amount |
|
|
determined by the original equipment manufacturer's manufacturer |
|
|
and estimating systems required to repair a vehicle to the |
|
|
condition before the covered damage to the vehicle occurred. |
|
|
SECTION 2. Section 1952.301, Insurance Code, is amended to |
|
|
read as follows: |
|
|
Sec. 1952.301. LIMITATION ON PARTS, PRODUCTS, OR REPAIR |
|
|
PERSONS OR FACILITIES PROHIBITED. (a) Except as provided by rules |
|
|
adopted by the commissioner, under an automobile insurance policy |
|
|
that is delivered, issued for delivery, or renewed in this state, an |
|
|
insurer may not directly or indirectly limit the insurer's coverage |
|
|
under a policy covering damage to a motor vehicle by[: |
|
|
[(1)] specifying the brand, type, kind, age, vendor, |
|
|
supplier, or condition of parts or products that may be used to |
|
|
repair the vehicle. [; or] |
|
|
(a-1) An insurer described by Subsection (a) may not require |
|
|
that: |
|
|
(1) a vehicle be repaired with a part or product on the |
|
|
basis that the part or product is the least expensive part or |
|
|
product available; or |
|
|
(2) the beneficiary of a policy purchase any part or |
|
|
product from any vendor or supplier, including an out-of-state |
|
|
vendor or supplier, on the basis that the part or product is the |
|
|
least expensive part or product available. |
|
|
(a-2) An insurer described by Subsection (a) may not |
|
|
consider a specified part or product for the repair of a motor |
|
|
vehicle to be of like kind and quality as an original equipment |
|
|
manufacturer part or product for any purpose unless the insurer or |
|
|
the manufacturer of the specified part or product has conclusively |
|
|
demonstrated that the specified part or product: |
|
|
(1) meets the fit, finish, and quality criteria |
|
|
established for the part or product by the original equipment |
|
|
manufacturer of the part or product; |
|
|
(2) is the same weight and metal hardness established |
|
|
for the part or product by the original equipment manufacturer of |
|
|
the part or product; and |
|
|
(3) has been tested using the same crash and safety |
|
|
test criteria used by the original equipment manufacturer of the |
|
|
part or product. |
|
|
(a-3) Under an automobile insurance policy that is |
|
|
delivered, issued for delivery, or renewed in this state, an |
|
|
insurer described by Subsection (a), an employee or agent of the |
|
|
insurer, an insurance adjuster, or an entity that employs an |
|
|
insurance adjuster may not directly or indirectly limit the |
|
|
insurer's coverage under a policy covering damage to a motor |
|
|
vehicle by: |
|
|
(1) [(2)] limiting the beneficiary of the policy from |
|
|
selecting a repair person or facility to repair damage to the |
|
|
vehicle to the vehicle's condition before the damage occurred in |
|
|
order for the beneficiary to obtain the repair without owing any |
|
|
out-of-pocket cost other than the deductible; |
|
|
(2) intimidating, coercing, or threatening the |
|
|
beneficiary to induce the beneficiary to use a particular repair |
|
|
person or facility; or |
|
|
(3) offering an incentive or inducement, other than a |
|
|
warranty issued by a repair person or facility, for the beneficiary |
|
|
to use a particular repair person or facility. |
|
|
(b) In settling a liability claim by a third party against |
|
|
an insured for property damage claimed by the third party, an |
|
|
insurer, an employee or agent of an insurer, an insurance adjuster, |
|
|
or an entity that employs an insurance adjuster may not: |
|
|
(1) require the third-party claimant to have repairs |
|
|
made by a particular repair person or facility; |
|
|
(2) require the third-party claimant [or] to use a |
|
|
particular brand, type, kind, age, vendor, supplier, or condition |
|
|
of parts or products to repair damage to the vehicle to the |
|
|
vehicle's condition before the damage occurred; |
|
|
(3) intimidate, coerce, or threaten the third-party |
|
|
claimant to induce the claimant to use a particular repair person or |
|
|
facility; or |
|
|
(4) offer an incentive or inducement, other than a |
|
|
warranty issued by a repair person or facility, for the third-party |
|
|
claimant to use a particular repair person or facility. |
|
|
SECTION 3. Section 1952.302, Insurance Code, is amended to |
|
|
read as follows: |
|
|
Sec. 1952.302. PROHIBITED ACTS IN CONNECTION WITH REPAIR OF |
|
|
MOTOR VEHICLE. (a) In connection with the repair of damage to a |
|
|
motor vehicle covered under an automobile insurance policy, an |
|
|
insurer, an employee or agent of an insurer, an insurance adjuster, |
|
|
or an entity that employs an insurance adjuster may not: |
|
|
(1) solicit or accept a referral fee or gratuity in |
|
|
exchange for referring a beneficiary or third-party claimant to a |
|
|
repair person or facility to repair the damage; |
|
|
(2) state or suggest, either orally or in writing, to a |
|
|
beneficiary that the beneficiary must use a specific repair person |
|
|
or facility or a repair person or facility identified on a preferred |
|
|
list compiled by an insurer for the damage repair or parts |
|
|
replacement to be covered by the policy; [or] |
|
|
(3) restrict the right of a beneficiary or third-party |
|
|
claimant to choose a repair person or facility by requiring the |
|
|
beneficiary or third-party claimant to travel a [an unreasonable] |
|
|
distance considered inconvenient by a beneficiary or third-party |
|
|
claimant to repair the damage; |
|
|
(4) offer, communicate, or suggest in any manner that |
|
|
a particular repair person or facility will provide faster repair |
|
|
times, faster service, or more efficient claims handling than |
|
|
another repair person or facility; or |
|
|
(5) disregard a repair operation or cost identified by |
|
|
an estimating system, including the system's procedural pages and |
|
|
any repair, process, or procedure recommended by the original |
|
|
equipment manufacturer of a part or product. |
|
|
(b) Notwithstanding Subsection (a)(5), a motor vehicle |
|
|
covered under an automobile insurance policy may be repaired with a |
|
|
part or product that is of like kind and quality as an original |
|
|
equipment manufacturer part or product as authorized by Section |
|
|
1952.301(a-2). |
|
|
SECTION 4. The change in law made by this Act applies only |
|
|
to an insurance policy that is delivered, issued for delivery, or |
|
|
renewed on or after January 1, 2022. A policy delivered, issued for |
|
|
delivery, or renewed before that date is governed by the law as it |
|
|
existed immediately before the effective date of this Act, and that |
|
|
law is continued in effect for that purpose. |
|
|
SECTION 5. This Act takes effect September 1, 2021. |