BILL ANALYSIS

Senate Research Center	C.S.H.B. 4194
88R30343 CJD-F	By: Perez et al. (Schwertner)
	Business & Commerce
	5/15/2023
	Committee Report (Substituted)

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

C.S.H.B. 4194 requires insurers to include appraisal for personal home and auto policies written in this state. Access to appraisal in residential and personal auto policies has long been the status quo but without clear requirements in statute, state regulators lack the clear authority to require access to appraisal in certain personal insurance policies filed with the Texas Department of Insurance (TDI).

The Office of Public Insurance Counsel (OPIC) and TDI have recommended the legislature take action to address a policyholder's right to appraisal to resolve disputes with the insurer over the amount of loss.

C.S.H.B. 4194 amends current law relating to an appraisal process for disputed losses under personal automobile or residential property insurance policies.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Subtitle A, Title 10, Insurance Code, by adding Chapter 1813, as follows:

CHAPTER 1813. APPRAISAL OF DISPUTED LOSSES

Sec. 1813.001. APPLICABILITY OF CHAPTER. (a) Provides that this chapter applies only to a personal automobile or residential property insurance policy delivered, issued for delivery, or renewed in this state by an insurer, including:

(1) a capital stock insurance company;

(2) a mutual insurance company;

(3) a county mutual insurance company;

(4) a Lloyd's plan;

(5) a reciprocal or interinsurance exchange;

(6) a farm mutual insurance company;

(7) an eligible surplus lines insurer if this state is the insured's home state as defined by Section 981.002 (Definitions); and

(8) the FAIR Plan Association.

(b) Provides that this chapter does not apply to:

(1) an insurance policy delivered, issued for delivery, or renewed by the Texas Windstorm Insurance Association; or

(2) a commercial insurance policy.

Sec. 1813.002. RULES. Authorizes the commissioner of insurance (commissioner) to adopt rules necessary to implement this chapter.

Sec. 1813.003. REQUIRED POLICY PROVISION: APPRAISAL PROCESS. (a) Requires that an insurance policy described by Section 1813.001(a) contain an appraisal provision that complies with this chapter.

(b) Provides that the appraisal provision required by this chapter is intended to provide a type of dispute resolution process solely to determine the amount of loss when that amount is in dispute between the policyholder and the insurer.

Sec. 1813.004. EFFECT OF APPRAISAL. Provides that an appraisal under the provision required by this chapter does not affect any applicable policy terms.

SECTION 2. Makes application of Chapter 1813, Insurance Code, as added by this Act, prospective to January 1, 2024.

SECTION 3. Effective date: September 1, 2023.