Enrolled Bill Summary

            Senate Bill 1654 amends provisions of the Insurance Code relating to the provision of defense counsel to insureds by liability insurers. The bill prohibits an insurer that issues certain liability insurance policies from submitting to a defense counsel a litigation-management guideline that requires or suggests that a defense attorney perform an activity that interferes with the attorney's independence, loyalty to the insured, or attorney-client relationship with the insured, or that would result in a waiver of any privilege of the insured. An insurer that refuses to pay a defense counsel's fee or expenses based on such a litigation-management guideline is liable to the counsel and the insured for the reasonable value of any unpaid legal services or expenses. The bill provides that an insurer that violates the prohibition is liable for a civil penalty, authorizes an insured to bring an action to recover actual damages and obtain injunctive relief, and authorizes a court to award attorney's fees to a person who recovers damages or obtains injunctive relief.