By:  Puente                                            H.B. No. 108
       73R1472 DLF-F
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to release of claims against certain insurers by
    1-3  endorsement of a negotiable instrument.
    1-4        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-5        SECTION 1.  Subchapter B, Chapter 21, Insurance Code, is
    1-6  amended by adding Article 21.21-6 to read as follows:
    1-7        Art. 21.21-6.  RELEASE OF CLAIMS BY ENDORSEMENT OF NEGOTIABLE
    1-8  INSTRUMENT.  (a)  Except as provided by Subsection (d) of this
    1-9  article, this article applies to any insurer authorized to do
   1-10  business as an insurance company or to provide insurance in this
   1-11  state, including:
   1-12              (1)  a capital stock company;
   1-13              (2)  a mutual company;
   1-14              (3)  a fraternal benefit society;
   1-15              (4)  a local mutual aid association;
   1-16              (5)  a statewide mutual assessment company;
   1-17              (6)  a county mutual insurance company;
   1-18              (7)  a Lloyd's plan company;
   1-19              (8)  a reciprocal or interinsurance exchange;
   1-20              (9)  a stipulated premium insurance company;
   1-21              (10)  a farm mutual insurance company;
   1-22              (11)  a risk retention group; and
   1-23              (12)  a surplus lines carrier.
   1-24        (b)  An insurer may not issue a negotiable instrument that
    2-1  requires the person endorsing the instrument to release the right
    2-2  to pursue a claim or cause of action against the insurer or an
    2-3  insured.
    2-4        (c)  Language in a negotiable instrument issued by an insurer
    2-5  that purports to release the right to pursue a claim or cause of
    2-6  action against the insurer or an insured is void.
    2-7        (d)  This article does not apply to a negotiable instrument
    2-8  issued under:
    2-9              (1)  an individual or group policy of accident and
   2-10  sickness insurance, including a policy written by a company subject
   2-11  to Chapter 20 of this code and an evidence of coverage written by a
   2-12  health maintenance organization subject to the Texas Health
   2-13  Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
   2-14  Code); or
   2-15              (2)  a title insurance policy subject to Chapter 9 of
   2-16  this code.
   2-17        SECTION 2.  This Act applies only to a negotiable instrument
   2-18  issued on or after the effective date of this Act.  A negotiable
   2-19  instrument issued before the effective date of this Act is governed
   2-20  by the law as it existed immediately before the effective date of
   2-21  this Act and that law is continued in effect for that purpose.
   2-22        SECTION 3.  The importance of this legislation and the
   2-23  crowded condition of the calendars in both houses create an
   2-24  emergency and an imperative public necessity that the
   2-25  constitutional rule requiring bills to be read on three several
   2-26  days in each house be suspended, and this rule is hereby suspended,
   2-27  and that this Act take effect and be in force from and after its
    3-1  passage, and it is so enacted.