BILL ANALYSIS S.B. 598 By: Ratliff (Driver) 05-10-95 Committee Report (Unamended) BACKGROUND Current law states that if an insurer delays payment of a claim for a period exceeding the time limit provided, then the insurer shall pay 18 percent interest on a claim and attorney fees as damage. However, this section has been interpreted to mean that the insurer must bring suit against the insurance company in order to receive the interest. Many other states have statutes which provide for automatic payment of interest in cases of life insurance benefits. PURPOSE As proposed, S.B. 598 requires attorney fees to be taxed as part of the costs in a case where a claim is made pursuant to a policy of insurance and the insurer liable is not in compliance with certain requirements. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 6, Article 21.55, Insurance Code, to require attorney fees to be taxed, if suit is filed, as part of the costs in a case where a claim is made pursuant to a policy of insurance and the insurer liable is not in compliance with requirements of this article. Deletes language requiring the insurer to be liable to pay reasonable attorney fees as may be determined by the trier of fact. SECTION 2. Effective date: September 1, 1995. SECTION 3. Emergency clause. SUMMARY OF COMMITTEE ACTION In accordance with House rules, S.B. 598 was heard in a public hearing on May 10, 1995. The Chair laid out S.B. 598 and recognized Representative Averitt who moved the Committee report S.B. 598 as engrossed to the full House with the recommendation that it do pass, be printed, and be sent to the Committee on Local and Consent. Representative De La Garza seconded the motion and the motion prevailed by the following vote: AYES: (7); NAYES: (0); PNV: (0); ABSENT: (2).