BILL ANALYSIS C.S.S.B. 598 By: Ratliff Economic Development 04-21-95 Committee Report (Substituted) 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, C.S.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 grant any additional rulemaking authority to a state officer, institution, or agency. 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.