H.B. No. 1487
1-1 AN ACT
1-2 relating to the investigation, prosecution, and punishment of the
1-3 offense of insurance fraud.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Title 7, Penal Code, is amended by adding Chapter
1-6 35 to read as follows:
1-7 CHAPTER 35. INSURANCE FRAUD
1-8 Sec. 35.01. DEFINITIONS. In this chapter:
1-9 (1) "Health care goods" means a tangible product,
1-10 device, medicine, or other object provided in conjunction with a
1-11 health care service.
1-12 (2) "Health care provider" means a person who renders
1-13 health care services or an agent or employee of an organization
1-14 that renders or provides a facility and means to render health care
1-15 services. The term includes a physician, surgeon, person who may
1-16 be selected by an insured or a beneficiary under Article 21.52,
1-17 Insurance Code, and person defined as a provider of health care
1-18 under Section 2.05(d)(1), Medical Practice Act (Article 4495b,
1-19 Vernon's Texas Civil Statutes).
1-20 (3) "Health care service" means a service that is
1-21 intended to improve or maintain the physical or mental condition of
1-22 an individual and that is rendered, directed, or supervised by a
1-23 health care provider.
2-1 (4) "Insurer" means a person who engages in the
2-2 business of insurance in this state, including:
2-3 (A) an insurer that is not authorized to do
2-4 business in this state;
2-5 (B) a health maintenance organization;
2-6 (C) a group hospital service corporation
2-7 regulated under Chapter 20, Insurance Code; and
2-8 (D) any person who self-insures and provides
2-9 health care benefits to the person's employees.
2-10 (5) "Statement" means an oral or written communication
2-11 or a record or documented representation of fact evidencing a loss,
2-12 injury, or expense. The term includes computer-generated
2-13 information.
2-14 Sec. 35.02. INSURANCE FRAUD. (a) A person commits an
2-15 offense if, with intent to defraud or deceive an insurer, the
2-16 person causes to be prepared or presents to an insurer in support
2-17 of a claim for payment under a health or property and casualty
2-18 insurance policy a statement that the person knows contains false
2-19 or misleading information concerning a matter that is material to
2-20 the claim, and the matter affects a person's right to a payment or
2-21 the amount of payment to which a person is entitled.
2-22 (b) A person commits an offense if, with intent to defraud
2-23 or deceive an insurer, the person solicits, offers, pays, or
2-24 receives a benefit in connection with the furnishing of health care
2-25 goods or services for which a claim for payment is submitted under
3-1 a health or property and casualty insurance policy.
3-2 (c) For purposes of Subsection (a), information concerning a
3-3 matter that is material to a claim for payment under an insurance
3-4 policy includes information concerning:
3-5 (1) whether health care goods or services were
3-6 provided;
3-7 (2) whether health care goods or services were
3-8 medically necessary under professionally accepted standards;
3-9 (3) the nature of the health care goods or services
3-10 provided;
3-11 (4) the date on which health care goods or services
3-12 were provided;
3-13 (5) the medical record of goods or services provided;
3-14 (6) the condition treated or diagnosis made;
3-15 (7) the identity and applicable license of the
3-16 provider or the recipient of health care goods or services;
3-17 (8) whether property was damaged or lost in the manner
3-18 and under the circumstances described in a statement related to a
3-19 claim for insurance payment; or
3-20 (9) whether any other claim for insurance payment has
3-21 been communicated to any other insurer concerning property damage
3-22 or loss to the same property.
3-23 (d) An offense under this section is:
3-24 (1) a Class C misdemeanor if the value of the claim is
3-25 less than $20;
4-1 (2) a Class B misdemeanor if the value of the claim is
4-2 $20 or more but less than $500;
4-3 (3) a Class A misdemeanor if the value of the claim is
4-4 $500 or more but less than $1,500;
4-5 (4) a state jail felony if the value of the claim is
4-6 $1,500 or more but less than $20,000;
4-7 (5) a felony of the third degree if the value of the
4-8 claim is $20,000 or more but less than $100,000;
4-9 (6) a felony of the second degree if the value of the
4-10 claim is $100,000 or more but less than $200,000; or
4-11 (7) a felony of the first degree if:
4-12 (A) the value of the claim is $200,000 or more;
4-13 or
4-14 (B) the value of the claim is less than $200,000
4-15 and the commission of the offense placed a person at risk of death
4-16 or serious bodily injury.
4-17 Sec. 35.03. AGGREGATION AND MULTIPLE OFFENSES. (a) When
4-18 separate claims in violation of this chapter are communicated to an
4-19 insurer or group of insurers pursuant to one scheme or continuing
4-20 course of conduct, the conduct may be considered as one offense and
4-21 the value of the claims aggregated in determining the
4-22 classification of the offense. If claims are aggregated under this
4-23 subsection, Subsection (b) shall not apply.
4-24 (b) When three or more separate claims in violation of this
4-25 chapter are communicated to an insurer or group of insurers
5-1 pursuant to one scheme or continuing course of conduct, the conduct
5-2 may be considered as one offense, and the classification of the
5-3 offense shall be one category higher than the most serious single
5-4 offense proven from the separate claims, except that if the most
5-5 serious offense is a felony of the first degree, the offense is a
5-6 felony of the first degree. This subsection shall not be applied
5-7 if claims are aggregated under Subsection (a).
5-8 Sec. 35.04. JURISDICTION OF ATTORNEY GENERAL. (a) The
5-9 attorney general may offer to an attorney representing the state in
5-10 the prosecution of an offense under Section 35.02 the
5-11 investigative, technical, and litigation assistance of the attorney
5-12 general's office.
5-13 (b) The attorney general may prosecute or assist in the
5-14 prosecution of an offense under Section 35.02 on the request of the
5-15 attorney representing the state described by Subsection (a).
5-16 SECTION 2. Article 2.12, Code of Criminal Procedure, is
5-17 amended to read as follows:
5-18 Art. 2.12. Who are peace officers. The following are peace
5-19 officers:
5-20 (1) sheriffs and their deputies;
5-21 (2) constables and deputy constables;
5-22 (3) marshals or police officers of an incorporated
5-23 city, town, or village;
5-24 (4) rangers and officers commissioned by the Public
5-25 Safety Commission and the Director of the Department of Public
6-1 Safety;
6-2 (5) investigators of the district attorneys', criminal
6-3 district attorneys', and county attorneys' offices;
6-4 (6) law enforcement agents of the Texas Alcoholic
6-5 Beverage Commission;
6-6 (7) each member of an arson investigating unit
6-7 commissioned by a city, a county, or the state;
6-8 (8) officers commissioned under Section 21.483,
6-9 Education Code, or Subchapter E, Chapter 51, Education Code;
6-10 (9) officers commissioned by the General Services
6-11 Commission;
6-12 (10) law enforcement officers commissioned by the
6-13 Parks and Wildlife Commission;
6-14 (11) airport police officers commissioned by a city
6-15 with a population of more than one million, according to the most
6-16 recent federal census, that operates an airport that serves
6-17 commercial air carriers;
6-18 (12) airport security personnel commissioned as peace
6-19 officers by the governing body of any political subdivision of this
6-20 state, other than a city described by Subdivision (11), that
6-21 operates an airport that serves commercial air carriers;
6-22 (13) municipal park and recreational patrolmen and
6-23 security officers;
6-24 (14) security officers commissioned as peace officers
6-25 by the State Treasurer;
7-1 (15) officers commissioned by a water control and
7-2 improvement district under Section 51.132, Water Code;
7-3 (16) officers commissioned by a board of trustees
7-4 under Chapter 341, Acts of the 57th Legislature, Regular Session,
7-5 1961 (Article 1187f, Vernon's Texas Civil Statutes);
7-6 (17) investigators commissioned by the Texas State
7-7 Board of Medical Examiners;
7-8 (18) officers commissioned by the board of managers of
7-9 the Dallas County Hospital District, the Tarrant County Hospital
7-10 District, or the Bexar County Hospital District under Section
7-11 281.057, Health and Safety Code;
7-12 (19) county park rangers commissioned under Subchapter
7-13 E, Chapter 351, Local Government Code;
7-14 (20) investigators employed by the Texas Racing
7-15 Commission;
7-16 (21) officers commissioned by the State Board of
7-17 Pharmacy;
7-18 (22) officers commissioned by the governing body of a
7-19 metropolitan rapid transit authority under Section 13, Chapter 141,
7-20 Acts of the 63rd Legislature, Regular Session, 1973 (Article 1118x,
7-21 Vernon's Texas Civil Statutes), or by a regional transportation
7-22 authority under Section 10, Chapter 683, Acts of the 66th
7-23 Legislature, Regular Session, 1979 (Article 1118y, Vernon's Texas
7-24 Civil Statutes);
7-25 (23) officers commissioned under the Texas High-Speed
8-1 Rail Act (Article 6674v.2, Revised Statutes) <by the Texas
8-2 High-Speed Rail Authority>;
8-3 (24) investigators commissioned by the attorney
8-4 general under Section 402.009, Government Code;
8-5 (25) security officers and investigators commissioned
8-6 as peace officers under Chapter 466, Government Code; <and>
8-7 (26) an officer employed by the Texas Department of
8-8 Health under Section 431.2471, Health and Safety Code;<.>
8-9 (27) <(26)> officers appointed by an appellate court
8-10 under Subchapter F, Chapter 53, Government Code;<.>
8-11 (28) <(26)> officers commissioned by the state fire
8-12 marshal under Chapter 417, Government Code; and
8-13 (29) an investigator commissioned by the commissioner
8-14 of insurance under Article 1.10D, Insurance Code.
8-15 SECTION 3. Article 59.01(2), Code of Criminal Procedure, as
8-16 amended by Section 5, Chapter 761, and Section 1, Chapter 828, Acts
8-17 of the 73rd Legislature, Regular Session, 1993, is amended to read
8-18 as follows:
8-19 (2) "Contraband" means property of any nature,
8-20 including real, personal, tangible, or intangible, that is:
8-21 (A) used in the commission of:
8-22 (i) any first or second degree felony
8-23 under the Penal Code;
8-24 (ii) any felony under Chapters 29, 30, 31,
8-25 <or> 32, or 35, Penal Code; or
9-1 (iii) any felony under The Securities Act
9-2 (Article 581-1 et seq., Vernon's Texas Civil Statutes);
9-3 (B) used or intended to be used in the
9-4 commission of:
9-5 (i) any felony under Chapter 481, Health
9-6 and Safety Code (Texas Controlled Substances Act);
9-7 (ii) any felony under Chapter 483, Health
9-8 and Safety Code;
9-9 (iii) a felony under Article 350, Revised
9-10 Statutes; <or>
9-11 (iv) any felony under Chapter 34, Penal
9-12 Code; <or>
9-13 (v) <(iv)> a Class A misdemeanor under
9-14 Subchapter B, Chapter 365, Health and Safety Code, if the defendant
9-15 has been previously convicted twice of an offense under that
9-16 subchapter; or
9-17 (vi) <(v)> any felony under The Sale of
9-18 Checks Act (Article 489d, Vernon's Texas Civil Statutes);
9-19 (C) the proceeds gained from the commission of a
9-20 felony listed in Paragraph (A) or (B) of this subdivision or a
9-21 crime of violence; or
9-22 (D) acquired with proceeds gained from the
9-23 commission of a felony listed in Paragraph (A) or (B) of this
9-24 subdivision or a crime of violence.
9-25 SECTION 4. Section 2, Article 1.10D, Insurance Code, is
10-1 amended by amending Subsections (b) and (e) and adding Subsections
10-2 (f) and (g) to read as follows:
10-3 (b) If the commissioner has reason to believe that a person
10-4 has engaged in or is engaging in an act or practice that may
10-5 constitute either a fraudulent insurance act, as defined by Section
10-6 1(a)(2) of this article, or insurance fraud under Section 35.02(a),
10-7 Penal Code, or has committed, or is about to commit, a fraudulent
10-8 insurance act or insurance fraud, the commissioner may make any
10-9 investigation necessary inside or outside this state to determine
10-10 whether or not the act has occurred, or to aid in the enforcement
10-11 of the laws relating to fraudulent insurance acts or insurance
10-12 fraud. <In regard to allegations of fraud on the part of a
10-13 policyholder or claimant, the commissioner's authority to initiate
10-14 investigations under this subsection is limited to those instances
10-15 in which there is evidence showing a pattern of fraudulent
10-16 activity.>
10-17 (e) This section does not prohibit or limit the authority of
10-18 an insurer to conduct its own independent investigation into a
10-19 suspected case of insurance claim fraud. Before an insurer may
10-20 request the commissioner to conduct an investigation of suspected
10-21 claim fraud, the insurer must have completed its investigation and
10-22 drafted a report of its findings. The insurer shall submit the
10-23 report and the related investigation file to the commissioner as
10-24 part of the insurer's request for investigation by the
10-25 commissioner. <In regard to an insurer's request for investigation
11-1 under this subsection, the commissioner's authority to undertake an
11-2 investigation against a policyholder or claimant is limited to
11-3 those instances in which the insurer's investigation reports show a
11-4 pattern of fraudulent activity.>
11-5 (f) The commissioner may employ investigators as the
11-6 commissioner considers necessary to enforce this article and may
11-7 commission those investigators as peace officers. An investigator
11-8 employed by the department as a peace officer must meet the
11-9 requirements for peace officers imposed under Chapter 415,
11-10 Government Code. If the commissioner elects to commission peace
11-11 officers, the commissioner shall appoint a chief investigator who
11-12 is commissioned as a peace officer and who is qualified by training
11-13 and experience in law enforcement to supervise, direct, and
11-14 administer the activities of the commissioned investigators.
11-15 (g) An investigator employed by the department may request
11-16 the assistance of local law enforcement officers in conducting an
11-17 investigation authorized by this article.
11-18 SECTION 5. Subsection (d), Section 1B, Texas Motor Vehicle
11-19 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
11-20 Statutes), is amended to read as follows:
11-21 (d) A standard proof of liability insurance form described
11-22 in Subsection (a)(2) <(A)(2)> of this section, or a document that
11-23 is an unauthorized version of the form, is a governmental record
11-24 for purposes of Chapter 37, Penal Code. A standard proof of
11-25 liability insurance form is unauthorized for purposes of this
12-1 subsection if it is not issued by an insurer authorized to transact
12-2 motor vehicle liability insurance in this state.
12-3 SECTION 6. (a) The change in law made by Chapter 35, Penal
12-4 Code, as added by this Act, applies only to an offense committed on
12-5 or after the effective date of this Act. For purposes of this
12-6 section, an offense is committed before the effective date of this
12-7 Act if any element of the offense occurs before that date.
12-8 (b) An offense committed before the effective date of this
12-9 Act is governed by the law in effect when the offense was
12-10 committed, and the former law is continued in effect for that
12-11 purpose.
12-12 SECTION 7. This Act takes effect September 1, 1995.
12-13 SECTION 8. The importance of this legislation and the
12-14 crowded condition of the calendars in both houses create an
12-15 emergency and an imperative public necessity that the
12-16 constitutional rule requiring bills to be read on three several
12-17 days in each house be suspended, and this rule is hereby suspended.