SRC-HRD H.B. 2503 75(R)   BILL ANALYSIS


Senate Research Center   H.B. 2503
By: Garcia (Gallegos)
Economic Development
5-12-97
Engrossed


DIGEST 

Currently, a public adjuster may be defined as a person who represents a
named insured in an insurance policy that covers damage to property, and
directly or indirectly solicits the right to provide advice regarding a
first-party claim for damage to property or solicits the right to prepare
or negotiate such a claim.  There are no existing penalties for
solicitations made, immediately following the incidence of a fire, to
provide services as a public adjuster in relation to insured fire losses.
There are concerns that these kinds of  solicitations have a corrupting
effect on the claim-filing process and increase the opportunities for
insurance fraud.  HB 2503 would address this problem by making such an
action a Class C misdemeanor.               

PURPOSE

As proposed, H.B. 2503 prohibits a person from soliciting, either during a
fire or within two days after a fire is extinguished, the right to provide
services as a public adjuster in relation to fire damages that may be
subject to a first-party claim under an insurance policy.  

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter 21A, Insurance Code, by adding Article 21.07-5,
as follows: 

Art. 21.07-5.  PUBLIC ADJUSTERS; PROHIBITED CONDUCT

Sec. 1.  DEFINITIONS.  Defines "public adjuster."  

Sec. 2.  PROHIBITED CONDUCT RELATING TO FIRE LOSS.  Prohibits a person, in
person, in writing, through an agent, or by telephone, from offering to
provide services as a public adjuster to another person in relation to
damages from a fire that may be subject to a first-party claim under an
insurance policy during the fire and before the second day after the date
on which the fire is extinguished. 

Sec. 3.  PENALTY.  Provides that a person commits a Class C misdemeanor if
the person violates Section 2 of this article.   

SECTION 2. Effective date: September 1, 1997.

SECTION 3. Emergency clause.