KMS H.B. 2503 75(R) BILL ANALYSIS INSURANCE H.B. 2503 By: Garcia 4-25-97 Committee Report (Unamended) BACKGROUND 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. PURPOSE HB 2503 would prohibit 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. 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. 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 Subchapter A, Chapter 21, Insurance Code by adding Article 21.07-5. Article 21.07-5. Public Adjusters; Prohibited Conduct. Sec. 1. Definitions. Defines "public adjuster". Sec. 2. Prohibited Conduct Relating to Fire Loss. Prohibits a person from providing services as a public adjuster to another person in relation to damages from a fire subject to a first-party claim under an insurance policy during the fire or within two days after the fire is extinguished. Sec. 3. Penalty. An offense under Section 2 of this article is a Class C misdemeanor. SECTION 2. Effective Date - September 1, 1997. SECTION 3. Emergency Clause.