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.