SRC-JFA S.B. 1106 75(R)   BILL ANALYSIS


Senate Research Center   S.B. 1106
By: Duncan
Economic Development
3-30-97
As Filed


DIGEST 

Currently, insurers are required to bring an action against a potentially
liable third party to recover the deductible on a motor vehicle policy for
a claim made by an insured.  The phrase "bring an action" has been
interpreted by the courts to mean filing a lawsuit.  This bill would
clarify the phrase "bring an action" to include collection efforts,
mediation, arbitration or litigation; and would require insurers to bring
an action within 12 months from the date a claim is made.  
 
PURPOSE

As proposed, S.B. 1106 clarifies the phrase "bring an action" and requires
insurers to bring an action within 12, rather than six, months from the
date a claim is made under Article 21.79E, Insurance Code, relating to an
action for amount of deductible by an insurer.    

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 Article 21.79E, Insurance Code, to provide that this
article applies to any insurer who delivers, issues for delivery, or
renews a private passenger automobile policy of insurance in this state,
rather than a policy of motor vehicle insurance in this state.  Requires
an insurer to bring an action to recover a deductible against a third
party no later than 12, rather than six, months after payment of its
insured's claim or pay the amount of the deductible to the insured if an
insurer is liable to an insured for a claim, and such claim is subject to
a deductible payable by the insured, and a third party may be liable to
the insurer or the insured for the amount of the deductible.  Provides
that Subsection (b) of this article does not apply if, no later than 12
months after the date the claim is paid, rather than made, the insurer
notifies the insured in writing that the insurer does, rather than will,
not intend to pursue further collection actions, rather than bring an
action, against the third party to pursue further collection actions.
Provides that this article is intended to encourage insurers to take
appropriate and necessary steps to collect from third parties or their
insurers.  Defines "bring an action."  Makes conforming and nonsubstantive
changes.  

SECTION 2. Effective date: September 1, 1997.

SECTION 3. Emergency clause.
  Effective date: upon passage.