By Naishtat                                      H.B. No. 879

      75R286 DLF-D                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to a professional liability insurance premium discount for

 1-3     attorneys who provide pro bono legal services.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Subchapter B, Chapter 5, Insurance Code, is

 1-6     amended by adding Article 5.15-5 to read as follows:

 1-7           Art. 5.15-5.  REDUCTION IN PROFESSIONAL LIABILITY INSURANCE

 1-8     PREMIUMS FOR ATTORNEYS WHO PROVIDE PRO BONO LEGAL SERVICES

 1-9           Sec. 1.  DEFINITIONS.  In this article:

1-10                 (1)  "Attorney" means a person who is licensed to

1-11     practice law in this state.

1-12                 (2)  "Department" means the Texas Department of

1-13     Insurance.

1-14                 (3)  "Pro bono legal services" means legal services

1-15     provided without compensation and without expectation of

1-16     compensation either directly to an individual or to a charitable

1-17     public interest organization.

1-18           Sec. 2.  QUALIFICATION FOR DISCOUNT.  An attorney is entitled

1-19     to a premium discount for the attorney's professional liability

1-20     insurance coverage if the attorney meets the criteria stated in

1-21     Section 4 of this article.

1-22           Sec. 3.  AMOUNT OF PREMIUM DISCOUNT.  (a)  The department

1-23     shall approve premium discounts to be used by each insurer on

1-24     premiums to be charged to an attorney covered by this article.

 2-1           (b)  Each insurer shall file with the department proposed

 2-2     premium discounts and any loss and statistical data required by

 2-3     department rule.

 2-4           (c)  The information required to be filed with the department

 2-5     under this section is public information and shall be made

 2-6     available to the public on written request.

 2-7           Sec. 4.  QUALIFICATION FOR PREMIUM DISCOUNT.  (a)  An

 2-8     attorney is entitled to a premium discount under this article if,

 2-9     during the calendar year in which the policy is in effect, the

2-10     attorney provides at least 50 hours of pro bono legal services.

2-11           (b)  Qualification for the premium discount shall be

2-12     determined at the beginning of the policy term, based on the

2-13     attorney's projection of pro bono legal services to be provided.

2-14     At the end of the policy term, the insurer may require an attorney

2-15     to verify the number of hours of pro bono legal services provided

2-16     during the policy term and may charge the attorney the amount of

2-17     the premium discount if the attorney did not provide at least 50

2-18     hours of pro bono legal services during the policy term.

2-19           Sec. 5.  REQUEST FOR PREMIUM DISCOUNT.  An attorney who

2-20     desires a premium discount under this article shall submit to the

2-21     insurer, at the time of application for coverage under a new or

2-22     renewal policy, a written verified application stating that the

2-23     attorney desires a premium discount and qualifies for a premium

2-24     discount under this article.

2-25           Sec. 6.  PROHIBITIONS ON INSURER; SANCTIONS.  (a)  An insurer

2-26     may not cancel or refuse to renew an attorney's professional

2-27     liability insurance coverage solely because the attorney is

 3-1     eligible for a premium discount under this article.

 3-2           (b)  An insurer who violates this article is subject to the

 3-3     sanctions authorized under Section 7, Article 1.10, of this code.

 3-4           Sec. 7.  AUTHORITY OF TEXAS DEPARTMENT OF INSURANCE.  The

 3-5     department shall administer this article and shall adopt rules,

 3-6     forms, endorsements, and procedures as necessary to carry out this

 3-7     article.

 3-8           SECTION 2.  This Act takes effect September 1, 1997, and

 3-9     applies only to a professional liability insurance policy that is

3-10     delivered, issued for delivery, or renewed on or after January 1,

3-11     1998.  A policy that is delivered, issued for delivery, or renewed

3-12     before January 1, 1998, is governed by the law as it existed

3-13     immediately before the effective date of this Act, and that law is

3-14     continued in effect for that purpose.

3-15           SECTION 3.  The importance of this legislation and the

3-16     crowded condition of the calendars in both houses create an

3-17     emergency and an imperative public necessity that the

3-18     constitutional rule requiring bills to be read on three several

3-19     days in each house be suspended, and this rule is hereby suspended.