By Lewis of Tarrant                             H.B. No. 1709

      75R6321 SAW-F                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the deadline for payment of certain insurance claims.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Section 3, Article 21.55, Insurance Code, is

 1-5     amended to read as follows:

 1-6           Sec. 3.  ACCEPTANCE OR REJECTION OF CLAIMS.  (a)  Except as

 1-7     provided by Subsection (c) [Subsections (b) and (d)] of this

 1-8     section, an insurer shall notify a claimant in writing of the

 1-9     acceptance or rejection of the claim not later than the 30th [15th]

1-10     business day after the date the insurer receives all items,

1-11     statements, and forms required by the insurer, in order to secure

1-12     final proof of loss.

1-13           (b)  [If the insurer has a reasonable basis to believe that

1-14     the loss results from arson, the insurer shall notify the claimant

1-15     in writing of the acceptance or rejection of the claim not later

1-16     than the 30th day after the date the insurer receives all items,

1-17     statements, and forms required by the insurer.]

1-18           [(c)]  If the insurer rejects the claim, the notice required

1-19     by Subsection [Subsections] (a) [and (b)] of this section must

1-20     state the reasons for the rejection.

1-21           (c) [(d)]  If the insurer is unable to accept or reject the

1-22     claim within the period specified by Subsection (a) [or (b)] of

1-23     this section, the insurer shall notify the claimant, not later than

1-24     the date specified under Subsection (a) [or (b), as applicable].

 2-1     The notice provided under this subsection must give the reasons the

 2-2     insurer needs additional time.

 2-3           (d) [(e)]  Not later than the 45th day after the date an

 2-4     insurer notifies a claimant under Subsection (c) [(d)] of this

 2-5     section, the  insurer shall accept or reject the claim.

 2-6           (e) [(f)]  Except as otherwise provided, if an insurer delays

 2-7     payment of a claim following its receipt of all items, statements,

 2-8     and forms reasonably requested and required, as provided under

 2-9     Section 2 of this article, for a period exceeding the period

2-10     specified in other applicable statutes or, in the absence of any

2-11     other specified period, for more than 60 days, the insurer shall

2-12     pay damages and other items as provided for in Section 6 of this

2-13     article.

2-14           (f) [(g)]  If it is determined as a result of arbitration or

2-15     litigation that a claim received by an insurer is invalid and

2-16     therefore should not be paid by the insurer, the requirements of

2-17     Subsection (e) [(f)] of this section shall not apply in such case.

2-18           SECTION 2.  The change in law made by this Act applies only

2-19     to a claim of which an insurer receives notice on or after the

2-20     effective date of this Act.  A claim of which an insurer receives

2-21     notice before the effective date of this Act is governed by the law

2-22     as it existed immediately before the effective date of this Act,

2-23     and that law is continued in effect for that purpose.

2-24           SECTION 3.  The importance of this legislation and the

2-25     crowded condition of the calendars in both houses create an

2-26     emergency and an imperative public necessity that the

2-27     constitutional rule requiring bills to be read on three several

 3-1     days in each house be suspended, and this rule is hereby suspended,

 3-2     and that this Act take effect and be in force from and after its

 3-3     passage, and it is so enacted.