By Gray                                         H.B. No. 2700

      75R9123 T                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the administrative review of class action lawsuits.

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

 1-4           SECTION 1.  Amend Article 1.10, Insurance Code by adding the

 1-5     following section:

 1-6                 (21)  Administration of Class Action Proceedings.  (a)

 1-7     If any person plans to file or has filed a cause of action against

 1-8     an insurer, insurers or other holder of a certificate of authority

 1-9     issued by the Department which will seek procedural treatment as a

1-10     class action, that person must give notice to the Commissioner of

1-11     such at the earliest opportunity.  The notice shall include all

1-12     pertinent information concerning the proposed or filed cause of

1-13     action, including identity of the parties, harm alleged and damages

1-14     sought to be recovered.  Failure to give this notice shall preclude

1-15     the maintenance of such cause as a class action proceeding, and the

1-16     court shall dismiss every class action proceeding so affected which

1-17     has not complied with the provisions of this section.

1-18           (b)  It shall be the duty of the Commissioner to review every

1-19     cause of action filed or matter proposed to be filed as a class

1-20     action proceeding in which one or more insurers or other holders of

1-21     a certificate of authority issued by the Department are or are

1-22     proposed to be a defendant.  Pending that review and any

1-23     determination as hereafter provided in (c), a pending cause of

1-24     action shall be abated, and no proposed matter shall be filed.  If

 2-1     the Commissioner commences an administrative action against the

 2-2     affected insurer, insurers or holder of a certificate of authority

 2-3     within one year from the date the Commissioner receives notice from

 2-4     the plaintiff or plaintiffs, the period of review shall continue

 2-5     until the administrative action is finally determined or

 2-6     adjudicated.  Failure to commence an administrative action within

 2-7     one year from such notice shall end the period for review and

 2-8     authorize the commencement or completion of a class action

 2-9     proceeding, still subject, however, to all other requirements

2-10     provided in the Texas Rules of Civil Procedure.  For and during the

2-11     period of review by the Commissioner any applicable statute of

2-12     limitations shall be tolled.

2-13           (c)  If, after review, the Commissioner issues an order

2-14     involving one or more of such insurers or certificate holders which

2-15     results in restitution to the affected insureds, as to such

2-16     insurer, insurers or certificate holder, (i) no type of class

2-17     action lawsuit or proceeding may be filed, or (ii) if a class

2-18     action lawsuit or proceeding was filed prior to being submitted to

2-19     the Commissioner for review, the class action suit shall be

2-20     dismissed by the court without further action or prejudice to the

2-21     refiling of any individual lawsuit concerning the same subject

2-22     matter.

2-23           SECTION 2.  This act takes effect on September 1, 1997, and

2-24     shall apply to all administrative actions initiated by and pending

2-25     before the Department as of that date and thereafter.  It shall

2-26     also apply to every cause of action filed but in which trial has

2-27     not commenced as of that date.

 3-1           SECTION 3.  The importance of this legislation and the

 3-2     crowded condition of the calendars in both houses create an

 3-3     emergency and an imperative public necessity that the

 3-4     constitutional rule requiring bills to be read on three several

 3-5     days in each house be suspended, and this rule is hereby suspended,

 3-6     and that this Act take effect and be in force from and after its

 3-7     passage, and it is so enacted.