By Wise H.B. No. 3364 Line and page numbers may not match official copy. Bill not drafted by TLC or Senate E&E. A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to fraudulent statements in the filing of insurance 1-3 claims. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Article 21.55(3)(b), Insurance Code, is amended 1-6 and section 21.55(3)(h) is added to read as follows: 1-7 Sec. 3(b): If the insurer has a reasonable basis to believe 1-8 that the loss results from arson or that the proof of loss contains 1-9 fraudulent information, the insurer shall notify the claimant in 1-10 writing of the acceptance or rejection of the claim not later than 1-11 the 30th day after the date the insurer receives all items, 1-12 statements, and forms required by the insurer. 1-13 Sec. 3(h): Should the proof of loss contain fraudulent 1-14 statements by the claimant amounting to more than 25 percent of the 1-15 monetary value of the claim, then the entire claim shall be 1-16 invalidated. In the event that the claimant is able to show that 1-17 such alleged fraud is a result of an inadvertent mistake or 1-18 negligence, then the claim shall be reinstated. 1-19 SECTION 2. Article 21.55(6), Insurance Code, is amended by 1-20 adding section (b) to read: 1-21 Sec. 6(a) In all cases where a claim is made pursuant to a 1-22 policy of insurance and the insurer liable therefore is not in 2-1 compliance with the requirements of this article, such insurer 2-2 shall be liable to pay the holder of the policy, or the beneficiary 2-3 making a claim under the policy, in addition to the amount of the 2-4 claim, 18 percent per annum of the amount of such claim as damages, 2-5 together with reasonable attorney fees. If suit is filed, such 2-6 attorney fees shall be taxed as part of the costs in the case. 2-7 (b) If the insurer continues to deny the claim under section 2-8 (3)(h) and the claimant prevails through arbitration or litigation, 2-9 then the insurer shall be liable for the penalties contained in 2-10 Section 16(b)(1), (2), and (3) or Article 21.21 of this code. 2-11 SECTION 3. This Act takes effect September 1, 1997. 2-12 SECTION 4. The importance of this legislation and the 2-13 crowded condition of the calendars in both houses create an 2-14 emergency and an imperative public necessity that the 2-15 constitutional rule requiring bills to be read on three several 2-16 days in each house be suspended, and this rule is hereby suspended.