AN ACT

 1-1     relating to actions for the amount of deductible under personal

 1-2     automobile insurance policies.

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

 1-4           SECTION 1.  Article 21.79E, Insurance Code, as added by

 1-5     Section 11.32, Chapter 242, Acts of the 72nd Legislature, Regular

 1-6     Session, 1991, is amended to read as follows:

 1-7           Art. 21.79E.  Action for Amount of Deductible.  (a)  This

 1-8     article applies to any insurer who delivers, issues for delivery,

 1-9     or renews a private passenger automobile policy of [motor vehicle]

1-10     insurance in this state, including an interinsurance exchange,

1-11     mutual, reciprocal, association, Lloyd's, or other insurer.

1-12           (b)  Notwithstanding any other provision of this code, and

1-13     except as provided by Subsection (c) of this article, if an insurer

1-14     is liable to an insured for a claim, and such [the] claim is

1-15     subject to a deductible payable by the insured, and a third party

1-16     may be liable to the insurer or the insured for the amount of the

1-17     deductible, the insurer shall bring an action to recover the

1-18     deductible against the third party not later than 12 [six] months

1-19     after payment of its insured's [the date the] claim [is made] or

1-20     pay the amount of the deductible to the insured.

1-21           (c)  Subsection (b) of this article does not apply if, not

1-22     later than the earlier of 12 [six] months after the date the

1-23     insured's claim is paid or 90 days prior to the expiration of the

 2-1     statute of limitations for negligence actions [made], the insurer

 2-2     notifies the insured in writing that the insurer does [will] not

 2-3     intend to pursue further collection actions [bring an action]

 2-4     against the third party and authorizes the insured to pursue

 2-5     further collection actions [bring the action].

 2-6           (d)  This article applies whether the third party who may be

 2-7     liable for the amount of the deductible is insured or uninsured.

 2-8           (e)  This article is intended to encourage insurers to take

 2-9     appropriate and necessary steps to collect from third parties or

2-10     their insurers.  As used in this article, the phrase "bring an

2-11     action" is intended to include various courses of action such as

2-12     reasonable and diligent collection efforts, mediation, arbitration,

2-13     or litigation against responsible third parties or their insurers.

2-14           (f)  The commissioner shall have authority to enforce this

2-15     article and is authorized to promulgate and enforce reasonable

2-16     rules and regulations as necessary for the accomplishment of the

2-17     purposes of this article.

2-18           SECTION 2.  This Act takes effect September 1, 1997.

2-19           SECTION 3.  The importance of this legislation and the

2-20     crowded condition of the calendars in both houses create an

2-21     emergency and an imperative public necessity that the

2-22     constitutional rule requiring bills to be read on three several

2-23     days in each house be suspended, and this rule is hereby suspended,

2-24     and that this Act take effect and be in force from and after its

2-25     passage, and it is so enacted.

         _______________________________     _______________________________

             President of the Senate              Speaker of the House

               I hereby certify that S.B. No. 1106 passed the Senate on

         April 10, 1997, by the following vote:  Yeas 31, Nays 0.

                                             _______________________________

                                                 Secretary of the Senate

               I hereby certify that S.B. No. 1106 passed the House on

         May 23, 1997, by a non-record vote.

                                             _______________________________

                                                 Chief Clerk of the House

         Approved:

         _______________________________

                     Date

         _______________________________

                   Governor