Bill not drafted by TLC or Senate E&E.

      Line and page numbers may not match official copy.

         By:  Duncan                                  S.B. No. 1106

                                A BILL TO BE ENTITLED

                                       AN ACT

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

 1-2     automobile insurance policies; and declaring an emergency.

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

 1-4           SECTION 1.  Article 21.79E, Insurance Code, is amended to

 1-5     read as follows:

 1-6           Art. 21.79E.  Action for Amount of Deductible.  (a)  This

 1-7     article applies to any insurer who delivers, issues for delivery,

 1-8     or renews a private passenger automobile policy of [motor vehicle]

 1-9     insurance in this state, including an interinsurance exchange,

1-10     mutual, reciprocal, association, Lloyd's, or other insurer.

1-11           (b)  Notwithstanding any other provision of this code, and

1-12     except as provided by Subsection (c) of this article, if an insurer

1-13     is liable to an insured for a claim, and such [the] claim is

1-14     subject to a deductible payable by the insured, and a third party

1-15     may be liable to the insurer or the insured for the amount of the

1-16     deductible, the insurer shall bring an action to recover the

1-17     deductible against the third party not later than twelve [six]

1-18     months after payment of its insured's [the date the] claim [is

1-19     made] or pay the amount of the deductible to the insured.

1-20           (c)  Subsection (b) of this article does not apply if, not

1-21     later than twelve [six] months after the date the claim is paid

1-22     [made], the insurer notifies the insured in writing that the

1-23     insurer does [will] not intend to pursue further collection actions

 2-1     [bring an action] against the third party and authorizes the

 2-2     insured to pursue further collection actions [bring the action].

 2-3           (d)  This article applies whether the third party who may be

 2-4     liable for the amount of the deductible is insured or uninsured.

 2-5           (e)  This article is intended to encourage insurers to take

 2-6     appropriate and necessary steps to collect from third parties or

 2-7     their insurers.  As used in this statute, the phrase "bring an

 2-8     action" is intended to include various courses of action such as

 2-9     reasonable and diligent collection efforts, mediation, arbitration

2-10     or litigation against responsible third parties or their insurers.

2-11           SECTION 2.  This Act takes effect September 1, 1997.

2-12           SECTION 3.  EMERGENCY CLAUSE.  The importance of this

2-13     legislation and the crowded condition of the calendars in both

2-14     houses create an emergency and an imperative public necessity that

2-15     the constitutional rule requiring bills to be read on three several

2-16     days in each house be suspended, and this rule is hereby suspended,

2-17     and that this Act take effect and be in force from and after its

2-18     passage, and it is so enacted.