By Gallegos                                            S.R. No. 954

         75R17259 DLF-D                           

                                 R E S O L U T I O N

 1-1           BE IT RESOLVED by the Senate of the State of Texas, 75th

 1-2     Legislature, Regular Session, 1997, That Senate Rule 12.03 be

 1-3     suspended in part as provided by Senate Rule 12.08, to enable the

 1-4     conference committee appointed to resolve the differences on House

 1-5     Bill No. 2503 to consider and take action on the following specific

 1-6     matters:

 1-7           1.  Senate Rule 12.03(3) is suspended to permit the committee

 1-8     to add Section 1(b), Article 21.07-5, Insurance Code, to read as

 1-9     follows:

1-10           (b)  The term "public adjuster" does not include an insurance

1-11     agent licensed under Article 21.14 of this code who is appointed by

1-12     the insurance company that covers the damage to the property.

1-13           Explanation:  The new text is necessary to make clear that

1-14     certain licensed insurance agents are not included within the

1-15     definition of "public adjuster."

1-16           2.  Senate Rule 12.03(1) is suspended to permit the committee

1-17     to change the text of added Section 2, Article 21.07-5, Insurance

1-18     Code, to read as follows:

1-19           Sec. 2.  CONTRACT REQUIRED FOR SERVICES RELATED TO CERTAIN

1-20     FIRE LOSSES; HOMEOWNER'S RIGHT TO CANCEL.  (a)  A person may not

1-21     provide services as a public adjuster to another person in relation

1-22     to damages to the insured's homestead from a fire that may be

1-23     subject to a first-party claim under an insurance policy unless the

1-24     services are provided pursuant to a written contract.

 2-1           (b)  In addition to any other right to revoke an offer or

 2-2     rescind a transaction or any other remedy authorized by law, a

 2-3     homeowner who contracts with a public adjuster for services

 2-4     described by Subsection (a) of this section may cancel the

 2-5     transaction before midnight of the third business day after the

 2-6     date on which the homeowner signs the contract.

 2-7           (c)  The public adjuster must furnish the homeowner with a

 2-8     fully completed copy of the contract that is in the same language

 2-9     as that principally used in the oral sales presentation and that

2-10     shows the date of the transaction and contains the name and address

2-11     of the public adjuster and, in immediate proximity to the space

2-12     reserved in the contract for the signature of the homeowner and in

2-13     at least 10-point boldfaced type, a statement in substantially the

2-14     following form:

2-15           "YOU MAY CANCEL THIS TRANSACTION AT ANY TIME BEFORE MIDNIGHT

2-16           OF THE THIRD BUSINESS DAY AFTER THE DATE OF THIS TRANSACTION.

2-17           SEE THE ATTACHED NOTICE OF CANCELLATION FORM FOR AN

2-18           EXPLANATION OF THIS RIGHT."

2-19           (d)  The public adjuster must furnish each homeowner, at the

2-20     time the homeowner signs the contract, a completed form in

2-21     duplicate, captioned "NOTICE OF CANCELLATION," that is attached to

2-22     the contract and is easily detachable and that contains, in at

2-23     least 10-point boldfaced type, a statement in the language in which

2-24     the contract is written in substantially the following form:

2-25                           "NOTICE OF CANCELLATION

2-26                        "(Enter date of transaction)

2-27                 "YOU MAY CANCEL THIS TRANSACTION, WITHOUT ANY PENALTY

 3-1           OR OBLIGATION, WITHIN THREE BUSINESS DAYS AFTER THE ABOVE

 3-2           DATE.

 3-3           "IF YOU CANCEL, PAYMENTS MADE BY YOU UNDER THE CONTRACT AND

 3-4           ANY NEGOTIABLE INSTRUMENT EXECUTED BY YOU WILL BE RETURNED

 3-5           WITHIN 10 BUSINESS DAYS AFTER THE DATE OF RECEIPT BY THE

 3-6           PUBLIC ADJUSTER OF YOUR CANCELLATION NOTICE AND ANY SECURITY

 3-7           INTEREST ARISING OUT OF THE TRANSACTION WILL BE CANCELED.

 3-8           "TO CANCEL THIS TRANSACTION, MAIL OR DELIVER A SIGNED AND

 3-9           DATED COPY OF THIS CANCELLATION NOTICE OR ANY OTHER WRITTEN

3-10           NOTICE, OR SEND A TELEGRAM, TO (Name of public adjuster), AT

3-11                 (Address of public adjuster's place of business) NOT

3-12           LATER THAN MIDNIGHT OF (Date).

3-13           "I HEREBY CANCEL THIS TRANSACTION.   (Date)

3-14                                                 (Signature of insured)"

3-15           Explanation:  The change is necessary to permit a public

3-16     adjuster to solicit business within the time frame previously

3-17     prohibited under the bill, to limit the application of the bill to

3-18     services provided in relation to damage to a homestead, to require

3-19     the adjuster to provide services under written contracts, and to

3-20     place certain restrictions on the required contracts.

3-21           3.  Senate Rule 12.03(4) is suspended to permit the committee

3-22     to add new Section 3, Article 21.07-5, Insurance Code, to read as

3-23     follows:

3-24           Sec. 3.  PROHIBITED CONDUCT.  (a)  A public adjuster may not

3-25     participate directly or indirectly in the reconstruction, repair,

3-26     or restoration of a homestead damaged by fire or engage in any

3-27     other activity that may be reasonably construed as presenting a

 4-1     conflict of interest.

 4-2           (b)  A public adjuster may not render legal advice to any

 4-3     person in the adjuster's capacity as a public adjuster.

 4-4           Explanation:  The new text is necessary to prohibit a public

 4-5     adjuster from engaging in certain conduct.