HBA-KMH H.B. 249 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 249
By: Puente
Insurance
1/22/1999
Introduced



BACKGROUND AND PURPOSE 

Currently, it is the practice of some insurance companies to require a
third party claimant to make a statement of facts to the insurance company
as a condition of the insurance company determining whether to pay or
settle a claim regarding motor vehicle insurance.  Many of the same
insurance companies also refuse to make the insured available to the third
party claimant for a similar statement.  H.B. 249 requires an insurance
company to make the insured or the insured's statement available to a third
party claimant if the insurance company requires a statement before making
its determination of whether to pay or settle an automobile insurance
claim. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subchapter A, Chapter 5, Insurance Code, by adding
Article 5.06-7, as follows: 

Art.  5.06-7.  SETTLEMENT OF CLAIM; REQUIRED STATEMENT OF FACTS.  (a)
Defines "insurer" to mean an insurance company, interinsurance exchange,
mutual, capital stock company, fraternal benefit society, local mutual aid
association, county mutual, reciprocal, association, Lloyd's plan, or other
entity writing motor vehicle insurance in this state, including affiliates
as defined by Section 2, Article 21.49-1.  Affiliate is defined as a
specific person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control
with, the person specified. 

(b) Prohibits an insurer from requiring a third party claimant to give a
statement of the facts relating to a motor vehicle insurance claim as a
condition of determining whether to pay or settle the claim unless the
insurer's insured reciprocates in like form with the third party claimant.
Restricts application of this section if the insured is unable to give a
statement for a reason outside the insurer's control. 

SECTION 2.  Effective date: September 1, 1999.
           Makes application of this Act prospective.

SECTION 3.  Emergency clause.