HBA-DMD H.B. 1787 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1787 By: Dutton Insurance 4/15/1999 Introduced BACKGROUND AND PURPOSE Current law does not provide for an assessment of damages, prior to an agent, broker, adjuster, or other representative of an insurer obtaining a release of liability from a claimant, in cases of accidents that discharge or release into the environment certain hazardous chemicals, wastes, and substances. H.B. 1787 prohibits a representative of an insurance company from obtaining a release agreement from a person unless the assessment of the damages to the person has been made by a neutral expert or the person is represented by legal counsel. This bill requires the commissioner of insurance to adopt rules as necessary to implement this article. This bill also establishes a criminal penalty. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the commissioner of insurance in SECTION 1 (Section 4, Article 21.21-3, Insurance Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter B, Chapter 21, Insurance Code, by adding Article 21.21-3, as follows: Art. 21.21-3. RELEASE FROM LIABILITY FOR RELEASE OF HAZARDOUS CHEMICALS; ASSESSMENT REQUIRED Sec. 1. DEFINITIONS. Defines "insurer," "release agreement." Sec. 2. APPLICABILITY. Sets forth that this article applies only to a release agreement obtained in connection with the deposit, discharge, or release into the environment of hazardous chemicals, hazardous wastes, hazardous hydrocarbons, similarly harmful organic or mineral substances, hazardous radiation sources, and other similarly harmful substances Sec. 3. ASSESSMENT OF DAMAGES REQUIRED. (a) Prohibits a representative of an insurance company from obtaining a release agreement from a person unless the assessment of the damages to the person has been made by a neutral expert as required by rules adopted by the commissioner of insurance (commissioner), or the person is represented in negotiating the release by legal counsel who is not directly or indirectly identified, suggested, or selected by the insurer or the insured. (b) Prohibits an expert who performs an assessment under Subsection (a) from being the employee of the insurer or the insured. (c) Requires an insurer seeking a release agreement to pay any fees or expenses involved in obtaining the assessment of damages required under Subsection (a) of this section. Sec. 4. RULES. Requires the commissioner to adopt rules as necessary to implement this article. Sec. 5. DISCIPLINARY ACTION. Authorizes the commissioner, on ten days notice by certified mail and on hearing, to suspend or cancel the certificate or other authority to engage in the business of insurance of any insurer violating this article. Sec. 6. PENALTY. Sets forth that a person who knowingly or intentionally violates Section 3 of this article, commits the offense of a Class A misdemeanor. SECTION 2.Effective date: September 1, 1999. SECTION 3.Makes application of this Act prospective. SECTION 4.Emergency clause.