By Moreno of Harris H.B. No. 1216
Line and page numbers may not match official copy.
Bill not drafted by TLC or Senate E&E.
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to third party claims against an insured covered under a
1-3 liability insurance policy.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 4, Article 21.21, Insurance Code, is
1-6 amended by amending Subsection (10) to read as follows:
1-7 (10) Unfair Settlement Practices. (a) Engaging in
1-8 any of the following unfair settlement practices with respect to a
1-9 claim by an insured or beneficiary:
1-10 (i) misrepresenting to a claimant a
1-11 material fact or policy provision relating to coverage at issue;
1-12 (ii) failing to attempt in good faith to
1-13 effectuate a prompt, fair, and equitable settlement of a claim with
1-14 respect to which the insurer's liability has become reasonably
1-15 clear;
1-16 (iii) failing to attempt, in good faith,
1-17 to effectuate a prompt, fair, and equitable settlement under one
1-18 portion of a policy of a claim with respect to which the insurer's
1-19 liability has become reasonably clear in order to influence the
1-20 claimant to settle an additional claim under another portion of the
1-21 coverage, provided that this prohibition does not apply if payment
2-1 under one portion of the coverage constitutes evidence of liability
2-2 under another portion of the policy;
2-3 (iv) failing to provide promptly to a
2-4 policyholder a reasonable explanation of the basis in the policy,
2-5 in relation to the facts or applicable law, for the insurer's
2-6 denial of a claim or for the offer of a compromise settlement of a
2-7 claim;
2-8 (v) failing within a reasonable time to:
2-9 (A) affirm or deny coverage of a claim to a
2-10 policyholder; or
2-11 (B) submit a reservation of rights to a
2-12 policyholder;
2-13 (vi) refusing, failing, or unreasonably
2-14 delaying an offer of settlement under applicable first-party
2-15 coverage on the basis that other coverage may be available or that
2-16 third parties are responsible for the damages suffered, except as
2-17 may be specifically provided in the policy;
2-18 (vii) undertaking to enforce a full and
2-19 final release of a claim from a policyholder when only a partial
2-20 payment has been made, provided that this prohibition does not
2-21 apply to a compromise settlement of a doubtful or disputed claim;
2-22 (viii) refusing to pay a claim without
2-23 conducting a reasonable investigation with respect to the claim;
2-24 (ix) with respect to a Texas personal auto
2-25 policy, delaying or refusing settlement of a claim solely because
3-1 there is other insurance of a different type available to satisfy
3-2 all or any part of the loss forming the basis of that claim; or
3-3 (x) requiring a claimant, as a condition
3-4 of settling a claim, to produce the claimant's federal income tax
3-5 returns for examination or investigation by the person unless:
3-6 (A) the claimant is ordered to produce those tax
3-7 returns by a court;
3-8 (B) the claim involves a fire loss; or
3-9 (C) the claim involves lost profits or income.
3-10 (b) Paragraph (a) of this clause does [not] provide a cause of
3-11 action to a third party asserting one or more claims against an
3-12 insured covered under a liability insurance policy.
3-13 SECTION 2. This Act takes effect September 1, 1999, and
3-14 applies only to a motor vehicle insurance claim that accrues on or
3-15 after the effective date of this Act. A claim that accrues before
3-16 the effective date of this Act is governed by the law as it existed
3-17 immediately before the effective date of this Act, and that law is
3-18 continued in effect for that purpose.
3-19 SECTION 3. The importance of this legislation and the
3-20 crowded condition of the calendars in both houses create an
3-21 emergency and an imperative public necessity that the
3-22 constitutional rule requiring bills to be read on three several
3-23 days in each house be suspended, and this rule is hereby suspended.