76R11416 DB-F
By Smithee H.B. No. 3041
Substitute the following for H.B. No. 3041:
By Moreno of Harris C.S.H.B. No. 3041
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to prompt payment of insurance claims.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 1(4), Article 21.55, Insurance Code, is
1-5 amended to read as follows:
1-6 (4) "Insurer" means any insurer engaged in the
1-7 business of insurance, as defined by Article 1.14-1 of this code,
1-8 [authorized to do business as an insurance company or to provide
1-9 insurance] in this state, including:
1-10 (A) a domestic or foreign, stock and mutual,
1-11 life, health, or accident insurance company;
1-12 (B) a domestic or foreign, stock or mutual, fire
1-13 and casualty insurance company;
1-14 (C) a Mexican casualty company;
1-15 (D) a domestic or foreign Lloyd's plan insurer;
1-16 (E) a domestic or foreign reciprocal or
1-17 insurance exchange;
1-18 (F) a domestic or foreign fraternal benefit
1-19 society;
1-20 (G) a stipulated premium insurance company;
1-21 (H) a nonprofit legal service corporation;
1-22 (I) a statewide mutual assessment company;
1-23 (J) a local mutual aid association;
1-24 (K) a local mutual burial association;
2-1 (L) an association exempt under Article 14.17 of
2-2 this code;
2-3 (M) a nonprofit hospital, medical, or dental
2-4 service corporation, including a company subject to Chapter 20 of
2-5 this code;
2-6 (N) a county mutual insurance company;
2-7 (O) a farm mutual insurance company;
2-8 (P) a risk retention group;
2-9 (Q) a purchase group;
2-10 (R) a surplus lines carrier; and
2-11 (S) a guaranty association created and operating
2-12 under Article 21.28-C or 21.28-D of this code.
2-13 SECTION 2. Section 2, Article 21.55, Insurance Code, is
2-14 amended by amending Subsection (a) and adding Subsection (c) to
2-15 read as follows:
2-16 (a) Except as provided by Subsection (c) [(d)] of this
2-17 section, an insurer shall, not later than the 15th day after
2-18 receipt of notice of a claim or the 30th business day if the
2-19 insurer is an eligible surplus lines insurer:
2-20 (1) acknowledge receipt of the claim;
2-21 (2) commence any investigation of the claim; and
2-22 (3) request from the claimant all items, statements,
2-23 and forms that the insurer reasonably believes, at that time, will
2-24 be required from the claimant. Additional requests may be made if
2-25 during the investigation of the claim such additional requests are
2-26 necessary.
2-27 (c) An insurer who receives a nonwritten notice of claim
3-1 may, on or before the third business day after the date the insurer
3-2 receives the notice of claim, advise the claimant that written
3-3 notice is required. An insurer who does not request written
3-4 notice under this subsection is subject to each requirement
3-5 applicable to a written notice of claim, beginning on the date the
3-6 insurer receives the nonwritten notice of claim. An insurer who
3-7 requests a written notice of claim from a claimant under this
3-8 subsection shall respond to that written notice, if received by the
3-9 insurer, as required by this article.
3-10 SECTION 3. Sections 3(a) and (b), Article 21.55, Insurance
3-11 Code, are amended to read as follows:
3-12 (a) Except as provided by Subsections (b) and (d) of this
3-13 section, an insurer shall notify a claimant in writing of the
3-14 acceptance or rejection of the claim not later than the 15th
3-15 business day after the date the insurer receives all items,
3-16 statements, and forms required by the insurer from the claimant, in
3-17 order to secure final proof of loss.
3-18 (b) If the insurer has a reasonable basis to believe that
3-19 the loss results from arson, the insurer shall notify the claimant
3-20 in writing of the acceptance or rejection of the claim not later
3-21 than the 30th day after the date the insurer receives all items,
3-22 statements, and forms required by the insurer from the claimant.
3-23 SECTION 4. Section 6, Article 21.55, Insurance Code, is
3-24 amended to read as follows:
3-25 Sec. 6. DAMAGES. In all cases where a claim is made
3-26 pursuant to a policy of insurance and the insurer liable therefor
3-27 is not in compliance with the requirements of this article, such
4-1 insurer may not deny liability for the claim and is [shall be]
4-2 liable to pay the holder of the policy, or the beneficiary making a
4-3 claim under the policy, in addition to the amount of the claim, 18
4-4 percent per annum of the amount of such claim as damages, together
4-5 with reasonable attorney fees. If suit is filed, such attorney
4-6 fees shall be taxed as part of the costs in the case. The damages
4-7 begin to accrue on the date of violation and end on the date the
4-8 claim is paid in full.
4-9 SECTION 5. This Act takes effect September 1, 1999, and
4-10 applies only to a claim against a policy made on or after the
4-11 effective date of this Act. A claim against a policy made before
4-12 the effective date of this Act is governed by the law applicable to
4-13 the claim immediately before the effective date of this Act, and
4-14 that law is continued in effect for that purpose.
4-15 SECTION 6. The importance of this legislation and the
4-16 crowded condition of the calendars in both houses create an
4-17 emergency and an imperative public necessity that the
4-18 constitutional rule requiring bills to be read on three several
4-19 days in each house be suspended, and this rule is hereby suspended.