By Lewis of Tarrant H.B. No. 3180
76R9211 T
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to unfair settlement practice in the business of
1-3 insurance.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 10, Article 21.21, Insurance Code is
1-6 amended 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, health care provider, or
1-10 person or entity with which one has contracted to provide services
1-11 to an insured or beneficiary, as appropriate.
1-12 (i) misrepresenting to a claimant a material
1-13 fact or policy provision relating to coverage at issue;
1-14 (ii) failing to attempt in good faith to
1-15 effectuate a prompt, fair, and equitable settlement of a claim with
1-16 respect to which the insurer's liability has become reasonably
1-17 clear;
1-18 (iii) failing to attempt, in good faith, to
1-19 effectuate a prompt, fair, and equitable settlement under one
1-20 portion of a policy of a claim with respect to which the insurer's
1-21 liability has become reasonably clear in order to influence the
1-22 claimant to settle an additional claim under another portion of the
1-23 coverage, provided that this prohibition does not apply if payment
1-24 under one portion of the coverage, provided that this prohibition
2-1 does not apply if payment under one portion of the coverage
2-2 constitutes evidence of liability under another portion of the
2-3 policy;
2-4 (iv) failing to provide promptly to a
2-5 policyholder a reasonable explanation of the basis in the policy,
2-6 in relation to the facts or applicable law, for the insurer's
2-7 denial of a claim or for the offer of a compromise settlement of a
2-8 claim;
2-9 (v) failing within a reasonable time to:
2-10 (A) affirm or deny coverage of a claim to
2-11 a policyholder; or
2-12 (B) submit a reservation of rights to a
2-13 policyholder;
2-14 (vi) refusing, failing or unreasonably delaying
2-15 an offer of settlement under applicable first-party coverage on the
2-16 basis that other coverage may be available or that third parties
2-17 are responsible for the damages suffered, except as may be
2-18 specifically provided in the policy;
2-19 (vii) undertaking to enforce a full and final
2-20 release of a claim from a policyholder when only a partial payment
2-21 has been made, provided that this prohibition does not apply to a
2-22 compromise settlement of a doubtful or disputed claim;
2-23 (viii) refusing to pay a claim without
2-24 conducting a reasonable investigation with respect to the claim;
2-25 (ix) with respect to a Texas personal auto
2-26 policy, delaying or refusing settlement of a claim solely because
2-27 there is other insurance of a different type available to satisfy
3-1 all or any part of the loss forming the basis of that claim; or
3-2 (x) requiring a claimant, as a condition of
3-3 settling a claim, to produce the claimant's federal income tax
3-4 returns for examination or investigation by the person unless:
3-5 (A) the claimant is ordered to produce
3-6 those tax returns by a court;
3-7 (B) the claim involves a fire loss; or
3-8 (C) the claim involves lost profits or
3-9 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 (11) Misrepresentation of Insurance Policy.
3-14 Misrepresenting an insurance policy by:
3-15 (a) making an untrue statement of material fact;
3-16 (b) failing to state a material fact that is necessary to
3-17 make other statements made not misleading considering the
3-18 circumstances under which the statements were made;
3-19 (c) making a statement in such manner as to mislead a
3-20 reasonably prudent person to a false conclusion of a material fact;
3-21 (d) making a material misstatement of law; or
3-22 (e) failing to disclose any matter required by law to be
3-23 disclosed, including a failure to make disclosure in accordance
3-24 with another provision of this code.
3-25 SECTION 2. This Act takes effect on September 1, 1999.
3-26 SECTION 3. The importance of the legislation and the crowded
3-27 condition of the calendars in both houses create an emergency and
4-1 an imperative public necessity that the constitutional rule
4-2 requiring bills to be read on three several days in each house be
4-3 suspended, and this rule is hereby suspended.