By Dunnam                                             H.B. No. 3344
         76R7994 DLF-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to certain attorneys employed by or under contract to
 1-3     insurers.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Subchapter E, Chapter 21, Insurance Code, is
 1-6     amended by adding Article 21.56B to read as follows:
 1-7           Art. 21.56B. INDEPENDENCE OF COUNSEL.  (a)  The commissioner,
 1-8     in consultation with the State Bar of Texas, shall adopt rules
 1-9     under this article to ensure the independence of counsel provided
1-10     to an insured under a casualty insurance policy. The rules must:
1-11                 (1)  require notice to the insured of the insured's
1-12     right to independent counsel to represent the insured's interests;
1-13     and
1-14                 (2)  specify circumstances in which, because of
1-15     conflict of interest or other relevant issues, an insurance company
1-16     may not offer or provide to the insured the services of an attorney
1-17     in the employ of or under contract to the insurance company.
1-18           (b)  An insurance company that, under a policy of casualty
1-19     insurance, is obligated to defend an insured under the policy, may
1-20     not offer or provide to the insured the services of an attorney in
1-21     the employ  of or under contract to the insurance company unless
1-22     the insurance company complies with rules adopted by the
1-23     commissioner under this article.
1-24           (c)  This article applies to any insurance company that
 2-1     issues a policy of casualty insurance that is delivered, issued for
 2-2     delivery, or renewed in this state, including a policy written by a
 2-3     county mutual insurance company, Lloyd's plan company, surplus
 2-4     lines insurer, or a reciprocal or interinsurance exchange.
 2-5           SECTION 2.  This Act takes effect September 1, 1999.
 2-6           SECTION 3.  (a)  The commissioner of insurance shall adopt
 2-7     the rules required by Article 21.56B, Insurance Code, as added by
 2-8     this Act, not later than December 15, 1999.
 2-9           (b)  Article 21.56B, Insurance Code, as added by this Act,
2-10     applies only to an insurance policy that is delivered, issued for
2-11     delivery, or renewed on or after January 1, 2000.  A policy that is
2-12     delivered, issued for delivery, or renewed before January 1, 2000,
2-13     is governed by the law as it existed immediately before the
2-14     effective date of this Act, and that law is continued in effect for
2-15     this purpose.
2-16           SECTION 4.  The importance of this legislation and the
2-17     crowded condition of the calendars in both houses create an
2-18     emergency and an imperative public necessity that the
2-19     constitutional rule requiring bills to be read on three several
2-20     days in each house be suspended, and this rule is hereby suspended.