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.