Amend SB 1653 by striking all below the enacting clause and
substituting the following:
      SECTION 1.  Subtitle B, Title 2, Insurance Code, is amended
by adding Chapter 103 to read as follows:
CHAPTER 103. DISCLOSURE OF FEE STATEMENTS
      Sec. 103.001.  DEFINITION. In this chapter, "insurer" means a
partnership, corporation, association, or other group, however
organized, that issues any form of liability insurance, whether
primary insurance coverage, excess insurance coverage, or umbrella
insurance coverage.  The term includes a Lloyd's plan, a reciprocal
or interinsurance exchange, a county mutual insurance company, or a
farm mutual insurance company.
      Sec. 103.002.  APPLICABILITY. This chapter applies only to an
insurer that issues a liability insurance policy:
            (1)  to or covering any resident of this state;
            (2)  covering liability incurred by an insured in this
state; or
            (3)  under which the insurer provides a defense to an
insured in a claim or action pending in this state.
      Sec. 103.003.  DISCLOSURE PROHIBITED; EXCEPTION. (a)  Except
as provided by Subsection (c), an insurer may not disclose defense
counsel fee statements regarding services provided for an insured
to any person, other than the insured, who is not an employee of
the insurer.
      (b)  An insurer may not require defense counsel to disclose
the defense counsel's fee statements to any person who is not an
employee of the insurer.
      (c)  To the extent, if any, otherwise permitted by law, an
insurer may disclose defense counsel's fee statements to a person
who is not an employee of the insurer for the purpose of reviewing
the fee statements in connection with a lawsuit over payment of the
fees.  Disclosure under this subsection does not, in itself, waive
any attorney-client privilege.
      Sec. 103.004.  CONTRACT PROVISIONS VOID; WAIVER PROHIBITED.
(a)  A provision in a contract entered into between an insurer and
defense counsel or between an insurer and an insured that requires
or permits disclosure of the defense counsel's fee statements to a
person who is not an employee of the insurer is against public
policy and is void and unenforceable.
      (b)  A waiver by an insured of the requirements of Section
103.003(a) or (b) is against public policy and is void and
unenforceable.
      Sec. 103.005.  DAMAGES; INJUNCTIVE RELIEF. (a)  An insured
may bring an action against an insurer to:
            (1)  recover any actual damages proximately suffered by
the insured because of a violation of Section 103.003(a) or (b);
and
            (2)  obtain injunctive relief to prevent the threatened
or continued violation of Section 103.003(a) or (b).
      (b)  A court shall award reasonable and necessary attorney's
fees to a person who recovers damages or obtains injunctive relief
under this section.
      Sec. 103.006.  CIVIL PENALTY. (a)  An insurer who violates
Section 103.003(a) or (b) is liable for a civil penalty.  A civil
penalty assessed under this section may not exceed:
            (1)  $5,000 for the first or second act of violation;
or
            (2)  $10,000 for the third and each subsequent act of
violation.
      (b)  At the commissioner's request, the attorney general
shall file and prosecute a civil action in a district court in
Travis County to recover a civil penalty under this section.
      SECTION 2.  This Act applies only to a disclosure that occurs
on or after the effective date of this Act.  A disclosure that
occurred before that date is governed by the law as it existed
immediately before the effective date of this Act, and that law is
continued in effect for that purpose.
      SECTION 3.  This Act takes effect September 1, 2001.