HBA-TBM C.S.H.B. 3346 77(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 3346 By: Uresti Insurance 5/3/2001 Committee Report (Substituted) BACKGROUND AND PURPOSE In an effort to reduce expenditures and increase profits, a motor vehicle insurance company or its representative (insurer) may attempt to reach a settlement agreement with a third party who is involved in an automobile accident with a party insured by the insurer. While a settlement agreement may reduce an insurer's financial risk, it may not provide for the well-being of the third party. For instance, an injury resulting from an automobile accident may not become immediately apparent to the injured person, and a person involved in an automobile accident may reach a settlement with the other party's insurer before realizing the full extent of any injuries received in the accident. C.S.H.B. 3346 provides an extended period of time between an automobile accident and when an insurer is allowed to solicit a contractually binding statement or settlement from a third party. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS C.S.H.B. 3346 amends the Insurance Code to prohibit a representative of a motor vehicle insurer from obtaining or attempting to obtain a release agreement from a person on or before the 10th day after the date of the motor vehicle accident that is the subject of the release agreement. A release agreement obtained in violation of this provision is voidable by the person from whom the release agreement was obtained. The bill prohibits a representative of a motor vehicle insurer, except as provided by the Texas Rules of Civil Procedure, from obtaining or attempting to obtain from an actual or potential third-party claimant, for the purpose of negotiating a release agreement, a written or oral statement regarding a motor vehicle accident on or before the seventh day after the date of the accident. A statement obtained in violation of this provision is not admissible against the person who made the statement in an action relating to damages arising out of the motor vehicle accident that is the subject of the statement. The bill establishes an administrative penalty for an insurer or a representative of an insurer who violates the provisions of this bill. EFFECTIVE DATE September 1, 2001. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 3346 differs from the original by removing a farm mutual insurance company from the definition of a "motor vehicle insurer" and modifying the definition of a "release agreement." The substitute prohibits a representative of a motor vehicle insurer from obtaining or attempting to obtain a release agreement from a person on or before the 10th day rather than the 30th day after the date of a motor vehicle accident or obtaining or attempting to obtain from an actual or potential third-party claimant a written or oral statement regarding a motor vehicle accident on or before the seventh day rather than the 15th day after the date of an accident.