77R9355 AJA-D By Thompson H.B. No. 1036 Substitute the following for H.B. No. 1036: By Lewis of Tarrant C.S.H.B. No. 1036 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to disclosure of certain information to insurance 1-3 claimants. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Subchapter B, Chapter 21, Insurance Code, is 1-6 amended by adding Article 21.21-11 to read as follows: 1-7 Art. 21.21-11. REQUIRED DISCLOSURE TO CLAIMANT 1-8 Sec. 1. DEFINITIONS. In this article: 1-9 (1) "Business day" means a day other than Saturday, 1-10 Sunday, or a holiday recognized by this state. 1-11 (2) "Claim" means a claim other than a first party 1-12 claim made by an insured or policyholder under an insurance policy 1-13 or contract or by a beneficiary named in the policy or contract 1-14 that must be paid by the insurer directly to the insured or 1-15 beneficiary. 1-16 (3) "Claimant" means a person making a claim. 1-17 (4) "Insurer" means an insurance company or other 1-18 entity that is authorized to engage in the business of insurance in 1-19 this state, including: 1-20 (A) a domestic or foreign, stock or mutual, fire 1-21 and casualty insurance company; 1-22 (B) a Mexican casualty company; 1-23 (C) a farm mutual insurance company; 1-24 (D) a county mutual insurance company; 2-1 (E) a domestic or foreign Lloyd's plan insurer; 2-2 (F) a domestic or foreign reciprocal or 2-3 insurance exchange; 2-4 (G) a surplus lines carrier; and 2-5 (H) a guaranty association created and operating 2-6 under Article 21.28-C or 21.28-D of this code. 2-7 Sec. 2. REQUIRED DISCLOSURE. (a) An insurer shall provide a 2-8 claimant with a copy of the disclosure document adopted by the 2-9 commissioner under this article. 2-10 (b) If a claimant notifies the insurer of a claim in person, 2-11 the disclosure document required by this section shall be provided 2-12 at the time the notice is given. 2-13 (c) If a claimant notifies the insurer of a claim in a 2-14 written document that the claimant does not deliver in person, the 2-15 insurer shall mail or deliver the disclosure document to the 2-16 claimant not later than the third business day after the date the 2-17 notice is received by the insurer. 2-18 (d) If a claimant notifies the insurer of a claim by 2-19 telephone, an insurer shall: 2-20 (1) mail or deliver the disclosure document to the 2-21 claimant not later than the third business day after the date the 2-22 notice is given; or 2-23 (2) provide the information in the disclosure document 2-24 to the claimant verbally at the time of the claimant's telephone 2-25 call and mail or deliver the disclosure document to the claimant 2-26 not later than the 15th business day after the date the notice is 2-27 given. 3-1 (e) An insurer is required to provide a disclosure document 3-2 only in response to the first notice of a claim received by the 3-3 insurer. 3-4 Sec. 3. DISCLOSURE DOCUMENT. (a) The office of public 3-5 insurance counsel shall submit to the commissioner and the 3-6 commissioner by rule shall adopt a disclosure document that informs 3-7 a claimant that: 3-8 (1) the insurer does not represent the claimant; 3-9 (2) the interests of the insurer are not necessarily 3-10 the same as the claimant's interests; 3-11 (3) the claimant is not required to accept a 3-12 settlement offered by the insurer or the insurer's representative; 3-13 and 3-14 (4) the claimant has the right to consult with an 3-15 attorney of the claimant's choice or seek other assistance at any 3-16 time to evaluate the fairness of any request for information or 3-17 settlement offer made by the insurer. 3-18 (b) The commissioner shall ensure that the disclosure 3-19 document adopted under this section does not unnecessarily 3-20 duplicate, and is not likely to be confused with, any other 3-21 disclosure an insurer is required to make. 3-22 Sec. 4. ADDITIONAL STATEMENTS NOT PROHIBITED. This article 3-23 does not prohibit a person representing an insurer or an insured in 3-24 the investigation or adjustment of any claim or loss from making 3-25 statements not in conflict with this article or any other law to a 3-26 claimant regarding the claim settlement process other than the 3-27 statements included in the disclosure document required under 4-1 Section 2(a) of this article. 4-2 Sec. 5. RULES. The commissioner shall adopt rules as 4-3 necessary to administer this article. 4-4 SECTION 2. (a) This Act takes effect September 1, 2001. 4-5 (b) The office of public insurance counsel shall submit the 4-6 document required under Article 21.21-11, Insurance Code, as added 4-7 by this Act, to the commissioner of insurance not later than 4-8 November 1, 2001, and the commissioner shall adopt the document by 4-9 rule not later than December 1, 2001. 4-10 (c) The change in law made by this Act applies only to 4-11 notice of a claim described by Article 21.21-11, Insurance Code, as 4-12 added by this Act, received by an insurer on or after January 1, 4-13 2002.