By Thompson H.B. No. 1036
77R3854 AJA-D
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 must 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 must 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 must:
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. The office of public insurance
3-5 counsel shall submit to the commissioner and the commissioner by
3-6 rule shall adopt a disclosure document that:
3-7 (1) informs a claimant that:
3-8 (A) the insurer does not represent the claimant;
3-9 (B) the interests of the insurer or the
3-10 insurer's insured may be in conflict with the claimant's interests;
3-11 (C) 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 (D) the claimant has the right to consult with
3-15 an attorney of the claimant's choice or seek other assistance at
3-16 any time to evaluate the fairness of any request for information or
3-17 settlement offer made by the insurer; and
3-18 (2) includes any other information the office of
3-19 public insurance counsel determines is appropriate and relevant to
3-20 assist a claimant in understanding the claimant's rights.
3-21 Sec. 4. ADDITIONAL STATEMENTS NOT PROHIBITED. This article
3-22 does not prohibit a person representing an insurer or an insured in
3-23 the investigation or adjustment of any claim or loss from making
3-24 statements not in conflict with this article or any other law to a
3-25 claimant regarding the claim settlement process other than the
3-26 statements included in the disclosure document required under
3-27 Section 2(a) of this article.
4-1 Sec. 5. RULES. The commissioner shall adopt rules as
4-2 necessary to administer this article.
4-3 SECTION 2. (a) This Act takes effect September 1, 2001.
4-4 (b) The office of public insurance counsel shall submit the
4-5 document required under Article 21.21-11, Insurance Code, as added
4-6 by this Act, to the commissioner of insurance not later than
4-7 November 1, 2001, and the commissioner shall adopt the document by
4-8 rule not later than December 1, 2001.
4-9 (c) The change in law made by this Act applies only to
4-10 notice of a claim described by Article 21.21-11, Insurance Code, as
4-11 added by this Act, received by an insurer on or after January 1,
4-12 2002.