By Thompson H.B. No. 2734
77R7571 PB-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to disclosure of certain information regarding the repair
1-3 of motor vehicles.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Article 5.07-1, Insurance Code, is amended by
1-6 amending Subsections (a), (b), (c), and (h) and by adding
1-7 Subsection (j) to read as follows:
1-8 (a) Except as provided by rules duly adopted by the
1-9 commissioner, under an auto insurance policy that is delivered,
1-10 issued for delivery, or renewed in this state an insurer may not,
1-11 directly or indirectly, limit its coverage under a policy covering
1-12 damage to a motor vehicle by specifying the brand, type, kind, age,
1-13 vendor, supplier, or condition of parts or products that may be
1-14 used to repair the vehicle or by limiting the beneficiary of the
1-15 policy or a third-party claimant from selecting a repair person or
1-16 facility to repair damage to the motor vehicle covered under the
1-17 policy.
1-18 (b) In connection with the repair of damage to a motor
1-19 vehicle covered under an auto insurance policy, an insurer, an
1-20 employee of an insurer, an agent of an insurer, a solicitor of
1-21 insurance for an insurer, an insurance adjuster, or an entity that
1-22 employs an insurance adjuster may not:
1-23 (1) solicit or accept a referral fee or gratuity in
1-24 exchange for referring a beneficiary or third-party claimant to a
2-1 repair person or facility to repair the damage;
2-2 (2) state or suggest, either orally or in writing, to
2-3 a beneficiary or third-party claimant that a specific repair person
2-4 or facility or a repair person or facility identified on a
2-5 preferred list compiled by an insurer must be used by a beneficiary
2-6 or third-party claimant in order for the damage repair or parts
2-7 replacement to be covered by the policy; [or]
2-8 (3) restrict a beneficiary's or third-party claimant's
2-9 right to choose a repair person or facility by requiring the
2-10 beneficiary or third-party claimant to travel an unreasonable
2-11 distance to repair the damage; or
2-12 (4) state or suggest, either orally or in writing, to
2-13 a beneficiary or third-party claimant that a specific repair person
2-14 or facility identified on a preferred list compiled by an insurer
2-15 be used after the beneficiary or third-party claimant has selected
2-16 a repair person or facility.
2-17 (c) A contract or other agreement between an insurer and a
2-18 repair person or facility[, including an agreement] under which the
2-19 insurer refers a beneficiary or third-party claimant to a repair
2-20 person or facility identified on a preferred list compiled by the
2-21 insurer, may not:
2-22 (1) agree [agrees] to extend discounts for parts or
2-23 labor to the insurer in exchange for referrals by the insurer;
2-24 (2) require sheet metal parts other than parts of the
2-25 original manufacturer of the motor vehicle unless use of different
2-26 parts is disclosed to the beneficiary or third-party claimant and
2-27 the beneficiary or third-party claimant provides the repair person
3-1 or facility with a signed release;
3-2 (3) set an arbitrary price cap on any materials or
3-3 procedures used in the repair of the motor vehicle;
3-4 (4) require the repair person or facility to indemnify
3-5 the insurer for legal actions taken against the insurer in
3-6 connection with the repair; or
3-7 (5) [, may not] result in a reduction of coverage
3-8 under the insured's auto insurance policy.
3-9 (h) The commissioner may exercise the rule-making authority
3-10 under Article 21.21-2 of this code with respect to any [fraudulent]
3-11 activity of any party to an agreement described by Subsection (c)
3-12 of this article.
3-13 (j) An insurer that conducts a survey of prevailing labor
3-14 rates charged by repair persons or facilities shall:
3-15 (1) ensure that the survey data was obtained by
3-16 statistically sound survey and research methods;
3-17 (2) publish a report that:
3-18 (A) contains the complete, factual criteria used
3-19 for the survey; and
3-20 (B) states the results by each market area
3-21 surveyed; and
3-22 (3) provide a copy of the report described by
3-23 Subdivision (2) of this subsection to the commissioner and to each
3-24 repair person or facility that participated in the survey.
3-25 SECTION 2. This Act takes effect September 1, 2001.