1-1     By:  Fraser                                           S.B. No. 1395
 1-2           (In the Senate - Filed March 8, 2001; March 13, 2001, read
 1-3     first time and referred to Committee on Business and Commerce;
 1-4     April 17, 2001, reported favorably by the following vote:  Yeas 4,
 1-5     Nays 1; April 17, 2001, sent to printer.)
 1-6                            A BILL TO BE ENTITLED
 1-7                                   AN ACT
 1-8     relating to the right of an insurance carrier to contest the
 1-9     compensability of an injury in a workers' compensation case.
1-11           SECTION 1.  Section 409.021, Labor Code, is amended to read
1-12     as  follows:
1-14     REFUSAL; ADMINISTRATIVE VIOLATION.  (a)  An insurance carrier shall
1-15     initiate compensation under this subtitle promptly.  Not later than
1-16     the seventh day after the date on which an insurance carrier
1-17     receives written notice of an injury, the insurance carrier shall:
1-18                 (1)  begin the payment of benefits as required by this
1-19     subtitle; or
1-20                 (2)  notify the commission and the employee in writing
1-21     of its refusal to pay and advise the employee of:
1-22                       (A)  the right to request a benefit review
1-23     conference; and
1-24                       (B)  the means to obtain additional information
1-25     from the commission.
1-26           (b)  An insurance carrier who fails to begin the payment of
1-27     benefits or file a notice of refusal on or before the seventh day
1-28     after the date on which the insurance carrier is notified of the
1-29     injury does not waive the carrier's right to contest the
1-30     compensability of the injury but commits an administrative
1-31     violation subject to Subsection (f).
1-32           (c)  An insurance carrier shall notify the commission in
1-33     writing of the initiation of income or death benefit payments in
1-34     the manner prescribed by commission rules.
1-35           (d) [(c)]  If an insurance carrier does not contest the
1-36     compensability of an injury on or before the 60th day after the
1-37     date on which the insurance carrier is notified of the injury, the
1-38     insurance carrier waives its right to contest compensability.  The
1-39     initiation of payments by an insurance carrier does not affect the
1-40     right of the insurance carrier to continue to investigate or deny
1-41     the compensability of an injury during the 60-day period.
1-42           (e) [(d)]  An insurance carrier may reopen the issue of the
1-43     compensability of an injury if there is a finding of evidence that
1-44     could not reasonably have been discovered earlier.
1-45           (f) [(e)]  An insurance carrier commits a violation if the
1-46     insurance carrier does not initiate payments or file a notice of
1-47     refusal as required by this section.  A violation under this
1-48     subsection is a Class B administrative violation.  Each day of
1-49     noncompliance constitutes a separate violation.
1-50           SECTION 2.  This Act takes effect September 1, 2001, and
1-51     applies only to a claim for workers' compensation benefits based on
1-52     a compensable injury that occurs on or after that date.  A claim
1-53     based on a compensable injury that occurs before the effective date
1-54     of this Act is governed by the law in effect on the date the
1-55     compensable injury occurred, and the former law is continued in
1-56     effect for that purpose.
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