78R2138 AKH-D

By:  Smithee                                                      H.B. No. 1085



A BILL TO BE ENTITLED

AN ACT

relating to the authority of the commissioner of insurance to adopt  
claim requirements and issue emergency orders to address an 
insurer's unreasonable delays in claims handling.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Article 21.55, Insurance Code, is amended by 
adding Section 9 to read as follows:
	Sec. 9.  UNREASONABLE DELAYS; EMERGENCY ORDERS. (a) The 
commissioner by order may impose claim response requirements  other 
than those prescribed by Sections 2, 3, and 4 of this article on an 
insurer that has a record of unreasonable delays in claims 
handling. In determining whether an insurer's delay is unreasonable 
for purposes of this section, the commissioner shall consider:
		(1)  justified complaints received by the department 
regarding the insurer;
		(2)  the timeliness of the insurer's response to claims 
that may require service arrangements to prevent loss to property;
		(3)  factors that may reasonably affect claim response, 
including the occurrence of a natural disaster and availability of 
licensed adjusters in the area; and
		(4)  other analogous criteria determined to be 
reasonable by the commission.
	(b)  If the commissioner issues an emergency order under 
Subsection (a) of this section, the commissioner shall provide the 
insurer reasonable notice and opportunity to be heard, except that  
notice is not required if the commissioner determines that a delay 
in issuing an order will cause irreparable harm.  The commissioner 
shall adopt rules as necessary to identify claims subject to this 
standard.
	(c)  If the commissioner determines that a delay will cause 
irreparable harm and issues an order without notice to the insurer, 
the commissioner shall provide the insurer with an opportunity to 
be heard not later than the fifth day after the date on which the 
order is issued.
	(d)  The commissioner shall adopt rules to govern procedures 
under which an insurer made subject to claim response requirements 
under Subsection (a) of this section may petition for removal of 
those requirements.
	(e)  An insurer that is not in compliance with the claim 
response requirements established by the commissioner under this 
section shall pay damages and attorney's fees as provided by 
Section 6 of this article.
	SECTION 2.  Not later than the 60th day after the effective 
date of this Act, the commissioner of insurance shall adopt rules as 
required by Section 9, Article 21.55, Insurance Code, as added by 
this Act.
	SECTION 3.  This Act takes effect immediately if it receives 
a vote of two-thirds of all the members elected to each house, as 
provided by Section 39, Article III, Texas Constitution.  If this 
Act does not receive the vote necessary for immediate effect, this 
Act takes effect September 1, 2003.