78R11299 DLF-D


By:  Castro, Gallego                                              H.B. No. 1262

Substitute the following for H.B. No. 1262:                                   

By:  Gallego                                                  C.S.H.B. No. 1262



A BILL TO BE ENTITLED

AN ACT

relating to certain claims settlement practices under a motor 
vehicle insurance policy.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subchapter E, Chapter 21, Insurance Code, is 
amended by adding Article 21.56A to read as follows:
	Art. 21.56A.  UNFAIR INCENTIVES IN SETTLING MOTOR VEHICLE 
INSURANCE CLAIMS.  (a)  In this article, "proportionate 
responsibility" means the percentage of responsibility attributed 
to a third-party claimant's negligent act or omission that 
contributed to the damages for which indemnification is sought 
under the motor vehicle insurance policy.
	(b)  This article applies to each insurer authorized to write 
motor vehicle insurance in this state, including a Lloyd's plan, 
county mutual insurance company, or reciprocal or interinsurance 
exchange.
	(c)  In processing third-party motor vehicle insurance 
claims for which the insured may be liable to a third-party 
claimant, an insurer may not require or encourage an insurance 
adjuster or other employee of the insurer to determine that, in a 
specific percentage of the third-party motor vehicle insurance 
claims, a third-party claimant was proportionately responsible.
	(d)  An insurer may not use a program or policy that 
establishes quotas or that provides financial or other incentives, 
including incentives connected with performance evaluation or 
increases in compensation, for assigning proportionate 
responsibility to third-party claimants in violation of Subsection 
(c) of this article.
	(e)  The commissioner may adopt rules as necessary to 
implement this article.
	SECTION 2.  This Act takes effect September 1, 2003, and 
applies only to conduct occurring on or after that date. Conduct 
occurring before the effective date of this Act is governed by the 
law as it existed immediately before that date, and that law is 
continued in effect for that purpose.