78R5680 DLF-D
By: Castro H.B. No. 1262
A BILL TO BE ENTITLED
AN ACT
relating to certain claims settlement practices under a motor
vehicle insurance policy; imposing penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter B, Chapter 21, Insurance Code, is
amended by adding Article 21.21-3 to read as follows:
Art. 21.21-3. 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 insurer is otherwise liable to a third-party
claimant, an insurer may not require or encourage an insurance
adjuster or other employee of the insurer to reduce payments to
third-party claimants by:
(1) allocating a specific percentage of the dollar
amount of third-party motor vehicle insurance claims to the
proportionate responsibility of claimants; or
(2) determining that, in a specific percentage of the
third-party motor vehicle insurance claims, the 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) A violation of this article is an unfair method of
competition or unfair or deceptive act or practice in the business
of insurance for purposes of Article 21.21 of this code and an
unfair claim settlement practice for purposes of Article 21.21-2 of
this code.
(f) 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.