79R5752 PB-D

By:  Thompson                                                     H.B. No. 2388



A BILL TO BE ENTITLED

AN ACT

relating to insurance fraud reporting requirements.                           
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 701.051(a), Insurance Code, as effective 
April 1, 2005, is amended to read as follows:
	Not later than the 30th day after the date the person makes 
the determination or has reasonable grounds for suspicion, a [(a) 
A] person who determines or reasonably suspects that a fraudulent 
insurance act has been or is about to be committed:
		(1)  shall report the information in writing to the 
insurance fraud unit of the department; and
		(2)  may also report the information to another [or an] 
authorized governmental agency [not later than the 30th day after 
the date the person makes the determination].
	SECTION 2.  Section 701.108, Insurance Code, as effective 
April 1, 2005, is amended to read as follows:
	Sec. 701.108.  [INSURER'S] DUTY TO PROVIDE INFORMATION.  On 
the written request of an authorized governmental agency, an 
insurer, or a person authorized to act on behalf of the insurer,
shall provide to the agency any relevant information or material 
relating to a matter under investigation.
	SECTION 3.  Section 701.109, Insurance Code, as effective 
April 1, 2005, is amended to read as follows:
	Sec. 701.109.  REQUEST FOR INVESTIGATION BY INSURER.  (a)  An 
insurer who conducts [must complete] an independent investigation 
of suspected insurance claim fraud is not required to complete that 
investigation [and draft a report of the insurer's findings] before 
requesting that the commissioner conduct an investigation.
	(b)  The insurer shall draft a report of the insurer's 
findings and [must] submit the report and any [the] related 
investigation file to the commissioner as soon as practicable on 
the conclusion [as part] of the insurer's independent [request that 
the commissioner conduct an] investigation.
	SECTION 4.  Sections 701.151(a) and (b), Insurance Code, as 
effective April 1, 2005, are amended to read as follows:
	(a)  Information or material acquired by the department that 
is relevant to an investigation by the insurance fraud unit is 
privileged and is not a public record [for the period the 
commissioner considers reasonably necessary to:
		[(1)  complete the investigation;                            
		[(2)  protect the person under investigation from 
unwarranted injury; or
		[(3)  serve the public interest].                            
	(b)  The information or material is not subject to a subpoena 
by another governmental entity, other than a grand jury subpoena, 
unless, [until:
		[(1)  the information or material is released for 
public inspection by the commissioner; or
		[(2)]  after notice and a hearing, a district court 
determines that obeying the subpoena would not jeopardize the 
public interest and any investigation by the commissioner.
	SECTION 5.  Sections 701.051(b), 701.052(f), 701.151(c), 
and 701.154(c), Insurance Code, as effective April 1, 2005, are 
repealed.
	SECTION 6.  This Act takes effect September 1, 2005.