| |
|
|
A BILL TO BE ENTITLED
|
|
|
AN ACT
|
|
|
relating to certain unfair practices in the settlement of insurance |
|
|
claims involving noneconomic damages. |
|
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
|
SECTION 1. Subchapter B, Chapter 541, Insurance Code, is |
|
|
amended by adding Section 541.0601 to read as follows: |
|
|
Sec. 541.0601. UNFAIR SETTLEMENT PRACTICES IN RELATION TO |
|
|
CERTAIN DAMAGES. (a) In this section: |
|
|
(1) "Artificial intelligence application" means a |
|
|
computer application that mimics human thought and cognitive |
|
|
processes to solve complex problems. |
|
|
(2) "Noneconomic damages" means damages awarded for |
|
|
the purpose of compensating a claimant for physical pain and |
|
|
suffering, mental or emotional pain or anguish, loss of consortium, |
|
|
disfigurement, physical impairment, loss of companionship and |
|
|
society, inconvenience, loss of enjoyment of life, injury to |
|
|
reputation, and all other nonpecuniary losses of any kind other |
|
|
than exemplary damages. |
|
|
(b) An insurer may not settle or adjust a claim by an insured |
|
|
or beneficiary that is, in whole or part, for compensation for |
|
|
noneconomic damages without a complete review of the claim by an |
|
|
individual who is authorized to evaluate the claim based on the |
|
|
facts of the claim and the individual's judgment. |
|
|
(c) It is an unfair method of competition or an unfair or |
|
|
deceptive act or practice in the business of insurance to evaluate a |
|
|
claim described by Subsection (b) using: |
|
|
(1) an artificial intelligence application or other |
|
|
computer software application; or |
|
|
(2) any other method without the complete review of |
|
|
the claim by an individual as required by Subsection (b). |
|
|
(d) This section applies to a claim made by a third party |
|
|
asserting one or more claims against an insured covered under a |
|
|
liability insurance policy. |
|
|
SECTION 2. Section 542.003(b), Insurance Code, is amended |
|
|
to read as follows: |
|
|
(b) Any of the following acts by an insurer constitutes |
|
|
unfair claim settlement practices: |
|
|
(1) knowingly misrepresenting to a claimant pertinent |
|
|
facts or policy provisions relating to coverage at issue; |
|
|
(2) failing to acknowledge with reasonable promptness |
|
|
pertinent communications relating to a claim arising under the |
|
|
insurer's policy; |
|
|
(3) failing to adopt and implement reasonable |
|
|
standards for the prompt investigation of claims arising under the |
|
|
insurer's policies; |
|
|
(4) not attempting in good faith to effect a prompt, |
|
|
fair, and equitable settlement of a claim submitted in which |
|
|
liability has become reasonably clear; |
|
|
(5) compelling a policyholder to institute a suit to |
|
|
recover an amount due under a policy by offering substantially less |
|
|
than the amount ultimately recovered in a suit brought by the |
|
|
policyholder; |
|
|
(6) failing to maintain the information required by |
|
|
Section 542.005; |
|
|
(7) using an artificial intelligence application, |
|
|
other computer software application, or other method to evaluate a |
|
|
claim in violation of Section 541.0601; or |
|
|
(8) [(7)] committing another act the commissioner |
|
|
determines by rule constitutes an unfair claim settlement practice. |
|
|
SECTION 3. The change in law made by this Act applies only |
|
|
to a claim that is filed on or after the effective date of this Act. |
|
|
A claim that is filed before the effective date of this Act is |
|
|
governed by the law as it existed at the time the claim was filed, |
|
|
and that law is continued in effect for this purpose. |
|
|
SECTION 4. This Act takes effect September 1, 2007. |