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A BILL TO BE ENTITLED
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AN ACT
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relating to disputes under insurance policies. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Insurance Code is amended to read as follows: |
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Sec. 541.163. APPRAISAL-DISPUTE RESOLUTION. (a) A person |
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or entity may not bring a suit or other non-compliant action for |
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damages under this chapter when the amount of loss or damage to |
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property is in dispute, before doing the following: |
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(1) notifying the insurer, in writing, that the amount |
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of damage or loss of property is disputed. The notice must be sent: |
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(A) by U.S. Postal Service, certified, first |
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class, return receipt requested; or |
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(B) similar service by a private carrier; and |
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(2) fully complying with the terms and conditions of |
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the applicable insurance policy, including, but not limited to, |
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full compliance with the policy's appraisal provision or |
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arbitration language if contained in the applicable policy. |
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(b) Within the lesser of 45 days of receipt of the notice |
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required by Subsection (a) or the time provided for initiation of |
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the proceedings applicable in the policy, the insurance company |
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must initiate proceedings as required by the applicable policy. |
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(c) Failure by the insurer to initiate proceedings within |
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the time outlined in Subsection (b) relieves the insured of any |
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penalty described in Section 541.164(a)(1) and Section |
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541.164(a)(2). |
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SECTION 2. Insurance Code is amended to read as follows: |
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541.164. ENFORCEMENT AND REMEDIES. (a) Upon hearing, |
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notice and a showing that the initiating party filed a suit or |
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brought any action not in compliance with Article 541.163, the |
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Court in which the action is pending shall: |
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(1) order that the insurance company initiate a |
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proceeding as described in Section 541.163(a)(2); and |
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(2) order that all reasonable and necessary attorney's |
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fees and costs of court shall be taxed, jointly and severally, |
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against the party initiating the non-compliant suit, or that |
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party's attorney(s) or counsel. The insurance company may not |
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execute, collect, or otherwise enforce this order prior to |
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initiating the proceedings described in Section 541.163(a)(2). |
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(b) Failure by the insurance company to comply with a court |
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order issued under Subsection (a)(1), will absolve the insured of |
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liability under Subsection (a)(1) and Subsection (a)(2). |
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(c) Failure by the insurance company to comply with the |
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court order under Subsection (a)(1), will automatically void any |
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court order issued under Subsection (a)(1) and Subsection (a)(2). |
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(d) The insurance company cannot recover any moneys awarded |
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under Subsection (a)(2) from any arbitration award or other award |
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to the insured payable under the applicable policy. |
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SECTION 3. Insurance Code is amended to read as follows: |
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541.165. Provision of Consumer Information. (a) At the |
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time of the creation of the policy, the insurance company shall |
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provide to the insured, information relating to the necessary |
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process to file a suit in compliance with the applicable policy. |
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SECTION 4. Insurance Code is amended to read as follows: |
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This Act takes effect September 1, 2011. |
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This Act applies only to policies written, created, or |
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extended on or after the effective date of this Act. |