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A BILL TO BE ENTITLED
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AN ACT
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relating to a direct action against an insurer and insured by third |
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parties and required provisions of a liability insurance policy. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Title 4, Civil Practice and Remedies Code, is |
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amended by adding Chapter 100B to read as follows: |
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CHAPTER 100B. THIRD-PARTY LIABILITY OF INSURERS AND INSUREDS |
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Sec. 100B.001. DEFINITIONS. In this chapter: |
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(1) "Insured" means an individual who is issued, is a |
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party to, or is a beneficiary under a liability insurance policy. |
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(2) "Insurer" means an insurance company or other |
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entity admitted to engage in business and authorized to write |
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liability insurance in this state, including a county mutual |
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insurance company, a Lloyd's plan, and a reciprocal or |
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interinsurance exchange. |
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Sec. 100B.002. DIRECT ACTION AGAINST INSURERS AND INSUREDS. |
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(a) Except as provided by Subsection (c), a third party who is |
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injured by an insured or is a survivor of an individual who was |
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injured by the insured may bring an action under this chapter |
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against the insured and the insured's insurer if the insurer is |
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liable under the terms of the insured's policy to indemnify the |
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insured for damages for the injury. |
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(b) The third party may bring an action under this chapter |
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only in the county in which the injury occurred or in a county in |
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which an action may be brought against the insured or insurer under |
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Chapter 15. |
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(c) A third party may bring an action under this chapter |
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against the insurer only if: |
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(1) the insured has received a discharge in bankruptcy |
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by a court of competent jurisdiction that is applicable to the third |
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party's claim or that evidences that the insured is unable to pay |
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the claim; |
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(2) at the time the third party brings the action, |
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bankruptcy proceedings are pending for the insured in a court of |
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competent jurisdiction; |
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(3) the insured is insolvent; |
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(4) service of citation or other process cannot be |
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made on the insured; |
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(5) the third party is a child, parent, or spouse of |
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the insured; |
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(6) the third party is seeking to recover under the |
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insured's uninsured or underinsured motorist coverage; or |
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(7) the insured is deceased. |
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(d) A third party may bring an action under this chapter |
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regardless of whether the insured's policy prohibits an action |
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under this chapter or is written or delivered outside of this state. |
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Sec. 100B.003. EFFECT ON INSURANCE POLICIES. (a) This |
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chapter may not be construed to affect the provisions of an |
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insurance policy if the provisions are not in violation of the laws |
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of this state. |
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(b) An action brought under this chapter is subject to the |
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lawful conditions of the applicable insurance policy and the |
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defenses which an insurer may raise. |
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SECTION 2. Subchapter A, Chapter 2301, Insurance Code, is |
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amended by adding Section 2301.011 to read as follows: |
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Sec. 2301.011. REQUIRED POLICY PROVISIONS. (a) An insurer |
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may not deliver or issue for delivery in this state a form for use in |
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writing liability insurance described by Section 2301.003 unless |
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the form contains the provisions described by this section. |
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(b) A form must contain a provision providing that the |
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insolvency or bankruptcy of the insured does not release the |
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insurer from the payment of damages for an injury or loss by a third |
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party for which the insurer is liable under the policy. |
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(c) A form must contain a provision providing that a |
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judgment against an insured from which a third party cannot collect |
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any damages is prima facie evidence of the insured's insolvency and |
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the third party may bring an action against the insurer within the |
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terms and limits of the policy against the insurer under Chapter |
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100B, Civil Practice and Remedies Code. |
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(d) A form must contain a provision providing that the |
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purpose of the policy includes: |
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(1) providing benefits to all injured third parties |
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and the third parties' survivors to whom the insured is liable; and |
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(2) providing protection and coverage to each person |
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insured under the policy, regardless of whether the person is a |
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named insured or an additional insured, for any legal liability the |
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person may incur under the terms and limits of the policy. |
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SECTION 3. The changes in law made by this Act apply only to |
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an insurance policy delivered, issued for delivery, or renewed on |
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or after the effective date of this Act. An insurance policy |
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delivered, issued for delivery, or renewed before the effective |
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date of this Act is governed by the law in effect immediately before |
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the effective date of this Act, and that law is continued in effect |
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for that purpose. |
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SECTION 4. This Act takes effect September 1, 2015. |