86R26916 PMO-F
 
  By: Clardy, J. Johnson of Dallas, Lambert, H.B. No. 1348
      Vo, et al.
 
  Substitute the following for H.B. No. 1348:
 
  By:  Lucio III C.S.H.B. No. 1348
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to certain insurance practices with respect to repair of
  motor vehicles.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subchapter G, Chapter 1952, Insurance Code, is
  amended by adding Section 1952.300 to read as follows:
         Sec. 1952.300.  DEFINITIONS. (a)  In this subchapter:
               (1)  "Estimating system" means an automobile collision
  damage estimating system that is generally accepted by the
  automobile repair industry for use in writing an automobile repair
  estimate.
               (2)  "Repair person or facility" does not include a
  person who exclusively provides automobile glass replacement,
  glass repair services, or glass products.
         (b)  For purposes of enforcement of this subchapter:
               (1)  "Prevailing rate" means the rate identified by a
  rate survey that is:
                     (A)  conducted by a third party;
                     (B)  designed to be transparent and unbiased; and
                     (C)  based on the posted retail labor rates and
  not direct repair program shop rates that operate under a contract
  with an insurer.
               (2)  "Reasonable and necessary amount" means the amount
  determined by the original equipment manufacturer's manufacturer
  and estimating systems required to repair a vehicle to the
  condition before the covered damage to the vehicle occurred.
         SECTION 2.  Section 1952.301, Insurance Code, is amended to
  read as follows:
         Sec. 1952.301.  LIMITATION ON PARTS, PRODUCTS, OR REPAIR
  PERSONS OR FACILITIES PROHIBITED.  (a)  Except as provided by rules
  adopted by the commissioner, under an automobile insurance policy
  that is delivered, issued for delivery, or renewed in this state, an
  insurer may not directly or indirectly limit the insurer's coverage
  under a policy covering damage to a motor vehicle by[:
               [(1)]  specifying the brand, type, kind, age, vendor,
  supplier, or condition of parts or products that may be used to
  repair the vehicle. [; or]
         (a-1)  An insurer described by Subsection (a) may not require
  that:
               (1)  a vehicle be repaired with a part or product on the
  basis that the part or product is the least expensive part or
  product available; or
               (2)  the beneficiary of a policy purchase any part or
  product from any vendor or supplier, including an out-of-state
  vendor or supplier, on the basis that the part or product is the
  least expensive part or product available.
         (a-2)  An insurer described by Subsection (a) may not
  consider a specified part or product for the repair of a motor
  vehicle to be of like kind and quality as an original equipment
  manufacturer part or product for any purpose unless the insurer or
  the manufacturer of the specified part or product has conclusively
  demonstrated that the specified part or product:
               (1)  meets the fit, finish, and quality criteria
  established for the part or product by the original equipment
  manufacturer of the part or product;
               (2)  is the same weight and metal hardness established
  for the part or product by the original equipment manufacturer of
  the part or product; and
               (3)  has been tested using the same crash and safety
  test criteria used by the original equipment manufacturer of the
  part or product.
         (a-3)  Under an automobile insurance policy that is
  delivered, issued for delivery, or renewed in this state, an
  insurer described by Subsection (a), an employee or agent of the
  insurer, an insurance adjuster, or an entity that employs an
  insurance adjuster may not directly or indirectly limit the
  insurer's coverage under a policy covering damage to a motor
  vehicle by:
               (1) [(2)]  limiting the beneficiary of the policy from
  selecting a repair person or facility to repair damage to the
  vehicle to the vehicle's condition before the damage occurred in
  order for the beneficiary to obtain the repair without owing any
  out-of-pocket cost other than the deductible;
               (2)  intimidating, coercing, or threatening the
  beneficiary to induce the beneficiary to use a particular repair
  person or facility; or
               (3)  offering an incentive or inducement, other than a
  warranty issued by a repair person or facility, for the beneficiary
  to use a particular repair person or facility.
         (b)  In settling a liability claim by a third party against
  an insured for property damage claimed by the third party, an
  insurer, an employee or agent of an insurer, an insurance adjuster,
  or an entity that employs an insurance adjuster may not:
               (1)  require the third-party claimant to have repairs
  made by a particular repair person or facility;
               (2)  require the third-party claimant [or] to use a
  particular brand, type, kind, age, vendor, supplier, or condition
  of parts or products to repair damage to the vehicle to the
  vehicle's condition before the damage occurred;
               (3)  intimidate, coerce, or threaten the third-party
  claimant to induce the claimant to use a particular repair person or
  facility; or
               (4)  offer an incentive or inducement, other than a
  warranty issued by a repair person or facility, for the third-party
  claimant to use a particular repair person or facility.
         SECTION 3.  Section 1952.302, Insurance Code, is amended to
  read as follows:
         Sec. 1952.302.  PROHIBITED ACTS IN CONNECTION WITH REPAIR OF
  MOTOR VEHICLE. (a)  In connection with the repair of damage to a
  motor vehicle covered under an automobile insurance policy, an
  insurer, an employee or agent of an insurer, an insurance adjuster,
  or an entity that employs an insurance adjuster may not:
               (1)  solicit or accept a referral fee or gratuity in
  exchange for referring a beneficiary or third-party claimant to a
  repair person or facility to repair the damage;
               (2)  state or suggest, either orally or in writing, to a
  beneficiary that the beneficiary must use a specific repair person
  or facility or a repair person or facility identified on a preferred
  list compiled by an insurer for the damage repair or parts
  replacement to be covered by the policy; [or]
               (3)  restrict the right of a beneficiary or third-party
  claimant to choose a repair person or facility by requiring the
  beneficiary or third-party claimant to travel a [an unreasonable]
  distance considered inconvenient by a beneficiary or third-party
  claimant to repair the damage;
               (4)  offer, communicate, or suggest in any manner that
  a particular repair person or facility will provide faster repair
  times, faster service, or more efficient claims handling than
  another repair person or facility; or
               (5)  disregard a repair operation or cost identified by
  an estimating system, including the system's procedural pages and
  any repair, process, or procedure recommended by the original
  equipment manufacturer of a part or product.
         (b)  Notwithstanding Subsection (a)(5), a motor vehicle
  covered under an automobile insurance policy may be repaired with a
  part or product that is of like kind and quality as an original
  equipment manufacturer part or product as authorized by Section
  1952.301(a-2).
         SECTION 4.  The change in law made by this Act applies only
  to an insurance policy that is delivered, issued for delivery, or
  renewed on or after January 1, 2020. A policy delivered, issued for
  delivery, or renewed before that date is governed by the law as it
  existed immediately before the effective date of this Act, and that
  law is continued in effect for that purpose.
         SECTION 5.  This Act takes effect September 1, 2019.