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A BILL TO BE ENTITLED
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AN ACT
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relating to claims settlement for automobile insurance. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle C, Title 10, Insurance Code, is amended |
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by adding Chapter 1955 to read as follows: |
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CHAPTER 1955. CLAIMS SETTLEMENT FOR AUTOMOBILE INSURANCE |
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Sec. 1955.0001. PURPOSE. The purpose of this chapter is to |
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protect those injured by motorists from predatory practices engaged |
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in by personal and commercial automobile insurers that seek to |
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induce injured motorists into settling and releasing their legal |
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claims for an amount that is insufficient to compensate their |
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losses at a time when these losses are not known with any certainty, |
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resulting in costs both to the injured person and medical providers |
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whose care and services may go uncompensated as a result of those |
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predatory insurance practices. |
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Sec. 1955.0002. DEFINITIONS. In this chapter: |
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(1) "Claimant" means an individual who has a claim for |
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an injury against another individual or an entity. |
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(2) "Injury" means a bodily or psychological injury. |
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(3) "Release" means a written or oral contract under |
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which a claimant releases, wholly or partly, one or more of the |
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claimant's claims arising out of an injury for which an insurer may |
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be liable under an automobile insurance policy in exchange for |
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money or other consideration paid by any releasee. |
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(4) "Releasee" means an individual, entity, or insurer |
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released from a claimant's claim in a release. |
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Sec. 1955.0003. APPLICABILITY OF CHAPTER. This chapter |
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applies to an insurer writing personal or commercial automobile |
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insurance in this state, including an insurance company, |
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corporation, reciprocal or interinsurance exchange, mutual |
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insurance company, association, Lloyd's plan, or other insurer. |
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Sec. 1955.0004. VOIDABLE RELEASE OF CLAIMS. (a) A release |
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is voidable by the claimant in accordance with this section if: |
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(1) the claimant entered into the release on or before |
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the 45th day after the date the cause of action that is the basis for |
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the released claim accrued; and |
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(2) the claimant was not represented by an attorney at |
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the time the claimant entered into the release. |
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(b) Not later than the first anniversary after the date the |
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release was entered into, a claimant may void a release under this |
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section by providing written notice of the claimant's intent to |
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void the release to each releasee. |
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(c) Any consideration paid to the claimant by or on behalf |
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of the releasee in exchange for a release voided under this section |
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must be credited against any award or payment made in connection |
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with a claim against the releasee arising from the cause of action |
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that is the basis for the previously released claim. |
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SECTION 2. The changes in law made by this Act apply only to |
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an automobile insurance policy delivered, issued for delivery, or |
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renewed on or after January 1, 2020. A policy delivered, issued for |
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delivery, or renewed before January 1, 2020, is governed by the law |
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as it existed immediately before the effective date of this Act, and |
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that law is continued in effect for that purpose. |
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SECTION 3. This Act takes effect September 1, 2019. |