By: Menéndez, Campbell  S.B. No. 1538
         (In the Senate - Filed March 11, 2021; March 24, 2021, read
  first time and referred to Committee on Business & Commerce;
  April 23, 2021, reported adversely, with favorable Committee
  Substitute by the following vote:  Yeas 9, Nays 0; April 23, 2021,
  sent to printer.)
Click here to see the committee vote
 
  COMMITTEE SUBSTITUTE FOR S.B. No. 1538 By:  Hancock
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to insurer restrictions and duties regarding repair of a
  motor vehicle covered under an insurance policy.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 1952.301, Insurance Code, is amended to
  read as follows:
         Sec. 1952.301.  LIMITATIONS AND DUTIES REGARDING REPAIR OF
  MOTOR VEHICLE [LIMITATION ON PARTS, PRODUCTS, OR REPAIR PERSONS OR
  FACILITIES PROHIBITED]. (a) In this section:
               (1)  "New motor vehicle" has the meaning assigned by
  Section 2301.002, Occupations Code.
               (2)  "Non-original equipment" means a part, product, or
  repair process used in the repair of a motor vehicle that is not
  made by or for or used by that vehicle's manufacturer or
  distributor.
         (b)  Under an automobile insurance policy that is delivered,
  issued for delivery, or renewed in this state, for damage to a motor
  vehicle that has been owned by the insured for 36 months or less and
  that was a new motor vehicle when delivered to the insured, the
  insurer:
               (1)  shall require that a part, product, or repair
  process used to repair the vehicle be the original equipment
  manufacturer's or distributor's part, product, or repair process,
  unless the insured opts to use non-original equipment in accordance
  with Subsection (f); and
               (2)  may not limit the beneficiary of the policy from
  selecting a repair person or facility to repair damage to the
  vehicle.
         (c)  Under [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 that has been
  owned by the insured for more than 36 months by:
               (1)  specifying the brand, type, kind, age, vendor,
  supplier, or condition of parts or products or the repair process
  that may be used to repair the vehicle; or
               (2)  limiting the beneficiary of the policy from
  selecting a repair person or facility to repair damage to the
  vehicle.
         (d)  In settling a liability claim by a third party against
  an insured for property damage claimed by the third party for damage
  to the third party's motor vehicle that has been owned by the third
  party for 36 months or less and that was a new motor vehicle when
  delivered to the third party, an insurer:
               (1)  shall require that a part, product, or repair
  process used to repair the vehicle be the original equipment
  manufacturer's or distributor's part, product, or repair process,
  unless the third-party claimant opts to use non-original equipment
  in accordance with Subsection (f); and
               (2)  may not require the third-party claimant to use a
  particular repair person or facility to repair damage to the
  vehicle.
         (e) [(b)]  In settling a liability claim by a third party
  against an insured for property damage claimed by the third party to
  a motor vehicle that has been owned by the insured for more than 36
  months, an insurer may not require the third-party claimant to have
  the motor vehicle repairs made by a particular repair person or
  facility or to use a particular brand, type, kind, age, vendor,
  supplier, or condition of parts or products or a particular repair
  process.
         (f)  An insured or third-party claimant may opt to accept the
  use of non-original equipment in the repair of the insured's or
  claimant's motor vehicle by signing a written disclosure. The
  disclosure must:
               (1)  be signed before repair of the vehicle begins;
               (2)  be delivered as an attachment to a written
  estimate provided for the repair of the vehicle;
               (3)  be written in at least a 12-point font; and
               (4)  include the following language:
         "I am opting to accept the use of a non-original equipment
  manufacturer's or distributor's part, product, or repair process in
  the repair of my vehicle, and I understand and agree that:
               1.  the attached repair estimate is based on the use of
  a non-original equipment manufacturer's or distributor's part,
  product, or repair process that is supplied by a manufacturer or
  distributor that is not my motor vehicle's manufacturer or
  distributor; and
               2.  the warranty for the non-original equipment
  manufacturer's or distributor's part, product, or repair process is
  provided by the manufacturer or distributor of that part, product,
  or repair process and not by my motor vehicle's manufacturer or
  distributor."
         (g)  An insurer that delivers, issues for delivery, or renews
  an automobile insurance policy in this state may not require or
  request that a repair person or facility use any specific
  percentage of non-original equipment in the repair of a motor
  vehicle.
         SECTION 2.  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, 2022. 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 3.  This Act takes effect September 1, 2021.
 
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