88R22914 CJD-F
 
  By: Jetton H.B. No. 597
 
  Substitute the following for H.B. No. 597:
 
  By:  Oliverson C.S.H.B. No. 597
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to an appraisal procedure for disputed losses under
  certain property and casualty insurance policies.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subtitle A, Title 10, Insurance Code, is amended
  by adding Chapter 1813 to read as follows:
  CHAPTER 1813. APPRAISAL PROCEDURES
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 1813.001.  APPLICABILITY OF CHAPTER. (a) This chapter
  applies only to an insurer writing a property or casualty insurance
  policy, including the FAIR Plan Association, the Texas Automobile
  Insurance Plan Association, a Lloyd's plan, a reciprocal or
  interinsurance exchange, a farm mutual insurance company, and a
  county mutual insurance company.
         (b)  This chapter does not apply to the Texas Windstorm
  Insurance Association.
         Sec. 1813.002.  RULES. The commissioner may adopt rules
  necessary to implement this chapter.
         Sec. 1813.003.  REQUIRED POLICY PROVISION: APPRAISAL
  PROCEDURE. An insurance policy described by Section 1813.001 must
  contain an appraisal procedure for first-party property damage
  claims that complies with this chapter.
  SUBCHAPTER B. APPRAISAL PROCEDURES
         Sec. 1813.051.  APPRAISAL DEMAND. (a)  If the policyholder
  and insurer fail to agree to the amount of a loss covered by the
  policy, the policyholder or insurer may provide a written demand
  for an appraisal to the other party not later than the 180th day
  after the date the policyholder receives the initial offer from the
  insurer.
         (b)  The insurer must include written notification of the
  180-day deadline to demand appraisal in the insurer's initial offer
  to the policyholder.
         (c)  The policyholder and the insurer may agree in writing
  not later than the 20th day after the date on which a demand for
  appraisal is provided to waive any deadlines imposed by this
  subchapter.
         Sec. 1813.052.  SELECTION OF APPRAISERS. Not later than the
  20th day after the date an appraisal demand is provided under
  Section 1813.051, the policyholder and insurer shall each:
               (1)  select a disinterested and competent appraiser;
  and
               (2)  provide written notice to the other party of the
  appraiser's identity.
         Sec. 1813.053.  APPRAISAL OF LOSS BY APPRAISERS; SELECTION
  OF UMPIRE. (a)  The appraisers shall appraise the loss that is the
  subject of the appraisal not later than the 90th day after the date
  both the policyholder and insurer have complied with Section
  1813.052.
         (b)  The policyholder and insurer by agreement may twice
  extend the deadline described by Subsection (a) for a period not to
  exceed 60 days each time.
         (c)  If the appraisers agree on the amount of the loss:
               (1)  the appraisers shall provide written notice of the
  agreement to the policyholder and insurer; and
               (2)  the agreed amount is set as the amount of the loss.
         (d)  If the appraisers fail to agree on the amount of the
  loss, the appraisers shall select a competent and impartial umpire.  
  If the appraisers do not agree on an umpire before the 20th day
  after the deadline for the appraisers to determine the amount of the
  loss under this section, a judge of a court in the county in which
  the policyholder resides or where the property is located shall
  select the umpire on the request of the policyholder or insurer. The
  policyholder or insurer shall provide at least 10 days' notice of
  the request to the other party before the request is submitted to
  the court.
         (e)  After the umpire is selected under Subsection (d), the
  appraisers shall provide written notice to the umpire that
  includes:
               (1)  the amount each appraiser sets for the loss; and
               (2)  any supporting documentation.
         Sec. 1813.054.  APPRAISAL DETERMINATION. (a)  The umpire
  shall present a draft award to both appraisers not later than the
  30th day after the date the umpire receives the notice described by
  Section 1813.053(e) from each appraiser. The umpire shall set the
  amount of loss by agreement of either appraiser with the umpire's
  draft award.
         (b)  If neither appraiser agrees to the umpire's draft award
  on or before the 15th day after the date on which the appraisers are
  presented the draft award, the umpire shall, not later than the 15th
  day after the date of that deadline, revise the award in an attempt
  to reach an agreement with either appraiser.
         (c)  The umpire shall continue revising the award every 15
  days until an agreement is reached with at least one of the
  appraisers.
         (d)  The umpire may not remove or reduce any items to which
  both appraisers previously agreed.
         (e)  By agreement, the policyholder and insurer may extend
  the deadline described by Subsection (a) for a period not to exceed
  60 days.
         (f)  On reaching an agreement on the amount of the loss as
  described by this section, the umpire shall provide a written
  determination to the policyholder and insurer that:
               (1)  sets the amount of the loss; and
               (2)  is signed by the umpire and the appraiser with whom
  the umpire reached the agreement.
         (g)  A determination provided under this section does not
  prevent either party from pursuing its rights under the policy or
  law.
         Sec. 1813.055.  APPRAISAL EXPENSES. The policyholder and
  insurer shall equally divide and pay the umpire's expenses, as
  applicable, and all other appraisal expenses.
         Sec. 1813.056.  EFFECT OF APPRAISAL. (a)  The appraisal does
  not affect any applicable policy terms, including deductibles.
         (b)  The appraisal decision on the amount of loss is binding,
  and the use of the appraisal procedure is not a condition precedent
  to bringing an action for a violation of this code, for a breach of
  contract, or for any other common-law or statutory remedy.
         SECTION 2.  Chapter 1813, Insurance Code, as added by this
  Act, applies only to an insurance policy delivered, issued for
  delivery, or renewed on or after January 1, 2024.
         SECTION 3.  This Act takes effect September 1, 2023.