This website will be unavailable from Friday, April 26, 2024 at 6:00 p.m. through Monday, April 29, 2024 at 7:00 a.m. due to data center maintenance.

  84R28798 AJA-F
 
  By: Taylor of Galveston, et al. S.B. No. 1628
 
  (Smithee)
 
  Substitute the following for S.B. No. 1628:  No.
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to insurance claims and certain prohibited acts and
  practices in or in relation to the business of insurance.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 541.151, Insurance Code, is amended to
  read as follows:
         Sec. 541.151.  PRIVATE ACTION FOR ACTUAL DAMAGES AUTHORIZED.  
  Except as provided by Section 541.1511, a [A] person who sustains
  actual damages may bring an action against another person for those
  damages caused by the other person engaging in an act or practice:
               (1)  defined by Subchapter B to be an unfair method of
  competition or an unfair or deceptive act or practice in the
  business of insurance; or
               (2)  specifically enumerated in Section 17.46(b),
  Business & Commerce Code, as an unlawful deceptive trade practice
  if the person bringing the action shows that the person relied on
  the act or practice to the person's detriment.
         SECTION 2.  Subchapter D, Chapter 541, Insurance Code, is
  amended by adding Section 541.1511 to read as follows:
         Sec. 541.1511.  ACTION RELATING TO CERTAIN CLAIMS FOR
  PROPERTY DAMAGE:  INSURER ELECTION FOR LEGAL RESPONSIBILITY FOR
  ACTIONS OF AGENTS AND EMPLOYEES. (a)  This section applies only to
  an action brought by an insured relating to or arising from a claim
  for damage to or loss of real property or tangible personal property
  made under an insurance policy providing coverage for damage to or
  loss of real property.
         (b)  Except as provided by Subsection (d), an insured seeking
  damages in an action to which this section applies may not file or
  maintain an action under this subchapter against an employee,
  agent, representative, or adjuster issuing policies, handling
  claims, or performing other acts on behalf of an insurer, and any
  such action shall be immediately dismissed, if:
               (1)  the employee, agent, representative, or adjuster
  was not named in a notice given under Section 541.1541; or
               (2)  not later than the 30th day after the date the
  notice given under Section 541.1541 is received, the insurer agrees
  in a document provided to the insured to be liable for any act or
  omission of the employee, agent, representative, or adjuster
  related to or arising out of the insured's claim.
         (c)  A dismissal under Subsection (b)(1) or an agreement
  under Subsection (b)(2) does not limit the insurer's liability and
  does not limit the insurer's vicarious liability for any act or
  omission of the employee, agent, representative, or adjuster
  related to or arising out of the insured's claim.
         (d)  An insured may file and maintain an action described by
  Subsection (b) if the insured shows and the court finds that the
  insured cannot reasonably expect to secure complete relief unless
  the employee, agent, representative, or adjuster is made a party to
  the action.
         SECTION 3.  The heading to Section 541.152, Insurance Code,
  is amended to read as follows:
         Sec. 541.152.  ACTUAL DAMAGES, ATTORNEY'S FEES, AND OTHER
  RELIEF.
         SECTION 4.  The heading to Section 541.154, Insurance Code,
  is amended to read as follows:
         Sec. 541.154.  PRIOR NOTICE OF ACTION OTHER THAN ACTION
  RELATING TO CLAIM FOR PROPERTY DAMAGE.
         SECTION 5.  Section 541.154(a), Insurance Code, is amended
  to read as follows:
         (a)  Except as provided by Section 541.1541, a [A] person
  seeking damages in an action against another person under this
  subchapter must provide written notice to the other person not
  later than the 61st day before the date the action is filed.
         SECTION 6.  Subchapter D, Chapter 541, Insurance Code, is
  amended by adding Section 541.1541 to read as follows:
         Sec. 541.1541.  PRIOR NOTICE OF ACTION RELATING TO CERTAIN
  CLAIMS FOR PROPERTY DAMAGE. (a)  This section applies only to an
  action brought by an insured relating to or arising from a claim for
  damage to or loss of real property or tangible personal property
  made under an insurance policy providing coverage for damage to or
  loss of real property.
         (b)  An insured seeking damages in an action to which this
  section applies must provide written notice complying with this
  section to all potential defendants not later than the 61st day
  before the date the action is filed.
         (c)  The notice required by this section must state:
               (1)  the specific damage items and the amount alleged
  to be owed by the insurer under the insurance policy;
               (2)  the amount of the actual damages, other damages,
  interest, and expenses, specifically stated for each item, that the
  insured alleges are owed by the insurer;
               (3)  the amount of attorney's fees the insured
  reasonably has incurred as of the date the notice is given in
  asserting the claim against the insurer;
               (4)  an amount that includes the amounts described by
  Subdivisions (1) through (3) that the insured will accept in full
  and final satisfaction of the claim; and
               (5)  the name of every person to whom notice is given
  under this section and a brief description of each person's
  relationship to the insured's claim.
         (d)  If the amount sought by the insured in the action
  involves a claim for damage items not previously submitted to the
  insurer, not later than the 15th day after the date notice under
  this section is provided to an insurer, the insurer may request that
  the insured provide copies of reports, estimates, photographs, and
  other items reasonably supporting the insured's additional damage
  items. If a request is made in accordance with this subsection, the
  insured must provide the requested information before filing an
  action to which this section applies.
         (e)  A presuit notice under this section is not required if
  giving notice is impracticable because the action:
               (1)  must be filed to prevent the statute of
  limitations from expiring; or
               (2)  is asserted as a counterclaim.
         SECTION 7.  Section 541.155, Insurance Code, is amended to
  read as follows:
         Sec. 541.155.  ABATEMENT. (a)  A person against whom an
  action under this subchapter is pending who does not receive [the]
  notice or requested information as required by Section 541.154 or
  541.1541 may file a plea in abatement not later than the 30th day
  after the date the person files an original answer in the court in
  which the action is pending.
         (b)  The court shall abate the action if, after a hearing,
  the court finds that the person is entitled to an abatement because
  the claimant did not provide [the] notice or requested information
  as required by Section 541.154 or 541.1541.
         (c)  An action is automatically abated without a court order
  beginning on the 11th day after the date a plea in abatement is
  filed if the plea:
               (1)  is verified and alleges that the person against
  whom the action is pending did not receive [the] notice or requested
  information as required by Section 541.154 or 541.1541; and
               (2)  is not controverted by an affidavit filed by the
  claimant before the 11th day after the date the plea in abatement is
  filed.
         (d)  An abatement under this section continues until the 60th
  day after the date notice or requested information is provided in
  compliance with Section 541.154 or 541.1541.
         (e)  This section does not apply if Section 541.154(c) or
  541.1541(e) applies.
         SECTION 8.  Subchapter B, Chapter 542, Insurance Code, is
  amended by adding Section 542.0595 to read as follows:
         Sec. 542.0595.  PRIOR NOTICE OF ACTION RELATING TO CERTAIN
  CLAIMS FOR PROPERTY DAMAGE; ABATEMENT. (a)  An insured may not
  bring suit under Section 542.060 in connection with a claim for
  damage to or loss of real property or tangible personal property
  made under an insurance policy providing coverage for damage to or
  loss of real property unless the insured has provided written
  notice to the insurer with respect to the claim in accordance with
  Section 541.1541 and any information requested by the insurer in
  accordance with that section.
         (b)  A suit under Section 542.060 for which notice is
  required by this section is subject to abatement to the same extent
  and in the same manner provided by Section 541.155 for an action
  under Subchapter D, Chapter 541.
         SECTION 9.  Section 542.060, Insurance Code, is amended to
  read as follows:
         Sec. 542.060.  LIABILITY FOR VIOLATION OF SUBCHAPTER.
  (a)  If an insurer that is liable for a claim under an insurance
  policy is not in compliance with this subchapter, the insurer is
  liable to pay the holder of the policy or the beneficiary making the
  claim under the policy, in addition to the amount of the claim,
  interest on the unpaid amount of the claim at the rate of 18 percent
  a year as damages, together with reasonable attorney's fees.
         (a-1)  In determining the amount of attorney's fees awarded
  under Subsection (a), the trier of fact shall consider:
               (1)  the time and labor required, the novelty and
  difficulty of the questions involved, and the skill requisite to
  perform the legal service properly;
               (2)  the likelihood, if apparent to the claimant, that
  the acceptance of the particular employment will preclude other
  employment by the attorney;
               (3)  the fee customarily charged in the locality for
  similar legal services;
               (4)  the amount involved and the results obtained;
               (5)  the time limitations imposed by the claimant or by
  the circumstances;
               (6)  the nature and length of the professional
  relationship with the claimant;
               (7)  the experience, reputation, and ability of the
  attorney performing the services; and
               (8)  whether the fee is fixed or contingent on results
  obtained or uncertainty of collection before the legal services
  have been rendered.
         (b)  If a suit is filed, interest and [the] attorney's fees
  payable under this section shall be taxed as part of the costs in
  the case.
         (c)  The liability for interest and attorney's fees provided
  by this section is the exclusive remedy for a violation of this
  subchapter. This section is not intended to affect a right or
  remedy provided by Chapter 541 or any other law outside this
  subchapter.
         (d)  If a claim for a loss has been paid by the insurer and a
  suit under this section arises out of a supplemental claim for that
  loss, interest awarded under this section on the supplemental claim
  begins to accrue on the 60th day after the date the insurer receives
  notice of the supplemental claim.
         SECTION 10.  Subtitle A, Title 10, Insurance Code, is
  amended by adding Chapter 1808 to read as follows:
  CHAPTER 1808. CERTAIN CLAIMS FOR PROPERTY DAMAGE
         Sec. 1808.001.  DEFINITION. In this chapter, "claim for
  property damage" means a claim to which this chapter applies.
         Sec. 1808.002.  APPLICABILITY OF CHAPTER. This chapter
  applies only to a first party claim for damage to or loss of real
  property or tangible personal property made under an insurance
  policy:
               (1)  providing coverage for damage to or loss of real
  property; and
               (2)  issued by:
                     (A)  any insurer authorized to write property
  insurance in this state, including:
                           (i)  an insurance company;
                           (ii)  a reciprocal or interinsurance
  exchange;
                           (iii)  a mutual insurance company;
                           (iv)  a capital stock insurance company;
                           (v)  a county mutual insurance company;
                           (vi)  a farm mutual insurance company; or
                           (vii)  a Lloyd's plan;
                     (B)  an eligible surplus lines insurer; or
                     (C)  the FAIR Plan Association.
         Sec. 1808.003.  CLAIM FILING PERIOD. (a)  Subject to
  Subsection (b), failure to provide notice of a claim for property
  damage by the second anniversary of the date on which the damage to
  or loss of property that is the basis of the claim occurs is an
  absolute bar to recovery on the claim.
         (b)  Recovery on a claim for property damage is not barred if
  in an action to recover on the claim the trier of fact determines
  the claimant had good cause not to provide notice of the claim in
  the time prescribed by Subsection (a).
         (c)  For the purposes of Subsection (b), "good cause"
  includes military deployment.
         (d)  Except as provided by this subsection, nothing in this
  section precludes an insurer from raising any defense available
  under the terms of its policy relating to prompt notice or that is
  otherwise available under the law. If an insurer raises a defense
  based on the fact that notice of claim was not made in accordance
  with the policy terms, the defense applies only on a showing and to
  the extent that the insurer was prejudiced by notice not being made
  in accordance with the policy terms.
         Sec. 1808.004.  APPRAISAL STANDARDS. (a) The commissioner
  by rule shall adopt standards for minimum fairness for provisions
  in insurance policies described by Section 1808.002 that provide an
  appraisal process for claims for property damage.
         (b)  Standards adopted under this section must:
               (1)  take into consideration the expense involved in
  submitting a claim to the appraisal process; and
               (2)  provide for a process that:
                     (A)  is not unnecessarily complicated; and
                     (B)  is designed to yield a prompt and fair
  resolution of the disputed matter.
         Sec. 1808.005.  APPROVAL OF APPRAISAL PROVISIONS. (a) An
  insurer described by Section 1808.002 may submit to the
  commissioner for purposes of Section 1808.006 any policy form used
  or proposed to be used by the insurer to write insurance policies
  described by Section 1808.002 that contains provisions that provide
  an appraisal process for claims for property damage.
         (b)  If the commissioner determines the appraisal provisions
  in a policy form submitted under this section comply with the
  minimum standards adopted by the commissioner under Section
  1808.004, the commissioner shall approve the appraisal provisions
  for purposes of Section 1808.006.
         Sec. 1808.006.  LIABILITY LIMITATIONS. (a) Except as
  provided by this section, an insurer is not liable in any private
  cause of action under Chapter 541 or 542 relating to or arising from
  a claim for property damage if:
               (1)  the policy under which the claim is made contains
  appraisal provisions:
                     (A)  approved by the commissioner under Section
  1808.005; or
                     (B)  substantially similar to provisions approved
  by the commissioner under that section;
               (2)  the insurer:
                     (A)  timely accepts the insured's demand for
  appraisal; or
                     (B)  makes a demand for appraisal not later than
  the 30th day after the later of the date the insurer receives the
  notice of the claim required by Section 541.1541 or 542.0595, as
  applicable, or the date the insurer receives information related to
  the claim timely requested by the insurer in accordance with
  Section 541.1541 for purposes of that section or Section 542.0595,
  as applicable, including notice or requested information received
  after an abatement of an action under Section 541.155 or 542.0595;
  and
               (3)  the insurer:
                     (A)  participates in the appraisal process in good
  faith; and
                     (B)  pays or tenders, not later than the 15th day
  after the date the insurer receives the appraisal award:
                           (i)  the full amount of the appraisal award,
  less the amount of any deductible or previous payment on the claim;
  and
                           (ii)  interest on the amount paid under
  Subparagraph (i) at the rate of 12 percent annually.
         (b)  For purposes of this section, if there is a dispute as to
  whether the insurer is to pay actual cash value or replacement cost,
  the insurer must pay or tender an amount under Section (a)(3)(B)
  that is based on the replacement cost.
         (c)  Interest to be paid under Subsection (a) accrues
  beginning on the later of:
               (1)  the fifth business day after the latest date on
  which the insurer is required to provide notice of acceptance or
  rejection of the relevant claim under Section 542.056; or
               (2)  if payment of the relevant claim or part of the
  relevant claim is conditioned on the performance of an act by the
  claimant, the fifth business day after the date the act is
  performed.
         SECTION 11.  Section 4102.051(a), Insurance Code, is amended
  to read as follows:
         (a)  A person may not act as a public insurance adjuster in
  this state or hold himself or herself out to be a public insurance
  adjuster in this state unless the person holds a license [or
  certificate] issued by the commissioner under Section 4102.053
  or[,] 4102.054[, or 4102.069].
         SECTION 12.  Sections 4102.066(a) and (b), Insurance Code,
  are amended to read as follows:
         (a)  The commissioner shall collect in advance the following
  nonrefundable fees:
               (1)  for a public insurance adjuster license, an
  application fee in an amount to be determined by rule by the
  commissioner;
               (2)  for a nonresident public insurance adjuster
  license, an application fee in an amount to be determined by rule by
  the commissioner; and
               (3)  for each public insurance adjuster examination, a
  fee in an amount to be determined by rule by the commissioner[; and
               [(4)     for a public insurance adjuster trainee
  certificate under Section 4102.069, a registration fee in an amount
  to be determined by rule by the commissioner].
         (b)  The amount of the fee for the renewal of a license [or a
  certificate] issued under this chapter shall be determined by rule
  by the commissioner.
         SECTION 13.  Section 4102.103, Insurance Code, is amended by
  adding Subsection (d) to read as follows:
         (d)  A license holder may not enter into a contract with an
  insured and collect a commission as provided by Section 4102.104
  without the intent to actually perform the services customarily
  provided by a licensed public insurance adjuster for the insured.
         SECTION 14.  Section 4102.104(d), Insurance Code, is amended
  to read as follows:
         (d)  A public insurance adjuster may not accept any payment
  that violates the provisions of this section [Subsection (c)].
         SECTION 15.  Section 4102.158, Insurance Code, is amended by
  amending Subsection (a) and adding Subsections (d), (e), and (f) to
  read as follows:
         (a)  A license holder may not:
               (1)  participate directly or indirectly in the
  reconstruction, repair, or restoration of damaged property that is
  the subject of a claim adjusted by the license holder; or
               (2)  engage in any other activities that may reasonably
  be construed as presenting a conflict of interest, including
  soliciting or accepting any remuneration from, [or] having a
  financial interest in, or deriving any direct or indirect financial
  benefit from, any salvage firm, repair firm, construction firm, or
  other firm that obtains business in connection with any claim the
  license holder has a contract or agreement to adjust.
         (d)  A license holder may not directly or indirectly solicit,
  as described by Chapter 38, Penal Code, employment for an attorney
  or enter into a contract with an insured for the primary purpose of
  referring an insured to an attorney and without the intent to
  actually perform the services customarily provided by a licensed
  public insurance adjuster.  This section may not be construed to
  prohibit a license holder from recommending a particular attorney
  to an insured.
         (e)  A license holder may not act on behalf of an attorney in
  having an insured sign an attorney representation agreement.
         (f)  A license holder must become familiar with and at all
  times act in conformance with the criminal barratry statute set
  forth in Section 38.12, Penal Code.
         SECTION 16.  Section 4102.160, Insurance Code, is amended to
  read as follows:
         Sec. 4102.160.  CERTAIN PAYMENTS PROHIBITED. A license
  holder may not:
               (1)  advance money to any potential client or insured;
  or
               (2)  pay, allow, or give, or offer to pay, allow, or
  give, directly or indirectly, to a person who is not a licensed
  public insurance adjuster a fee, commission, or other valuable
  consideration for the referral of an insured to the public
  insurance adjuster for purposes of [based on] the insured entering
  into a contract with that public insurance adjuster or for any other
  purpose[; or
               [(3)     otherwise offer to pay a fee, commission, or
  other valuable consideration exceeding $100 to a person not
  licensed as a public insurance adjuster for referring an insured to
  the license holder].
         SECTION 17.  Subchapter D, Chapter 4102, Insurance Code, is
  amended by adding Section 4102.164 to read as follows:
         Sec. 4102.164.  ACCEPTANCE OF REFERRAL PAYMENTS PROHIBITED.  
  (a)  A licensed public insurance adjuster may not accept a fee,
  commission, or other valuable consideration of any nature,
  regardless of form or amount, in exchange for the referral by a
  licensed public insurance adjuster of an insured to any third-party
  individual or firm, including but not limited to an attorney,
  appraiser, umpire, construction company, contractor, or salvage
  company.
         (b)  The commissioner shall adopt rules necessary to
  implement and enforce this section.
         SECTION 18.  The heading to Section 27.02, Business &
  Commerce Code, is amended to read as follows:
         Sec. 27.02.  CERTAIN OFFERS MADE AND INFORMATION PROVIDED IN
  CONNECTION WITH INSURANCE CLAIMS [FOR EXCESSIVE CHARGES].
         SECTION 19.  Section 27.02(a), Business & Commerce Code, is
  amended to read as follows:
         (a)  A person who sells goods or services, including a
  contractor, appraiser, estimator, or insurance restoration
  contractor, commits an offense if, in connection with a claim for
  property loss or damage under a property or casualty insurance
  policy:
               (1)  the person advertises or promises to [provide the
  good or service and to] pay, waive, absorb, rebate, subsidize,
  credit, or otherwise cover for any reason[:
                     [(A)]  all or part of any applicable insurance
  deductible or other uninsured amount owed by an insured under the
  terms of the policy; [or
                     [(B)     a rebate in an amount equal to all or part of
  any applicable insurance deductible;]
               (2)  [the good or service is paid for by the consumer
  from proceeds of a property or casualty insurance policy; and
               [(3)]  the person knowingly provides or causes to be
  provided to an insurer any estimate or other statement as to the
  cost of repair for the good or service to be provided that has been
  increased, inflated, or otherwise manipulated [charges an amount
  for the good or service that exceeds the usual and customary charge
  by the person for the good or service] by an amount equal to or
  greater than all or part of the applicable insurance deductible or
  other uninsured amount owed by an insured under the policy; or
               (3)  the person knowingly provides or causes to be
  provided to an insurer any false information within any estimate,
  bid, proposal, or other statement as to the scope of damage or cost
  of repair for the good or service to be provided [paid by the person
  to an insurer on behalf of an insured or remitted to an insured by
  the person as a rebate].
         SECTION 20.  Section 4102.069, Insurance Code, is repealed.
         SECTION 21.  (a) The Texas Department of Insurance shall
  conduct a study to determine the effectiveness of the changes in law
  made by this Act. The study must determine:
               (1)  whether the changes in law made the affected
  insurance policies more affordable;
               (2)  whether the changes in law made the affected
  insurance policies more available;
               (3)  whether the changes in law resulted in a change in
  the percentage of home buyers who qualify for home loans;
               (4)  the effect of the changes in law on litigation;
               (5)  the effect of the changes in law on consumer
  complaints; and
               (6)  the effect of the changes in law on policy
  deductibles.
         (b)  The commissioner of insurance may request and obtain
  data from insurers as necessary to perform the study required by
  this section.
         (c)  Not later than November 1, 2018, the Texas Department of
  Insurance shall submit a written report detailing the findings made
  by the department under this section to the lieutenant governor,
  speaker of the house of representatives, and members of the
  legislature.
         (d)  This section expires January 1, 2019.
         SECTION 22.  Chapter 541, Insurance Code, as amended by this
  Act, applies only to conduct that occurs on or after the effective
  date of this Act. Conduct that occurs before the effective date of
  this Act 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 23.  Subchapter B, Chapter 542, Insurance Code, as
  amended by this Act, applies only to a claim for which notice of
  claim is provided to an insurer on or after the effective date of
  this Act. A claim for which notice of claim is provided to an
  insurer before the effective date of this Act 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 24.  Chapter 1808, Insurance Code, as added by this
  Act, applies only to a claim under an insurance policy delivered,
  issued for delivery, or renewed on or after January 1, 2016. A
  claim under a policy delivered, issued for delivery, or renewed
  before January 1, 2016, 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 25.  The repeal by this Act of Section 4102.069,
  Insurance Code, does not affect the authority of a person to act
  under a temporary certificate issued by the Texas Department of
  Insurance under that section before the effective date of this Act.
         SECTION 26.  Sections 4102.103(d) and 4102.158(d),
  Insurance Code, as added by this Act, apply only to a contract
  entered into or solicitation made on or after the effective date of
  this Act.
         SECTION 27.  (a)  Except as provided by this section,
  Section 4102.104, Insurance Code, as amended by this Act, applies
  only to payment for a service performed on or after the effective
  date of this Act.
         (b)  Payment for a service performed before the effective
  date of this Act or performed after the effective date of this Act
  under a contract entered into before the effective date of this Act
  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 28.  Section 4102.160, Insurance Code, as amended by
  this Act, and Section 4102.164, Insurance Code, as added by this
  Act, apply only to a referral made on or after the effective date of
  this Act. A referral made before the effective date of this Act 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 29.  The changes in law made by this Act apply only
  to an offense committed on or after the effective date of this Act.
  An offense committed before the effective date of this Act is
  governed by the law in effect when the offense was committed, and
  the former law is continued in effect for that purpose. For
  purposes of this section, an offense was committed before the
  effective date of this Act if any element of the offense occurred
  before that date.
         SECTION 30.  This Act takes effect September 1, 2015.