Texas 2009 - 81st Regular

Texas House Bill HB198 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	81R2464 PMO-D
2	2	By: Alonzo H.B. No. 198
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to certain unfair practices in the settlement of insurance
8	8	claims involving noneconomic damages.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Subchapter B, Chapter 541, Insurance Code, is
11	11	amended by adding Section 541.0601 to read as follows:
12	12	Sec. 541.0601. UNFAIR SETTLEMENT PRACTICES IN RELATION TO
13	13	CERTAIN DAMAGES. (a) In this section:
14	14	(1) "Artificial intelligence application" means a
15	15	computer application that mimics human thought and cognitive
16	16	processes to solve complex problems.
17	17	(2) "Noneconomic damages" means damages awarded for
18	18	the purpose of compensating a claimant for physical pain and
19	19	suffering, mental or emotional pain or anguish, loss of consortium,
20	20	disfigurement, physical impairment, loss of companionship and
21	21	society, inconvenience, loss of enjoyment of life, injury to
22	22	reputation, and all other nonpecuniary losses of any kind other
23	23	than exemplary damages.
24	24	(b) An insurer may not settle or adjust a claim by an insured
25	25	or beneficiary that is, in whole or part, for compensation for
26	26	noneconomic damages without a complete review of the claim by an
27	27	individual who is authorized to evaluate the claim based on the
28	28	facts of the claim and the individual's judgment.
29	29	(c) It is an unfair method of competition or an unfair or
30	30	deceptive act or practice in the business of insurance to evaluate a
31	31	claim described by Subsection (b) using:
32	32	(1) an artificial intelligence application or other
33	33	computer software application; or
34	34	(2) any other method without the complete review of
35	35	the claim by an individual as required by Subsection (b).
36	36	(d) This section applies to a claim made by a third party
37	37	asserting one or more claims against an insured covered under a
38	38	liability insurance policy.
39	39	SECTION 2. Section 542.003(b), Insurance Code, is amended
40	40	to read as follows:
41	41	(b) Any of the following acts by an insurer constitutes
42	42	unfair claim settlement practices:
43	43	(1) knowingly misrepresenting to a claimant pertinent
44	44	facts or policy provisions relating to coverage at issue;
45	45	(2) failing to acknowledge with reasonable promptness
46	46	pertinent communications relating to a claim arising under the
47	47	insurer's policy;
48	48	(3) failing to adopt and implement reasonable
49	49	standards for the prompt investigation of claims arising under the
50	50	insurer's policies;
51	51	(4) not attempting in good faith to effect a prompt,
52	52	fair, and equitable settlement of a claim submitted in which
53	53	liability has become reasonably clear;
54	54	(5) compelling a policyholder to institute a suit to
55	55	recover an amount due under a policy by offering substantially less
56	56	than the amount ultimately recovered in a suit brought by the
57	57	policyholder;
58	58	(6) failing to maintain the information required by
59	59	Section 542.005;
60	60	(7) using an artificial intelligence application,
61	61	other computer software application, or other method to evaluate a
62	62	claim in violation of Section 541.0601; or
63	63	(8) [(7)] committing another act the commissioner
64	64	determines by rule constitutes an unfair claim settlement practice.
65	65	SECTION 3. The change in law made by this Act applies only
66	66	to a claim that is filed on or after the effective date of this Act.
67	67	A claim that is filed before the effective date of this Act is
68	68	governed by the law as it existed at the time the claim was filed,
69	69	and that law is continued in effect for that purpose.
70	70	SECTION 4. This Act takes effect September 1, 2009.