Texas House Bill HB198

Texas 2009 - 81st Regular

• Filed: 11/12/08

Caption

Relating to certain unfair practices in the settlement of insurance claims involving noneconomic damages.

Impact

By enacting this bill, the Texas legislature seeks to protect consumers from potentially unfair practices in the insurance industry. It aims to enhance accountability within insurance companies, particularly concerning how they manage and settle claims. The legislation reinforces the notion that human judgment is essential in evaluating complex claims, which often involve personal interpretations of nonpecuniary losses and emotional distress.

Summary

House Bill 198 aims to establish guidelines regarding the settling of insurance claims related to noneconomic damages, such as pain and suffering. One of the critical components of the bill mandates that insurance claims cannot be settled solely through automated processes, specifically disallowing the use of artificial intelligence applications to evaluate claims. This requirement posits that claims must undergo a complete review by a qualified individual to ensure fair treatment of the insured parties.

Contention

Discussions around HB198 have raised questions regarding the balance between efficient claims management and consumer protection. Proponents argue that the bill is necessary to safeguard the rights of policyholders and ensure just compensation for noneconomic damages. However, opponents may raise concerns about the implications for operational efficiency within insurance companies and whether such regulations might increase costs for consumers or prolong the claims process.