By: Thompson H.B. No. 2423
A BILL TO BE ENTITLED
AN ACT
relating to insurer and third party interests in certain motor
vehicle repair facilities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2307.001, Subtitle A, Title 14,
Occupations Code, is amended to read as follows:
Sec. 2307.001. DEFINITIONS. In this chapter:
(1) "Arm's length transaction" means the standard of
conduct under which two parties having substantially equal
bargaining power, each acting in its own interest, would negotiate
or carry out a particular transaction.
(2) "Automotive glass work" means installing,
maintaining, or repairing fixed or moveable glass in a motor
vehicle.
(3) [(2)] "Claims center" means a location designated
by an insurer where a claims adjuster, employee, or agent of the
insurer performs an initial damage estimate on a vehicle under the
terms of an insurance policy.
(4) [(3)] "Favored facility agreement" means an
agreement between an insurer and a repair facility under which the
insurer agrees to recommend, directly or indirectly, to its
policyholders or other beneficiaries under the insurer's policies,
that the policyholder or other beneficiary obtain repairs at that
repair facility or in any other way agrees to influence its
policyholders or other beneficiaries under the insurer's policies
to obtain repairs at that repair facility.
(5) "Automotive glass repair service" means a business
that provides automotive glass work services.
(6) [(4)] "Insurer" means an insurer authorized by the
Texas Department of Insurance to write motor vehicle insurance in
this state, including a county mutual insurance company, a Lloyd's
plan, and a reciprocal or interinsurance exchange if that insurer
owns an interest in a repair facility in this state. The term
includes an entity that is an affiliate of an insurer as described
by Section 823.003, Insurance Code.
(7) [(5)] "Repair facility" has the meaning assigned
by Section 2304.001.
(8) [(6)] "Support services" means basic services,
provided nonspecifically, that are provided internally and to each
affiliate or subsidiary, by an insurer, its parent company, or a
separate affiliate created to provide basic corporate support. The
term does not include a service related to the operation of a repair
facility if that service would have no value, or minimal value to
any other type of business.
(9) "Third party administrator" means any person who
collects charges or premiums from or paid on behalf of, or who
provides administrative services to or adjusts or settles claims
by, residents of this state in connection with motor vehicle
insurance coverage.
(10) [(7)] "Tied repair facility" means a repair
facility in which an insurer owns an interest.
SECTION 2. Section 2307.002 is amended to read as follows:
Sec. 2307.002. INSURER AND THIRD PARTY INTERESTS. (a)
Except as provided by this section, an insurer may not own or
acquire an interest in a repair facility.
(b) An insurer that owns an interest in a tied repair
facility that was open for business, or on which construction had
commenced, on April 15, 2003, may maintain that ownership interest
and may operate that facility.
(c) An insurer may relocate a tied repair facility described
by Subsection (b), but may not obtain an ownership interest in any
additional facility not described by Subsection (b).
(d) Subsections (b) and (c) are applicable to an insurer
only if the insurer and its tied repair facility are otherwise in
compliance with this chapter.
(e) An insurer or third party administrator may not own or
acquire an interest in an automotive glass repair service.
(f) The insurer or third party administrator shall not in
any manner coerce or induce an insured to use an automotive glass
repair service other than the insured's chosen service, if the
insured has chosen a service.
(g) If an insurer or third party administration determines
that a claimant's motor vehicle must be inspected before approving
a claim for automotive glass work, the inspector must be a direct
employee of the insurer or an independent party who is unrelated and
unaffiliated with any automotive glass repair service. For the
purposes of this subsection, "inspector" means a party who is
engaged in the physical inspection of a claimant's vehicle for the
purposes of adjusting a claim.
(h) Subsections (e) through (g) do not apply to an insurer
or third party administrator that owns or acquires an interest in a
repair facility that engages in automotive glass work.
SECTION 3. This act takes effect September 1, 2011.