82R7038 AJA-D
By: Smithee H.B. No. 3061
A BILL TO BE ENTITLED
AN ACT
relating to arbitration of certain disputes arising in connection
with a personal automobile insurance policy.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle B, Title 5, Insurance Code, is amended
by adding Chapter 525 to read as follows:
CHAPTER 525. ARBITRATION OF CERTAIN AUTOMOBILE INSURANCE DISPUTES
Sec. 525.001. DEFINITIONS. In this chapter:
(1) "Arbitration" means a binding forum in which each
party and counsel for the party, if desired by the party, present
the party's position before an impartial third party who renders a
specific, binding, and enforceable award.
(2) "Claimant" means an insured or another person
making a claim under a personal automobile insurance policy,
including a third-party claimant.
Sec. 525.002. APPLICABILITY OF CHAPTER. (a) This chapter
applies to any insurer that issues a personal automobile insurance
policy, including a county mutual insurance company, a Lloyd's
plan, and a reciprocal or interinsurance exchange.
(b) This chapter does not apply to a dispute:
(1) that turns on a question that primarily relates to
interpretation of a policy term of an insured's policy or to a
matter that is solely a question of law;
(2) that involves the actions of an agent or broker in
which the insurer is not alleged to have been responsible for the
conduct;
(3) that is based on a complaint the commissioner
determines is frivolous; or
(4) in which a party is alleged to have committed
fraud.
Sec. 525.003. ARBITRATION OF CERTAIN DISPUTES. If a
dispute arises from a claim for damage to a motor vehicle under a
personal automobile insurance policy in which the claimant seeks
less than $25,000, the claimant in writing may request that the
insurer participate in arbitration of the dispute with the claimant
under this chapter.
Sec. 525.004. INSURER PARTICIPATION; SETTLEMENT OFFER
REQUIRED. (a) Not later than the 15th day after the date a claimant
requests arbitration under this chapter, the insurer shall make a
written settlement offer to the claimant.
(b) Not later than the 15th day after the insurer makes a
settlement offer, the claimant shall in writing accept or reject
the offer. If the claimant does not accept or reject the offer
within that period, the offer is considered accepted. If the
claimant rejects the offer, the insurer shall participate in
arbitration under this chapter.
Sec. 525.005. ARBITRATORS; ARBITRATION FEE. (a) By
agreement, the claimant and the insurer shall select an arbitrator
from the list established by the commissioner under this section.
(b) The commissioner shall:
(1) establish a list of arbitrators located throughout
the state who are qualified to serve under Section 154.052(a),
Civil Practice and Remedies Code; and
(2) by rule adopt:
(A) fees that may be charged for an arbitration
under this chapter;
(B) procedures under which an arbitrator may for
good cause request and receive higher fees than the fees adopted
under this section; and
(C) procedures for selection of an arbitrator
when the claimant and insurer cannot agree under Subsection (a).
(c) Sections 154.053(b), (c), and (d) and 154.055, Civil
Practice and Remedies Code, apply to an arbitrator under this
chapter.
Sec. 525.006. PAYMENT OF COSTS. (a) If the arbitrator
awards the claimant an amount that is more than the amount of the
settlement offer rejected by the claimant under Section 525.004,
the insurer shall pay the costs of the arbitration.
(b) If the arbitrator does not award the claimant an amount
that is more than the amount of the settlement offer rejected by the
claimant under Section 525.004, the claimant shall pay the costs of
the arbitration.
Sec. 525.007. LAW APPLICABLE; CONFLICT OF LAWS. (a)
Section 154.073, Civil Practice and Remedies Code, applies to
arbitration under this chapter.
(b) This chapter controls over any other law relating to or
requiring arbitration between the complainant and the insured.
Sec. 525.008. WAIVER PROHIBITED. The provisions of this
chapter may not be waived by contract. A provision of an insurance
policy or other contract that purports to waive a provision of this
chapter is void and unenforceable.
Sec. 525.009. UNFAIR OR DECEPTIVE ACT OR PRACTICE. An
insurer that refuses to make a settlement offer as required by this
chapter or participate in arbitration as required by this chapter
or rules adopted under this chapter commits an unfair or deceptive
act or practice in the business of insurance for the purposes of
Chapter 541.
Sec. 525.010. APPLICATION OF OTHER LAW. To the extent not
inconsistent with this chapter and the rules adopted under this
chapter, Chapter 171, Civil Practice and Remedies Code, applies to
an arbitration conducted under this chapter.
Sec. 525.011. RULES. The commissioner may adopt rules
governing an arbitration conducted under this chapter, including
rules governing the communication of a written offer of settlement
and the acceptance or rejection of that offer.
SECTION 2. Chapter 525, Insurance Code, as added by this
Act, applies only to a dispute involving a claim for damages under
an insurance policy that is delivered, issued for delivery, or
renewed on or after January 1, 2012. A dispute involving a claim
for damages under an insurance policy that is delivered, issued for
delivery, or renewed before January 1, 2012, is governed by the law
in effect immediately before the effective date of this Act, and
that law is continued in effect for that purpose.
SECTION 3. This Act takes effect September 1, 2011.