By: Burkett H.B. No. 3794
A BILL TO BE ENTITLED
AN ACT
relating to disputes under insurance policies.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Insurance Code is amended to read as follows:
Sec. 541.163. APPRAISAL-DISPUTE RESOLUTION. (a) A person
or entity may not bring a suit or other non-compliant action for
damages under this chapter when the amount of loss or damage to
property is in dispute, before doing the following:
(1) notifying the insurer, in writing, that the amount
of damage or loss of property is disputed. The notice must be sent:
(A) by U.S. Postal Service, certified, first
class, return receipt requested; or
(B) similar service by a private carrier; and
(2) fully complying with the terms and conditions of
the applicable insurance policy, including, but not limited to,
full compliance with the policy's appraisal provision or
arbitration language if contained in the applicable policy.
(b) Within the lesser of 45 days of receipt of the notice
required by Subsection (a) or the time provided for initiation of
the proceedings applicable in the policy, the insurance company
must initiate proceedings as required by the applicable policy.
(c) Failure by the insurer to initiate proceedings within
the time outlined in Subsection (b) relieves the insured of any
penalty described in Section 541.164(a)(1) and Section
541.164(a)(2).
SECTION 2. Insurance Code is amended to read as follows:
541.164. ENFORCEMENT AND REMEDIES. (a) Upon hearing,
notice and a showing that the initiating party filed a suit or
brought any action not in compliance with Article 541.163, the
Court in which the action is pending shall:
(1) order that the insurance company initiate a
proceeding as described in Section 541.163(a)(2); and
(2) order that all reasonable and necessary attorney's
fees and costs of court shall be taxed, jointly and severally,
against the party initiating the non-compliant suit, or that
party's attorney(s) or counsel. The insurance company may not
execute, collect, or otherwise enforce this order prior to
initiating the proceedings described in Section 541.163(a)(2).
(b) Failure by the insurance company to comply with a court
order issued under Subsection (a)(1), will absolve the insured of
liability under Subsection (a)(1) and Subsection (a)(2).
(c) Failure by the insurance company to comply with the
court order under Subsection (a)(1), will automatically void any
court order issued under Subsection (a)(1) and Subsection (a)(2).
(d) The insurance company cannot recover any moneys awarded
under Subsection (a)(2) from any arbitration award or other award
to the insured payable under the applicable policy.
SECTION 3. Insurance Code is amended to read as follows:
541.165. Provision of Consumer Information. (a) At the
time of the creation of the policy, the insurance company shall
provide to the insured, information relating to the necessary
process to file a suit in compliance with the applicable policy.
SECTION 4. Insurance Code is amended to read as follows:
This Act takes effect September 1, 2011.
This Act applies only to policies written, created, or
extended on or after the effective date of this Act.