82R10240 KCR-F
By: Hegar S.B. No. 1227
A BILL TO BE ENTITLED
AN ACT
relating to the payment of third-party claims under commercial and
personal automobile insurance policies in this state.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 542, Insurance Code, is amended by
adding Subchapter H to read as follows:
SUBCHAPTER H. PROMPT PAYMENT OF THIRD-PARTY LIABILITY CLAIMS
Sec. 542.401. DEFINITIONS. In this subchapter:
(1) "Third-party claim" means a claim for bodily
injury or property damage that is incurred by a person other than
the insured and is payable under the liability portion of a
commercial or personal automobile insurance policy or contract.
(2) "Third-party claimant" means a person who files a
third-party claim.
Sec. 542.402. APPLICABILITY OF SUBCHAPTER. This subchapter
applies to any insurer authorized to write commercial or personal
automobile liability insurance, or to otherwise provide automobile
liability insurance in this state, including:
(1) a stock fire or casualty insurance company;
(2) a mutual fire or casualty insurance company;
(3) a Mexican casualty insurance company;
(4) a Lloyd's plan;
(5) a reciprocal or interinsurance exchange;
(6) a county mutual insurance company;
(7) an eligible surplus lines insurer; and
(8) a guaranty association operating under Chapter
462.
Sec. 542.403. EVALUATION OF THIRD-PARTY CLAIM. In
evaluating a third-party claim, an insurer shall:
(1) obtain and review reasonably available relevant
information, including reports, statements, visual and audio
recordings, and other data or analysis prepared or recorded by the
insured or another person at the time of or after the accident that
gave rise to the claim; and
(2) make and document reasonable, diligent efforts to
communicate with the person insured under the policy under which
the third-party claim is filed.
Sec. 542.404. PAYMENT OF CLAIM. (a) Except as provided by
Subsection (b) or (c), an insurer shall pay a third-party claim not
later than the 10th business day after the date the insurer and the
third-party claimant agree on the amount of the claimant's
third-party claim that the insurer will pay.
(b) Except as provided by Subsection (c), if payment of all
or part of a third-party claim is conditioned on the performance of
an act by the third-party claimant, the insurer shall pay the
third-party claim not later than the 10th business day after the
date the third-party claimant performs the required act.
(c) An eligible surplus lines insurer shall pay a
third-party claim not later than the 20th business day after, as
applicable, the date:
(1) the insurer and the third-party claimant agree on
the amount of the claimant's third-party claim that the insurer
will pay; or
(2) the third-party claimant performs a required act,
if payment of all or part of the third-party claim is conditioned on
the performance of an act by the third-party claimant.
Sec. 542.405. NO CAUSE OF ACTION CREATED. (a) This
subchapter does not create a private cause of action.
(b) This subchapter does not establish or create:
(1) rights of the third-party claimant as a
beneficiary under a commercial or personal automobile insurance
policy or contract; or
(2) obligations or duties on behalf of an insured or
insurer as a result of the third-party claim or to the third-party
claimant, other than those duties described by Sections 542.403 and
542.404.
Sec. 542.406. RULES. The commissioner may adopt rules
necessary to implement this subchapter.
SECTION 2. Subchapter H, Chapter 542, Insurance Code, as
added by this Act, applies only to a claim filed under a commercial
or personal automobile insurance policy on or after the effective
date of this Act. A claim filed under a commercial or personal
automobile insurance policy before the effective date of this Act
is governed by the law in effect on the date the claim was filed, and
the former law is continued in effect for that purpose.
SECTION 3. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2011.