Texas House Bill HB2394

Texas 2017 - 85th Regular

Caption

Relating to the award of damages in certain civil actions against certain entities regulated under the Insurance Code.

Impact

The implementation of HB2394 is anticipated to significantly impact how damages are awarded in civil actions against regulated insurance entities. By mandating that exemplary damages are based on previous premiums, the bill provides a clearer financial incentive for policyholders to pursue claims against insurance companies that may be acting in bad faith. This could lead to increased accountability for insurers and more equitable outcomes for consumers who feel they have been wronged by their insurers' actions.

Summary

House Bill 2394 aims to amend the Texas Insurance Code by introducing changes to the award of damages in civil actions against entities regulated under this code. The bill stipulates that if a claimant prevails in a civil lawsuit against an insurance entity regarding claims for coverage or benefits, the court must award exemplary damages that equal the total premiums or contributions made by the claimant over the previous five years. This change intends to enhance the rights of policyholders when seeking redress against insurance companies, ensuring they are compensated fairly for their losses.

Contention

Discussions surrounding HB2394 may reveal points of contention among different stakeholders. Proponents of the bill argue that increasing the potential damages payable to policyholders will deter improper practices by insurance companies and empower consumers, thereby enhancing their rights. Conversely, opponents may express concern that such a bill could lead to raised costs for insurance providers, which may ultimately be passed on to consumers in the form of higher premiums. Additionally, there could be fears regarding the potential influx of claims that might arise as a result of the more favorable damage award structure.