86R26916 PMO-F
By: Clardy, J. Johnson of Dallas, Lambert, H.B. No. 1348
Vo, et al.
Substitute the following for H.B. No. 1348:
By: Lucio III C.S.H.B. No. 1348
A BILL TO BE ENTITLED
AN ACT
relating to certain insurance practices with respect to repair of
motor vehicles.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter G, Chapter 1952, Insurance Code, is
amended by adding Section 1952.300 to read as follows:
Sec. 1952.300. DEFINITIONS. (a) In this subchapter:
(1) "Estimating system" means an automobile collision
damage estimating system that is generally accepted by the
automobile repair industry for use in writing an automobile repair
estimate.
(2) "Repair person or facility" does not include a
person who exclusively provides automobile glass replacement,
glass repair services, or glass products.
(b) For purposes of enforcement of this subchapter:
(1) "Prevailing rate" means the rate identified by a
rate survey that is:
(A) conducted by a third party;
(B) designed to be transparent and unbiased; and
(C) based on the posted retail labor rates and
not direct repair program shop rates that operate under a contract
with an insurer.
(2) "Reasonable and necessary amount" means the amount
determined by the original equipment manufacturer's manufacturer
and estimating systems required to repair a vehicle to the
condition before the covered damage to the vehicle occurred.
SECTION 2. Section 1952.301, Insurance Code, is amended to
read as follows:
Sec. 1952.301. LIMITATION ON PARTS, PRODUCTS, OR REPAIR
PERSONS OR FACILITIES PROHIBITED. (a) Except as provided by rules
adopted by the commissioner, under an automobile insurance policy
that is delivered, issued for delivery, or renewed in this state, an
insurer may not directly or indirectly limit the insurer's coverage
under a policy covering damage to a motor vehicle by[:
[(1)] specifying the brand, type, kind, age, vendor,
supplier, or condition of parts or products that may be used to
repair the vehicle. [; or]
(a-1) An insurer described by Subsection (a) may not require
that:
(1) a vehicle be repaired with a part or product on the
basis that the part or product is the least expensive part or
product available; or
(2) the beneficiary of a policy purchase any part or
product from any vendor or supplier, including an out-of-state
vendor or supplier, on the basis that the part or product is the
least expensive part or product available.
(a-2) An insurer described by Subsection (a) may not
consider a specified part or product for the repair of a motor
vehicle to be of like kind and quality as an original equipment
manufacturer part or product for any purpose unless the insurer or
the manufacturer of the specified part or product has conclusively
demonstrated that the specified part or product:
(1) meets the fit, finish, and quality criteria
established for the part or product by the original equipment
manufacturer of the part or product;
(2) is the same weight and metal hardness established
for the part or product by the original equipment manufacturer of
the part or product; and
(3) has been tested using the same crash and safety
test criteria used by the original equipment manufacturer of the
part or product.
(a-3) Under an automobile insurance policy that is
delivered, issued for delivery, or renewed in this state, an
insurer described by Subsection (a), an employee or agent of the
insurer, an insurance adjuster, or an entity that employs an
insurance adjuster may not directly or indirectly limit the
insurer's coverage under a policy covering damage to a motor
vehicle by:
(1) [(2)] limiting the beneficiary of the policy from
selecting a repair person or facility to repair damage to the
vehicle to the vehicle's condition before the damage occurred in
order for the beneficiary to obtain the repair without owing any
out-of-pocket cost other than the deductible;
(2) intimidating, coercing, or threatening the
beneficiary to induce the beneficiary to use a particular repair
person or facility; or
(3) offering an incentive or inducement, other than a
warranty issued by a repair person or facility, for the beneficiary
to use a particular repair person or facility.
(b) In settling a liability claim by a third party against
an insured for property damage claimed by the third party, an
insurer, an employee or agent of an insurer, an insurance adjuster,
or an entity that employs an insurance adjuster may not:
(1) require the third-party claimant to have repairs
made by a particular repair person or facility;
(2) require the third-party claimant [or] to use a
particular brand, type, kind, age, vendor, supplier, or condition
of parts or products to repair damage to the vehicle to the
vehicle's condition before the damage occurred;
(3) intimidate, coerce, or threaten the third-party
claimant to induce the claimant to use a particular repair person or
facility; or
(4) offer an incentive or inducement, other than a
warranty issued by a repair person or facility, for the third-party
claimant to use a particular repair person or facility.
SECTION 3. Section 1952.302, Insurance Code, is amended to
read as follows:
Sec. 1952.302. PROHIBITED ACTS IN CONNECTION WITH REPAIR OF
MOTOR VEHICLE. (a) In connection with the repair of damage to a
motor vehicle covered under an automobile insurance policy, an
insurer, an employee or agent of an insurer, an insurance adjuster,
or an entity that employs an insurance adjuster may not:
(1) solicit or accept a referral fee or gratuity in
exchange for referring a beneficiary or third-party claimant to a
repair person or facility to repair the damage;
(2) state or suggest, either orally or in writing, to a
beneficiary that the beneficiary must use a specific repair person
or facility or a repair person or facility identified on a preferred
list compiled by an insurer for the damage repair or parts
replacement to be covered by the policy; [or]
(3) restrict the right of a beneficiary or third-party
claimant to choose a repair person or facility by requiring the
beneficiary or third-party claimant to travel a [an unreasonable]
distance considered inconvenient by a beneficiary or third-party
claimant to repair the damage;
(4) offer, communicate, or suggest in any manner that
a particular repair person or facility will provide faster repair
times, faster service, or more efficient claims handling than
another repair person or facility; or
(5) disregard a repair operation or cost identified by
an estimating system, including the system's procedural pages and
any repair, process, or procedure recommended by the original
equipment manufacturer of a part or product.
(b) Notwithstanding Subsection (a)(5), a motor vehicle
covered under an automobile insurance policy may be repaired with a
part or product that is of like kind and quality as an original
equipment manufacturer part or product as authorized by Section
1952.301(a-2).
SECTION 4. The change in law made by this Act applies only
to an insurance policy that is delivered, issued for delivery, or
renewed on or after January 1, 2020. A policy delivered, issued for
delivery, or renewed before that date is governed by the law as it
existed immediately before the effective date of this Act, and that
law is continued in effect for that purpose.
SECTION 5. This Act takes effect September 1, 2019.