86R10965 SCL-F
By: J. Johnson of Dallas H.B. No. 2374
A BILL TO BE ENTITLED
AN ACT
relating to claims settlement for automobile insurance.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle C, Title 10, Insurance Code, is amended
by adding Chapter 1955 to read as follows:
CHAPTER 1955. CLAIMS SETTLEMENT FOR AUTOMOBILE INSURANCE
Sec. 1955.0001. PURPOSE. The purpose of this chapter is to
protect those injured by motorists from predatory practices engaged
in by personal and commercial automobile insurers that seek to
induce injured motorists into settling and releasing their legal
claims for an amount that is insufficient to compensate their
losses at a time when these losses are not known with any certainty,
resulting in costs both to the injured person and medical providers
whose care and services may go uncompensated as a result of those
predatory insurance practices.
Sec. 1955.0002. DEFINITIONS. In this chapter:
(1) "Claimant" means an individual who has a claim for
an injury against another individual or an entity.
(2) "Injury" means a bodily or psychological injury.
(3) "Release" means a written or oral contract under
which a claimant releases, wholly or partly, one or more of the
claimant's claims arising out of an injury for which an insurer may
be liable under an automobile insurance policy in exchange for
money or other consideration paid by any releasee.
(4) "Releasee" means an individual, entity, or insurer
released from a claimant's claim in a release.
Sec. 1955.0003. APPLICABILITY OF CHAPTER. This chapter
applies to an insurer writing personal or commercial automobile
insurance in this state, including an insurance company,
corporation, reciprocal or interinsurance exchange, mutual
insurance company, association, Lloyd's plan, or other insurer.
Sec. 1955.0004. VOIDABLE RELEASE OF CLAIMS. (a) A release
is voidable by the claimant in accordance with this section if:
(1) the claimant entered into the release on or before
the 45th day after the date the cause of action that is the basis for
the released claim accrued; and
(2) the claimant was not represented by an attorney at
the time the claimant entered into the release.
(b) Not later than the first anniversary after the date the
release was entered into, a claimant may void a release under this
section by providing written notice of the claimant's intent to
void the release to each releasee.
(c) Any consideration paid to the claimant by or on behalf
of the releasee in exchange for a release voided under this section
must be credited against any award or payment made in connection
with a claim against the releasee arising from the cause of action
that is the basis for the previously released claim.
SECTION 2. The changes in law made by this Act apply only to
an automobile insurance policy delivered, issued for delivery, or
renewed on or after January 1, 2020. A policy delivered, issued for
delivery, or renewed before January 1, 2020, 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 3. This Act takes effect September 1, 2019.