86R29699 SCL-F
By: J. Johnson of Dallas H.B. No. 2374
Substitute the following for H.B. No. 2374:
By: Lucio III C.S.H.B. No. 2374
A BILL TO BE ENTITLED
AN ACT
relating to prohibiting oral releases for automobile insurance
claims.
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. ORAL RELEASES FOR AUTOMOBILE INSURANCE CLAIMS
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) "Oral release" means an 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.
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, county mutual insurance company, association,
Lloyd's plan, or other insurer.
Sec. 1955.0004. ORAL RELEASE OF CLAIMS PROHIBITED. A
claimant and an insurer or another individual or entity may not
enter into an oral release. A release made in exchange for money or
other consideration paid for the claimant's claim arising out of an
injury for which an insurer may be liable under an automobile
insurance policy is not enforceable unless the contract is in
writing.
SECTION 2. The changes in law made by this Act apply only to
a contract entered into on or after January 1, 2020. A contract
entered into 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.