Texas 2021 - 87th Regular

Texas House Bill HB1131 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	87R1966 JES-F
2	2	By: Clardy H.B. No. 1131
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to certain insurance practices with respect to repair of
8	8	motor vehicles.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Subchapter G, Chapter 1952, Insurance Code, is
11	11	amended by adding Section 1952.300 to read as follows:
12	12	Sec. 1952.300. DEFINITIONS. (a) In this subchapter:
13	13	(1) "Estimating system" means an automobile collision
14	14	damage estimating system that is generally accepted by the
15	15	automobile repair industry for use in writing an automobile repair
16	16	estimate.
17	17	(2) "Repair person or facility" does not include a
18	18	person who exclusively provides automobile glass replacement,
19	19	glass repair services, or glass products.
20	20	(b) For purposes of enforcement of this subchapter:
21	21	(1) "Prevailing rate" means the rate identified by a
22	22	rate survey that is:
23	23	(A) conducted by a third party;
24	24	(B) designed to be transparent and unbiased; and
25	25	(C) based on the posted retail labor rates and
26	26	not direct repair program shop rates that operate under a contract
27	27	with an insurer.
28	28	(2) "Reasonable and necessary amount" means the amount
29	29	determined by the original equipment manufacturer's manufacturer
30	30	and estimating systems required to repair a vehicle to the
31	31	condition before the covered damage to the vehicle occurred.
32	32	SECTION 2. Section 1952.301, Insurance Code, is amended to
33	33	read as follows:
34	34	Sec. 1952.301. LIMITATION ON PARTS, PRODUCTS, OR REPAIR
35	35	PERSONS OR FACILITIES PROHIBITED. (a) Except as provided by rules
36	36	adopted by the commissioner, under an automobile insurance policy
37	37	that is delivered, issued for delivery, or renewed in this state, an
38	38	insurer may not directly or indirectly limit the insurer's coverage
39	39	under a policy covering damage to a motor vehicle by[:
40	40	[(1)] specifying the brand, type, kind, age, vendor,
41	41	supplier, or condition of parts or products that may be used to
42	42	repair the vehicle. [; or]
43	43	(a-1) An insurer described by Subsection (a) may not require
44	44	that:
45	45	(1) a vehicle be repaired with a part or product on the
46	46	basis that the part or product is the least expensive part or
47	47	product available; or
48	48	(2) the beneficiary of a policy purchase any part or
49	49	product from any vendor or supplier, including an out-of-state
50	50	vendor or supplier, on the basis that the part or product is the
51	51	least expensive part or product available.
52	52	(a-2) An insurer described by Subsection (a) may not
53	53	consider a specified part or product for the repair of a motor
54	54	vehicle to be of like kind and quality as an original equipment
55	55	manufacturer part or product for any purpose unless the insurer or
56	56	the manufacturer of the specified part or product has conclusively
57	57	demonstrated that the specified part or product:
58	58	(1) meets the fit, finish, and quality criteria
59	59	established for the part or product by the original equipment
60	60	manufacturer of the part or product;
61	61	(2) is the same weight and metal hardness established
62	62	for the part or product by the original equipment manufacturer of
63	63	the part or product; and
64	64	(3) has been tested using the same crash and safety
65	65	test criteria used by the original equipment manufacturer of the
66	66	part or product.
67	67	(a-3) Under an automobile insurance policy that is
68	68	delivered, issued for delivery, or renewed in this state, an
69	69	insurer described by Subsection (a), an employee or agent of the
70	70	insurer, an insurance adjuster, or an entity that employs an
71	71	insurance adjuster may not directly or indirectly limit the
72	72	insurer's coverage under a policy covering damage to a motor
73	73	vehicle by:
74	74	(1) [(2)] limiting the beneficiary of the policy from
75	75	selecting a repair person or facility to repair damage to the
76	76	vehicle to the vehicle's condition before the damage occurred in
77	77	order for the beneficiary to obtain the repair without owing any
78	78	out-of-pocket cost other than the deductible;
79	79	(2) intimidating, coercing, or threatening the
80	80	beneficiary to induce the beneficiary to use a particular repair
81	81	person or facility; or
82	82	(3) offering an incentive or inducement, other than a
83	83	warranty issued by a repair person or facility, for the beneficiary
84	84	to use a particular repair person or facility.
85	85	(b) In settling a liability claim by a third party against
86	86	an insured for property damage claimed by the third party, an
87	87	insurer, an employee or agent of an insurer, an insurance adjuster,
88	88	or an entity that employs an insurance adjuster may not:
89	89	(1) require the third-party claimant to have repairs
90	90	made by a particular repair person or facility;
91	91	(2) require the third-party claimant [or] to use a
92	92	particular brand, type, kind, age, vendor, supplier, or condition
93	93	of parts or products to repair damage to the vehicle to the
94	94	vehicle's condition before the damage occurred;
95	95	(3) intimidate, coerce, or threaten the third-party
96	96	claimant to induce the claimant to use a particular repair person or
97	97	facility; or
98	98	(4) offer an incentive or inducement, other than a
99	99	warranty issued by a repair person or facility, for the third-party
100	100	claimant to use a particular repair person or facility.
101	101	SECTION 3. Section 1952.302, Insurance Code, is amended to
102	102	read as follows:
103	103	Sec. 1952.302. PROHIBITED ACTS IN CONNECTION WITH REPAIR OF
104	104	MOTOR VEHICLE. (a) In connection with the repair of damage to a
105	105	motor vehicle covered under an automobile insurance policy, an
106	106	insurer, an employee or agent of an insurer, an insurance adjuster,
107	107	or an entity that employs an insurance adjuster may not:
108	108	(1) solicit or accept a referral fee or gratuity in
109	109	exchange for referring a beneficiary or third-party claimant to a
110	110	repair person or facility to repair the damage;
111	111	(2) state or suggest, either orally or in writing, to a
112	112	beneficiary that the beneficiary must use a specific repair person
113	113	or facility or a repair person or facility identified on a preferred
114	114	list compiled by an insurer for the damage repair or parts
115	115	replacement to be covered by the policy; [or]
116	116	(3) restrict the right of a beneficiary or third-party
117	117	claimant to choose a repair person or facility by requiring the
118	118	beneficiary or third-party claimant to travel a [an unreasonable]
119	119	distance considered inconvenient by a beneficiary or third-party
120	120	claimant to repair the damage;
121	121	(4) offer, communicate, or suggest in any manner that
122	122	a particular repair person or facility will provide faster repair
123	123	times, faster service, or more efficient claims handling than
124	124	another repair person or facility; or
125	125	(5) disregard a repair operation or cost identified by
126	126	an estimating system, including the system's procedural pages and
127	127	any repair, process, or procedure recommended by the original
128	128	equipment manufacturer of a part or product.
129	129	(b) Notwithstanding Subsection (a)(5), a motor vehicle
130	130	covered under an automobile insurance policy may be repaired with a
131	131	part or product that is of like kind and quality as an original
132	132	equipment manufacturer part or product as authorized by Section
133	133	1952.301(a-2).
134	134	SECTION 4. The change in law made by this Act applies only
135	135	to an insurance policy that is delivered, issued for delivery, or
136	136	renewed on or after January 1, 2022. A policy delivered, issued for
137	137	delivery, or renewed before that date is governed by the law as it
138	138	existed immediately before the effective date of this Act, and that
139	139	law is continued in effect for that purpose.
140	140	SECTION 5. This Act takes effect September 1, 2021.