| 3 | 5 | | |
|---|
| 4 | 6 | | |
|---|
| 5 | 7 | | A BILL TO BE ENTITLED |
|---|
| 6 | 8 | | AN ACT |
|---|
| 7 | 9 | | relating to prohibiting oral releases for automobile insurance |
|---|
| 8 | 10 | | claims. |
|---|
| 9 | 11 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|---|
| 10 | 12 | | SECTION 1. Subtitle C, Title 10, Insurance Code, is amended |
|---|
| 11 | 13 | | by adding Chapter 1955 to read as follows: |
|---|
| 12 | 14 | | CHAPTER 1955. ORAL RELEASES FOR AUTOMOBILE INSURANCE CLAIMS |
|---|
| 13 | 15 | | Sec. 1955.001. DEFINITIONS. In this chapter: |
|---|
| 14 | 16 | | (1) "Claimant" means an individual who has a claim for |
|---|
| 15 | 17 | | property damage or an injury against another individual or an |
|---|
| 16 | 18 | | entity. |
|---|
| 17 | 19 | | (2) "Injury" means a bodily or psychological injury. |
|---|
| 18 | 20 | | (3) "Oral release" means an oral contract under which |
|---|
| 19 | 21 | | a claimant releases, wholly or partly, one or more of the claimant's |
|---|
| 20 | 22 | | claims arising out of property damage or an injury for which an |
|---|
| 21 | 23 | | insurer may be liable under an automobile insurance policy in |
|---|
| 22 | 24 | | exchange for money or other consideration paid. |
|---|
| 23 | 25 | | Sec. 1955.002. APPLICABILITY OF CHAPTER. This chapter |
|---|
| 24 | 26 | | applies to an insurer writing personal or commercial automobile |
|---|
| 25 | 27 | | insurance in this state, including an insurance company, |
|---|
| 26 | 28 | | corporation, reciprocal or interinsurance exchange, mutual |
|---|
| 27 | 29 | | insurance company, county mutual insurance company, association, |
|---|
| 28 | 30 | | Lloyd's plan, or other insurer. |
|---|
| 29 | 31 | | Sec. 1955.003. ORAL RELEASE OF CLAIMS PROHIBITED. A |
|---|
| 30 | 32 | | claimant and an insurer or another individual or entity may not |
|---|
| 31 | 33 | | enter into an oral release for claims arising out of property damage |
|---|
| 32 | 34 | | or an injury for which an insurer may be liable under an automobile |
|---|
| 33 | 35 | | insurance policy. A release made in exchange for money or other |
|---|
| 34 | 36 | | consideration paid for the claimant's claim arising out of property |
|---|
| 35 | 37 | | damage or an injury for which an insurer may be liable under an |
|---|
| 36 | 38 | | automobile insurance policy is not enforceable unless the contract |
|---|
| 37 | 39 | | is in writing. |
|---|
| 38 | 40 | | SECTION 2. The changes in law made by this Act apply only to |
|---|
| 39 | 41 | | a contract entered into on or after January 1, 2022. A contract |
|---|
| 40 | 42 | | entered into before January 1, 2022, is governed by the law as it |
|---|
| 41 | 43 | | existed immediately before the effective date of this Act, and that |
|---|
| 42 | 44 | | law is continued in effect for that purpose. |
|---|
| 43 | 45 | | SECTION 3. This Act takes effect September 1, 2021. |
|---|