Texas 2023 - 88th Regular

Texas House Bill HB1321 Compare Versions

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1	1	88R2614 CJD-F
2	2	By: Clardy H.B. No. 1321
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	"estimating system" means an automobile collision damage
14	14	estimating system that is generally accepted by the automobile
15	15	repair industry for use in writing an automobile repair estimate.
16	16	(b) For purposes of enforcement of this subchapter:
17	17	(1) "Prevailing rate" means the rate identified by a
18	18	rate survey that is:
19	19	(A) conducted by a third party;
20	20	(B) designed to be transparent and unbiased; and
21	21	(C) based on the posted retail labor rates and
22	22	not direct repair program shop rates that operate under a contract
23	23	with an insurer.
24	24	(2) "Reasonable and necessary amount" means the amount
25	25	determined by the original equipment manufacturer's manufacturer
26	26	and estimating systems required to repair a vehicle to the
27	27	condition before the covered damage to the vehicle occurred.
28	28	SECTION 2. Section 1952.301, Insurance Code, is amended to
29	29	read as follows:
30	30	Sec. 1952.301. LIMITATION ON PARTS, PRODUCTS, OR REPAIR
31	31	PERSONS OR FACILITIES PROHIBITED. (a) Except as provided by rules
32	32	adopted by the commissioner, under an automobile insurance policy
33	33	that is delivered, issued for delivery, or renewed in this state, an
34	34	insurer may not directly or indirectly limit the insurer's coverage
35	35	under a policy covering damage to a motor vehicle by[:
36	36	[(1)] specifying the brand, type, kind, age, vendor,
37	37	supplier, or condition of parts or products that may be used to
38	38	repair the vehicle.[; or]
39	39	(a-1) An insurer may not require that:
40	40	(1) a vehicle be repaired with a part or product on the
41	41	basis that the part or product is the least expensive part or
42	42	product available; or
43	43	(2) the beneficiary of a policy purchase any part or
44	44	product from any vendor or supplier, including an out-of-state
45	45	vendor or supplier, on the basis that the part or product is the
46	46	least expensive part or product available.
47	47	(a-2) An insurer may not consider a specified part or
48	48	product for the repair of a motor vehicle to be of like kind and
49	49	quality as an original equipment manufacturer part or product for
50	50	any purpose unless the insurer or the manufacturer of the specified
51	51	part or product has conclusively demonstrated that the specified
52	52	part or product:
53	53	(1) meets the fit, finish, and quality criteria
54	54	established for the part or product by the original equipment
55	55	manufacturer of the part or product;
56	56	(2) is the same weight and metal hardness established
57	57	for the part or product by the original equipment manufacturer of
58	58	the part or product; and
59	59	(3) has been tested using the same crash and safety
60	60	test criteria used by the original equipment manufacturer of the
61	61	part or product.
62	62	(a-3) Under an automobile insurance policy that is
63	63	delivered, issued for delivery, or renewed in this state, an
64	64	insurer, an employee or agent of the insurer, an insurance
65	65	adjuster, or an entity that employs an insurance adjuster may not
66	66	directly or indirectly limit the insurer's coverage under a policy
67	67	covering damage to a motor vehicle by:
68	68	(1) [(2)] limiting the beneficiary of the policy from
69	69	selecting a repair person or facility to repair [damage to] the
70	70	vehicle to the vehicle's condition before the damage occurred in
71	71	order for the beneficiary to obtain the repair without owing any
72	72	out-of-pocket cost other than the deductible;
73	73	(2) intimidating, coercing, or threatening the
74	74	beneficiary to induce the beneficiary to use a particular repair
75	75	person or facility; or
76	76	(3) offering an incentive or inducement, other than a
77	77	warranty issued by a repair person or facility, for the beneficiary
78	78	to use a particular repair person or facility.
79	79	(b) In settling a liability claim by a third party against
80	80	an insured for property damage claimed by the third party, an
81	81	insurer, an employee or agent of an insurer, an insurance adjuster,
82	82	or an entity that employs an insurance adjuster may not:
83	83	(1) require the third-party claimant to have repairs
84	84	made by a particular repair person or facility;
85	85	(2) require the third-party claimant [or] to use a
86	86	particular brand, type, kind, age, vendor, supplier, or condition
87	87	of parts or products to repair the vehicle to the vehicle's
88	88	condition before the damage occurred;
89	89	(3) intimidate, coerce, or threaten the third-party
90	90	claimant to induce the claimant to use a particular repair person or
91	91	facility; or
92	92	(4) offer an incentive or inducement, other than a
93	93	warranty issued by a repair person or facility, for the third-party
94	94	claimant to use a particular repair person or facility.
95	95	SECTION 3. Section 1952.302, Insurance Code, is amended to
96	96	read as follows:
97	97	Sec. 1952.302. PROHIBITED ACTS IN CONNECTION WITH REPAIR OF
98	98	MOTOR VEHICLE. (a) In connection with the repair of damage to a
99	99	motor vehicle covered under an automobile insurance policy, an
100	100	insurer, an employee or agent of an insurer, an insurance adjuster,
101	101	or an entity that employs an insurance adjuster may not:
102	102	(1) solicit or accept a referral fee or gratuity in
103	103	exchange for referring a beneficiary or third-party claimant to a
104	104	repair person or facility to repair the damage;
105	105	(2) state or suggest, either orally or in writing, to a
106	106	beneficiary that the beneficiary must use a specific repair person
107	107	or facility or a repair person or facility identified on a preferred
108	108	list compiled by an insurer for the damage repair or parts
109	109	replacement to be covered by the policy; [or]
110	110	(3) restrict the right of a beneficiary or third-party
111	111	claimant to choose a repair person or facility by requiring the
112	112	beneficiary or third-party claimant to travel a [an unreasonable]
113	113	distance considered inconvenient by a beneficiary or third-party
114	114	claimant to repair the damage;
115	115	(4) offer, communicate, or suggest in any manner that
116	116	a particular repair person or facility will provide faster repair
117	117	times, faster service, or more efficient claims handling than
118	118	another repair person or facility; or
119	119	(5) disregard a repair operation or cost identified by
120	120	an estimating system, including the system's procedural pages and
121	121	any repair, process, or procedure recommended by the original
122	122	equipment manufacturer of a part or product.
123	123	(b) Notwithstanding Subsection (a)(5), a motor vehicle
124	124	covered under an automobile insurance policy may be repaired with a
125	125	part or product that is of like kind and quality as an original
126	126	equipment manufacturer part or product as authorized by Section
127	127	1952.301(a-2).
128	128	SECTION 4. The change in law made by this Act applies only
129	129	to an insurance policy that is delivered, issued for delivery, or
130	130	renewed on or after January 1, 2024. A policy delivered, issued for
131	131	delivery, or renewed before that date is governed by the law as it
132	132	existed immediately before the effective date of this Act, and that
133	133	law is continued in effect for that purpose.
134	134	SECTION 5. This Act takes effect September 1, 2023.