| 1 | 1 | | 88R15698 SCL-F |
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| 2 | 2 | | By: Jetton H.B. No. 601 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to deceptive, unfair, or prohibited practices by an |
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| 8 | 8 | | insurer. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Section 542.003(b), Insurance Code, is amended |
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| 11 | 11 | | to read as follows: |
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| 12 | 12 | | (b) Any of the following acts by an insurer constitutes |
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| 13 | 13 | | unfair claim settlement practices: |
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| 14 | 14 | | (1) knowingly misrepresenting to a claimant pertinent |
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| 15 | 15 | | facts or policy provisions relating to coverage at issue; |
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| 16 | 16 | | (2) failing to acknowledge with reasonable promptness |
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| 17 | 17 | | pertinent communications relating to a claim arising under the |
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| 18 | 18 | | insurer's policy; |
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| 19 | 19 | | (3) failing to adopt and implement reasonable |
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| 20 | 20 | | standards for the prompt investigation of claims arising under the |
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| 21 | 21 | | insurer's policies; |
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| 22 | 22 | | (4) not attempting in good faith to effect a prompt, |
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| 23 | 23 | | fair, and equitable settlement of a claim submitted in which |
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| 24 | 24 | | liability has become reasonably clear; |
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| 25 | 25 | | (5) compelling a policyholder to institute a suit to |
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| 26 | 26 | | recover an amount due under a policy by offering substantially less |
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| 27 | 27 | | than the amount ultimately recovered in a suit brought by the |
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| 28 | 28 | | policyholder; |
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| 29 | 29 | | (6) compelling a policyholder to retain a public |
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| 30 | 30 | | insurance adjuster to recover an amount due under a policy by |
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| 31 | 31 | | offering less than the amount ultimately recovered in a settlement |
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| 32 | 32 | | with the policyholder; |
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| 33 | 33 | | (7) failing to maintain the information required by |
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| 34 | 34 | | Section 542.005; or |
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| 35 | 35 | | (8) [(7)] committing another act the commissioner |
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| 36 | 36 | | determines by rule constitutes an unfair claim settlement practice. |
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| 37 | 37 | | SECTION 2. Section 4102.104, Insurance Code, is amended by |
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| 38 | 38 | | adding Subsection (b-1) to read as follows: |
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| 39 | 39 | | (b-1) Notwithstanding Subsection (b), an insurer shall pay |
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| 40 | 40 | | a commission of a license holder for services provided to an insured |
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| 41 | 41 | | as a result of the insurer violating Chapter 541 or Section |
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| 42 | 42 | | 542.003(b). The payment required by this subsection is in addition |
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| 43 | 43 | | to any other payment required under other law. |
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| 44 | 44 | | SECTION 3. Section 542.003, Insurance Code, as amended by |
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| 45 | 45 | | this Act, applies only to an offer made on or after the effective |
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| 46 | 46 | | date of this Act. An offer made before the effective date of this |
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| 47 | 47 | | Act is governed by the law as it existed immediately before the |
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| 48 | 48 | | effective date of this Act, and that law continues in effect for |
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| 49 | 49 | | that purpose. |
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| 50 | 50 | | SECTION 4. Section 4102.104(b-1), Insurance Code, as added |
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| 51 | 51 | | by this Act, applies only to services provided under a contract |
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| 52 | 52 | | between a public insurance adjuster and an insured entered into on |
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| 53 | 53 | | or after the effective date of this Act. |
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| 54 | 54 | | SECTION 5. This Act takes effect September 1, 2023. |
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