Proposed New Insurance Laws

Here is information for Texas insurance lawyers. The following are a few new laws being proposed by the Texas Legislature concerning insurance. These proposed laws change existing statutes.
HB 3646 – Insurance Claims and Cerlaln Prohibited Acts and Practices Relating to the Business of Insurance Summary: HB 3646, would amend various sections of the Insurance Code to do, among other things, the following:
The definition of “person” would no longer include an adjuster or any third-party individual or entity “engaged by an insurer to provide adjusting, estimating, consulting, engineering, or other services related to the insurer’s adjustment of a claim.
An insurer would be “solely responsible” for any “unfair method of competition or an unfair or deceptive act or practice in the business of insurance” committed by an individual employed by the insurer such as an adjuster or a third-party individual or entity engaged by the insurer to provide adjusting, estimating, consulting, engineering, or other services related to the insurer’s adjustment of a claim.
An insured seeking damages in an action against an insurer would be required to provide written notice to the insurer at least 61 days prior filing suit that includes a sworn statement that includes (1) the specific damage items and the amount alleged to be owed by the insurer; (2) the amount of the attorney’s fees the insured reasonably incurred in asserting the claim against the insurer; and (3) the amount that the insured will accept in full and final satisfaction of the claim. If the sworn statement included damage amounts sought by the insured not previously submitted to the insurer, the notice must contain: (1) a sworn statement signed by the insured stating the specific damage items;·the amount alleged to be owed by the insured, and the reason the damage items were not previously submitted to the insurer; (2) copies of reports, estimates, photographs, and other items reasonably supporting the insured’s additional damage items; (3) a statement that the insured will cooperate in allowing the insurer to inspect the insured property for purposes of investigating the additional damage items; (4) the amount of the attorney’s fees the insured reasonably incurred in asserting the claim against the insurer; and (5) a stated amount that the insured will accept in full and final satisfaction of the claim.
Establish a requirement in which a failure to provide requisite notice prior to filing suit would, in certain circumstances, be subject to dismissal.
Establish a 2-year statute of limitations for providing notice to an insurer certain claims for damages to or loss of real property or tangible personal property.
HB 3697 – Texas Deparlment of Insurance Study of Claims Data and Recovery of Attorney’s Fees in First Party Claims
HB 3697, would amend section 542.062 of the Insurance Code and limit the recovery of attorney’s fees in first party insurance claims to an amount equal to the recoverable economic damages. Under HB 3697, the Department of Insurance would be required to research and evaluate claims data made in the past five years to compare and establish an understanding between first party claims made, legal actions filed by claimants to recover damages, and complaints made by claimants to the Department, if any.
SB 1166 – Recovery of Damages for Delayed Payment of Certain Insurance Claims
Summary: SB 1166, would amend the “Prompt Payment of Claims” section of the Insurance Code to provide additional instances in which an insurer would not be liable for damages due to a delay in paying on a first party claim. Under SB 1166, the damages-for-delay provisions would not apply if: (1) the amount of damages awarded as a result of arbitration or litigation is less than 80 percent of a settlement offer (as defined by section 42.001 of the CPRC) made by an insurer and rejected by the claimant; (2) a claimant fails to provide an affidavit of damages as defined by SB 1166; or (3) the insurer pays to the claimant the amount of damages awarded as a result of an appraisal no later than the 15th business day after the date the damages are awarded in the appraisal. The “affidavit of damages” provisions in SB 1166 would require a claimant to provide an insurer with an affidavit containing the dollar amount of all damages the claimant intends to seek in a suit no later than the 30th day before the date the claimant commences the suit against the insurer. However, if a claimant ultimately seeks damages that·exceed the amount in the claimant’s affidavit, the claimant would be required to provide the insurer with written notice of the excess amount by affidavit no later than the 15th day before the date the claimant files a pleading seeking the excess amount.
Under SB 1166, a claimant could also file a claim seeking damages as a “small claims case” (as provided by section 27.060 of the Government Code) if the disputed amount of the insurance claim does not exceed the maximum amount allowed for a small claims case as determined by the Texas Rules of Civil Procedure. However, the total amount awarded in an action filed as a small claims case may not exceed two times the disputed amount of the claim. If a suit seeking damages is filed as a small claims case as provided by the Government Code, an insurer may elect to waive the insurer’s right to appeal no later than the 15th day after the date the suit is filed against the insurer.
Finally, SB 1166 would also amend section 542.060 of the Insurance Code to modify the damages provisions of that section. In addition to paying the amount of the claim, an insurer would be liable for interest only on the “disputed amount” of the claim, for reasonable and necessary attorney’s fees, and, in small claims cases, for court costs if the insurer did not waive its right to appeal any judgment entered in the small claims case. SB 1166 would also add the following to the damages section of the “Prompt Payment of Claims” section of the Insurance Code: (1) the court will determine the amount of attorney’s fees awarded, but the amount of attorney’s fees must bear a reasonable relationship to the damages awarded by the trier of fact based on the disputed amount of the claim; (2) any interest awarded would begin to accrue on the date the claimant provided the affidavit of damages; and (3) an attorney cannot share attorney’s fees awarded with the claimant.
HB 1603 – Creation of the Chancery Court and Court of Chancery Appeals to Hear Certain Cases
Summary: HB 1603, would create a statewide specialized civil trial court and an appellate court to hear certain business-related litigation cases, such as actions against businesses, accusations of wrongdoing by businesses or their members, disputes between businesses, violations of Business Organizations Code, Finance Code, and Business & Commerce Code. This court would have no jurisdiction over governmental entities (absent the government entity invoking or consenting to jurisdiction) or personal injury cases unless agreed to by the parties and the court. Some of the other notable components of the bill are:
The chancery court would be composed of seven (7) judges who are appointed by the governor for staggered six (6) year terms. The judges would be selected from a list of qualified candidates compiled by a bipartisan advisory council (Chancery Court Nominations Advisory Council) and would be required to have at least 10 years of experience in complex business law.
The court clerk would be located in Travis County, but individual judges would be based in the county seat of their respective counties.
Current venue rules would apply, but cases could be heard in an agreed~upon county or where the court may decide to be more convenient or necessary.
There would be a removal procedure for cases filed in a district court.
The Courts of Chancery Appeals, which would handle appeals from the chancery trial court, would be composed of seven (7) justices from current court of appeals justices that are appointed by the governor based on a list of qualified candidates compiled by the advisory council. Justices would serve six (6) year terms and would hear cases in panels of three (3) randomly-selected justices. Appeals from the CCA would go to the Supreme Court.
HB 230 – Recovery ofAttorney’s Fees In Certain Civil Cases · Summary: HB 230, wouid amend Chapter 38.001 of the Civil Practice and Remedies Code (CPRC) to (1) add “other legal entity” to the list of those from whom attorney’s fees can be recovered; and (2) expressly provide that Chapter 38.001 does not authorize the recovery of attorney’s fees from the state, an agency or institution of the state, or a political subdivision. The bill would further provide that the amendment to Chapter 38.001 does not affect any other statute that permits the recovery of attorney’s fees from the governmental entities listed in the statute.