Key legislative issues for IIAT, its members and their clients
IIAT's Bills of Interest for the 87th Texas Legislative Session
HB 19 by Leach – Priority bill which would help curb the “nuclear verdicts” we are seeing in commercial auto claims in Texas. The final bill was not as comprehensive as the original bill, but the two key pieces of the bill were retained, however in different ways. First was the paid vs. incurred provision which was to reign in the outrageous charges that are often a “white herring” of what is actually paid by the claimant. This will be covered as a separate item under SB 207. Secondly, under this legislation, a trial will be bifurcated, or split, into two phases.
In phase 1, the facts of the incident are determined, and fault is established. One important provision is that in phase 1, the driving record and hiring practices can be used to determine negligent entrustment of the vehicle by the insured. It will be imperative that agents advise their clients to adhere to strict hiring practices to avoid poor practices be used against them in court.
If an insured is found to be liable, then the second phase of the trial begins. In this phase, the determination of award is ascertained. All sorts of additional information may be entered into the second phase, including prior claims history, safety records, and a multitude of other information.
HB 1113 by Oliverson – Peer-to-peer auto sharing has become more popular in Texas and this bill outlines whose insurance policy is responsible in the event of an automobile accident involving a shared auto.
HB 769 by Middleton – This omnibus TWIA bill would have imposed several onerous requirements onto TWIA had it not been amended by Senator Larry Taylor. The original bill included provisions such as moving the headquarters of TWIA to a Tier 1 or Tier 2 county essentially prohibiting any hope of rate increase with the requirement of no vote allowed if there was a vacancy on the Board and would require a 2/3 vote for any increase. The final bill as amended has only two provisions: Board cannot vote on a rate increase if there is a vacancy and reinsurance cannot be purchased from a broker involved in the modeling of the PML.
HB 1195 by Geren – This bill clarifies that certain monies received for COVID-19 relief are not subject to Franchise Tax by the state of Texas.
HB 1418 by Leach – This bill protects contractors from liability for defects in plans, specifications, or other related documents for the construction or repair to real property. The contractors have responsibilities to point out defects if, or when, they become aware of such.
HB 1689 by Oliverson - Credit for reinsurance agreements and ceded to certain assuming insurers made it imperative that we passed legislation to allow for reinsurance agreements to avoid negative ramifications for those insurers.
HB 1693 by Shaheen – Municipal courts do not have access to the financial responsibility information that is available to DPS and law enforcement officers to confirm evidence of insurance. This legislation will allow the courts access to the same database to determine whether coverage is in force. This will streamline the process of determining whether an individual has met the financial responsibility requirement of the state.
HB 1777 by Oliverson – Based on NAIC model legislation, this bill requires certain disclosures and standards required of life agents for certain annuity transactions.
HB 1787 by Lambert – This is a cleanup of a bill passed last session and clarifies that a personal auto insurance policy provides coverage while your vehicle is in any repair facility.
HB 2547 by Oliverson – The modernization of commercial insurance offered by this legislation will allow more flexibility in bringing certain commercial insurance products to the marketplace.
HB 3564 by Paul – Properties eligible for TWIA coverage must have a WPI-8 certification. Once the certification is received, the TDI may not rescind the certification unless modifications are made to the property.
HB 3769 by Smithee – Certain disclosures on occupational insurance policies and materials must be clearly visible on the first page of any policy or the first page of any marketing or sales brochure stating that this policy is not Workers Compensation insurance. Agents who market or sell these policies must provide the disclosure language on any material that they produce.
HB 4030 by Smithee – Amending certain requirements for TDI including the requirement of agents to provide information to the department on subagent of an agency. Also increased the ethics training for agents from two hours to three hours each license cycle.
SB 6 by Hancock – This was a priority bill for IIAT this session. This is the Pandemic Liability Protection legislation which provides businesses, physicians, healthcare equipment providers and educational entities protection from frivolous lawsuits. This only requires that an entity prove that they adhered to guidelines set out by Federal, State, or Local officials to receive the protection. This bill applies to any claim filed and adjudicated after 3/13/2020.
SB 207 by Schwertner – This was the bill to address paid vs. incurred charges in commercial automobile liability cases. SB 207 was well on its way to passage when the Supreme Court of Texas handed down a ruling that was more beneficial to our case than the bill was. In the case of John vs Doe, the SCOT ruled that only the actual amount that had been paid was allowable in the pleadings for damages. This ruling would have been overturned by passage of SB 207; thus the bill was pulled down to protect the ruling.
SB 713 by Buckingham – SB 713 is the omnibus Sunset bill which moves the dates for Sunset of Texas Department of Insurance, Texas Workers Compensation division, and OPIC until 2025.
SB 1448 by Taylor – In 2019 the Texas legislature passed a bill requiring a study of the funding structure of the Texas Windstorm Insurance Association. As a result of COVID-19, this study never occurred. This bill merely extended the date for the study to be completed by December of 2022.
SB 1602 by Taylor – The practice of failure to cooperate in the investigation of a personal automobile claim has become a practice that allows companies and persons to avoid liability. This will require an insurer that denies a claim based on a failure to cooperate, or inability to contact their insured, send notice of non-renewal to the insured.
Bills of Interest Not Passing
HB 359 by Geren – Would amend the UM/UIM part of the policy so that you would merely have to notify the company of a claim to receive benefits.
HB 429 by K. King – Adding the coverage of tornado and wildfire statewide to TWIA policy.
HB 430 by K. King – Loss experience from a catastrophe could not be considered in setting rates for risks located outside the disaster area.
HB 477 by Deshotel – Would have allowed casino gaming to barrier islands and part of the proceeds would go to the funding of TWIA.
HB 573 by Oliverson – This would have brought Health Care Ministries under the authority of the TDI to regulate certain actions of these programs.
HB 776 by Walle – Requiring Workers Compensation to be provided by contractors and subcontractors for any government job.
HB 804 by J. Johnson – Would remove the offset of PIP payments against liability claim unless the entire limit of liability had been exhausted.
HB 1110 by J. Johnson - Increasing the initial payment on a replacement cost payment policy. This would have required 80% of the estimated claims amount to be paid rather than ACV.
HB 1111 by Johnson – Prohibiting discrimination on underwriting and rating due to sexual orientation.
HB 1119 by Lucio – Establishment of the Texas Uninsured Vehicle Enforcement program
HB 1131 by Clardy – Requirement of OEM (original equipment mfg.) parts for repair of damage to any auto.
HB 1399 by Krause – Would require professional liability insurance coverage and prohibition of certain medical procedures for children.
HB 1433 by Capriglione - Deals with the payment of deductibles and release of insurance proceeds
HB 1450 by Herrero – Would require a vote of TWIA policyholders on the approval of a rate increase.
HB 1626 by Lucio – Prohibiting the use of credit scoring by an insurer during and after a disaster.
HB 1649 by Middleton – Would have required cities, counties and school districts to secure two bids on all insurance and risk pool contracts.
HB 1682 by Krause – Requiring that the liability limits be disclosed to the claimant in any liability claim by the insurer or the policyholder.
HB 1793 by J. Johnson – Eliminates the ability for an insurer to use an oral release for automobile claims.
HB 1864 by Lucio – Attempt to move the WPI-8 certification process from TDI back to TWIA.
HB 1932 by S. Thompson – Providing for a disclosure to be included on life insurance policies outlining the alternatives to allowing a policy to lapse or be surrendered.
HB 2111 by Lucio – Easing the requirements for filing of rates for personal lines policies in areas designated as low market share.
HB 2269 by J. Turner – Requiring the declaration page of a personal auto policy to outline any deductible that might be charged.
HB 2534 by Clardy – Would change the appraisal process under a personal automobile policy.
HB 2738 by Hernandez – would revise the ability of an insured to decline to purchase UM/UIM coverage on a personal auto policy.
HB 2777 by Pacheco – Would create a provision to regulate roofing contractors by requiring registering and providing penalties for those operating without registering.
HB 2779 by Pacheco – Clarifies that a contractor working for the insured is not required to be licensed as a Public Adjuster.
HB 2782 by Dean - Relating to COVID 19 liability protection.
HB 2788 by Leach – Would require arbitration in any accident involving a Transportation Network Company.
HB 3809 by Hunter – Moves the rate making authority for TWIA away from the TWIA Board and places it with the Insurance Commissioner.
HB 3810 by Hunter – Eliminates the 5% file and use provision from TWIA rates and requires a vote of 2/3 of the Board to increase rates.
HB 3960 by Lambert – Requiring the use of OEM parts for the repair of any vehicle that is 36 months or newer.
HB 3969 by Sanford – Allowing the use of violations in setting the rates to be charged for a personal auto policy. Currently reserved for County Mutuals.
HB 4210 by Paul – TDI does not currently have specific authority to conduct business electronically. This will allow them to do so unless the person requests in writing that TDI not communicate electronically.
HB 4404 by Sanford – Regulation of the sale of AD&D insurance policies by a financial institution.
HB 4481 by Oliverson – Dealing with civil liability for claims from COVID 19.
SB 207 by Schwertner – Removed by author as SCOT ruling more favorable than the bill.
SB 249 by Schwertner – Requiring the inclusion of pandemic to be covered under any policy that included Business Interruption.
SB 493 by N. Johnson – Requiring nursing homes to maintain professional liability insurance coverage in the amount of at least $300K / $1 mil.