HBA-ATS, PDH C.S.H.B. 205 76(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 205
By: Burnam
Insurance
4/8/1999
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Currently, a fire marshal, fire chief, or police officer may request
certain information from insurance companies regarding a fire loss of
$1,000 or more as a means of investigating insurance fraud. C.S.H.B. 205
expands the insurance fraud investigative powers of the state fire marshal,
a fire marshal of a political subdivision, a fire chief, a police chief of
a municipality, and a sheriff to include the investigation of insurance
fraud in cases of burglary, robbery, and death claims. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subchapter E, Chapter 21, Insurance Code, by adding
Article 21.49C, as follows: 

Art. 21.49C.  REPORT OF CLAIMS INFORMATION ABOUT BURGLARY, ROBBERY, OR
DEATH.  (a) Authorizes a chief of police of a municipality or a sheriff or
certain fire department officials in this state, in the course of a
criminal investigation, to request in writing that an insurance company
release information obtained by it while investigating a claimed burglary
or robbery loss or a death claim seeking life insurance proceeds.  Requires
the company to release the requested information and cooperate with the
authorized official requesting the information.  Provides the specific
information that may be included in the report. 

(b)   Provides that this article does not authorize a public official or
agency to adopt or require any form of periodic report by an insurer. 

(c)  Requires an insurance company to notify a requesting official, furnish
the relevant material from an investigation, cooperate with the law
enforcement agency, and allow inspection of records, for a request made on
a claim the insurance company has reason to believe is false, fraudulent,
or exaggerated. 

(d)  Exempts an insurance company or a person providing information on the
company's behalf from liability for providing oral or written information
under this article, unless fraud or malice is shown. 

(e)  Requires officials and department personnel to keep confidential the
information received under this article until the information is released
in a criminal or civil proceeding. 

(f)  Provides that an official under this article may be required to
testify in a civil action regarding the information the official possesses
regarding a claim seeking recovery under a policy held by an insurance
company. 

(g)  Prohibits an insurer or its representative from intentionally refusing
to comply with  the requirements of this article.   

SECTION 2.  Effective date: September 1, 1999.
                       Makes application of this Act prospective. 

SECTION 3.  Emergency clause.

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 205 modifies the original bill in SECTION 1 by including a chief
of police of a municipality in this state and a sheriff in this state,
rather than a peace officer in this state, among the officials authorized
to request an insurer to release information related to a claimed burglary
or robbery loss or death claim in its possession, as provided by proposed
Article 21.49C(a), Insurance Code.  The substitute modifies the original by
stipulating that the request from these officials must be in writing and
that the request from these officials must be made during the course of a
criminal investigation. 

The substitute also modifies the original in proposed Article 21.49C(g) by
providing that an insurer or its representative, rather than a person, is
prohibited from intentionally refusing to comply with the requirements of
Article 21.49C.