HBA-ALS H.B. 3041 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3041 By: Smithee Insurance 3/21/1999 Introduced BACKGROUND AND PURPOSE The purpose of this bill is to clarify the requirements of an insurer in responding to a claimant. H.B. 3041 changes the time period in which an eligible surplus lines insurer is required to acknowledge the receipt of a claim, commence investigation of a claim, and request specified information from the claimant. Under this bill, if an insurer receives unwritten notice of a claim the insurer is allowed to notify the claimant that written notice is required, as long as the notice is given within three business days of receipt of the unwritten notice. This bill removes the provision requiring surplus lines insurers to pay a claim no later than the 20th business day after notice, or the day that a specified act is performed. This bill removes exemptions currently granted to certain types of insurance and bonds under this article. In addition, this bill provides damages and penalties for an insurer's noncompliance with this article. 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 Article 21.55, Chapter 21, Subchapter E, Insurance Code, as follows: Sec. 1. Definitions. Redefines "insurer" and defines "notice." Sec. 2. Notice of claim. Deletes the provision authorizing an eligible surplus lines insurer to perform specified acts that are required of an insurer upon receipt of a notice of claim no later than the 30th business day after receiving the notice of claim. Authorizes the insurer, if the insurer receives unwritten notice of a claim, to advise the claimant within three (3) business days that written notice is required. Provides that if the insurer does not request written notice of the claim, the insurer's time limits for acknowledging the claim, commencing its investigation, and requesting information run from the date the insurer received unwritten notice. Sec. 3. Acceptance or rejection of claims. Makes nonsubstantive changes. Sec. 4. Payment of claims. Deletes language requiring surplus lines insurers to pay a claim no later than the 20th business day after the notice or date a specified act is performed. Sec. 5. Exemption. Deletes specified exemptions to which this article does not apply. Deletes language providing that this article does not apply to Chapter 20A of this code except as provided in Section 9 of that chapter. Redesignates existing Subsection (d) to Subsection (c). Makes nonsubstantive changes. Sec. 6. Damages. Prohibits an insurer from denying liability for a claim made pursuant to an insurance policy if the insurer does not comply with this article. Requires the 18 percent penalty for noncompliance with this article to begin accruing on the violation date and requires the penalty to continue until the claim is paid in full. Makes nonsubstantive changes. Sec. 7. Cumulative remedies. Makes no change to this section. Sec. 8. Liberal construction. Makes no change to this section. SECTION 2.Effective date: September 1, 1999. Makes application of this Act prospective. SECTION 3.Emergency clause.