HBA-TYH C.S.H.B. 643 76(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 643
By: Flores
Insurance
5/7/1999
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

C.S.H.B. 643 defines "insurer," provides that an insurer pursuing a claim
against a person under a right of subrogation must obtain a judgment or
written settlement agreement for the amount of the claim before the insurer
may submit information to a credit reporting bureau regarding the amount of
the claim or the person's failure to pay the amount of the claim, and
provides that a violation of this article is an unfair or deceptive act or
practice and is subject to penalty and sanction. 

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 A, Chapter 5, Insurance Code, by adding
Article 5.06-8, as follows: 

Art. 5.06-8.  REPORTING OF AN AMOUNT CLAIMED UNDER A RIGHT OF SUBROGATION.
(a)  Defines "insurer" as an insurance  company, interinsurance exchange,
mutual, capital stock company, fraternal benefit society, local mutual aid
association, county mutual, reciprocal, association, Lloyd's plan, or other
entity writing motor vehicle insurance in this state.  Provides that the
term includes an affiliate, as defined by Section 2 (Definitions), Article
21.49-1, Insurance Code.  
 
(b)  Provides that an insurer pursuing a claim against a person under a
right of subrogation must obtain a judgment or written settlement agreement
for the amount of the claim before the insurer may submit information to a
credit reporting bureau regarding the amount of the claim or the person's
failure to pay the amount of the claim.  

(c)  Provides that an insurer who violates this article commits an unfair
or deceptive act or practice as defined by Article 21.21 (Unfair
Competition and Unfair Practices), Insurance Code, and is subject to each
penalty and sanction imposed under that article.  

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

SECTION 3.  Emergency clause.

COMPARISON OF ORIGINAL TO SUBSTITUTE

The substitute modifies the original bill by changing the caption form
"relating to certain insurers' ability to collet the amount of a motor
vehicle insurance claim under a right of subrogation" to "relating to
reporting of certain information by an insurer to a credit reporting
bureau." 

The substitute modifies the original bill in SECTION 1 by changing the
title of proposed Article 5.06-8, Insurance Code, from "Collection of an
Amount Claimed Under a Right of Subrogation" to "Reporting of an Amount
Claimed Under a Right of Subrogation." 
 
The substitute modifies the original bill in SECTION 1 (proposed Article
5.06-8(b), Insurance Code) 
by deleting text providing that an insurer pursuing a claim against a
person under a right of subrogation must obtain a judgment or written
settlement agreement for the amount of the claim before the insurer may
engage a third party to collect the amount of the claim.