HBA-TBM C.S.H.B. 1036 77(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 1036 By: Thompson Insurance 3/23/2001 Committee Report (Substituted) BACKGROUND AND PURPOSE Insurance companies are required by law to give information about the settlement of claims to their insureds, but they are not required by law to give information to persons settling claims with a company against its insureds. As a result, many Texans are disadvantaged when settling claims with insurance companies other than their own insurers, because such claimants are not aware of their rights. C.S.H.B. 1036 requires insurance companies to inform claimants of their rights in a timely manner. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the commissioner of insurance in SECTION 1 (Sections 3 and 5, Article 21.21-11, Insurance Code) and SECTION 2 in this bill. ANALYSIS C.S.H.B. 1036 amends the Insurance Code to require an insurer to provide a third-party claimant (claimant) with a copy of the disclosure document adopted by the commissioner of insurance (commissioner) and sets forth provisions regarding the issuance of the required disclosure document to certain claimants. The bill requires the insurer to provide the disclosure document only in response to the first notice of a claim received by the insurer. The bill requires the office of public insurance counsel (office) to submit and the commissioner to adopt, by rule, a disclosure document that informs the claimant of the following: _the insurer does not represent the claimant; _the interests of the insurer are not necessarily the same as the claimant's interests; _the claimant is not required to accept a settlement offered by the insurer or the insurer's representative; and _the claimant has the right to consult with an attorney of the claimant's choice or seek other assistance at any time to evaluate the fairness of any request for information or settlement offer made by the insurer. This bill requires the commissioner to adopt rules as necessary to administer these provisions. The bill requires the commissioner to ensure that the disclosure document does not unnecessarily duplicate, and is not likely to be confused with, any other disclosure an insurer is required to make. The office of public insurance counsel is required to submit the disclosure document to the commissioner of insurance not later than November 1, 2001, and the commissioner is required to adopt the document by rule not later than December 1, 2001. The change in law made by this Act applies only to notice of a claim as added by this Act, received by an insurer on or after January 1, 2002. EFFECTIVE DATE September 1, 2001. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 1036 differs from the original by replacing the provision that provides for the inclusion in the disclosure document of any information the office of public insurance counsel determines is appropriate and relevant to assist the claimant in understanding the claimant's rights with a provision that requires the commissioner of insurance to ensure that the disclosure document does not unnecessarily duplicate and is not likely to be confused with any other disclosure an insurer is required to make.