HBA-DMH H.B. 1433 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1433 By: Dunnam Insurance 3/15/2001 Introduced BACKGROUND AND PURPOSE Under current law, an insured party's attorney can be compelled to submit detailed billing statements to a third-party auditor. This may constitute a violation of attorney-client privilege that could lead to the revelation of client confidences and make confidential materials discoverable. House Bill 1433 requires an insured to give consent before confidential information may be made available to a third-party auditor. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the commissioner of insurance SECTION 1 (Article 21.56A, Insurance Code) of this bill. ANALYSIS House Bill 1433 amends the Insurance Code to prohibit any insurer authorized to write casualty insurance that is obligated under a casualty insurance policy to defend an insured in a suit from submitting to a thirdparty auditor, or from requiring the insured's attorney to submit to the auditor, a specified billing statement unless, after full disclosure to the insured, the insured has given prior written consent for such an action to take place. The bill requires the commissioner of insurance, in consultation with the State Bar of Texas, to adopt rules and provides that the rules must specify the disclosure required to be made to the insured. EFFECTIVE DATE September 1, 2001, and applies only to a billing statement in relation to a defense provided under a casualty insurance policy that is delivered, issued for delivery, or renewed on or after January 1, 2002.