HBA-SEP, TBM C.S.H.B. 186 77(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 186
By: Burnam
Insurance
3/2/2001
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Under current law, fire marshals, fire chiefs, and police officers are
authorized to request insurance companies to release certain information
regarding a fire loss of $1,000 or more as a means to investigate possible
insurance fraud.  C.S.H.B. 186 expands the insurance fraud investigative
powers of police officers, fire chiefs, and fire marshals to include the
investigation of possible 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. 

ANALYSIS

C.S.H.B. 186 amends the Insurance Code to provide that, in the course of a
criminal investigation the state fire marshal, the fire marshal of a
political subdivision in this state, the chief of a fire department in this
state, a chief of police of a municipality in this state, or a sheriff
(official) in this state may make a written request that an insurance
company (company) release information relating to a claimed burglary or
robbery loss or a death claim seeking life insurance proceeds.  The company
is required to release the information to any official authorized to
request information pertaining to a claim if the company has reason to
believe that the insurance claim is false or fraudulent.  The bill also
provides that an official who requests information is only authorized to
request an insurance policy relevant to an insurance claim under
investigation and the application for that policy, policy premium payment
records, the history of previous claims made by the insured, and material
relating to the investigation of the insurance claim, including statements
of any person, proof of loss, or other relevant evidence.  The bill
provides that a public official or agency is not authorized to adopt or
require any form of periodic report by an insurer and requires the
officials and department personnel who receive the information to maintain
its confidence until the release of the information is required by a
criminal or civil proceeding.   

In the absence of fraud or malice, neither an insurance company nor a
person who provides information on behalf of an insurance company is liable
for damages in a civil action or subject to criminal prosecution for an
oral or written statement made, or any other action taken, that relates to
the information required to be released under these provisions.  The bill
prohibits an insurance company or the company's representative from
intentionally refusing to release to an official the information required
to be released to that official.   

EFFECTIVE DATE

September 1, 2001.

COMPARISON OF ORIGINAL TO SUBSTITUTE

The substitute differs from the original bill by removing the provision in
the original which required an  insurance company that receives a request
for information regarding a claim that the company has reason to believe is
false, fraudulent, or exaggerated to notify the requesting official,
furnish that official with all relevant material acquired during the
company's investigation of the insurance claim, cooperate with and take
action as requested by any law enforcement agency, or permit an inspection
of the company's records relating to the policy and the loss by any person
ordered by a court to inspect those records.  The substitute removes the
provision which provides that an official authorized to request information
relating to an insurance claim may be required to testify in a civil
action.