HBA-TBM C.S.H.B. 3346 77(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 3346
By: Uresti
Insurance
5/3/2001
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

In an effort to reduce expenditures and increase profits, a motor vehicle
insurance company or its representative (insurer) may attempt to reach a
settlement agreement with a third party who is involved in an automobile
accident with a party insured by the insurer.  While a settlement agreement
may reduce an insurer's financial risk, it may not provide for the
well-being of the third party.  For instance, an injury resulting from an
automobile accident may not become immediately apparent to the injured
person, and a person involved in an automobile accident may reach a
settlement with the other party's insurer before realizing the full extent
of any injuries received in the accident.  C.S.H.B. 3346 provides an
extended period of time between an automobile accident and when an insurer
is allowed to solicit a contractually binding statement or settlement from
a third party.   

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. 3346 amends the Insurance Code to prohibit a representative of a
motor vehicle insurer from obtaining or attempting to obtain a release
agreement from a person on or before the 10th day after the date of the
motor vehicle accident that is the subject of the release agreement.  A
release agreement obtained in violation of this provision is voidable by
the person from whom the release agreement was obtained.   

The bill prohibits a representative of a motor vehicle insurer, except as
provided by the Texas Rules of Civil Procedure, from obtaining or
attempting to obtain from an actual or potential third-party claimant, for
the purpose of negotiating a release agreement, a written or oral statement
regarding a motor vehicle accident on or before the seventh day after the
date of the accident.  A statement obtained in violation of this provision
is not admissible against the person who made the statement in an action
relating to damages arising out of the motor vehicle accident that is the
subject of the statement.   

The bill establishes an administrative penalty for an insurer or a
representative of an insurer who violates the provisions of this bill.   

EFFECTIVE DATE

September 1, 2001.  

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 3346 differs from the original by removing a farm mutual insurance
company from the definition of a "motor vehicle insurer" and modifying the
definition of a "release agreement."  The substitute prohibits a
representative of a motor vehicle insurer from obtaining or attempting to
obtain a release agreement from a person on or before the 10th day rather
than the 30th day after the date of a motor vehicle accident or  obtaining
or attempting to obtain from an actual or potential third-party claimant a
written or oral statement regarding a motor vehicle accident on or before
the seventh day rather than the 15th day after the date of an accident.