Bill Summary – FastDemocracy

      
            88R2614 CJD-F
         
		By: Clardy
            H.B. No. 1321
         
               A BILL TO BE ENTITLED
            
               AN ACT
            
            relating to certain insurance practices with respect to repair of 
         
            motor vehicles.
         
                   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         
                   SECTION 1.  Subchapter G, Chapter 1952, Insurance Code, is 
         
            amended by adding Section 1952.300 to read as follows:
         
                   Sec. 1952.300.  DEFINITIONS.  (a)  In this subchapter, 
         
            "estimating system" means an automobile collision damage 
         
            estimating system that is generally accepted by the automobile 
         
            repair industry for use in writing an automobile repair estimate.
         
                   (b)  For purposes of enforcement of this subchapter:
         
                         (1)  "Prevailing rate" means the rate identified by a 
         
            rate survey that is:
         
                               (A)  conducted by a third party;
         
                               (B)  designed to be transparent and unbiased; and
         
                               (C)  based on the posted retail labor rates and 
         
            not direct repair program shop rates that operate under a contract 
         
            with an insurer.
         
                         (2)  "Reasonable and necessary amount" means the amount 
         
            determined by the original equipment manufacturer's manufacturer 
         
            and estimating systems required to repair a vehicle to the 
         
            condition before the covered damage to the vehicle occurred.
         
                   SECTION 2.  Section 1952.301, Insurance Code, is amended to 
         
            read as follows:
         
                   Sec. 1952.301.  LIMITATION ON PARTS, PRODUCTS, OR REPAIR 
         
            PERSONS OR FACILITIES PROHIBITED.  (a)  Except as provided by rules 
         
            adopted by the commissioner, under an automobile insurance policy 
         
            that is delivered, issued for delivery, or renewed in this state, an 
         
            insurer may not directly or indirectly limit the insurer's coverage 
         
            under a policy covering damage to a motor vehicle by[:
         
                         [(1)]  specifying the brand, type, kind, age, vendor, 
         
            supplier, or condition of parts or products that may be used to 
         
            repair the vehicle.[; or]
         
                   (a-1)  An insurer may not require that:
         
                         (1)  a vehicle be repaired with a part or product on the 
         
            basis that the part or product is the least expensive part or 
         
            product available; or
         
                         (2)  the beneficiary of a policy purchase any part or 
         
            product from any vendor or supplier, including an out-of-state 
         
            vendor or supplier, on the basis that the part or product is the 
         
            least expensive part or product available.
         
                   (a-2)  An insurer may not consider a specified part or 
         
            product for the repair of a motor vehicle to be of like kind and 
         
            quality as an original equipment manufacturer part or product for 
         
            any purpose unless the insurer or the manufacturer of the specified 
         
            part or product has conclusively demonstrated that the specified 
         
            part or product:
         
                         (1)  meets the fit, finish, and quality criteria 
         
            established for the part or product by the original equipment 
         
            manufacturer of the part or product;
         
                         (2)  is the same weight and metal hardness established 
         
            for the part or product by the original equipment manufacturer of 
         
            the part or product; and
         
                         (3)  has been tested using the same crash and safety 
         
            test criteria used by the original equipment manufacturer of the 
         
            part or product.
         
                   (a-3)  Under an automobile insurance policy that is 
         
            delivered, issued for delivery, or renewed in this state, an 
         
            insurer, an employee or agent of the insurer, an insurance 
         
            adjuster, or an entity that employs an insurance adjuster may not 
         
            directly or indirectly limit the insurer's coverage under a policy 
         
            covering damage to a motor vehicle by:
         
                         (1) [(2)]  limiting the beneficiary of the policy from 
         
            selecting a repair person or facility to repair [damage to] the 
         
            vehicle to the vehicle's condition before the damage occurred in 
         
            order for the beneficiary to obtain the repair without owing any 
         
            out-of-pocket cost other than the deductible;
         
                         (2)  intimidating, coercing, or threatening the 
         
            beneficiary to induce the beneficiary to use a particular repair 
         
            person or facility; or
         
                         (3)  offering an incentive or inducement, other than a 
         
            Statutes affected: 
Introduced: Insurance Code 1952.301, Insurance Code 1952.302 (Insurance Code 1952)



	A BILL TO BE ENTITLED
	AN ACT
	relating to certain insurance practices with respect to repair of
	motor vehicles.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. Subchapter G, Chapter 1952, Insurance Code, is
	amended by adding Section 1952.300 to read as follows:
	Sec. 1952.300. DEFINITIONS. (a) In this subchapter,
	"estimating system" means an automobile collision damage
	estimating system that is generally accepted by the automobile
	repair industry for use in writing an automobile repair estimate.
	(b) For purposes of enforcement of this subchapter:
	(1) "Prevailing rate" means the rate identified by a
	rate survey that is:
	(A) conducted by a third party;
	(B) designed to be transparent and unbiased; and
	(C) based on the posted retail labor rates and
	not direct repair program shop rates that operate under a contract
	with an insurer.
	(2) "Reasonable and necessary amount" means the amount
	determined by the original equipment manufacturer's manufacturer
	and estimating systems required to repair a vehicle to the
	condition before the covered damage to the vehicle occurred.
	SECTION 2. Section 1952.301, Insurance Code, is amended to
	read as follows:
	Sec. 1952.301. LIMITATION ON PARTS, PRODUCTS, OR REPAIR
	PERSONS OR FACILITIES PROHIBITED. (a) Except as provided by rules
	adopted by the commissioner, under an automobile insurance policy
	that is delivered, issued for delivery, or renewed in this state, an
	insurer may not directly or indirectly limit the insurer's coverage
	under a policy covering damage to a motor vehicle by[:
	[~~(1)~~] specifying the brand, type, kind, age, vendor,
	supplier, or condition of parts or products that may be used to
	repair the vehicle.[~~; or~~]
	(a-1) An insurer may not require that:
	(1) a vehicle be repaired with a part or product on the
	basis that the part or product is the least expensive part or
	product available; or
	(2) the beneficiary of a policy purchase any part or
	product from any vendor or supplier, including an out-of-state
	vendor or supplier, on the basis that the part or product is the
	least expensive part or product available.
	(a-2) An insurer may not consider a specified part or
	product for the repair of a motor vehicle to be of like kind and
	quality as an original equipment manufacturer part or product for
	any purpose unless the insurer or the manufacturer of the specified
	part or product has conclusively demonstrated that the specified
	part or product:
	(1) meets the fit, finish, and quality criteria
	established for the part or product by the original equipment
	manufacturer of the part or product;
	(2) is the same weight and metal hardness established
	for the part or product by the original equipment manufacturer of
	the part or product; and
	(3) has been tested using the same crash and safety
	test criteria used by the original equipment manufacturer of the
	part or product.
	(a-3) Under an automobile insurance policy that is
	delivered, issued for delivery, or renewed in this state, an
	insurer, an employee or agent of the insurer, an insurance
	adjuster, or an entity that employs an insurance adjuster may not
	directly or indirectly limit the insurer's coverage under a policy
	covering damage to a motor vehicle by:
	(1) [~~(2)~~] limiting the beneficiary of the policy from
	selecting a repair person or facility to repair [~~damage to~~] the
	vehicle to the vehicle's condition before the damage occurred in
	order for the beneficiary to obtain the repair without owing any
	out-of-pocket cost other than the deductible;
	(2) intimidating, coercing, or threatening the
	beneficiary to induce the beneficiary to use a particular repair
	person or facility; or
	(3) offering an incentive or inducement, other than a
	Statutes affected: Introduced: Insurance Code 1952.301, Insurance Code 1952.302 (Insurance Code 1952)