bill making liability insurers disclose coverage to claimants

The text as introduced · 535 words

By: Geren
H.B. No. 3969

A BILL TO BE ENTITLED

AN ACT

relating to disclosures by liability insurers and policyholders to

third-party claimants; providing an administrative penalty.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 542, Insurance Code, is amended by

adding Subchapter C-2 to read as follows:

SUBCHAPTER C-2. DISCLOSURE OF POLICY INFORMATION TO THIRD-PARTY

CLAIMANTS

Sec. 542.141. DISCLOSURE BY INSURER. (a) This section

applies to an insurer that receives:

(1) a written request for policy information from a

claimant asserting a claim that is or might be covered under

liability insurance coverage provided by the insurer to a

policyholder against whom the claim is asserted; or

(2) a claimant's request for policy information

forwarded under Section 542.142.

(b) An insurer described by Subsection (a) shall provide to

the claimant:

(1) a sworn statement of an officer or claims manager

of the insurer that contains the following information for each

policy known by the insurer that provides or may provide relevant

coverage, including excess or umbrella coverage:

(A) the name of the insurer;

(B) the name of each insured;

(C) the limits of liability coverage; and

(D) any policy or coverage defense the insurer

reasonably believes is available to the insurer at the time the

sworn statement is made; and

(2) a copy of each policy described by Subdivision (1)

under which the insurer provides coverage.

(c) An insurer that fails to comply with this section is

subject to an administrative penalty under Chapter 84 of not more

than $500.

Sec. 542.142. DISCLOSURE BY POLICYHOLDER. (a) This

section applies to a policyholder that receives a written request

for policy information from a claimant asserting a claim against

the policyholder that the policyholder believes is or may be

covered under liability insurance coverage provided to the

policyholder.

(b) A policyholder described by Subsection (a) shall

promptly:

(1) disclose to the claimant the name of and type of

coverage provided by each insurer that provides or may provide

liability coverage for the claim; and

(2) forward the claimant's request to each insurer

included in the disclosure under Subdivision (1).

Sec. 542.143. INSURER'S DEADLINE FOR PROVIDING REQUESTED

INFORMATION. An insurer shall provide the information requested

under Section 542.141 or 542.142 to the claimant not later than the

30th day after the date the insurer receives the request from the

claimant or policyholder.

Sec. 542.144. AMENDMENT OF STATEMENT. (a) An insurer that

is aware of a material change that affects a fact stated in the

insurer's sworn statement under Section 542.141 or a policyholder

that is aware of a material change that affects a fact stated in the

policyholder's disclosure under Section 542.142 shall provide to

the claimant a written amended statement or disclosure, as

applicable, stating the material change.

(b) An amended statement provided by an insurer under

Subsection (a) must be sworn and include a copy of each insurance

policy relevant to the change.

(c) The insurer or the policyholder must provide the amended

statement or disclosure described by Subsection (a) not later than

the second business day after the date the insurer or policyholder

is aware of the material change.

SECTION 2. This Act takes effect September 1, 2025.