HBA-TYH H.B. 1370 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1370
By: Burnam
Insurance
3/9/1999
Introduced



BACKGROUND AND PURPOSE 

Current law does not allow an injured party to sue an insurance company
directly when its policyholder caused the injuries.  If an insurance
company refuses to settle a claim, the injured party must file suit against
the person who caused the injury and not the insurance company.  This can
lead to awkward situations.  For instance, when the injured party and the
defendant are family members and the defendant admits fault, the injured
party is still forced to file suit against the other family member.  H.B.
1370 allows insurance companies to be named as a party to a lawsuit in
which the insurer's policyholder is or could be a defendant. 

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. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subchapter E, Chapter 21, Insurance Code, by adding
Section 21.56A, as follows: 

Sec. 21.56A.  INSURER AS PROPER PARTY.  Provides that in a suit for
recovery of damages in which a defendant in the suit is an insured under a
policy of liability insurance that may provide coverage for the damages,
the insurer who issued the policy, including a county mutual insurance
company, Lloyd's plan company, surplus lines insurer, or a reciprocal or
interinsurance exchange, is a proper party to the suit. 

SECTION 2.Effective date: September 1, 1999.

SECTION 3.Makes application of this Act prospective. 

SECTION 4.Emergency clause.