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.