Legislative Update

IIAT Government Affairs

Your IMPACT dollars – where do they go? Well, they help our State PAC to look out for us. See below for a very important bill that passed, although amended but 2 key pieces were retained.

The Texas Legislature regularly tweaks insurance rules, policies, and protocols. Some of these changes benefit independent insurance agencies; some threaten them. IIAT’s mission is to defeat bad bills and pass good bills into law.

HB 19 by Leach – Priority bill which would help curb the “nuclear verdicts” we are seeing in commercial auto claims in Texas. The final bill was not as comprehensive as the original bill, but the two key pieces of the bill were retained, however in different ways. First was the paid vs. incurred provision which was to reign in the outrageous charges that are often a “white herring” of what is actually paid by the claimant. This will be covered as a separate item under SB 207. Secondly, under this legislation, a trial will be bifurcated, or split, into two phases.

In phase 1, the facts of the incident are determined, and fault is established. One important provision is that in phase 1, the driving record and hiring practices can be used to determine negligent entrustment of the vehicle by the insured. It will be imperative that agents advise their clients to adhere to strict hiring practices to avoid poor practices be used against them in court.

If an insured is found to be liable, then the second phase of the trial begins. In this phase, the determination of award is ascertained. All sorts of additional information may be entered into the second phase, including prior claims history, safety records, and a multitude of other information.

To read more about what bills passed and how they affect YOU, the insurance professional, go here:

Legislative Issues | IIAT Legislative Update