TEXAS LEGISLATURE PASSES HB 1774

By: Kristine M. Sorenson & David E. Walker

The Texas legislature passed House Bill 1774, which applies to first party property claims in Texas, and is explained in the attached memo.  Governor Abbott has not yet signed it into a law, but he endorsed the bill in his State of the State speech in January 2017, and is expected to sign it.

The legislation creates a new section of the Texas Insurance Code – § 542A.  One highlight is Part 6, which permits an insurer to accept liability for the acts of its agents (i.e. adjuster, third-party claims administrator, managing general agent).  If liability is accepted, all claims against the agents must be dismissed with prejudice.  Another highlight is Part 7, which allows for a reduction in attorneys’ fees awarded to the claimant if the amount of actual damages (property damage) alleged in the pre-suit notice letter is greater than the amount of damages awarded by the jury at trial.

All seven parts of § 542A are explained in the attached client alert.

Click here for client alert.