88R22914 CJD-F
	By: Jetton	H.B. No. 597
	Substitute the following for H.B. No. 597:
	By:  Oliverson	C.S.H.B. No. 597

	A BILL TO BE ENTITLED
	AN ACT
	relating to an appraisal procedure for disputed losses under
	certain property and casualty insurance policies.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Subtitle A, Title 10, Insurance Code, is amended
	by adding Chapter 1813 to read as follows:
	CHAPTER 1813. APPRAISAL PROCEDURES
	SUBCHAPTER A. GENERAL PROVISIONS
	Sec. 1813.001.  APPLICABILITY OF CHAPTER. (a) This chapter
	applies only to an insurer writing a property or casualty insurance
	policy, including the FAIR Plan Association, the Texas Automobile
	Insurance Plan Association, a Lloyd's plan, a reciprocal or
	interinsurance exchange, a farm mutual insurance company, and a
	county mutual insurance company.
	(b)  This chapter does not apply to the Texas Windstorm
	Insurance Association.
	Sec. 1813.002.  RULES. The commissioner may adopt rules
	necessary to implement this chapter.
	Sec. 1813.003.  REQUIRED POLICY PROVISION: APPRAISAL
	PROCEDURE. An insurance policy described by Section 1813.001 must
	contain an appraisal procedure for first-party property damage
	claims that complies with this chapter.
	SUBCHAPTER B. APPRAISAL PROCEDURES
	Sec. 1813.051.  APPRAISAL DEMAND. (a)  If the policyholder
	and insurer fail to agree to the amount of a loss covered by the
	policy, the policyholder or insurer may provide a written demand
	for an appraisal to the other party not later than the 180th day
	after the date the policyholder receives the initial offer from the
	insurer.
	(b)  The insurer must include written notification of the
	180-day deadline to demand appraisal in the insurer's initial offer
	to the policyholder.
	(c)  The policyholder and the insurer may agree in writing
	not later than the 20th day after the date on which a demand for
	appraisal is provided to waive any deadlines imposed by this
	subchapter.
	Sec. 1813.052.  SELECTION OF APPRAISERS. Not later than the
	20th day after the date an appraisal demand is provided under
	Section 1813.051, the policyholder and insurer shall each:
	(1)  select a disinterested and competent appraiser;
	and
	(2)  provide written notice to the other party of the
	appraiser's identity.
	Sec. 1813.053.  APPRAISAL OF LOSS BY APPRAISERS; SELECTION
	OF UMPIRE. (a)  The appraisers shall appraise the loss that is the
	subject of the appraisal not later than the 90th day after the date
	both the policyholder and insurer have complied with Section
	1813.052.
	(b)  The policyholder and insurer by agreement may twice
	extend the deadline described by Subsection (a) for a period not to
	exceed 60 days each time.
	(c)  If the appraisers agree on the amount of the loss:
	(1)  the appraisers shall provide written notice of the
	agreement to the policyholder and insurer; and
	(2)  the agreed amount is set as the amount of the loss.
	(d)  If the appraisers fail to agree on the amount of the
	loss, the appraisers shall select a competent and impartial umpire.
	If the appraisers do not agree on an umpire before the 20th day
	after the deadline for the appraisers to determine the amount of the
	loss under this section, a judge of a court in the county in which
	the policyholder resides or where the property is located shall
	select the umpire on the request of the policyholder or insurer. The
	policyholder or insurer shall provide at least 10 days' notice of
	the request to the other party before the request is submitted to
	the court.
	(e)  After the umpire is selected under Subsection (d), the
	appraisers shall provide written notice to the umpire that
	includes:
	(1)  the amount each appraiser sets for the loss; and
	(2)  any supporting documentation.
	Sec. 1813.054.  APPRAISAL DETERMINATION. (a)  The umpire
	shall present a draft award to both appraisers not later than the
	30th day after the date the umpire receives the notice described by
	Section 1813.053(e) from each appraiser. The umpire shall set the
	amount of loss by agreement of either appraiser with the umpire's
	draft award.
	(b)  If neither appraiser agrees to the umpire's draft award
	on or before the 15th day after the date on which the appraisers are
	presented the draft award, the umpire shall, not later than the 15th
	day after the date of that deadline, revise the award in an attempt
	to reach an agreement with either appraiser.
	(c)  The umpire shall continue revising the award every 15
	days until an agreement is reached with at least one of the
	appraisers.
	(d)  The umpire may not remove or reduce any items to which
	both appraisers previously agreed.
	(e)  By agreement, the policyholder and insurer may extend
	the deadline described by Subsection (a) for a period not to exceed
	60 days.
	(f)  On reaching an agreement on the amount of the loss as
	described by this section, the umpire shall provide a written
	determination to the policyholder and insurer that:
	(1)  sets the amount of the loss; and
	(2)  is signed by the umpire and the appraiser with whom
	the umpire reached the agreement.
	(g)  A determination provided under this section does not
	prevent either party from pursuing its rights under the policy or
	law.
	Sec. 1813.055.  APPRAISAL EXPENSES. The policyholder and
	insurer shall equally divide and pay the umpire's expenses, as
	applicable, and all other appraisal expenses.
	Sec. 1813.056.  EFFECT OF APPRAISAL. (a)  The appraisal does
	not affect any applicable policy terms, including deductibles.
	(b)  The appraisal decision on the amount of loss is binding,
	and the use of the appraisal procedure is not a condition precedent
	to bringing an action for a violation of this code, for a breach of
	contract, or for any other common-law or statutory remedy.
	SECTION 2.  Chapter 1813, Insurance Code, as added by this
	Act, applies only to an insurance policy delivered, issued for
	delivery, or renewed on or after January 1, 2024.
	SECTION 3.  This Act takes effect September 1, 2023.