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.