Legislative Update: How Texas’ Proposed Bill Could Reshape Insurance Defense

As insurance professionals, staying ahead of legislative changes is critical to managing claims effectively and protecting your company’s bottom line. A newly proposed bill in the Texas legislature could significantly alter how personal injury and wrongful death cases are handled, with direct implications for claims departments and adjusters.

Here’s what you need to know and how this could impact your role in claims management:

Key Highlights of the Proposed Bill:

1. Caps on Noneconomic Damages:

   • Wrongful Death Cases: Mental or emotional anguish damages capped at $1,000,000.

   • Personal Injury Cases: 

     • Physical pain and suffering: The lesser of two times the awarded healthcare expenses or $100,000 per year of life expectancy.

     • Emotional injuries (e.g., sexual assault): Capped at $1,000,000.

     • Bodily injuries: Capped at $250,000.

       
       

These caps aim to reduce the unpredictability of noneconomic damages that often inflate settlement valuations.

2. Affidavit Requirements for Healthcare Costs:

   • Affidavits must include Current Procedural Terminology (CPT) codes to substantiate reasonableness and necessity.

   • Caps healthcare charges at 150% of the median amount paid by non-governmental third-party payors.

   • Limits discovery related to healthcare costs unless specific conditions are met.

     
     

3. Stronger Evidentiary Standards:

   • Claims for physical pain and mental anguish must demonstrate a measurable, significant impact.

   • Damages must show a direct and rational connection to the evidence presented.

     
     

4. Changes to Attorney Fees and Discovery:

   • Limits on plaintiff attorneys’ fees for healthcare expenses to one-third of amounts awarded.

   • New disclosure requirements for letters of protection and healthcare provider relationships, adding transparency to claims.

     
     

5. Jury and Appellate Changes:

   • Requires juries to receive clearer instructions on damage awards.

   • Appellate courts must provide detailed written opinions when reviewing damage awards.

   

Implications for Insurance Adjusters and Claims Leaders:

If passed, this bill will likely:

• Enhance Predictability: Caps on noneconomic damages may help reduce runaway verdicts, making it easier to assess claims exposure accurately.

• Streamline Claims Evaluation: With stricter standards for affidavits and disclosures, adjusters can more effectively evaluate the validity of claims.

• Reduce Litigation Costs: Transparency requirements and fee caps could disincentivize overinflated healthcare costs and excessive litigation.

• Improve Defense Strategy: With clearer definitions and limits, defense attorneys can more effectively argue against excessive claims.

  

What Should Insurance Leaders Do Now?

1. Monitor Progress: Stay updated on this legislation’s status and potential amendments.

2. Engage Legal Counsel: Work closely with your defense attorneys to adjust settlement and trial strategies in anticipation of these changes.

3. Review Internal Processes: Align your claims handling procedures with the proposed legislation’s transparency and evidence requirements.

   

Closing Thoughts:

This proposed bill represents a pivotal moment for insurance defense in Texas. By reducing uncertainty and emphasizing evidence-based damages, the legislation could create a more balanced playing field for insurers. At Roerig, Oliveira, & Fisher, LLP, we support your team with insights and strategies to navigate these changes effectively.

Let’s work together to protect your company’s interests and deliver results that reflect these new legal standards. Contact us today to discuss how we can tailor our approach to meet your needs.

Zeke Moya

Partner

Email: zmoya@rofllp.com

Ph.: 956.393.6300

10225 N. 10th Street

McAllen, Texas 78504

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