Insurers receive hardship exemption for Texas child support legislation

By Kate O'Kelly May 9, 2016

In December 2013, Texas amended Child Support Enforcement regulation 1 TAC 55.601 to include first and third-party property claims reporting. Due to significant implementation problems expressed by the industry, the Attorney General’s Office granted a hardship exemption in which insurers would not be required to report property damage, medical payments, and PIP claims. The hardship has been extended through February 1, 2017.

The changes were included in Texas Family Code Section 231.015 (Acts 2015, 84th Leg., R.S., Ch. 1185 S.B. 1174) effective June 19, 2015, that excludes under certain circumstances, first- and third-party property damage from the Insurance Reporting Program. Specifically the code states

(c) An insurer may not be required to report or identify the following types of claims:

(1) a first-party property damage claim under:

(A) a personal automobile insurance policy for actual repair, replacement, or loss of use of an insured vehicle; or
(B) a residential or tenant property insurance policy for actual repair, replacement, or loss of use of an insured dwelling and contents, including additional living expenses actually incurred; or

(2) a third-party property damage claim:

(A) that will be paid to a vendor or repair facility for the actual repair, replacement, or loss of use of:

(i) a dwelling, condominium, or other improvements on real property;
(ii) a vehicle, including a motor vehicle, motorcycle, or recreational vehicle; or
(iii) other tangible personal property that has sustained actual damage or loss; or

(B) for the reimbursement to a claimant for payments made by the claimant to a vendor or repair facility for the actual repair, replacement, or loss of use of:

(i) a dwelling, condominium, or other improvements on real property;
(ii) a vehicle, including a motor vehicle, motorcycle, or recreational vehicle; or
(iii) other tangible personal property that has sustained actual damage or loss.

Insurers should be aware that the Attorney General’s Office is expected to issue revised regulations in the near future. In the meantime, it appears that insurers are not required to report property damage claims under the conditions stated in the hardship exemption.

Please reach out to ClaimSearchCompliance@iso.com with any questions or concerns.


Kate O'Kelly

Katherine O’Kelly is the ClaimSearch compliance manager. She is responsible for compliance and state regulatory matters involving ISO ClaimSearch, the property/casualty insurance industry’s “all claims” database. Katherine has five years of claims experience in the property/casualty industry, with a specialization in workers' compensation.