                         April 12, 1990



Honorable Juan J. Hinojosa     opinion No. JM-1154
Chairman
Local and Consent Calendars    Re: Waiver of insurance de-
  Committee                    ductible under section 27.02
Texas Rouse of Representatives of the Business and Commerce
P. 0. Box 2910                 Code   (RQ-1843)
Austin, Texas 78768-2910

bear Representative Hinojosa:

     You ask about the interpretation of section 27.02 of
the Business and Commerce Code, which was added by the 71st
Legislature.  Acts 1989, 71st beg., ch. 898', at 3925.
Section 27.02 provides:

           (a) A person who sells goods or   services
        commits an offense if:

              (1) the person advertises or promises
           to provide the good or service and to pay:

                 (A) all or part of any applicable
              insurance deductible: or

                 (B) a rebate in an amount equal to
              all or part of any applicable insurance
              deductible:

              (2) the good or service is paid for by
           the consumer from proceeds of a property
           or casualty insurance policy; and

              (3) the person knowingly charges au
           amount for the good or service that
           exceeds the usual and customary charge by
           the person for the good or service by an
           amount equal to or greater than all or
           part of the applicable insurance
           deductible paid by the person to
           an insurer on behalf of an insured or




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Honorable Juan J. Hinojosa - page 2      (JM-1154)




           remitted to an insured by the person as a
           rebate.

           (b) A person who     is insured under a
        property or casualty insurance policy commits
        an offense if the person:

              (1) submits a claim under the policy
           based on charges that are in violation of
           Subsection (a) of this section: or

               (2) knowingly allows a claim in
           violation of Subsection (a) of this
           section to be submitted, unless the person
           promptly notifies the insurer of the
           excessive charges.

           (4 &l offense under     this section      is   a
        Class A misdemeanor.

     You ask whether a person who advertises or promises  to
provide a good or service and "waives the deductible"
violates section 27.02(a). We understand you to be asking
about an advertisement or promise to engage in the following
transaction: A person providing    a good or service would
submit a bill directly to an insurer and then accept the
portion of the bill paid by the insurer as satisfaction  for
the entire claim. In other words, the person providing   the
good or service would not seek payment of the unpaid portion
-- the insured's deductible -- from the insured.

      Certainly that type of transaction comes within the
spirit of the prohibitions    set out in section 27.02(a).
Declining to seek payment of the portion of the bill for
which the insured is responsible has the same effect as
rebating the amount      of the deductible.       Nonetheless,
"waiving the deductible"   is not encompassed by the actual
language of either subsection      (4 (1) (A) or    subsection
(4 (1) @I.   Declining to seek all or part of the deductible
is technically not the same as "pay[ing] all or part of any
applicable insurance deductible."     Nor is it the same as
giving a rebate of all or part of the deductible.           Due
process requires that criminal statutes give fair notice of
the activity that is outlawed.       panachristou v. Citv     f
Jacksonville, 405 U.S. 156    (1972). A forbidden act muzt
come within the prohibition of the statute and any doubt as
to whether an offense has been committed should be resolved
in favor of the accused. Sncelkina v. State, 750 S.W.2d 213
 (Tex. Grim. App. 1988).     Because   of the constitutional




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Honorable Juan J. Hinojosa - Page 3        (JM-1154)




requirement of fair notice of criminal acts, we think a
court would conclude that the situation you describe  as
*waiving the deductible* is not an offense under section
27.02(a).

      You also ask whether a violation  of section 27.02(a)
has occurred when a charge submitted to an insurer by a
person providing a good or service is not in excess of that
~2::s      usual and customary charge for that good or
        . It is an element of the offense created by section
27.02(a) that the person charge an amount in excess of his
usual and customary charge.   Without that element there is
no offense under section 27.62(a).

                       SUMMARY
             A situation in which a person  providing
        a good or service does not seek payment  from
        an insured of the amount of his insurance
        deductible does not constitute     a criminal
        offense under    section 27.02(a)    of   the
        Business and Commerce Code.




                                   JIM      MATTOX           -
                                   ~Attorney General of Texas

MARY KELLER
First Assistant Attorney General

JUDGE ZOLLIE STEANLHY
Special Assistant Attorney General

RENEA HICKS
Special Assistant Attorney General

RICK GILE'IN
Chairman, Opinion Committee

Prepared by Sarah Woelk
Assistant Attorney General




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