By: Clemons H.B. No. 368
73R2023 DLF-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to motor vehicle insurance coverage and liability for
1-3 motor vehicle accidents.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. The Insurance Code is amended by adding Chapter
1-6 26 to read as follows:
1-7 CHAPTER 26. COMPREHENSIVE MOTOR VEHICLE INSURANCE REPARATIONS
1-8 Art. 26.01. DEFINITIONS. In this chapter:
1-9 (1) "Bus" means:
1-10 (A) a motor vehicle, owned by a governmental
1-11 agency or privately owned and operated for compensation, used to
1-12 transport children to or from school; or
1-13 (B) a motor vehicle having seating capacity for
1-14 15 or more passengers in addition to the driver and used for the
1-15 transportation of persons.
1-16 (2) "Covered economic loss":
1-17 (A) means the following expenses and losses
1-18 resulting from bodily injury arising out of the use of a motor
1-19 vehicle:
1-20 (i) medical expenses incurred not later
1-21 than one year after the date of the accident that caused the
1-22 injury, and medical expenses that are reasonably related to the
1-23 same injury and that are ascertainable with reasonable medical
1-24 certainty to be incurred not later than three years after the date
2-1 of the accident that caused the injury;
2-2 (ii) loss of earnings not to exceed $1,000
2-3 per month, for not more than three years from the date of the
2-4 accident that caused the injury; and
2-5 (iii) all other reasonable and necessary
2-6 expenses incurred, not to exceed $25 per day, for not more than one
2-7 year from the date of the accident that caused the injury; but
2-8 (B) does not include loss incurred because of
2-9 death.
2-10 (3) "Covered person" means any person entitled to
2-11 benefits under Article 26.02(a) or 26.03(a) of this code or covered
2-12 by a certificate of self-insurance under Section 34, Texas Motor
2-13 Vehicle Safety-Responsibility Act (Section 6701h, Vernon's Texas
2-14 Civil Statutes).
2-15 (4) "First-party benefits" means payments to a covered
2-16 person to reimburse the person for covered economic loss resulting
2-17 from bodily injury arising out of the use of a motor vehicle.
2-18 (5) "Insurer" means an insurance company, a
2-19 corporation, an interinsurance exchange, a mutual, a county mutual,
2-20 a reciprocal, an association, a Lloyd's, or other insurer writing
2-21 motor vehicle insurance delivered, issued for delivery, or renewed
2-22 in this state.
2-23 (6) "Intoxicated" has the meaning assigned by Article
2-24 6701l-1, Revised Statutes.
2-25 (7) "Loss of earnings" means 70 percent of the sum of:
2-26 (A) the amount actually incurred of loss of
2-27 earnings from work that a person would have performed had the
3-1 person not been injured; and
3-2 (B) the amount of reasonable and necessary
3-3 expenses incurred by the injured person in obtaining services
3-4 instead of those that the person would have performed for income.
3-5 (8) "Medical expenses" means necessary expenses
3-6 reasonably incurred for:
3-7 (A) medical, hospital, surgical, nursing,
3-8 dental, ambulance, X-ray, prescription drug, and prosthetic
3-9 products or services;
3-10 (B) nonmedical remedial care or treatment
3-11 rendered in accordance with a religious method of healing
3-12 recognized by the laws of this state; or
3-13 (C) any other professional health care services.
3-14 (9) "Member of named insured's household" means a
3-15 spouse, child, ward, foster child, or relative of the named insured
3-16 who regularly resides in the named insured's household.
3-17 (10) "Motorcycle" has the meaning assigned by Section
3-18 1, Texas Motor Vehicle Safety-Responsibility Act (Article 6701h,
3-19 Vernon's Texas Civil Statutes).
3-20 (11) "Motor vehicle" has the meaning assigned by
3-21 Section 1, Texas Motor Vehicle Safety-Responsibility Act (Article
3-22 6701h, Vernon's Texas Civil Statutes).
3-23 (12) "Motor vehicle insurance" means a policy of
3-24 insurance delivered, issued for delivery, or renewed in this state
3-25 that provides coverage for bodily injury resulting from the use of
3-26 a motor vehicle.
3-27 (13) "Noneconomic loss" means any detriment caused by
4-1 bodily injury arising out of the use of a motor vehicle other than
4-2 economic loss. The term includes pain and suffering.
4-3 (14) "Operator" has the meaning assigned by Section 1,
4-4 Texas Motor Vehicle Safety-Responsibility Act (Article 6701h,
4-5 Vernon's Texas Civil Statutes).
4-6 (15) "Owner" has the meaning assigned by Section 1,
4-7 Texas Motor Vehicle Safety-Responsibility Act (Article 6701h,
4-8 Vernon's Texas Civil Statutes).
4-9 (16) "Serious injury" means a bodily injury that
4-10 results in death, permanent and serious impairment of an important
4-11 body function, or permanent and significant disfigurement.
4-12 (17) "Speed contest" means a competition or race
4-13 formally or otherwise arranged between the driver of a motor
4-14 vehicle covered by the insurance policy and the driver of another
4-15 vehicle, regardless of whether the competition or race is for
4-16 compensation. The term does not include operation of a vehicle at
4-17 a speed that exceeds the legal speed limit if the driver is not
4-18 engaged in a competition or race.
4-19 (18) "Uninsured motor vehicle" means a motor vehicle
4-20 that is:
4-21 (A) not covered by a policy of insurance that
4-22 meets the requirements of this chapter; or
4-23 (B) owned by a person whose identity is unknown
4-24 and unascertainable, if actual physical contact occurred between
4-25 the motor vehicle owned and operated by the unknown person and the
4-26 person or property of the insured.
4-27 Art. 26.02. ENTITLEMENT TO FIRST-PARTY BENEFITS; ADDITIONAL
5-1 FINANCIAL SECURITY REQUIRED. (a) Except as provided by
5-2 Subsections (d) and (e) of this article, each motor vehicle
5-3 insurance policy, except policies issued to the owner or operator
5-4 of a motorcycle, must provide for the payment of first-party
5-5 benefits to:
5-6 (1) the following persons for bodily injury arising
5-7 out of the use in this state of a motor vehicle covered by the
5-8 policy:
5-9 (A) the named insured;
5-10 (B) a member of the named insured's household;
5-11 (C) a passenger or operator of a motor vehicle
5-12 covered by the policy;
5-13 (D) a person who is a passenger of a motor
5-14 vehicle operated by the named insured or by a member of the named
5-15 insured's household and who is not covered by another motor vehicle
5-16 insurance policy that provides first-party benefits under this
5-17 article;
5-18 (E) a pedestrian injured through the use of a
5-19 motor vehicle covered by the policy; and
5-20 (F) a pedestrian injured through the use of a
5-21 motor vehicle that is:
5-22 (i) not owned by the pedestrian;
5-23 (ii) operated by the named insured or a
5-24 member of the named insured's household; and
5-25 (iii) not covered by another motor vehicle
5-26 insurance policy that meets the requirements of this article;
5-27 (2) the named insured and members of the named
6-1 insured's household, other than an occupant of a motorcycle, for
6-2 bodily injury arising out of the use, outside of this state and in
6-3 the United States, its territories or possessions, or Canada, of a
6-4 motor vehicle, other than a motorcycle, covered by the policy or
6-5 covered by another policy;
6-6 (3) the named insured and members of the named
6-7 insured's household, other than an occupant of a motorcycle, for
6-8 bodily injury arising out of the use, in the United States, its
6-9 territories or possessions, or Canada, of an uninsured motor
6-10 vehicle or any motorcycle; and
6-11 (4) a resident of this state who is not the owner of a
6-12 motor vehicle for which coverage for first-party benefits is
6-13 required by the Texas Motor Vehicle Safety-Responsibility Act
6-14 (Article 6701h, Vernon's Texas Civil Statutes) and who is not a
6-15 member of a named insured's household on another policy providing
6-16 coverage for first-party benefits under this article, for bodily
6-17 injury arising out of the use, outside of this state, but in the
6-18 United States, its territories or possessions, or Canada, of a
6-19 motor vehicle covered by the policy.
6-20 (b) Except as provided by Article 26.08 of this code, a
6-21 motor vehicle insurance policy under this article must provide at
6-22 least $20,000 in first-party benefits for each covered person in
6-23 any one accident.
6-24 (c) A motor vehicle insurance policy under this article must
6-25 provide liability coverage in an amount of at least $15,000,
6-26 indemnifying the named insured, a member of the named insured's
6-27 household, and an operator of a motor vehicle owned by the named
7-1 insured who is operating the vehicle with the permission of the
7-2 named insured for liability imposed by law for injury to or
7-3 destruction of property of others arising out of the use of a motor
7-4 vehicle. Coverage under this subsection may be subject to a
7-5 deductible of not more than $250.
7-6 (d) First-party benefits for a bus passenger, other than the
7-7 operator or owner of the bus or an employee of the owner or
7-8 operator, who is injured in a motor vehicle accident in this state
7-9 must be provided by each motor vehicle insurance policy under which
7-10 the injured person is a named insured or a member of a named
7-11 insured's household. If the injured person is not a named insured
7-12 or a member of a named insured's household on a motor vehicle
7-13 insurance policy, first-party benefits shall be provided by the
7-14 insurer of the bus.
7-15 (e) A covered person is not entitled to receive first-party
7-16 benefits for loss of earnings to the extent the person's loss of
7-17 earnings is offset by payments from that person's employer, whether
7-18 the payments are required by statute or contract or are made
7-19 voluntarily by the employer, unless the payments from the employer
7-20 reduce the covered person's income or level of future benefits
7-21 arising from a subsequent illness or injury.
7-22 Art. 26.03. MOTORCYCLE INSURANCE. (a) A policy of
7-23 liability insurance covering a motorcycle issued to satisfy the
7-24 requirements of the Texas Motor Vehicle Safety-Responsibility Act
7-25 (Article 6701h, Vernon's Texas Civil Statutes) must also provide
7-26 for the payment of first-party benefits to persons, other than the
7-27 occupants of the covered motorcycle, another motorcycle, or any
8-1 motor vehicle, for loss arising out of the use or operation of the
8-2 motorcycle in this state.
8-3 (b) A motor vehicle insurance policy under this article must
8-4 provide at least $20,000 in first-party benefits for each covered
8-5 person in any one accident.
8-6 Art. 26.04. DEATH BENEFIT. A motor vehicle insurance policy
8-7 must provide a death benefit in the amount of $2,000 for the death
8-8 of a person who would have been entitled to first-party benefits
8-9 under Article 26.02(a) or 26.03(a) of this code had the person
8-10 survived. The death benefit required by this article is in
8-11 addition to first-party benefits payable as a result of the use of
8-12 the motor vehicle and is payable to the estate of the deceased.
8-13 Art. 26.05. EXCLUSIONS. A policy of motor vehicle insurance
8-14 under Article 26.02 or 26.03 of this code may exclude payment of
8-15 first-party benefits to a covered person whose conduct contributed
8-16 to the injury sustained in any of the following ways:
8-17 (1) the injury was caused intentionally;
8-18 (2) the injury was caused while the covered person was
8-19 committing a felony, seeking to evade lawful apprehension by a law
8-20 enforcement official, operating a motor vehicle in a speed contest,
8-21 or operating or occupying a motor vehicle known by the covered
8-22 person to be stolen; or
8-23 (3) the injury was caused while the covered person was
8-24 intoxicated.
8-25 Art. 26.06. DEDUCTIBLES. (a) An insurer offering motor
8-26 vehicle insurance that provides first-party benefits under Article
8-27 26.02 of this code shall offer that insurance without a deductible
9-1 and shall also offer that insurance with a deductible of not more
9-2 than $200 applicable only to the covered economic loss of the named
9-3 insured and members of the named insured's household.
9-4 (b) The board shall approve a higher deductible for policies
9-5 providing additional benefits or to coordinate first-party benefits
9-6 with other benefits provided under the policy or provided by other
9-7 policies. A deductible approved by the board may apply only to the
9-8 claims of the named insured and members of the named insured's
9-9 household.
9-10 Art. 26.07. COST CONTAINMENT PROVISIONS. The board may
9-11 adopt rules under which a policy of motor vehicle insurance under
9-12 Article 26.02 or 26.03 of this code may contain cost containment
9-13 provisions, including provisions for:
9-14 (1) precertification of covered services;
9-15 (2) preauthorization for specified services;
9-16 (3) a second opinion before surgery;
9-17 (4) concurrent utilization review and management;
9-18 (5) discharge planning;
9-19 (6) large case management;
9-20 (7) coordination of benefits, if the provisions comply
9-21 with guidelines established by the National Association of
9-22 Insurance Commissioners; and
9-23 (8) managed care or point of service arrangements.
9-24 Art. 26.08. USE OF COVERED VEHICLE OUTSIDE STATE. A policy
9-25 of insurance that provides first-party benefits under Article 26.02
9-26 of this code must provide that when any covered motor vehicle is
9-27 used in another state or Canadian province the policy provides at
10-1 least the minimum amount of insurance coverage required by the laws
10-2 of that state or province.
10-3 Art. 26.09. NONCONFORMING POLICIES. A policy of insurance
10-4 represented by an insurer as meeting the requirements of the Texas
10-5 Motor Vehicle Safety-Responsibility Act (Article 6701h, Vernon's
10-6 Texas Civil Statutes) shall be construed to meet the requirements
10-7 of this chapter.
10-8 Art. 26.10. LIABILITY OF OPERATORS OF MOTOR VEHICLES. (a)
10-9 By registering, maintaining, or using a motor vehicle in this
10-10 state, a person accepts the provisions of this chapter.
10-11 (b) Notwithstanding any other law, and except as provided by
10-12 Subsections (d), (e), and (f) of this article, in an action to
10-13 recover damages for bodily injury arising out of the use in this
10-14 state of a motor vehicle, other than a motorcycle, a covered person
10-15 may not be held liable in tort for covered economic loss or
10-16 noneconomic loss.
10-17 (c) Notwithstanding any other law, and except as provided by
10-18 Subsections (d), (e), and (f) of this article, a covered person may
10-19 not recover for covered economic loss arising out of the use of a
10-20 motorcycle in this state from the owner, operator, or occupant of a
10-21 motorcycle that is covered by a policy of insurance that meets the
10-22 requirements of Article 26.03 of this code and the financial
10-23 responsibility requirements of the Texas Motor Vehicle
10-24 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
10-25 Statutes).
10-26 (d) A covered person may be held liable in tort for the
10-27 amount of covered economic loss that exceeds $20,000.
11-1 (e) A covered person may be held liable for noneconomic loss
11-2 if the injured person has suffered a serious injury.
11-3 (f) Damages for bodily injury arising out of a motor vehicle
11-4 accident may be recovered if the person against whom damages are
11-5 sought caused the injury:
11-6 (1) intentionally;
11-7 (2) while intoxicated; or
11-8 (3) while committing a felony, seeking to evade lawful
11-9 apprehension by a law enforcement official, operating a motor
11-10 vehicle in a speed contest, or operating or occupying a motor
11-11 vehicle known by the person to be stolen.
11-12 (g) A covered person may not settle an action for bodily
11-13 injury brought against a noncovered person unless:
11-14 (1) the insurer consents in writing;
11-15 (2) the settlement is approved by a court of competent
11-16 jurisdiction; or
11-17 (3) a court of competent jurisdiction enters an order
11-18 for the equitable distribution of the settlement proceeds.
11-19 (h) In an action to recover the amount of economic loss that
11-20 has not been paid or is not payable, or to recover for noneconomic
11-21 loss, or both, the first $20,000 of economic loss may be pleaded
11-22 and proved to the extent that it is relevant to the action.
11-23 Art. 26.11. PRIMARY COVERAGE. (a) Except as provided by
11-24 Article 26.02(d) of this code, coverage provided by insurance under
11-25 this chapter is the primary coverage for bodily injury to a named
11-26 insured or to a member of the named insured's household and must be
11-27 exhausted before the covered person may collect benefits from a
12-1 different policy.
12-2 (b) A policy form approved by the board for motor vehicle
12-3 insurance under this chapter may limit or prohibit recovery for one
12-4 occurrence from more than one coverage or policy or from a coverage
12-5 or policy and a tort-feasor.
12-6 (c) A policy form approved by the board for motor vehicle
12-7 insurance under this chapter must prohibit multiple recovery for
12-8 the same elements of loss under the first-party benefits and any
12-9 other benefits a covered person receives or is entitled to receive
12-10 from any other source, including social security, workers'
12-11 compensation, and Medicare.
12-12 Art. 26.12. ADDITIONAL BENEFITS. An insurer may provide
12-13 benefits broader than or in addition to the minimum benefits
12-14 provided by this chapter, subject to the rules and forms approved
12-15 by the board.
12-16 Art. 26.13. COVERAGE FOR NONRESIDENT MOTORISTS. (a) Each
12-17 insurer authorized to transact or transacting business in this
12-18 state, and each insurer controlling, controlled by, or under common
12-19 control by or with an insurer authorized to transact or transacting
12-20 business in this state, that sells a policy providing motor vehicle
12-21 insurance coverage or similar coverage in any state or Canadian
12-22 province shall include in each policy coverage to satisfy the
12-23 requirements of Article 26.02 of this code applicable to a motor
12-24 vehicle covered by the policy when it is used in this state.
12-25 (b) A policy sold by an insurer subject to Subsection (a) of
12-26 this article shall be construed to provide coverage described in
12-27 Article 26.02(a) of this code.
13-1 Art. 26.14. PAYMENT OF FIRST-PARTY BENEFITS. (a)
13-2 First-party benefits shall be paid periodically as the claims arise
13-3 and not later than the 30th day after the date satisfactory proof
13-4 of loss is received by the insurer. If proof is not supplied for
13-5 the entire claim, an amount that is supported by proof shall be
13-6 paid not later than the 30th day after the date proof is supplied.
13-7 (b) If an insurer fails to pay first-party benefits when
13-8 due, the person entitled to the benefits may bring an action in
13-9 contract to recover the benefits, and, if the insurer is required
13-10 to pay the benefits, the person entitled to the benefits is also
13-11 entitled to recover:
13-12 (1) reasonable attorney's fees;
13-13 (2) a 12 percent penalty on the amount of benefits
13-14 due; and
13-15 (3) interest on the amount of benefits due, at the
13-16 rate applicable to judgments under Section 2, Article 1.05, Title
13-17 79, Revised Statutes (Article 5069-1.05, Vernon's Texas Civil
13-18 Statutes), from the date on which the benefits become due.
13-19 Art. 26.15. RIGHT TO ELECT ARBITRATION. A policy of motor
13-20 vehicle insurance must authorize the claimant to elect arbitration
13-21 of a dispute involving the insurer's liability to pay first-party
13-22 benefits or additional first-party benefits, the amount of the
13-23 benefits, or any matter that arises under Article 26.14 of this
13-24 code.
13-25 Art. 26.16. SETTLEMENT BETWEEN INSURERS. (a) This article
13-26 applies only to payment of first-party benefits for injury arising
13-27 out of a motor vehicle accident involving at least one motor
14-1 vehicle that:
14-2 (1) weighs more than 6,500 pounds unloaded; or
14-3 (2) is used primarily for the transportation of
14-4 persons or property for hire.
14-5 (b) For purposes of this article, the weight of a motor
14-6 vehicle is the actual weight of the fully equipped vehicle, as
14-7 certified by an official public weigher or a license and weight
14-8 inspector of the Texas Department of Public Safety.
14-9 (c) Except as provided by Subsection (d) of this article, an
14-10 insurer liable for the payment of first-party benefits, as
14-11 described by Subsection (a) of this article, to or on behalf of a
14-12 covered person, has the right to recover from the insurer of any
14-13 other covered person to the extent that the other covered person
14-14 would be liable, if Article 26.10 of this code did not bar recovery
14-15 from the covered person.
14-16 (d) An insurer who pays first-party benefits under Article
14-17 26.02(d) of this code to the occupants of a bus, other than the
14-18 operator or owner of the bus or employees of the operator or owner,
14-19 does not have a right to recover the amount of those benefits from
14-20 the insurer of the bus.
14-21 (e) An insurer seeking to recover on a disputed claim
14-22 arising under Subsection (c) of this article shall submit the
14-23 controversy to arbitration.
14-24 (f) The liability of an insurer imposed by this article does
14-25 not affect that insurer's obligations under a policy of bodily
14-26 injury liability insurance.
14-27 Art. 26.17. ARBITRATION OF DISPUTES BETWEEN INSURERS. A
15-1 dispute between insurers concerning their respective
15-2 responsibilities for payment of first-party benefits shall be
15-3 submitted to arbitration.
15-4 Art. 26.18. ARBITRATION. (a) An arbitration under Article
15-5 26.15, 26.16, or 26.17 of this code shall be conducted under rules
15-6 adopted by the board.
15-7 (b) An award entered in an arbitration under this article is
15-8 final and binding on all parties. Except as provided by Subsection
15-9 (c) of this article, the parties to the arbitration may not appeal.
15-10 (c) A suit to vacate an arbitrator's award must be filed not
15-11 later than the 30th day after the date of the award or not later
15-12 than the 30th day after the date the appealing party knew or should
15-13 have known of a basis for suit under this article, whichever is
15-14 later. The suit may not be filed after the first anniversary of
15-15 the arbitrator's award. Venue for a suit to vacate an arbitrator's
15-16 award is in the county in which the arbitration was conducted or
15-17 where the accident occurred. In the appeal, the court is confined
15-18 to the record developed before the arbitrator and may vacate the
15-19 arbitrator's award only on a finding that:
15-20 (1) the award was obtained by corruption, fraud, or
15-21 misrepresentation;
15-22 (2) the decision of the arbitrator was arbitrary and
15-23 capricious; or
15-24 (3) the decision of the arbitrator was not based on
15-25 substantial evidence.
15-26 Art. 26.19. RATE REDUCTION. (a) The board shall adjust the
15-27 benchmark rate set under Subchapter M, Chapter 5, of this code for
16-1 coverage for bodily injury arising out of the use of a motor
16-2 vehicle, other than a motorcycle, for all motor vehicle insurance
16-3 policies under this chapter issued on or after January 1, 1994, and
16-4 before January 1, 1995, to reflect at least a 12 percent reduction
16-5 in the benchmark rate for bodily injury liability coverage that was
16-6 effective on January 1, 1993, distributed among rate
16-7 classifications in accordance with sound actuarial principles.
16-8 (b) The reductions in the benchmark rate required by this
16-9 article take effect only on a finding by the board that:
16-10 (1) the reductions are consistent with encouragement
16-11 of the prevention of accidents;
16-12 (2) the reductions are consistent with consideration
16-13 of the peculiar hazard and experience of individual risks, past and
16-14 prospective, in and outside the state, and all other relevant
16-15 factors, in and outside the state;
16-16 (3) the reductions are fair, reasonable, and not
16-17 confiscatory as to any class of insurer authorized by law to write
16-18 motor vehicle insurance in this state; and
16-19 (4) the statistical data and other information
16-20 provided to justify the reductions indicate that approval of the
16-21 reductions is reasonable.
16-22 SECTION 2. Subdivision 10, Section 1, Texas Motor Vehicle
16-23 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
16-24 Statutes), is amended to read as follows:
16-25 10. "<Proof of> Financial Responsibility"--
16-26 (A) in the case of a motor vehicle other than a
16-27 motorcycle, a motor vehicle insurance policy that meets the
17-1 requirements of Chapter 26, Insurance Code; or
17-2 (B) in the case of a motorcycle, motorcycle
17-3 liability insurance indemnifying the owner or operator <Proof of
17-4 ability to respond in damages> for liability, on account of
17-5 accidents occurring subsequent to the effective date of the
17-6 insurance <said proof>, arising out of the ownership, maintenance
17-7 or use of a motorcycle <motor vehicle>, in the following amounts:
17-8 <effective January 1, 1984, Fifteen Thousand Dollars ($15,000)
17-9 because of bodily injury to or death of one person in any one
17-10 accident, and, subject to said limit for one person, Thirty
17-11 Thousand Dollars ($30,000) because of bodily injury to or death of
17-12 two (2) or more persons in any one accident, and Fifteen Thousand
17-13 Dollars ($15,000) because of injury to or destruction of property
17-14 of others in any one accident and effective January 1, 1986,>
17-15 Twenty Thousand Dollars ($20,000) because of bodily injury to or
17-16 death of one person in any one accident, and, subject to said limit
17-17 for one person, Forty Thousand Dollars ($40,000) because of bodily
17-18 injury to or death of two (2) or more persons in any one accident,
17-19 and Fifteen Thousand Dollars ($15,000) because of injury to or
17-20 destruction of property of others in any one accident; provided
17-21 that the policy<. The proof of ability to respond in damages> may
17-22 exclude the first Two Hundred Fifty Dollars ($250) of liability for
17-23 bodily injury to or death of any one person in any one accident,
17-24 and, subject to that exclusion for one person, may exclude the
17-25 first Five Hundred Dollars ($500) of liability for the bodily
17-26 injury to or death of two (2) or more persons in any one accident
17-27 and may exclude the first Two Hundred Fifty Dollars ($250) of
18-1 liability for the injury to or destruction of property of others in
18-2 any one accident.
18-3 SECTION 3. Section 1, Texas Motor Vehicle
18-4 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
18-5 Statutes), is amended by adding Subdivision 15 to read as follows:
18-6 15. "Motorcycle" means each motor vehicle that has a
18-7 saddle for the use of the rider and is designed to propel itself
18-8 with not more than three wheels in contact with the ground. The
18-9 term does not include a tractor or any three-wheeled vehicle
18-10 equipped with a cab, seat, and seat belt and designed to contain
18-11 the operator of the vehicle in the cab.
18-12 SECTION 4. Section 1A, Texas Motor Vehicle
18-13 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
18-14 Statutes), is amended by amending Subsections (a) and (d) and
18-15 adding Subsection (a-1) to read as follows:
18-16 (a) A person may not operate a motor vehicle in this state,
18-17 other than a motorcycle, unless:
18-18 (1) the motor vehicle is a covered vehicle on a policy
18-19 of motor vehicle insurance that meets the requirements of Chapter
18-20 26, Insurance Code; or
18-21 (2) the operator is a named insured, or a member of a
18-22 named insured's household, on a policy of motor vehicle insurance
18-23 that meets the requirements of Chapter 26, Insurance Code.
18-24 (a-1) A person may not operate a motorcycle in this state
18-25 unless a policy of motorcycle liability insurance <On and after
18-26 January 1, 1982, no motor vehicle may be operated in this State
18-27 unless a policy of automobile liability insurance> in at least the
19-1 minimum amounts to provide evidence of financial responsibility
19-2 under this Act is in effect to insure against potential losses
19-3 which may arise out of the operation of the motorcycle. The
19-4 insurance must also provide benefits under Article 26.03, Insurance
19-5 Code <that vehicle>.
19-6 (d) Subsection (b) of this section may not be construed to
19-7 exempt a person who is operating a vehicle for which title is held
19-8 in the name of a volunteer fire department from the <liability>
19-9 insurance requirements of this Act.
19-10 SECTION 5. Section 1B(a), Texas Motor Vehicle
19-11 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
19-12 Statutes), is amended to read as follows:
19-13 (a) As a condition of operating a motor vehicle in this
19-14 state, the operator of the motor vehicle shall furnish, on request
19-15 of a peace officer or a person involved in an accident with the
19-16 operator:
19-17 (1) a motor vehicle <liability> insurance policy in at
19-18 least the minimum amounts required by this Act, or a photocopy of
19-19 that policy, that covers the vehicle;
19-20 (2) a standard proof of motor vehicle <liability>
19-21 insurance form promulgated by the Texas Department of Insurance and
19-22 issued by an <a liability> insurer that:
19-23 (A) includes the name of the insurer;
19-24 (B) includes the insurance policy number;
19-25 (C) includes the policy period;
19-26 (D) includes the name and address of each
19-27 insured;
20-1 (E) includes the policy benefits and liability
20-2 limits or a statement that the coverage of the policy complies with
20-3 at least the minimum amounts of motor vehicle <liability> insurance
20-4 coverage required by this Act; and
20-5 (F) includes the make and model of each covered
20-6 vehicle;
20-7 (3) an insurance binder that confirms that the
20-8 operator is in compliance with this Act;
20-9 (4) a certificate or copy of a certificate issued by
20-10 the department that shows the vehicle is covered by self-insurance;
20-11 (5) a certificate issued by the state treasurer that
20-12 shows that the owner of the vehicle has on deposit with the
20-13 treasurer money or securities in at least the amount required by
20-14 Section 25 of this Act;
20-15 (6) a certificate issued by the department that shows
20-16 that the vehicle is a vehicle for which a bond is on file with the
20-17 department as provided by Section 24 of this Act; or
20-18 (7) a copy of a certificate issued by the county judge
20-19 of a county in which the vehicle is registered that shows that the
20-20 owner of the vehicle has on deposit with the county judge cash or a
20-21 cashier's check in at least the amount required by Section 1A(b)(6)
20-22 of this Act.
20-23 SECTION 6. Section 1D, Texas Motor Vehicle
20-24 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
20-25 Statutes), is amended to read as follows:
20-26 Sec. 1D. It is a defense to prosecution under this Act if
20-27 the person charged produces in court a motor vehicle <an automobile
21-1 liability> insurance policy or a certificate of self-insurance
21-2 previously issued to that person that was valid at the time that
21-3 the offense is alleged to have occurred and the charge shall be
21-4 dismissed.
21-5 SECTION 7. Section 1E, Texas Motor Vehicle
21-6 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
21-7 Statutes), is amended to read as follows:
21-8 Sec. 1E. When notified of an accident by the Department in
21-9 which an owner or operator has reported evidence of financial
21-10 responsibility with an insurance company, the insurance company so
21-11 notified shall be required to respond to the Department only if
21-12 there is not a policy of motor vehicle <liability> insurance in
21-13 effect, as reported.
21-14 SECTION 8. Sections 1F(a) and (f), Texas Motor Vehicle
21-15 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
21-16 Statutes), are amended to read as follows:
21-17 (a) The department shall suspend the driver's license and
21-18 motor vehicle registration of a person convicted of an offense
21-19 under Section 1C(a) of this Act, if a prior conviction of the
21-20 person under Section 1C(a) of this Act has been previously reported
21-21 to the department by a magistrate or the judge or clerk of a court,
21-22 unless the person establishes and maintains proof of financial
21-23 responsibility for two years from the date of the second or
21-24 subsequent conviction. The requirement for filing proof of
21-25 financial responsibility may be waived if satisfactory evidence is
21-26 filed with the Department that the party convicted was at the time
21-27 of arrest covered by a policy of motor vehicle <liability>
22-1 insurance or was otherwise exempt as provided in Section 1A <1A(b)>
22-2 of this Act.
22-3 (f) The following evidence of financial responsibility or a
22-4 photocopy of the evidence satisfies the requirement of Subsection
22-5 (e) of this section:
22-6 (1) a motor vehicle <liability> insurance policy in at
22-7 least the minimum amounts required by this Act to provide proof of
22-8 financial responsibility covering at least the period required by
22-9 Subsection (e) of this section;
22-10 (2) a standard proof of motor vehicle <liability>
22-11 insurance form promulgated by the Texas Department of Insurance and
22-12 issued by an <a liability> insurer that includes:
22-13 (A) the name of the insurer;
22-14 (B) the insurance policy number;
22-15 (C) the policy period, which must equal or
22-16 exceed the period required by Subsection (e) of this section;
22-17 (D) the name and address of each insured; and
22-18 (E) the policy limits or a statement that the
22-19 coverage of the policy complies with at least the minimum amounts
22-20 of motor vehicle <liability> insurance coverage required by this
22-21 Act;
22-22 (3) an insurance binder that confirms to the
22-23 satisfaction of the court that the defendant is in compliance with
22-24 this Act for at least the period required by Subsection (e) of this
22-25 section;
22-26 (4) a copy of a certificate issued by the Department
22-27 of Public Safety that shows that the vehicle to be registered is
23-1 covered by self-insurance;
23-2 (5) a certificate issued by the state treasurer that
23-3 shows that the owner of the vehicle has on deposit with the
23-4 treasurer money or securities in at least the amount required by
23-5 Section 25 of this Act;
23-6 (6) a certificate issued by the Department that shows
23-7 that the vehicle is a vehicle for which a bond is on file with the
23-8 Department as provided by Section 24 of this Act; or
23-9 (7) a copy of a certificate issued by the county judge
23-10 of a county in which the vehicle is registered that shows that the
23-11 owner of the vehicle has on deposit with the county judge cash or a
23-12 cashier's check in at least the amount required by Section 1A(b)(6)
23-13 of this Act.
23-14 SECTION 9. Section 1H(a), Texas Motor Vehicle
23-15 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
23-16 Statutes), is amended to read as follows:
23-17 (a) If a person is unable to furnish evidence of financial
23-18 responsibility to a law enforcement officer under Section 1B of
23-19 this Act and the officer issues the person a citation for an
23-20 offense under Section 1C(a)(1) of this Act, the citation must
23-21 include in type larger than other type appearing on the citation
23-22 the following: "A second or subsequent conviction of an offense
23-23 under the Texas Motor Vehicle Safety-Responsibility Act will result
23-24 in the suspension of your driver's license and motor vehicle
23-25 registration unless you file and maintain proof of financial
23-26 responsibility with the Department of Public Safety for two years
23-27 from the date of conviction. The Department may waive the
24-1 requirement to file proof of financial responsibility if you file
24-2 satisfactory evidence with the Department showing that at the time
24-3 this citation was issued, the vehicle was covered by a motor
24-4 vehicle <liability> insurance policy or that you were otherwise
24-5 exempt from the requirements to provide evidence of financial
24-6 responsibility."
24-7 SECTION 10. Section 5(c), Texas Motor Vehicle
24-8 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
24-9 Statutes), is amended to read as follows:
24-10 (c) This section shall not apply under the conditions stated
24-11 in Section 6 nor:
24-12 1. To a motor vehicle operator or owner against whom
24-13 the Department or a person presiding at a hearing finds there is
24-14 not a reasonable probability of a judgment being rendered as a
24-15 result of the accident;
24-16 2. To such operator or owner if such owner had in
24-17 effect at the time of such accident a motor vehicle insurance
24-18 <liability> policy with respect to the motor vehicle involved in
24-19 such accident;
24-20 3. To such operator, if not the owner of such motor
24-21 vehicle, if there was in effect at the time of such accident a
24-22 motor vehicle insurance <liability> policy or bond with respect to
24-23 his operation of motor vehicles not owned by him;
24-24 4. To any person employed by the government of the
24-25 United States, when such person is acting within the scope or
24-26 office of his employment;
24-27 5. To such operator or owner if the liability of such
25-1 operator or owner for damages resulting from such accident is, in
25-2 the judgment of the Department, covered by any other form of
25-3 liability insurance policy or bond; nor
25-4 6. To any person qualifying as a self-insurer under
25-5 Section 34 of this Act, or to any person operating a motor vehicle
25-6 for such self-insurer.
25-7 No such policy or bond shall be effective under this section
25-8 or under Section 7 unless issued by an insurance company or surety
25-9 company authorized to write motor vehicle liability insurance in
25-10 this State, except that if such motor vehicle was not registered in
25-11 this State, or was a motor vehicle which was registered elsewhere
25-12 than in this State at the effective date of the policy, or the most
25-13 recent renewal thereof, such policy or bond shall not be effective
25-14 under this section unless the insurance company or surety company
25-15 if not authorized to do business in this State shall execute a
25-16 power of attorney authorizing the Department to accept service on
25-17 its behalf of notice or process in any action upon such policy or
25-18 bond arising out of such accident; providing, however, every such
25-19 policy or bond is subject, if the accident has resulted in bodily
25-20 injury or death, to a limit, exclusive of interest and costs, as
25-21 follows: <effective January 1, 1984, not less than Fifteen
25-22 Thousand Dollars ($15,000) because of bodily injury to or death of
25-23 one person in any one accident and, subject to said limit for one
25-24 person, to a limit of not less than Thirty Thousand Dollars
25-25 ($30,000) because of bodily injury to or death of two (2) or more
25-26 persons in any one accident, and, if the accident has resulted in
25-27 injury to or destruction of property, to a limit of not less than
26-1 Fifteen Thousand Dollars ($15,000) because of injury to or
26-2 destruction of property of others in any one accident and effective
26-3 January 1, 1986,> not less than Twenty Thousand Dollars ($20,000)
26-4 because of bodily injury to or death of one person in any one
26-5 accident, and, subject to said limit for one person, to a limit of
26-6 not less than Forty Thousand Dollars ($40,000) because of bodily
26-7 injury to or death of two (2) or more persons in any one accident,
26-8 and, if the accident has resulted in injury to or destruction of
26-9 property, to a limit of not less than Fifteen Thousand Dollars
26-10 ($15,000) because of injury to or destruction of property of others
26-11 in any one accident. The policy or bond may exclude coverage of
26-12 the first Two Hundred Fifty Dollars ($250) of liability for bodily
26-13 injury to or death of any one person in any one accident, and,
26-14 subject to that exclusion for one person, may exclude coverage for
26-15 the first Five Hundred Dollars ($500) of liability for the bodily
26-16 injury to or death of two (2) or more persons in any one accident
26-17 and may exclude coverage for the first Two Hundred Fifty Dollars
26-18 ($250) of liability for the injury to or destruction of property of
26-19 others in any one accident.
26-20 7. Wherever the word "bond" appears in this section or
26-21 this Act, it shall mean a bond filed with and approved by the
26-22 Department of Public Safety.
26-23 SECTION 11. Section 8(c), Texas Motor Vehicle
26-24 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
26-25 Statutes), is amended to read as follows:
26-26 (c) Upon receipt of certification by the Department that the
26-27 operating privilege of a Texas resident has been suspended or
27-1 revoked in another state pursuant to a law providing for its
27-2 suspension or revocation for failure to deposit security for the
27-3 payment of judgments arising out of a motor vehicle accident, for
27-4 failure to satisfy any judgment, or for failure to file proof of
27-5 financial responsibility, the Department shall contact the official
27-6 who issued the certification and request information pertaining to
27-7 the specific nature of the Texas resident's noncompliance. If the
27-8 alleged noncompliance is based on the failure of the Texas
27-9 resident's insurance company or surety company to obtain
27-10 authorization to write motor vehicle <liability> insurance in the
27-11 other state and for failure of the insurance or surety company to
27-12 execute a power of attorney directing the appropriate official in
27-13 the other state to accept service on its behalf of notice or
27-14 process in any action upon the policy arising out of the accident,
27-15 then the Department shall not suspend the Texas resident's license
27-16 and other registrations. If the evidence shows that the Texas
27-17 resident's operating privilege was suspended in the other state for
27-18 any other violation of another state's laws providing for
27-19 suspension or revocation for failure to deposit security for the
27-20 payment of judgments arising out of motor vehicle accidents, for
27-21 failure to satisfy any judgment, or for failure to file proof of
27-22 financial responsibility, under circumstances that would require
27-23 the Department to suspend a nonresident's operating privilege had
27-24 the accident occurred in this state, then the Department shall
27-25 suspend the Texas resident's license and registrations. The
27-26 suspension shall continue until the resident furnishes evidence of
27-27 his compliance with the law of the other state relating to the
28-1 deposit of security, satisfaction of judgment, or proof of
28-2 financial responsibility.
28-3 SECTION 12. Section 19(a), Texas Motor Vehicle
28-4 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
28-5 Statutes), is amended to read as follows:
28-6 (a) Proof of financial responsibility may be furnished by
28-7 filing with the Department the certificate of any insurance company
28-8 duly authorized to write motor vehicle <liability> insurance in
28-9 this State certifying that there is in effect a motor vehicle
28-10 insurance <liability> policy for the benefit of the person required
28-11 to furnish proof of financial responsibility. Such certificate
28-12 shall give the effective date of such motor vehicle insurance
28-13 <liability> policy, which date shall be the same as the effective
28-14 date of the certificate, and shall cover all motor vehicles owned
28-15 by the individual required to make such filing as covered by the
28-16 <liability> insurance policy, unless the policy is issued to a
28-17 person who is not the owner of a motor vehicle. In the case of a
28-18 motor vehicle other than a motorcycle, the certificate must state
28-19 that the policy meets the requirements of Chapter 26, Insurance
28-20 Code. In the case of a motorcycle, the certificate must state that
28-21 the policy meets the requirements of Article 26.03, Insurance Code,
28-22 and provides motorcycle liability coverage that meets the
28-23 requirements of Section 21 of this Act.
28-24 SECTION 13. Section 20(a), Texas Motor Vehicle
28-25 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
28-26 Statutes), is amended to read as follows:
28-27 (a) The non-resident owner or operator of a motor vehicle
29-1 not registered in this State may give proof of financial
29-2 responsibility by filing with the Department a certificate or
29-3 certificates of an insurance company authorized to transact
29-4 business in the state in which the motor vehicle or motor vehicles
29-5 covered in such certificate are registered, or if such non-resident
29-6 does not own a motor vehicle, then in the state in which the
29-7 insured resides, provided such certificate otherwise conforms to
29-8 the provisions of this Act, and the Department shall accept the
29-9 same upon condition that said insurance company complies with the
29-10 following provisions with respect to the policies so certified:
29-11 1. Said insurance company shall execute a power of
29-12 attorney authorizing the Department to accept service on its behalf
29-13 of notice or process in any action arising out of a motor vehicle
29-14 accident in this State;
29-15 2. Said insurance company shall agree in writing that:
29-16 (A) in the case of a motor vehicle other than a
29-17 motorcycle, the policy meets the requirements of Chapter 26,
29-18 Insurance Code; or
29-19 (B) in the case of a motorcycle, the policy
29-20 meets the requirements of Article 26.03, Insurance Code, and
29-21 provides motorcycle liability coverage that meets the requirements
29-22 of Section 21 of this Act <such policies shall be deemed to conform
29-23 with the laws of this State relating to the terms of motor vehicle
29-24 liability policies issued herein>.
29-25 SECTION 14. Section 21, Texas Motor Vehicle
29-26 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
29-27 Statutes), is amended to read as follows:
30-1 Sec. 21. MOTORCYCLE <MOTOR VEHICLE> LIABILITY POLICY
30-2 DEFINED. (a) A "motorcycle <motor vehicle> liability policy" as
30-3 said term is used in this Act shall mean an owner's or an
30-4 operator's policy of liability insurance, certified as provided in
30-5 Section 19 or Section 20 as proof of financial responsibility, and
30-6 issued, except as otherwise provided in Section 20, by an insurance
30-7 company duly authorized to write motor vehicle liability insurance
30-8 in this State, to or for the benefit of the person named therein as
30-9 insured.
30-10 (b) An <Such> owner's policy of liability insurance under
30-11 this Section:
30-12 1. Shall cover all motorcycles <motor vehicles> with
30-13 respect to which coverage is thereby to be granted; and
30-14 2. Shall pay on behalf of the insured named therein
30-15 and any other person, as insured, using any motorcycle covered by
30-16 the policy <such motor vehicle or motor vehicles> with the express
30-17 or implied permission of such named insured, all sums which the
30-18 insured shall become legally obligated to pay as damages arising
30-19 out of the ownership, maintenance or use of the motorcycle <such
30-20 motor vehicle or motor vehicles> within the United States of
30-21 America or the Dominion of Canada, subject to limits exclusive of
30-22 interest and costs, with respect to each motorcycle <such motor
30-23 vehicle>, as set out in Subdivision (6) of Subsection (c) of
30-24 Section 5 of this Act. The policy may exclude coverage of the
30-25 first Two Hundred Fifty Dollars ($250) of liability for bodily
30-26 injury to or death of any one person in any one accident, and,
30-27 subject to that exclusion for one person, may exclude coverage for
31-1 the first Five Hundred Dollars ($500) of liability for the bodily
31-2 injury to or death of two (2) or more persons in any one accident
31-3 and may exclude coverage for the first Two Hundred Fifty Dollars
31-4 ($250) of liability for the injury to or destruction of property of
31-5 others in any one accident.
31-6 (c) An <Such> operator's policy of liability insurance under
31-7 this Section shall pay on behalf of the insured named therein all
31-8 sums which the insured shall become legally obligated to pay as
31-9 damages arising out of the use by him of any motorcycle <motor
31-10 vehicle> not owned by him, within the same territorial limits and
31-11 subject to the same limits of liability as are set forth above with
31-12 respect to an owner's policy of liability insurance.
31-13 (d) A motorcycle <Such motor vehicle> liability policy under
31-14 this Section shall state the name and address of the named insured,
31-15 the coverage afforded by the policy, the premium charged therefor,
31-16 the policy period and the limits of liability, and shall contain an
31-17 agreement or be endorsed that insurance is provided thereunder in
31-18 accordance with the coverage defined in this Act as respects bodily
31-19 injury and death or property damage, or both, and is subject to all
31-20 the provisions of this Act.
31-21 (e) A motorcycle <Such motor vehicle> liability policy under
31-22 this Section shall not insure:
31-23 1. Any obligation for which the insured or any company
31-24 as his insurer may be held liable under any workmen's compensation
31-25 law;
31-26 2. Any liability on account of bodily injury to or
31-27 death of any employee of the insured while engaged in the
32-1 employment, other than domestic, of the insured, or in domestic
32-2 employment if benefits therefor are either payable or required to
32-3 be provided under any workmen's compensation law; nor
32-4 3. Any liability because of injury to or destruction
32-5 of property owned by, rented to, in charge of or transported by the
32-6 insured.
32-7 (f) Every motorcycle <motor vehicle> liability policy under
32-8 this Section is <shall be> subject to the following provisions
32-9 which need not be contained therein:
32-10 1. The liability of the insurance company with respect
32-11 to the insurance required by this Act shall become absolute
32-12 whenever injury or damage covered by the <said motor vehicle
32-13 liability> policy occurs; the <said> policy may not be canceled or
32-14 annulled as to such liability by any agreement between the
32-15 insurance company and the insured after the occurrence of the
32-16 injury or damage; no statement made by the insured or on his behalf
32-17 and no violation of said policy shall defeat or void said policy;
32-18 2. The satisfaction by the insured of a judgment for
32-19 such injury or damage shall not be a condition precedent to the
32-20 right or duty of the insurance company to make payment on account
32-21 of such injury or damage;
32-22 3. The insurance company shall have the right to
32-23 settle any claim covered by the policy, and if such settlement is
32-24 made in good faith, the amount thereof shall be deductible from the
32-25 limits of liability specified in Subdivision 2 of Subsection (b) of
32-26 this Section;
32-27 4. The policy, the written application therefor, if
33-1 any, and any rider or endorsement which does not conflict with the
33-2 provisions of the Act shall constitute the entire contract between
33-3 the parties.
33-4 (g) Any policy which grants the coverage required for a
33-5 motorcycle <motor vehicle> liability policy under this Section may
33-6 also grant any lawful coverage in excess of or in addition to the
33-7 coverage specified for a motorcycle <motor vehicle> liability
33-8 policy and such excess or additional coverage shall not be subject
33-9 to the provisions of this Act. With respect to a policy which
33-10 grants such excess or additional coverage the term "motorcycle
33-11 <motor vehicle> liability policy" shall apply only to that part of
33-12 the coverage which is required by this Section.
33-13 (h) Any motorcycle <motor vehicle> liability policy may
33-14 provide that the insured shall reimburse the insurance company for
33-15 any payment the insurance company would not have been obligated to
33-16 make under the terms of the policy except for the provisions of
33-17 this Act.
33-18 (i) Any motorcycle <motor vehicle> liability policy may
33-19 provide for the prorating of the insurance thereunder with other
33-20 valid and collectible insurance.
33-21 (j) The requirements for a motorcycle <motor vehicle>
33-22 liability policy may be fulfilled by the policies of one (1) or
33-23 more insurance companies which policies together meet such
33-24 requirements.
33-25 (k) Any binder issued pending the issuance of a motorcycle
33-26 <motor vehicle> liability policy shall be deemed to fulfill the
33-27 requirements for such a policy.
34-1 SECTION 15. Section 22, Texas Motor Vehicle
34-2 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
34-3 Statutes), is amended to read as follows:
34-4 Sec. 22. Notice of Cancellation or Termination of Certified
34-5 Policy. When an insurance company has certified a motor vehicle
34-6 insurance <liability> policy under Section 19 or a policy under
34-7 Section 20, the insurance so certified shall not be canceled or
34-8 terminated until at least five (5) days after a notice of
34-9 cancellation or termination of the insurance so certified shall be
34-10 received in the office of the Department, except that such a policy
34-11 subsequently procured and certified shall, on the effective date of
34-12 its certification, terminate the insurance previously certified.
34-13 SECTION 16. Section 24(a), Texas Motor Vehicle
34-14 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
34-15 Statutes), is amended to read as follows:
34-16 (a) Proof of financial responsibility may be furnished by
34-17 filing a bond with the Department, accompanied by the statutory
34-18 recording fee of the County Clerk to cover the cost of recordation
34-19 of the notice provided for herein, and with at least two (2)
34-20 individual sureties each owning real estate within this State, not
34-21 exempt under the Constitution or laws of the State of Texas, and
34-22 together having equities equal in value to at least twice the
34-23 amount of such bond. Such real estate shall be scheduled in the
34-24 bond approved by a judge of a court of record, and shall be
34-25 certified by the tax assessor and collector of the county where the
34-26 property is situated as being free from any tax liens. Such bond
34-27 shall be conditioned for payments in amounts and under the same
35-1 circumstances as would be required in a motorcycle <motor vehicle>
35-2 liability policy, except that the bond is applicable to sums that
35-3 the person covered by the bond may become legally obligated to pay
35-4 as damages arising out of the ownership, maintenance, or use of any
35-5 motor vehicle. The bond may <and shall> not be cancelable except
35-6 after five (5) days written notice is received by the Department,
35-7 but cancellation shall not prevent recovery with respect to any
35-8 right or cause of action arising prior to the date of cancellation.
35-9 On filing of a valid bond, the Department shall issue to the person
35-10 named as principal in the bond a certificate of compliance with
35-11 this section. Such bond shall constitute a lien in favor of the
35-12 State upon the real estate so scheduled of any surety, which lien
35-13 shall exist in favor of any holder of a final judgment against the
35-14 person who has filed such bond. Notice to that effect, which shall
35-15 include a description of the real estate scheduled in the bond,
35-16 shall be filed by the Department in the office of the County Clerk
35-17 of the county where such real estate is situated. Such notice
35-18 shall be accompanied by the statutory fee for the services of the
35-19 County Clerk in connection with the recordation of such notice, and
35-20 the County Clerk or his deputy, upon receipt of such notice, shall
35-21 acknowledge and cause the same to be recorded in the lien records.
35-22 Recordation shall constitute notice as provided by the statutes
35-23 governing the recordation of liens on real estate.
35-24 SECTION 17. Section 34, Texas Motor Vehicle
35-25 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
35-26 Statutes), is amended to read as follows:
35-27 Sec. 34. Self-Insurers. (a) Any person in whose name more
36-1 than 25 motor vehicles are registered may qualify as a self-insurer
36-2 by obtaining a certificate of self-insurance issued by the
36-3 Department as provided in Subsection (b) of this Section.
36-4 (b) An applicant for a certificate of self-insurance shall
36-5 submit to the Department, in a form approved by the Department, an
36-6 undertaking binding the person to provide benefits for bodily
36-7 injury meeting the requirements of Chapter 26, Insurance Code. The
36-8 Department may, in its discretion, <upon the application of a
36-9 person,> issue a certificate of self-insurance when it is satisfied
36-10 that such person is possessed and will continue to be possessed of
36-11 ability to pay benefits meeting the requirements of Chapter 26,
36-12 Insurance Code, or judgments for property damage obtained against
36-13 such person.
36-14 (c) Upon not less than five (5) days notice and a hearing
36-15 pursuant to such notice, the Department may upon reasonable grounds
36-16 cancel a certificate of self-insurance. Failure to pay any
36-17 required benefit or judgment within thirty (30) days after the
36-18 injured person has supplied proof of loss or the <such> judgment
36-19 becomes <shall have become> final is <shall constitute> a
36-20 <reasonable> ground for the cancellation of a certificate of
36-21 self-insurance.
36-22 SECTION 18. Section 35, Texas Motor Vehicle
36-23 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
36-24 Statutes), is amended to read as follows:
36-25 Sec. 35. Assigned Risk Plan. (a) Subject to the provisions
36-26 of Article 5.10, <Texas> Insurance Code <of 1951, as amended>,
36-27 insurance companies authorized to issue motor vehicle insurance
37-1 <liability> policies in this state may establish an administrative
37-2 agency and make necessary reasonable rules in connection therewith,
37-3 relative to the formation of a plan and procedure to provide a
37-4 means by which insurance may be assigned to an authorized insurance
37-5 company for a person required by this Act to show proof of
37-6 financial responsibility for the future and who is in good faith
37-7 entitled to motor vehicle <liability> insurance in this state but
37-8 is unable to secure it through ordinary methods; or, in amounts not
37-9 to exceed the limits prescribed in Chapter 26, Insurance Code
37-10 <Section 21(b)2 of this law>, for any unit of government within the
37-11 State of Texas which, acting in good faith, is unable to secure
37-12 motor vehicle <liability> insurance in this state through ordinary
37-13 methods; and may establish a plan and procedure for the equitable
37-14 apportionment among such authorized companies of applicants for
37-15 such policies and for motor vehicle insurance <liability> policies,
37-16 including, but not limited to, voluntary agreements by insurance
37-17 companies to accept such assignments. When any such plan has been
37-18 approved by the State Board of Insurance, all insurance companies
37-19 authorized to issue motor vehicle insurance <liability> policies in
37-20 the State of Texas shall subscribe thereto and participate therein.
37-21 (b) The State Board of Insurance, in addition to the
37-22 provisions prescribed by Subchapter A, Chapter 5, <Texas> Insurance
37-23 Code <of 1951, as amended>, may determine, fix, prescribe,
37-24 promulgate, change, and amend rates or minimum premiums normally
37-25 applicable to a risk so as to apply to any and every assignment
37-26 such rates and minimum premiums as are commensurate with the
37-27 greater hazard of the risk, considering in connection therewith the
38-1 experience, physical or other conditions of such risk of the person
38-2 or municipality applying for insurance under any such plan.
38-3 (c) The State Board of Insurance may adjust the benchmark
38-4 rate promulgated under Subchapter M, Chapter 5, Insurance Code,
38-5 that is applicable to insurance written under this section to
38-6 reflect the greater hazard of risks insured under this section.
38-7 This section expires December 31, 1995.
38-8 SECTION 19. Sections 2a(d) and (e), Chapter 88, General
38-9 Laws, Acts of the 41st Legislature, 2nd Called Session, 1929
38-10 (Article 6675a-2a, Vernon's Texas Civil Statutes), are amended to
38-11 read as follows:
38-12 (d) The following evidence of financial responsibility or a
38-13 photocopy of the evidence satisfies the requirement of this
38-14 section:
38-15 (1) a motor vehicle <liability> insurance policy or
38-16 <liability> self-insurance or pool coverage document issued by a
38-17 political subdivision or governmental pool pursuant to the
38-18 authority contained in Chapter 791, Government Code <The Interlocal
38-19 Cooperation Act (Article 4413(32c), Vernon's Texas Civil
38-20 Statutes)>, Chapter 119, Local Government Code, or other applicable
38-21 law in at least the minimum amounts required by the Texas Motor
38-22 Vehicle Safety-Responsibility Act (Article 6701h, Vernon's Texas
38-23 Civil Statutes) to provide proof of financial responsibility
38-24 covering at least the period required by Subsection (a) of this
38-25 section;
38-26 (2) a standard proof of motor vehicle insurance
38-27 <liability> form promulgated by the Texas Department of Insurance
39-1 and issued by an <a liability> insurer that includes:
39-2 (A) the name of the insurer;
39-3 (B) the insurance policy or other coverage
39-4 document number;
39-5 (C) the policy or other coverage document
39-6 coverage period;
39-7 (D) the name and address of each insured or
39-8 covered person;
39-9 (E) the policy or other coverage document
39-10 benefits and liability limits or a statement that the coverage of
39-11 the policy complies with at least the minimum amounts of motor
39-12 vehicle <liability> insurance coverage required by the Texas Motor
39-13 Vehicle Safety-Responsibility Act (Article 6701h, Vernon's Texas
39-14 Civil Statutes); and
39-15 (F) the make and model of each covered vehicle;
39-16 (3) an insurance binder that confirms to the
39-17 satisfaction of the county tax collector that the owner of the
39-18 motor vehicle to be registered is in compliance with the Texas
39-19 Motor Vehicle Safety-Responsibility Act (Article 6701h, Vernon's
39-20 Texas Civil Statutes) for at least the period required by
39-21 Subsection (a) of this section;
39-22 (4) a copy of a certificate issued by the Department
39-23 of Public Safety that shows that the vehicle to be registered is
39-24 covered by self-insurance;
39-25 (5) a certificate issued by the state treasurer that
39-26 shows that the owner of the vehicle has on deposit with the
39-27 treasurer money or securities in at least the amount required by
40-1 Section 25 of the Texas Motor Vehicle Safety-Responsibility Act
40-2 (Article 6701h, Vernon's Texas Civil Statutes);
40-3 (6) a certificate issued by the Department of Public
40-4 Safety that shows that the vehicle is a vehicle for which a bond is
40-5 on file with the Department as provided by Section 24 of the Texas
40-6 Motor Vehicle Safety-Responsibility Act (Article 6701h, Vernon's
40-7 Texas Civil Statutes); or
40-8 (7) a copy of a certificate issued by the county judge
40-9 of a county in which the vehicle is registered that shows that the
40-10 owner of the vehicle has on deposit with the county judge cash or a
40-11 cashier's check in at least the amount required by Section 1A(b)(6)
40-12 of the Texas Motor Vehicle Safety-Responsibility Act (Article
40-13 6701h, Vernon's Texas Civil Statutes).
40-14 (e) At the time the county tax collector registers a motor
40-15 vehicle, the tax collector shall provide to the person registering
40-16 the motor vehicle a separate document that contains a statement
40-17 that the motor vehicle being registered may not be operated in this
40-18 state unless motor vehicle <liability> insurance coverage for the
40-19 vehicle in at least the minimum amounts required by law remains in
40-20 effect to insure against potential losses or unless the motor
40-21 vehicle is exempt from the insurance requirement by Section
40-22 1A<(b)>, Texas Motor Vehicle Safety-Responsibility Act (Article
40-23 6701h, Vernon's Texas Civil Statutes).
40-24 SECTION 20. Article 5.01(e), Insurance Code, is amended to
40-25 read as follows:
40-26 (e) Motor vehicle or automobile insurance as referred to in
40-27 this subchapter means <shall be taken and construed to mean> every
41-1 form of insurance on any automobile or other vehicle hereinafter
41-2 enumerated and its operating equipment or necessitated by reason of
41-3 the liability imposed by law for damages arising out of the
41-4 ownership, operation, maintenance, or use in this State of any
41-5 automobile, motorcycle, motorbicycle, truck, truck-tractor,
41-6 tractor, traction engine, or any other self-propelled vehicle, and
41-7 including also every vehicle, trailer or semi-trailer pulled or
41-8 towed by a motor vehicle, but excluding every motor vehicle running
41-9 only upon fixed rails or tracks. Workers' Compensation Insurance
41-10 is excluded from the foregoing definition, but motor vehicle
41-11 insurance under Chapter 26 of this code is included.
41-12 SECTION 21. Article 5.01B(a), Insurance Code, is amended to
41-13 read as follows:
41-14 (a) Information filed or otherwise provided by an insurer to
41-15 the State Board of Insurance for the purpose of determining,
41-16 fixing, prescribing, promulgating, altering, or amending commercial
41-17 automobile <liability> insurance rates under Article 5.01 of this
41-18 code, obtaining a rate deviation under Article 5.03 of this code,
41-19 or reporting losses under Article 5.04-1 of this code is public
41-20 information unless it is exempt under Section 3(a), Chapter 424,
41-21 Acts of the 63rd Legislature, Regular Session, 1973 (Article
41-22 6252-17a, Vernon's Texas Civil Statutes), or Section (b) of this
41-23 article.
41-24 SECTION 22. Article 5.06-4(a), Insurance Code, is amended to
41-25 read as follows:
41-26 (a) Any insurer desiring to write commercial automobile
41-27 <liability> insurance in this state must provide loss control
42-1 information as a prerequisite for a license to write that
42-2 insurance.
42-3 SECTION 23. Article 5.06-6, Insurance Code, is amended to
42-4 read as follows:
42-5 Art. 5.06-6. Coverages for Spouses and Former Spouses. A
42-6 personal automobile policy or any similar policy form adopted or
42-7 approved by the State Board of Insurance under Article 5.06 of this
42-8 code that provides coverage to <covers liability arising out of
42-9 ownership, maintenance, or use of a motor vehicle of> a spouse, who
42-10 is otherwise insured by the policy, shall contain a provision to
42-11 continue coverage for the spouse during a period of separation in
42-12 contemplation of divorce.
42-13 SECTION 24. Section 11(a), Chapter 270, Acts of the 40th
42-14 Legislature, Regular Session, 1927 (Article 911a, Vernon's Texas
42-15 Civil Statutes), as amended by Chapters 377, 624, and 1050, Acts of
42-16 the 70th Legislature, Regular Session, 1987, is amended to read as
42-17 follows:
42-18 (a) The Commission shall, in the granting of any certificate
42-19 to any motor bus company for regularly transporting persons as
42-20 passengers for compensation or hire, require the owner or operator
42-21 to first procure insurance covering bodily injury <liability> and
42-22 property damage <insurance> from a company holding a certificate of
42-23 authority to transact such kinds of insurance business in the State
42-24 of Texas or, with the approval of the Commissioner, from <by> a
42-25 surplus lines insurer <licensed to make and issue such insurance
42-26 policy in the State of Texas or, if the owner or operator is unable
42-27 to procure insurance from an insurance company authorized to
43-1 conduct business in this state, to first procure, with the
43-2 Commission's approval, liability and property damage insurance from
43-3 a surplus lines insurer that meets> meeting the requirements of
43-4 Article 1.14-2, Insurance Code, and rules adopted by the State
43-5 Board of Insurance under that article, covering each and every
43-6 motor propelled vehicle while actually being operated by such
43-7 applicant. The Commission shall adopt rules governing the coverage
43-8 limits and terms of the insurance policy, except that the coverage
43-9 provided under the policy must meet the requirements of Chapter 26,
43-10 Insurance Code <The amount of such policy or policies of insurance
43-11 shall be fixed by the Commission by general order or otherwise, and
43-12 the terms and conditions of said policy or policies covering said
43-13 motor vehicle are to be such as to indemnify the applicant against
43-14 loss by reason of any personal injury to any person or loss or
43-15 damage to the property of any person other than the assured and his
43-16 employees>. Such policy or policies shall furthermore provide that
43-17 the insurer will pay benefits under the policy and any judgment
43-18 <all judgments> which may be recovered against the insured motor
43-19 bus company based on claims for loss or damage from personal injury
43-20 or loss of or injury to property occurring during the term of the
43-21 said policy or policies and arising out of the actual operation of
43-22 such motor bus or busses, and such policy or policies shall also
43-23 provide for successive recoveries to the complete exhaustion of the
43-24 face amount thereof, and that such judgment will be paid by the
43-25 insurer irrespective of the solvency or insolvency of the insured.
43-26 Such bodily injury <liability> and property damage insurance as
43-27 required by the Commission shall be continuously maintained in
44-1 force on each and every motor propelled vehicle while being
44-2 operated in common carrier service. In addition to the insurance
44-3 hereinabove set forth, the owner or operator shall also protect his
44-4 employees by taking out workmen's compensation insurance either as
44-5 provided by the Workmen's Compensation Laws of the State of Texas
44-6 or in a reliable insurance company approved by the <Railroad>
44-7 Commission <of the State of Texas>. The taking out of such
44-8 indemnity policy or policies shall be a condition precedent to any
44-9 operation and such policy or policies as required under this Act,
44-10 shall be approved and filed with the Commission and failure to file
44-11 and keep such policy or policies in force and effect as provided
44-12 herein shall be cause for the revocation of the certificate and
44-13 shall subject the motor bus company so failing to the penalties
44-14 prescribed herein.
44-15 SECTION 25. Section 13, Chapter 314, Acts of the 41st
44-16 Legislature, Regular Session, 1929 (Article 911b, Vernon's Texas
44-17 Civil Statutes), as amended by Chapters 377 and 1050, Acts of the
44-18 70th Legislature, Regular Session, 1987, and by Chapter 894, Acts
44-19 of the 72nd Legislature, Regular Session, 1991, is amended to read
44-20 as follows:
44-21 Sec. 13. Before any permit or certificate of public
44-22 convenience and necessity may be issued to any motor carrier and
44-23 before any motor carrier may lawfully operate under such permit or
44-24 certificate as the case may be, such motor carrier shall file with
44-25 the Commission bonds and/or insurance policies issued by some
44-26 insurance company including mutuals and reciprocals or bonding
44-27 company holding a certificate of authority to transact such kinds
45-1 of insurance business in Texas or, with the approval of the
45-2 Commissioner, by a surplus lines insurer meeting <authorized by law
45-3 to transact business in Texas or, if the motor carrier is unable to
45-4 obtain insurance from an insurance company authorized to do
45-5 business in this state, with the Commission's approval, insurance
45-6 policies issued by a surplus lines insurer that meet> the
45-7 requirements of Article 1.14-2, Insurance Code, and rules adopted
45-8 by the State Board of Insurance under that article. The Commission
45-9 shall adopt rules governing the coverage limits and terms of the
45-10 policies and bonds, except that the coverage provided under the
45-11 policies must meet the requirements of Chapter 26, Insurance Code.
45-12 The bonds or<, in an amount to be fixed by the Commission under
45-13 such rules and regulations as it may prescribe, which bonds and>
45-14 insurance policies shall provide that the obligor therein will pay
45-15 to the extent of the face amount of such insurance policies and
45-16 bonds benefits under the policies or bonds and any judgment <all
45-17 judgments> which may be recovered against the motor carrier so
45-18 filing said insurance policies and bonds, based on claims for loss
45-19 or damages from personal injury or loss of, or injury to property
45-20 occurring during the term of said bonds and policies and arising
45-21 out of the actual operation of such motor carrier; and such bonds
45-22 and policies shall also provide for successive recoveries to the
45-23 complete exhaustion of the face amount thereof and that such
45-24 benefits and judgments will be paid by the obligor in said bonds
45-25 and insurance policies irrespective of the solvency or insolvency
45-26 of the motor carrier; provided, however, such bonds and policies
45-27 shall not cover personal injuries sustained by the servants, agents
46-1 or employees of such motor carrier. Provided further, that in the
46-2 event the insured shall abandon his permit or certificate and leave
46-3 the state, a claimant, asserting a claim within the provisions of
46-4 said bonds or policies, may file suit against the sureties
46-5 executing such bond or the company issuing such policies in a court
46-6 of competent jurisdiction without the necessity of making the
46-7 insured a party to said suit. Provided, however, that the
46-8 Commission shall not require insurance covering loss of or damage
46-9 to cargo in amount excessive for the class of service to be
46-10 rendered by any motor carrier. Each such motor carrier shall, on
46-11 or before the date of the expiration of the term of any policy or
46-12 bond so filed by him, file a renewal thereof, or new bonds or
46-13 policies containing the same terms and obligations of the preceding
46-14 bonds and policies, and shall each year thereafter on or before the
46-15 expiration date of the existing bonds and policies, file such
46-16 renewal policies and bonds so as to provide continuous and unbroken
46-17 protection to the public having legal claims against such motor
46-18 carrier; and in the event such renewal bonds and policies are not
46-19 so filed, the Commission, after notice to the motor carrier, and
46-20 hearing, may, within its discretion if it shall find and determine
46-21 that the ends of justice will be better subserved thereby, cancel
46-22 such permit or certificate for failure to furnish and provide such
46-23 bonds or insurance as herein required. The Commission may accept
46-24 in lieu of the filing of the original policies of insurance, a
46-25 certificate of insurance, in such form as may be prescribed by the
46-26 Commission, which certificate, when filed with the Commission, will
46-27 bind the obligor thereunder and satisfy the requirements of this
47-1 section as if the original policies of insurance had been filed.
47-2 Each motor carrier shall also protect his employees by
47-3 obtaining workers' compensation insurance coverage as defined
47-4 under the Texas Workers' Compensation Act (Article 8308-1.01 et
47-5 seq., Vernon's Texas Civil Statutes) or accidental insurance
47-6 coverage in an amount fixed by the Commission from a reliable
47-7 insurance company or companies authorized to write such policies in
47-8 this state approved by the Commission.
47-9 SECTION 26. (a) Article 5.06-1, Insurance Code, is
47-10 repealed.
47-11 (b) Article 5.06-3, Insurance Code, is repealed.
47-12 SECTION 27. (a) Articles 26.01 through 26.09 and Articles
47-13 26.11 through 26.19, Insurance Code, as added by this Act, would
47-14 not have been enacted if Article 26.10, Insurance Code, had not
47-15 been enacted. If Article 26.10, Insurance Code, is held invalid,
47-16 Articles 26.01 through 26.09 and Articles 26.11 through 26.19,
47-17 Insurance Code, as added by this Act, are invalid.
47-18 (b) Section 26 of this Act would not have been enacted if
47-19 Article 26.10, Insurance Code, had not been enacted. If Article
47-20 26.10, Insurance Code, is held invalid, Section 26 of this Act is
47-21 invalid.
47-22 SECTION 28. (a) This Act takes effect September 1, 1993,
47-23 and applies only to motor vehicle insurance policies delivered,
47-24 issued for delivery, or renewed to be effective on or after January
47-25 1, 1994, and to other conduct occurring on or after that date.
47-26 Policies delivered, issued for delivery, or renewed to be effective
47-27 before January 1, 1994, and other conduct occurring before that
48-1 date, are governed by the law that existed immediately before the
48-2 effective date of this Act, and that law is continued in effect for
48-3 that purpose.
48-4 (b) The State Board of Insurance may approve an endorsement
48-5 to motor vehicle policies delivered, issued for delivery, or
48-6 renewed before the effective date of this Act that conforms the
48-7 policies to this Act. An insurer may attach the endorsement to
48-8 such a policy only with the consent of the named insured.
48-9 SECTION 29. The importance of this legislation and the
48-10 crowded condition of the calendars in both houses create an
48-11 emergency and an imperative public necessity that the
48-12 constitutional rule requiring bills to be read on three several
48-13 days in each house be suspended, and this rule is hereby suspended.