By Clemons H.B. No. 149
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
2-1 certainty to be incurred not later than three years after the date
2-2 of the accident that caused the injury;
2-3 (ii) loss of earnings not to exceed $1,000
2-4 per month, for not more than three years from the date of the
2-5 accident that caused the injury; and
2-6 (iii) all other reasonable and necessary
2-7 expenses incurred, not to exceed $25 per day, for not more than one
2-8 year from the date of the accident that caused the injury; but
2-9 (B) does not include loss incurred because of
2-10 death.
2-11 (3) "Covered person" means any person entitled to
2-12 benefits under Article 26.02(a) or 26.03(a) of this code or covered
2-13 by a certificate of self-insurance under Section 34, Texas Motor
2-14 Vehicle Safety-Responsibility Act (Section 6701h, Vernon's Texas
2-15 Civil Statutes).
2-16 (4) "First-party benefits" means payments to a covered
2-17 person to reimburse the person for covered economic loss resulting
2-18 from bodily injury arising out of the use of a motor vehicle.
2-19 (5) "Insurer" means an insurance company, a
2-20 corporation, an interinsurance exchange, a mutual, a county mutual,
2-21 a reciprocal, an association, a Lloyd's, or other insurer writing
2-22 motor vehicle insurance delivered, issued for delivery, or renewed
2-23 in this state.
2-24 (6) "Intoxicated" has the meaning assigned by Article
2-25 6701l-1, Revised Statutes.
3-1 (7) "Loss of earnings" means 70 percent of the sum of:
3-2 (A) the amount actually incurred of loss of
3-3 earnings from work that a person would have performed had the
3-4 person not been injured; and
3-5 (B) the amount of reasonable and necessary
3-6 expenses incurred by the injured person in obtaining services
3-7 instead of those that the person would have performed for income.
3-8 (8) "Medical expenses" means necessary expenses
3-9 reasonably incurred for:
3-10 (A) medical, hospital, surgical, nursing,
3-11 dental, ambulance, X-ray, prescription drug, and prosthetic
3-12 products or services;
3-13 (B) nonmedical remedial care or treatment
3-14 rendered in accordance with a religious method of healing
3-15 recognized by the laws of this state; or
3-16 (C) any other professional health care services.
3-17 (9) "Member of named insured's household" means a
3-18 spouse, child, ward, foster child, or relative of the named insured
3-19 who regularly resides in the named insured's household.
3-20 (10) "Motorcycle" has the meaning assigned by Section
3-21 1, Texas Motor Vehicle Safety-Responsibility Act (Article 6701h,
3-22 Vernon's Texas Civil Statutes).
3-23 (11) "Motor vehicle" has the meaning assigned by
3-24 Section 1, Texas Motor Vehicle Safety-Responsibility Act (Article
3-25 6701h, Vernon's Texas Civil Statutes).
4-1 (12) "Motor vehicle insurance" means a policy of
4-2 insurance delivered, issued for delivery, or renewed in this state
4-3 that provides coverage for bodily injury resulting from the use of
4-4 a motor vehicle.
4-5 (13) "Noneconomic loss" means any detriment caused by
4-6 bodily injury arising out of the use of a motor vehicle other than
4-7 economic loss. The term includes pain and suffering.
4-8 (14) "Operator" has the meaning assigned by Section 1,
4-9 Texas Motor Vehicle Safety-Responsibility Act (Article 6701h,
4-10 Vernon's Texas Civil Statutes).
4-11 (15) "Owner" has the meaning assigned by Section 1,
4-12 Texas Motor Vehicle Safety-Responsibility Act (Article 6701h,
4-13 Vernon's Texas Civil Statutes).
4-14 (16) "Serious injury" means a bodily injury that
4-15 results in death, permanent and serious impairment of an important
4-16 body function, or permanent and significant disfigurement.
4-17 (17) "Speed contest" means a competition or race
4-18 formally or otherwise arranged between the driver of a motor
4-19 vehicle covered by the insurance policy and the driver of another
4-20 vehicle, regardless of whether the competition or race is for
4-21 compensation. The term does not include operation of a vehicle at
4-22 a speed that exceeds the legal speed limit if the driver is not
4-23 engaged in a competition or race.
4-24 (18) "Uninsured motor vehicle" means a motor vehicle
4-25 that is:
5-1 (A) not covered by a policy of insurance that
5-2 meets the requirements of this chapter; or
5-3 (B) owned by a person whose identity is unknown
5-4 and unascertainable, if actual physical contact occurred between
5-5 the motor vehicle owned and operated by the unknown person and the
5-6 person or property of the insured.
5-7 Art. 26.02. ENTITLEMENT TO FIRST-PARTY BENEFITS; ADDITIONAL
5-8 FINANCIAL SECURITY REQUIRED. (a) Except as provided by
5-9 Subsections (d) and (e) of this article, each motor vehicle
5-10 insurance policy, except policies issued to the owner or operator
5-11 of a motorcycle, must provide for the payment of first-party
5-12 benefits to:
5-13 (1) the following persons for bodily injury arising
5-14 out of the use in this state of a motor vehicle covered by the
5-15 policy:
5-16 (A) the named insured;
5-17 (B) a member of the named insured's household;
5-18 (C) a passenger or operator of a motor vehicle
5-19 covered by the policy;
5-20 (D) a person who is a passenger of a motor
5-21 vehicle operated by the named insured or by a member of the named
5-22 insured's household and who is not covered by another motor vehicle
5-23 insurance policy that provides first-party benefits under this
5-24 article;
5-25 (E) a pedestrian injured through the use of a
6-1 motor vehicle covered by the policy; and
6-2 (F) a pedestrian injured through the use of a
6-3 motor vehicle that is:
6-4 (i) not owned by the pedestrian;
6-5 (ii) operated by the named insured or a
6-6 member of the named insured's household; and
6-7 (iii) not covered by another motor vehicle
6-8 insurance policy that meets the requirements of this article;
6-9 (2) the named insured and members of the named
6-10 insured's household, other than an occupant of a motorcycle, for
6-11 bodily injury arising out of the use, outside of this state and in
6-12 the United States, its territories or possessions, or Canada, of a
6-13 motor vehicle, other than a motorcycle, covered by the policy or
6-14 covered by another policy;
6-15 (3) the named insured and members of the named
6-16 insured's household, other than an occupant of a motorcycle, for
6-17 bodily injury arising out of the use, in the United States, its
6-18 territories or possessions, or Canada, of an uninsured motor
6-19 vehicle or any motorcycle; and
6-20 (4) a resident of this state who is not the owner of a
6-21 motor vehicle for which coverage for first-party benefits is
6-22 required by the Texas Motor Vehicle Safety-Responsibility Act
6-23 (Article 6701h, Vernon's Texas Civil Statutes) and who is not a
6-24 member of a named insured's household on another policy providing
6-25 coverage for first-party benefits under this article, for bodily
7-1 injury arising out of the use, outside of this state, but in the
7-2 United States, its territories or possessions, or Canada, of a
7-3 motor vehicle covered by the policy.
7-4 (b) Except as provided by Article 26.08 of this code, a
7-5 motor vehicle insurance policy under this article must provide at
7-6 least $20,000 in first-party benefits for each covered person in
7-7 any one accident.
7-8 (c) A motor vehicle insurance policy under this article must
7-9 provide liability coverage in an amount of at least $15,000,
7-10 indemnifying the named insured, a member of the named insured's
7-11 household, and an operator of a motor vehicle owned by the named
7-12 insured who is operating the vehicle with the permission of the
7-13 named insured for liability imposed by law for injury to or
7-14 destruction of property of others arising out of the use of a motor
7-15 vehicle. Coverage under this subsection may be subject to a
7-16 deductible of not more than $250.
7-17 (d) First-party benefits for a bus passenger, other than the
7-18 operator or owner of the bus or an employee of the owner or
7-19 operator, who is injured in a motor vehicle accident in this state
7-20 must be provided by each motor vehicle insurance policy under which
7-21 the injured person is a named insured or a member of a named
7-22 insured's household. If the injured person is not a named insured
7-23 or a member of a named insured's household on a motor vehicle
7-24 insurance policy, first-party benefits shall be provided by the
7-25 insurer of the bus.
8-1 (e) A covered person is not entitled to receive first-party
8-2 benefits for loss of earnings to the extent the person's loss of
8-3 earnings is offset by payments from that person's employer, whether
8-4 the payments are required by statute or contract or are made
8-5 voluntarily by the employer, unless the payments from the employer
8-6 reduce the covered person's income or level of future benefits
8-7 arising from a subsequent illness or injury.
8-8 Art. 26.03. MOTORCYCLE INSURANCE. (a) A policy of
8-9 liability insurance covering a motorcycle issued to satisfy the
8-10 requirements of the Texas Motor Vehicle Safety-Responsibility Act
8-11 (Article 6701h, Vernon's Texas Civil Statutes) must also provide
8-12 for the payment of first-party benefits to persons, other than the
8-13 occupants of the covered motorcycle, another motorcycle, or any
8-14 motor vehicle, for loss arising out of the use or operation of the
8-15 motorcycle in this state.
8-16 (b) A motor vehicle insurance policy under this article must
8-17 provide at least $20,000 in first-party benefits for each covered
8-18 person in any one accident.
8-19 Art. 26.04. DEATH BENEFIT. A motor vehicle insurance policy
8-20 must provide a death benefit in the amount of $2,000 for the death
8-21 of a person who would have been entitled to first-party benefits
8-22 under Article 26.02(a) or 26.03(a) of this code had the person
8-23 survived. The death benefit required by this article is in
8-24 addition to first-party benefits payable as a result of the use of
8-25 the motor vehicle and is payable to the estate of the deceased.
9-1 Art. 26.05. EXCLUSIONS. A policy of motor vehicle insurance
9-2 under Article 26.02 or 26.03 of this code may exclude payment of
9-3 first-party benefits to a covered person whose conduct contributed
9-4 to the injury sustained in any of the following ways:
9-5 (1) the injury was caused intentionally;
9-6 (2) the injury was caused while the covered person was
9-7 committing a felony, seeking to evade lawful apprehension by a law
9-8 enforcement official, operating a motor vehicle in a speed contest,
9-9 or operating or occupying a motor vehicle known by the covered
9-10 person to be stolen; or
9-11 (3) the injury was caused while the covered person was
9-12 intoxicated.
9-13 Art. 26.06. DEDUCTIBLES. (a) An insurer offering motor
9-14 vehicle insurance that provides first-party benefits under Article
9-15 26.02 of this code shall offer that insurance without a deductible
9-16 and shall also offer that insurance with a deductible of not more
9-17 than $200 applicable only to the covered economic loss of the named
9-18 insured and members of the named insured's household.
9-19 (b) The board shall approve a higher deductible for policies
9-20 providing additional benefits or to coordinate first-party benefits
9-21 with other benefits provided under the policy or provided by other
9-22 policies. A deductible approved by the board may apply only to the
9-23 claims of the named insured and members of the named insured's
9-24 household.
9-25 Art. 26.07. COST CONTAINMENT PROVISIONS. The board may
10-1 adopt rules under which a policy of motor vehicle insurance under
10-2 Article 26.02 or 26.03 of this code may contain cost containment
10-3 provisions, including provisions for:
10-4 (1) precertification of covered services;
10-5 (2) preauthorization for specified services;
10-6 (3) a second opinion before surgery;
10-7 (4) concurrent utilization review and management;
10-8 (5) discharge planning;
10-9 (6) large case management;
10-10 (7) coordination of benefits, if the provisions comply
10-11 with guidelines established by the National Association of
10-12 Insurance Commissioners; and
10-13 (8) managed care or point of service arrangements.
10-14 Art. 26.08. USE OF COVERED VEHICLE OUTSIDE STATE. A policy
10-15 of insurance that provides first-party benefits under Article 26.02
10-16 of this code must provide that when any covered motor vehicle is
10-17 used in another state or Canadian province the policy provides at
10-18 least the minimum amount of insurance coverage required by the laws
10-19 of that state or province.
10-20 Art. 26.09. NONCONFORMING POLICIES. A policy of insurance
10-21 represented by an insurer as meeting the requirements of the Texas
10-22 Motor Vehicle Safety-Responsibility Act (Article 6701h, Vernon's
10-23 Texas Civil Statutes) shall be construed to meet the requirements
10-24 of this chapter.
10-25 Art. 26.10. LIABILITY OF OPERATORS OF MOTOR VEHICLES. (a)
11-1 By registering, maintaining, or using a motor vehicle in this
11-2 state, a person accepts the provisions of this chapter.
11-3 (b) Notwithstanding any other law, and except as provided by
11-4 Subsections (d), (e), and (f) of this article, in an action to
11-5 recover damages for bodily injury arising out of the use in this
11-6 state of a motor vehicle, other than a motorcycle, a covered person
11-7 may not be held liable in tort for covered economic loss or
11-8 noneconomic loss.
11-9 (c) Notwithstanding any other law, and except as provided by
11-10 Subsections (d), (e), and (f) of this article, a covered person may
11-11 not recover for covered economic loss arising out of the use of a
11-12 motorcycle in this state from the owner, operator, or occupant of a
11-13 motorcycle that is covered by a policy of insurance that meets the
11-14 requirements of Article 26.03 of this code and the financial
11-15 responsibility requirements of the Texas Motor Vehicle
11-16 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
11-17 Statutes).
11-18 (d) A covered person may be held liable in tort for the
11-19 amount of covered economic loss that exceeds $20,000.
11-20 (e) A covered person may be held liable for noneconomic loss
11-21 if the injured person has suffered a serious injury.
11-22 (f) Damages for bodily injury arising out of a motor vehicle
11-23 accident may be recovered if the person against whom damages are
11-24 sought caused the injury:
11-25 (1) intentionally;
12-1 (2) while intoxicated; or
12-2 (3) while committing a felony, seeking to evade lawful
12-3 apprehension by a law enforcement official, operating a motor
12-4 vehicle in a speed contest, or operating or occupying a motor
12-5 vehicle known by the person to be stolen.
12-6 (g) A covered person may not settle an action for bodily
12-7 injury brought against a noncovered person unless:
12-8 (1) the insurer consents in writing;
12-9 (2) the settlement is approved by a court of competent
12-10 jurisdiction; or
12-11 (3) a court of competent jurisdiction enters an order
12-12 for the equitable distribution of the settlement proceeds.
12-13 (h) In an action to recover the amount of economic loss that
12-14 has not been paid or is not payable, or to recover for noneconomic
12-15 loss, or both, the first $20,000 of economic loss may be pleaded
12-16 and proved to the extent that it is relevant to the action.
12-17 Art. 26.11. PRIMARY COVERAGE. (a) Except as provided by
12-18 Article 26.02(d) of this code, coverage provided by insurance under
12-19 this chapter is the primary coverage for bodily injury to a named
12-20 insured or to a member of the named insured's household and must be
12-21 exhausted before the covered person may collect benefits from a
12-22 different policy.
12-23 (b) A policy form approved by the board for motor vehicle
12-24 insurance under this chapter may limit or prohibit recovery for one
12-25 occurrence from more than one coverage or policy or from a coverage
13-1 or policy and a tort-feasor.
13-2 (c) A policy form approved by the board for motor vehicle
13-3 insurance under this chapter must prohibit multiple recovery for
13-4 the same elements of loss under the first-party benefits and any
13-5 other benefits a covered person receives or is entitled to receive
13-6 from any other source, including social security, workers'
13-7 compensation, and Medicare.
13-8 Art. 26.12. ADDITIONAL BENEFITS. An insurer may provide
13-9 benefits broader than or in addition to the minimum benefits
13-10 provided by this chapter, subject to the rules and forms approved
13-11 by the board.
13-12 Art. 26.13. COVERAGE FOR NONRESIDENT MOTORISTS. (a) Each
13-13 insurer authorized to transact or transacting business in this
13-14 state, and each insurer controlling, controlled by, or under common
13-15 control by or with an insurer authorized to transact or transacting
13-16 business in this state, that sells a policy providing motor vehicle
13-17 insurance coverage or similar coverage in any state or Canadian
13-18 province shall include in each policy coverage to satisfy the
13-19 requirements of Article 26.02 of this code applicable to a motor
13-20 vehicle covered by the policy when it is used in this state.
13-21 (b) A policy sold by an insurer subject to Subsection (a) of
13-22 this article shall be construed to provide coverage described in
13-23 Article 26.02(a) of this code.
13-24 Art. 26.14. PAYMENT OF FIRST-PARTY BENEFITS. (a)
13-25 First-party benefits shall be paid periodically as the claims arise
14-1 and not later than the 30th day after the date satisfactory proof
14-2 of loss is received by the insurer. If proof is not supplied for
14-3 the entire claim, an amount that is supported by proof shall be
14-4 paid not later than the 30th day after the date proof is supplied.
14-5 (b) If an insurer fails to pay first-party benefits when
14-6 due, the person entitled to the benefits may bring an action in
14-7 contract to recover the benefits, and, if the insurer is required
14-8 to pay the benefits, the person entitled to the benefits is also
14-9 entitled to recover:
14-10 (1) reasonable attorney's fees;
14-11 (2) a 12 percent penalty on the amount of benefits
14-12 due; and
14-13 (3) interest on the amount of benefits due, at the
14-14 rate applicable to judgments under Section 2, Article 1.05, Title
14-15 79, Revised Statutes (Article 5069-1.05, Vernon's Texas Civil
14-16 Statutes), from the date on which the benefits become due.
14-17 Art. 26.15. RIGHT TO ELECT ARBITRATION. A policy of motor
14-18 vehicle insurance must authorize the claimant to elect arbitration
14-19 of a dispute involving the insurer's liability to pay first-party
14-20 benefits or additional first-party benefits, the amount of the
14-21 benefits, or any matter that arises under Article 26.14 of this
14-22 code.
14-23 Art. 26.16. SETTLEMENT BETWEEN INSURERS. (a) This article
14-24 applies only to payment of first-party benefits for injury arising
14-25 out of a motor vehicle accident involving at least one motor
15-1 vehicle that:
15-2 (1) weighs more than 6,500 pounds unloaded; or
15-3 (2) is used primarily for the transportation of
15-4 persons or property for hire.
15-5 (b) For purposes of this article, the weight of a motor
15-6 vehicle is the actual weight of the fully equipped vehicle, as
15-7 certified by an official public weigher or a license and weight
15-8 inspector of the Texas Department of Public Safety.
15-9 (c) Except as provided by Subsection (d) of this article, an
15-10 insurer liable for the payment of first-party benefits, as
15-11 described by Subsection (a) of this article, to or on behalf of a
15-12 covered person, has the right to recover from the insurer of any
15-13 other covered person to the extent that the other covered person
15-14 would be liable, if Article 26.10 of this code did not bar recovery
15-15 from the covered person.
15-16 (d) An insurer who pays first-party benefits under Article
15-17 26.02(d) of this code to the occupants of a bus, other than the
15-18 operator or owner of the bus or employees of the operator or owner,
15-19 does not have a right to recover the amount of those benefits from
15-20 the insurer of the bus.
15-21 (e) An insurer seeking to recover on a disputed claim
15-22 arising under Subsection (c) of this article shall submit the
15-23 controversy to arbitration.
15-24 (f) The liability of an insurer imposed by this article does
15-25 not affect that insurer's obligations under a policy of bodily
16-1 injury liability insurance.
16-2 Art. 26.17. ARBITRATION OF DISPUTES BETWEEN INSURERS. A
16-3 dispute between insurers concerning their respective
16-4 responsibilities for payment of first-party benefits shall be
16-5 submitted to arbitration.
16-6 Art. 26.18. ARBITRATION. (a) An arbitration under Article
16-7 26.15, 26.16, or 26.17 of this code shall be conducted under rules
16-8 adopted by the board.
16-9 (b) An award entered in an arbitration under this article is
16-10 final and binding on all parties. Except as provided by Subsection
16-11 (c) of this article, the parties to the arbitration may not appeal.
16-12 (c) A suit to vacate an arbitrator's award must be filed not
16-13 later than the 30th day after the date of the award or not later
16-14 than the 30th day after the date the appealing party knew or should
16-15 have known of a basis for suit under this article, whichever is
16-16 later. The suit may not be filed after the first anniversary of
16-17 the arbitrator's award. Venue for a suit to vacate an arbitrator's
16-18 award is in the county in which the arbitration was conducted or
16-19 where the accident occurred. In the appeal, the court is confined
16-20 to the record developed before the arbitrator and may vacate the
16-21 arbitrator's award only on a finding that:
16-22 (1) the award was obtained by corruption, fraud, or
16-23 misrepresentation;
16-24 (2) the decision of the arbitrator was arbitrary and
16-25 capricious; or
17-1 (3) the decision of the arbitrator was not based on
17-2 substantial evidence.
17-3 Art. 26.19. RATE REDUCTION. (a) The board shall adjust the
17-4 benchmark rate set under Subchapter M, Chapter 5, of this code for
17-5 coverage for bodily injury arising out of the use of a motor
17-6 vehicle, other than a motorcycle, for all motor vehicle insurance
17-7 policies under this chapter issued on or after January 1, 1994, and
17-8 before January 1, 1995, to reflect at least a 12 percent reduction
17-9 in the benchmark rate for bodily injury liability coverage that was
17-10 effective on January 1, 1993, distributed among rate
17-11 classifications in accordance with sound actuarial principles.
17-12 (b) The reductions in the benchmark rate required by this
17-13 article take effect only on a finding by the board that:
17-14 (1) the reductions are consistent with encouragement
17-15 of the prevention of accidents;
17-16 (2) the reductions are consistent with consideration
17-17 of the peculiar hazard and experience of individual risks, past and
17-18 prospective, in and outside the state, and all other relevant
17-19 factors, in and outside the state;
17-20 (3) the reductions are fair, reasonable, and not
17-21 confiscatory as to any class of insurer authorized by law to write
17-22 motor vehicle insurance in this state; and
17-23 (4) the statistical data and other information
17-24 provided to justify the reductions indicate that approval of the
17-25 reductions is reasonable.
18-1 SECTION 2. Subdivision 10, Section 1, Texas Motor Vehicle
18-2 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
18-3 Statutes), is amended to read as follows:
18-4 10. "<Proof of> Financial Responsibility"--
18-5 (A) in the case of a motor vehicle other than a
18-6 motorcycle, a motor vehicle insurance policy that meets the
18-7 requirements of Chapter 26, Insurance Code; or
18-8 (B) in the case of a motorcycle, motorcycle
18-9 liability insurance indemnifying the owner or operator <Proof of
18-10 ability to respond in damages> for liability, on account of
18-11 accidents occurring subsequent to the effective date of the
18-12 insurance <said proof>, arising out of the ownership, maintenance
18-13 or use of a motorcycle <motor vehicle>, in the following amounts:
18-14 <effective January 1, 1984, Fifteen Thousand Dollars ($15,000)
18-15 because of bodily injury to or death of one person in any one
18-16 accident, and, subject to said limit for one person, Thirty
18-17 Thousand Dollars ($30,000) because of bodily injury to or death of
18-18 two (2) or more persons in any one accident, and Fifteen Thousand
18-19 Dollars ($15,000) because of injury to or destruction of property
18-20 of others in any one accident and effective January 1, 1986,>
18-21 Twenty Thousand Dollars ($20,000) because of bodily injury to or
18-22 death of one person in any one accident, and, subject to said limit
18-23 for one person, Forty Thousand Dollars ($40,000) because of bodily
18-24 injury to or death of two (2) or more persons in any one accident,
18-25 and Fifteen Thousand Dollars ($15,000) because of injury to or
19-1 destruction of property of others in any one accident; provided
19-2 that the policy<. The proof of ability to respond in damages> may
19-3 exclude the first Two Hundred Fifty Dollars ($250) of liability for
19-4 bodily injury to or death of any one person in any one accident,
19-5 and, subject to that exclusion for one person, may exclude the
19-6 first Five Hundred Dollars ($500) of liability for the bodily
19-7 injury to or death of two (2) or more persons in any one accident
19-8 and may exclude the first Two Hundred Fifty Dollars ($250) of
19-9 liability for the injury to or destruction of property of others in
19-10 any one accident.
19-11 SECTION 3. Section 1, Texas Motor Vehicle
19-12 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
19-13 Statutes), is amended by adding Subdivision 15 to read as follows:
19-14 15. "Motorcycle" means each motor vehicle that has a
19-15 saddle for the use of the rider and is designed to propel itself
19-16 with not more than three wheels in contact with the ground. The
19-17 term does not include a tractor or any three-wheeled vehicle
19-18 equipped with a cab, seat, and seat belt and designed to contain
19-19 the operator of the vehicle in the cab.
19-20 SECTION 4. Section 1A, Texas Motor Vehicle
19-21 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
19-22 Statutes), is amended by amending Subsections (a) and (d) and
19-23 adding Subsection (a-1) to read as follows:
19-24 (a) A person may not operate a motor vehicle in this state,
19-25 other than a motorcycle, unless:
20-1 (1) the motor vehicle is a covered vehicle on a policy
20-2 of motor vehicle insurance that meets the requirements of Chapter
20-3 26, Insurance Code; or
20-4 (2) the operator is a named insured, or a member of a
20-5 named insured's household, on a policy of motor vehicle insurance
20-6 that meets the requirements of Chapter 26, Insurance Code.
20-7 (a-1) A person may not operate a motorcycle in this state
20-8 unless a policy of motorcycle liability insurance <On and after
20-9 January 1, 1982, no motor vehicle may be operated in this State
20-10 unless a policy of automobile liability insurance> in at least the
20-11 minimum amounts to provide evidence of financial responsibility
20-12 under this Act is in effect to insure against potential losses
20-13 which may arise out of the operation of the motorcycle. The
20-14 insurance must also provide benefits under Article 26.03, Insurance
20-15 Code <that vehicle>.
20-16 (d) Subsection (b) of this section may not be construed to
20-17 exempt a person who is operating a vehicle for which title is held
20-18 in the name of a volunteer fire department from the <liability>
20-19 insurance requirements of this Act.
20-20 SECTION 5. Section 1B(a), Texas Motor Vehicle
20-21 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
20-22 Statutes), is amended to read as follows:
20-23 (a) As a condition of operating a motor vehicle in this
20-24 state, the operator of the motor vehicle shall furnish, on request
20-25 of a peace officer or a person involved in an accident with the
21-1 operator:
21-2 (1) a motor vehicle <liability> insurance policy in at
21-3 least the minimum amounts required by this Act, or a photocopy of
21-4 that policy, that covers the vehicle;
21-5 (2) a standard proof of motor vehicle <liability>
21-6 insurance form promulgated by the Texas Department of Insurance and
21-7 issued by an <a liability> insurer that:
21-8 (A) includes the name of the insurer;
21-9 (B) includes the insurance policy number;
21-10 (C) includes the policy period;
21-11 (D) includes the name and address of each
21-12 insured;
21-13 (E) includes the policy benefits and liability
21-14 limits or a statement that the coverage of the policy complies with
21-15 at least the minimum amounts of motor vehicle <liability> insurance
21-16 coverage required by this Act; and
21-17 (F) includes the make and model of each covered
21-18 vehicle;
21-19 (3) an insurance binder that confirms that the
21-20 operator is in compliance with this Act;
21-21 (4) a certificate or copy of a certificate issued by
21-22 the department that shows the vehicle is covered by self-insurance;
21-23 (5) a certificate issued by the state treasurer that
21-24 shows that the owner of the vehicle has on deposit with the
21-25 treasurer money or securities in at least the amount required by
22-1 Section 25 of this Act;
22-2 (6) a certificate issued by the department that shows
22-3 that the vehicle is a vehicle for which a bond is on file with the
22-4 department as provided by Section 24 of this Act; or
22-5 (7) a copy of a certificate issued by the county judge
22-6 of a county in which the vehicle is registered that shows that the
22-7 owner of the vehicle has on deposit with the county judge cash or a
22-8 cashier's check in at least the amount required by Section 1A(b)(6)
22-9 of this Act.
22-10 SECTION 6. Section 1D, Texas Motor Vehicle
22-11 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
22-12 Statutes), is amended to read as follows:
22-13 Sec. 1D. It is a defense to prosecution under this Act if
22-14 the person charged produces in court a motor vehicle <an automobile
22-15 liability> insurance policy or a certificate of self-insurance
22-16 previously issued to that person that was valid at the time that
22-17 the offense is alleged to have occurred and the charge shall be
22-18 dismissed.
22-19 SECTION 7. Section 1E, Texas Motor Vehicle
22-20 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
22-21 Statutes), is amended to read as follows:
22-22 Sec. 1E. When notified of an accident by the Department in
22-23 which an owner or operator has reported evidence of financial
22-24 responsibility with an insurance company, the insurance company so
22-25 notified shall be required to respond to the Department only if
23-1 there is not a policy of motor vehicle <liability> insurance in
23-2 effect, as reported.
23-3 SECTION 8. Sections 1F(a) and (f), Texas Motor Vehicle
23-4 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
23-5 Statutes), are amended to read as follows:
23-6 (a) The department shall suspend the driver's license and
23-7 motor vehicle registration of a person convicted of an offense
23-8 under Section 1C(a) of this Act, if a prior conviction of the
23-9 person under Section 1C(a) of this Act has been previously reported
23-10 to the department by a magistrate or the judge or clerk of a court,
23-11 unless the person establishes and maintains proof of financial
23-12 responsibility for two years from the date of the second or
23-13 subsequent conviction. The requirement for filing proof of
23-14 financial responsibility may be waived if satisfactory evidence is
23-15 filed with the Department that the party convicted was at the time
23-16 of arrest covered by a policy of motor vehicle <liability>
23-17 insurance or was otherwise exempt as provided in Section 1A <1A(b)>
23-18 of this Act.
23-19 (f) The following evidence of financial responsibility or a
23-20 photocopy of the evidence satisfies the requirement of Subsection
23-21 (e) of this section:
23-22 (1) a motor vehicle <liability> insurance policy in at
23-23 least the minimum amounts required by this Act to provide proof of
23-24 financial responsibility covering at least the period required by
23-25 Subsection (e) of this section;
24-1 (2) a standard proof of motor vehicle <liability>
24-2 insurance form promulgated by the Texas Department of Insurance and
24-3 issued by an <a liability> insurer that includes:
24-4 (A) the name of the insurer;
24-5 (B) the insurance policy number;
24-6 (C) the policy period, which must equal or
24-7 exceed the period required by Subsection (e) of this section;
24-8 (D) the name and address of each insured; and
24-9 (E) the policy limits or a statement that the
24-10 coverage of the policy complies with at least the minimum amounts
24-11 of motor vehicle <liability> insurance coverage required by this
24-12 Act;
24-13 (3) an insurance binder that confirms to the
24-14 satisfaction of the court that the defendant is in compliance with
24-15 this Act for at least the period required by Subsection (e) of this
24-16 section;
24-17 (4) a copy of a certificate issued by the Department
24-18 of Public Safety that shows that the vehicle to be registered is
24-19 covered by self-insurance;
24-20 (5) a certificate issued by the state treasurer that
24-21 shows that the owner of the vehicle has on deposit with the
24-22 treasurer money or securities in at least the amount required by
24-23 Section 25 of this Act;
24-24 (6) a certificate issued by the Department that shows
24-25 that the vehicle is a vehicle for which a bond is on file with the
25-1 Department as provided by Section 24 of this Act; or
25-2 (7) a copy of a certificate issued by the county judge
25-3 of a county in which the vehicle is registered that shows that the
25-4 owner of the vehicle has on deposit with the county judge cash or a
25-5 cashier's check in at least the amount required by Section 1A(b)(6)
25-6 of this Act.
25-7 SECTION 9. Section 1H(a), Texas Motor Vehicle
25-8 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
25-9 Statutes), is amended to read as follows:
25-10 (a) If a person is unable to furnish evidence of financial
25-11 responsibility to a law enforcement officer under Section 1B of
25-12 this Act and the officer issues the person a citation for an
25-13 offense under Section 1C(a)(1) of this Act, the citation must
25-14 include in type larger than other type appearing on the citation
25-15 the following: "A second or subsequent conviction of an offense
25-16 under the Texas Motor Vehicle Safety-Responsibility Act will result
25-17 in the suspension of your driver's license and motor vehicle
25-18 registration unless you file and maintain proof of financial
25-19 responsibility with the Department of Public Safety for two years
25-20 from the date of conviction. The Department may waive the
25-21 requirement to file proof of financial responsibility if you file
25-22 satisfactory evidence with the Department showing that at the time
25-23 this citation was issued, the vehicle was covered by a motor
25-24 vehicle <liability> insurance policy or that you were otherwise
25-25 exempt from the requirements to provide evidence of financial
26-1 responsibility."
26-2 SECTION 10. Section 5(c), Texas Motor Vehicle
26-3 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
26-4 Statutes), is amended to read as follows:
26-5 (c) This section shall not apply under the conditions stated
26-6 in Section 6 nor:
26-7 1. To a motor vehicle operator or owner against whom
26-8 the Department or a person presiding at a hearing finds there is
26-9 not a reasonable probability of a judgment being rendered as a
26-10 result of the accident;
26-11 2. To such operator or owner if such owner had in
26-12 effect at the time of such accident a motor vehicle insurance
26-13 <liability> policy with respect to the motor vehicle involved in
26-14 such accident;
26-15 3. To such operator, if not the owner of such motor
26-16 vehicle, if there was in effect at the time of such accident a
26-17 motor vehicle insurance <liability> policy or bond with respect to
26-18 his operation of motor vehicles not owned by him;
26-19 4. To any person employed by the government of the
26-20 United States, when such person is acting within the scope or
26-21 office of his employment;
26-22 5. To such operator or owner if the liability of such
26-23 operator or owner for damages resulting from such accident is, in
26-24 the judgment of the Department, covered by any other form of
26-25 liability insurance policy or bond; nor
27-1 6. To any person qualifying as a self-insurer under
27-2 Section 34 of this Act, or to any person operating a motor vehicle
27-3 for such self-insurer.
27-4 No such policy or bond shall be effective under this section
27-5 or under Section 7 unless issued by an insurance company or surety
27-6 company authorized to write motor vehicle liability insurance in
27-7 this State, except that if such motor vehicle was not registered in
27-8 this State, or was a motor vehicle which was registered elsewhere
27-9 than in this State at the effective date of the policy, or the most
27-10 recent renewal thereof, such policy or bond shall not be effective
27-11 under this section unless the insurance company or surety company
27-12 if not authorized to do business in this State shall execute a
27-13 power of attorney authorizing the Department to accept service on
27-14 its behalf of notice or process in any action upon such policy or
27-15 bond arising out of such accident; providing, however, every such
27-16 policy or bond is subject, if the accident has resulted in bodily
27-17 injury or death, to a limit, exclusive of interest and costs, as
27-18 follows: <effective January 1, 1984, not less than Fifteen
27-19 Thousand Dollars ($15,000) because of bodily injury to or death of
27-20 one person in any one accident and, subject to said limit for one
27-21 person, to a limit of not less than Thirty Thousand Dollars
27-22 ($30,000) because of bodily injury to or death of two (2) or more
27-23 persons in any one accident, and, if the accident has resulted in
27-24 injury to or destruction of property, to a limit of not less than
27-25 Fifteen Thousand Dollars ($15,000) because of injury to or
28-1 destruction of property of others in any one accident and effective
28-2 January 1, 1986,> not less than Twenty Thousand Dollars ($20,000)
28-3 because of bodily injury to or death of one person in any one
28-4 accident, and, subject to said limit for one person, to a limit of
28-5 not less than Forty Thousand Dollars ($40,000) because of bodily
28-6 injury to or death of two (2) or more persons in any one accident,
28-7 and, if the accident has resulted in injury to or destruction of
28-8 property, to a limit of not less than Fifteen Thousand Dollars
28-9 ($15,000) because of injury to or destruction of property of others
28-10 in any one accident. The policy or bond may exclude coverage of
28-11 the first Two Hundred Fifty Dollars ($250) of liability for bodily
28-12 injury to or death of any one person in any one accident, and,
28-13 subject to that exclusion for one person, may exclude coverage for
28-14 the first Five Hundred Dollars ($500) of liability for the bodily
28-15 injury to or death of two (2) or more persons in any one accident
28-16 and may exclude coverage for the first Two Hundred Fifty Dollars
28-17 ($250) of liability for the injury to or destruction of property of
28-18 others in any one accident.
28-19 7. Wherever the word "bond" appears in this section or
28-20 this Act, it shall mean a bond filed with and approved by the
28-21 Department of Public Safety.
28-22 SECTION 11. Section 8(c), Texas Motor Vehicle
28-23 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
28-24 Statutes), is amended to read as follows:
28-25 (c) Upon receipt of certification by the Department that the
29-1 operating privilege of a Texas resident has been suspended or
29-2 revoked in another state pursuant to a law providing for its
29-3 suspension or revocation for failure to deposit security for the
29-4 payment of judgments arising out of a motor vehicle accident, for
29-5 failure to satisfy any judgment, or for failure to file proof of
29-6 financial responsibility, the Department shall contact the official
29-7 who issued the certification and request information pertaining to
29-8 the specific nature of the Texas resident's noncompliance. If the
29-9 alleged noncompliance is based on the failure of the Texas
29-10 resident's insurance company or surety company to obtain
29-11 authorization to write motor vehicle <liability> insurance in the
29-12 other state and for failure of the insurance or surety company to
29-13 execute a power of attorney directing the appropriate official in
29-14 the other state to accept service on its behalf of notice or
29-15 process in any action upon the policy arising out of the accident,
29-16 then the Department shall not suspend the Texas resident's license
29-17 and other registrations. If the evidence shows that the Texas
29-18 resident's operating privilege was suspended in the other state for
29-19 any other violation of another state's laws providing for
29-20 suspension or revocation for failure to deposit security for the
29-21 payment of judgments arising out of motor vehicle accidents, for
29-22 failure to satisfy any judgment, or for failure to file proof of
29-23 financial responsibility, under circumstances that would require
29-24 the Department to suspend a nonresident's operating privilege had
29-25 the accident occurred in this state, then the Department shall
30-1 suspend the Texas resident's license and registrations. The
30-2 suspension shall continue until the resident furnishes evidence of
30-3 his compliance with the law of the other state relating to the
30-4 deposit of security, satisfaction of judgment, or proof of
30-5 financial responsibility.
30-6 SECTION 12. Section 19(a), Texas Motor Vehicle
30-7 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
30-8 Statutes), is amended to read as follows:
30-9 (a) Proof of financial responsibility may be furnished by
30-10 filing with the Department the certificate of any insurance company
30-11 duly authorized to write motor vehicle <liability> insurance in
30-12 this State certifying that there is in effect a motor vehicle
30-13 insurance <liability> policy for the benefit of the person required
30-14 to furnish proof of financial responsibility. Such certificate
30-15 shall give the effective date of such motor vehicle insurance
30-16 <liability> policy, which date shall be the same as the effective
30-17 date of the certificate, and shall cover all motor vehicles owned
30-18 by the individual required to make such filing as covered by the
30-19 <liability> insurance policy, unless the policy is issued to a
30-20 person who is not the owner of a motor vehicle. In the case of a
30-21 motor vehicle other than a motorcycle, the certificate must state
30-22 that the policy meets the requirements of Chapter 26, Insurance
30-23 Code. In the case of a motorcycle, the certificate must state that
30-24 the policy meets the requirements of Article 26.03, Insurance Code,
30-25 and provides motorcycle liability coverage that meets the
31-1 requirements of Section 21 of this Act.
31-2 SECTION 13. Section 20(a), Texas Motor Vehicle
31-3 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
31-4 Statutes), is amended to read as follows:
31-5 (a) The non-resident owner or operator of a motor vehicle
31-6 not registered in this State may give proof of financial
31-7 responsibility by filing with the Department a certificate or
31-8 certificates of an insurance company authorized to transact
31-9 business in the state in which the motor vehicle or motor vehicles
31-10 covered in such certificate are registered, or if such non-resident
31-11 does not own a motor vehicle, then in the state in which the
31-12 insured resides, provided such certificate otherwise conforms to
31-13 the provisions of this Act, and the Department shall accept the
31-14 same upon condition that said insurance company complies with the
31-15 following provisions with respect to the policies so certified:
31-16 1. Said insurance company shall execute a power of
31-17 attorney authorizing the Department to accept service on its behalf
31-18 of notice or process in any action arising out of a motor vehicle
31-19 accident in this State;
31-20 2. Said insurance company shall agree in writing that:
31-21 (A) in the case of a motor vehicle other than a
31-22 motorcycle, the policy meets the requirements of Chapter 26,
31-23 Insurance Code; or
31-24 (B) in the case of a motorcycle, the policy
31-25 meets the requirements of Article 26.03, Insurance Code, and
32-1 provides motorcycle liability coverage that meets the requirements
32-2 of Section 21 of this Act <such policies shall be deemed to conform
32-3 with the laws of this State relating to the terms of motor vehicle
32-4 liability policies issued herein>.
32-5 SECTION 14. Section 21, Texas Motor Vehicle
32-6 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
32-7 Statutes), is amended to read as follows:
32-8 Sec. 21. MOTORCYCLE <MOTOR VEHICLE> LIABILITY POLICY
32-9 DEFINED. (a) A "motorcycle <motor vehicle> liability policy" as
32-10 said term is used in this Act shall mean an owner's or an
32-11 operator's policy of liability insurance, certified as provided in
32-12 Section 19 or Section 20 as proof of financial responsibility, and
32-13 issued, except as otherwise provided in Section 20, by an insurance
32-14 company duly authorized to write motor vehicle liability insurance
32-15 in this State, to or for the benefit of the person named therein as
32-16 insured.
32-17 (b) An <Such> owner's policy of liability insurance under
32-18 this Section:
32-19 1. Shall cover all motorcycles <motor vehicles> with
32-20 respect to which coverage is thereby to be granted; and
32-21 2. Shall pay on behalf of the insured named therein
32-22 and any other person, as insured, using any motorcycle covered by
32-23 the policy <such motor vehicle or motor vehicles> with the express
32-24 or implied permission of such named insured, all sums which the
32-25 insured shall become legally obligated to pay as damages arising
33-1 out of the ownership, maintenance or use of the motorcycle <such
33-2 motor vehicle or motor vehicles> within the United States of
33-3 America or the Dominion of Canada, subject to limits exclusive of
33-4 interest and costs, with respect to each motorcycle <such motor
33-5 vehicle>, as set out in Subdivision (6) of Subsection (c) of
33-6 Section 5 of this Act. The policy may exclude coverage of the
33-7 first Two Hundred Fifty Dollars ($250) of liability for bodily
33-8 injury to or death of any one person in any one accident, and,
33-9 subject to that exclusion for one person, may exclude coverage for
33-10 the first Five Hundred Dollars ($500) of liability for the bodily
33-11 injury to or death of two (2) or more persons in any one accident
33-12 and may exclude coverage for the first Two Hundred Fifty Dollars
33-13 ($250) of liability for the injury to or destruction of property of
33-14 others in any one accident.
33-15 (c) An <Such> operator's policy of liability insurance under
33-16 this Section shall pay on behalf of the insured named therein all
33-17 sums which the insured shall become legally obligated to pay as
33-18 damages arising out of the use by him of any motorcycle <motor
33-19 vehicle> not owned by him, within the same territorial limits and
33-20 subject to the same limits of liability as are set forth above with
33-21 respect to an owner's policy of liability insurance.
33-22 (d) A motorcycle <Such motor vehicle> liability policy under
33-23 this Section shall state the name and address of the named insured,
33-24 the coverage afforded by the policy, the premium charged therefor,
33-25 the policy period and the limits of liability, and shall contain an
34-1 agreement or be endorsed that insurance is provided thereunder in
34-2 accordance with the coverage defined in this Act as respects bodily
34-3 injury and death or property damage, or both, and is subject to all
34-4 the provisions of this Act.
34-5 (e) A motorcycle <Such motor vehicle> liability policy under
34-6 this Section shall not insure:
34-7 1. Any obligation for which the insured or any company
34-8 as his insurer may be held liable under any workmen's compensation
34-9 law;
34-10 2. Any liability on account of bodily injury to or
34-11 death of any employee of the insured while engaged in the
34-12 employment, other than domestic, of the insured, or in domestic
34-13 employment if benefits therefor are either payable or required to
34-14 be provided under any workmen's compensation law; nor
34-15 3. Any liability because of injury to or destruction
34-16 of property owned by, rented to, in charge of or transported by the
34-17 insured.
34-18 (f) Every motorcycle <motor vehicle> liability policy under
34-19 this Section is <shall be> subject to the following provisions
34-20 which need not be contained therein:
34-21 1. The liability of the insurance company with respect
34-22 to the insurance required by this Act shall become absolute
34-23 whenever injury or damage covered by the <said motor vehicle
34-24 liability> policy occurs; the <said> policy may not be canceled or
34-25 annulled as to such liability by any agreement between the
35-1 insurance company and the insured after the occurrence of the
35-2 injury or damage; no statement made by the insured or on his behalf
35-3 and no violation of said policy shall defeat or void said policy;
35-4 2. The satisfaction by the insured of a judgment for
35-5 such injury or damage shall not be a condition precedent to the
35-6 right or duty of the insurance company to make payment on account
35-7 of such injury or damage;
35-8 3. The insurance company shall have the right to
35-9 settle any claim covered by the policy, and if such settlement is
35-10 made in good faith, the amount thereof shall be deductible from the
35-11 limits of liability specified in Subdivision 2 of Subsection (b) of
35-12 this Section;
35-13 4. The policy, the written application therefor, if
35-14 any, and any rider or endorsement which does not conflict with the
35-15 provisions of the Act shall constitute the entire contract between
35-16 the parties.
35-17 (g) Any policy which grants the coverage required for a
35-18 motorcycle <motor vehicle> liability policy under this Section may
35-19 also grant any lawful coverage in excess of or in addition to the
35-20 coverage specified for a motorcycle <motor vehicle> liability
35-21 policy and such excess or additional coverage shall not be subject
35-22 to the provisions of this Act. With respect to a policy which
35-23 grants such excess or additional coverage the term "motorcycle
35-24 <motor vehicle> liability policy" shall apply only to that part of
35-25 the coverage which is required by this Section.
36-1 (h) Any motorcycle <motor vehicle> liability policy may
36-2 provide that the insured shall reimburse the insurance company for
36-3 any payment the insurance company would not have been obligated to
36-4 make under the terms of the policy except for the provisions of
36-5 this Act.
36-6 (i) Any motorcycle <motor vehicle> liability policy may
36-7 provide for the prorating of the insurance thereunder with other
36-8 valid and collectible insurance.
36-9 (j) The requirements for a motorcycle <motor vehicle>
36-10 liability policy may be fulfilled by the policies of one (1) or
36-11 more insurance companies which policies together meet such
36-12 requirements.
36-13 (k) Any binder issued pending the issuance of a motorcycle
36-14 <motor vehicle> liability policy shall be deemed to fulfill the
36-15 requirements for such a policy.
36-16 SECTION 15. Section 22, Texas Motor Vehicle
36-17 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
36-18 Statutes), is amended to read as follows:
36-19 Sec. 22. Notice of Cancellation or Termination of Certified
36-20 Policy. When an insurance company has certified a motor vehicle
36-21 insurance <liability> policy under Section 19 or a policy under
36-22 Section 20, the insurance so certified shall not be canceled or
36-23 terminated until at least five (5) days after a notice of
36-24 cancellation or termination of the insurance so certified shall be
36-25 received in the office of the Department, except that such a policy
37-1 subsequently procured and certified shall, on the effective date of
37-2 its certification, terminate the insurance previously certified.
37-3 SECTION 16. Section 24(a), Texas Motor Vehicle
37-4 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
37-5 Statutes), is amended to read as follows:
37-6 (a) Proof of financial responsibility may be furnished by
37-7 filing a bond with the Department, accompanied by the statutory
37-8 recording fee of the County Clerk to cover the cost of recordation
37-9 of the notice provided for herein, and with at least two (2)
37-10 individual sureties each owning real estate within this State, not
37-11 exempt under the Constitution or laws of the State of Texas, and
37-12 together having equities equal in value to at least twice the
37-13 amount of such bond. Such real estate shall be scheduled in the
37-14 bond approved by a judge of a court of record, and shall be
37-15 certified by the tax assessor and collector of the county where the
37-16 property is situated as being free from any tax liens. Such bond
37-17 shall be conditioned for payments in amounts and under the same
37-18 circumstances as would be required in a motorcycle <motor vehicle>
37-19 liability policy, except that the bond is applicable to sums that
37-20 the person covered by the bond may become legally obligated to pay
37-21 as damages arising out of the ownership, maintenance, or use of any
37-22 motor vehicle. The bond may <and shall> not be cancelable except
37-23 after five (5) days written notice is received by the Department,
37-24 but cancellation shall not prevent recovery with respect to any
37-25 right or cause of action arising prior to the date of cancellation.
38-1 On filing of a valid bond, the Department shall issue to the person
38-2 named as principal in the bond a certificate of compliance with
38-3 this section. Such bond shall constitute a lien in favor of the
38-4 State upon the real estate so scheduled of any surety, which lien
38-5 shall exist in favor of any holder of a final judgment against the
38-6 person who has filed such bond. Notice to that effect, which shall
38-7 include a description of the real estate scheduled in the bond,
38-8 shall be filed by the Department in the office of the County Clerk
38-9 of the county where such real estate is situated. Such notice
38-10 shall be accompanied by the statutory fee for the services of the
38-11 County Clerk in connection with the recordation of such notice, and
38-12 the County Clerk or his deputy, upon receipt of such notice, shall
38-13 acknowledge and cause the same to be recorded in the lien records.
38-14 Recordation shall constitute notice as provided by the statutes
38-15 governing the recordation of liens on real estate.
38-16 SECTION 17. Section 34, Texas Motor Vehicle
38-17 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
38-18 Statutes), is amended to read as follows:
38-19 Sec. 34. Self-Insurers. (a) Any person in whose name more
38-20 than 25 motor vehicles are registered may qualify as a self-insurer
38-21 by obtaining a certificate of self-insurance issued by the
38-22 Department as provided in Subsection (b) of this Section.
38-23 (b) An applicant for a certificate of self-insurance shall
38-24 submit to the Department, in a form approved by the Department, an
38-25 undertaking binding the person to provide benefits for bodily
39-1 injury meeting the requirements of Chapter 26, Insurance Code. The
39-2 Department may, in its discretion, <upon the application of a
39-3 person,> issue a certificate of self-insurance when it is satisfied
39-4 that such person is possessed and will continue to be possessed of
39-5 ability to pay benefits meeting the requirements of Chapter 26,
39-6 Insurance Code, or judgments for property damage obtained against
39-7 such person.
39-8 (c) Upon not less than five (5) days notice and a hearing
39-9 pursuant to such notice, the Department may upon reasonable grounds
39-10 cancel a certificate of self-insurance. Failure to pay any
39-11 required benefit or judgment within thirty (30) days after the
39-12 injured person has supplied proof of loss or the <such> judgment
39-13 becomes <shall have become> final is <shall constitute> a
39-14 <reasonable> ground for the cancellation of a certificate of
39-15 self-insurance.
39-16 SECTION 18. Section 35, Texas Motor Vehicle
39-17 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
39-18 Statutes), is amended to read as follows:
39-19 Sec. 35. Assigned Risk Plan. (a) Subject to the provisions
39-20 of Article 5.10, <Texas> Insurance Code <of 1951, as amended>,
39-21 insurance companies authorized to issue motor vehicle insurance
39-22 <liability> policies in this state may establish an administrative
39-23 agency and make necessary reasonable rules in connection therewith,
39-24 relative to the formation of a plan and procedure to provide a
39-25 means by which insurance may be assigned to an authorized insurance
40-1 company for a person required by this Act to show proof of
40-2 financial responsibility for the future and who is in good faith
40-3 entitled to motor vehicle <liability> insurance in this state but
40-4 is unable to secure it through ordinary methods; or, in amounts not
40-5 to exceed the limits prescribed in Chapter 26, Insurance Code
40-6 <Section 21(b)2 of this law>, for any unit of government within the
40-7 State of Texas which, acting in good faith, is unable to secure
40-8 motor vehicle <liability> insurance in this state through ordinary
40-9 methods; and may establish a plan and procedure for the equitable
40-10 apportionment among such authorized companies of applicants for
40-11 such policies and for motor vehicle insurance <liability> policies,
40-12 including, but not limited to, voluntary agreements by insurance
40-13 companies to accept such assignments. When any such plan has been
40-14 approved by the State Board of Insurance, all insurance companies
40-15 authorized to issue motor vehicle insurance <liability> policies in
40-16 the State of Texas shall subscribe thereto and participate therein.
40-17 (b) The State Board of Insurance, in addition to the
40-18 provisions prescribed by Subchapter A, Chapter 5, <Texas> Insurance
40-19 Code <of 1951, as amended>, may determine, fix, prescribe,
40-20 promulgate, change, and amend rates or minimum premiums normally
40-21 applicable to a risk so as to apply to any and every assignment
40-22 such rates and minimum premiums as are commensurate with the
40-23 greater hazard of the risk, considering in connection therewith the
40-24 experience, physical or other conditions of such risk of the person
40-25 or municipality applying for insurance under any such plan.
41-1 (c) The State Board of Insurance may adjust the benchmark
41-2 rate promulgated under Subchapter M, Chapter 5, Insurance Code,
41-3 that is applicable to insurance written under this section to
41-4 reflect the greater hazard of risks insured under this section.
41-5 This section expires December 31, 1995.
41-6 SECTION 19. Sections 2a(d) and (e), Chapter 88, General
41-7 Laws, Acts of the 41st Legislature, 2nd Called Session, 1929
41-8 (Article 6675a-2a, Vernon's Texas Civil Statutes), are amended to
41-9 read as follows:
41-10 (d) The following evidence of financial responsibility or a
41-11 photocopy of the evidence satisfies the requirement of this
41-12 section:
41-13 (1) a motor vehicle <liability> insurance policy or
41-14 <liability> self-insurance or pool coverage document issued by a
41-15 political subdivision or governmental pool pursuant to the
41-16 authority contained in Chapter 791, Government Code <The Interlocal
41-17 Cooperation Act (Article 4413(32c), Vernon's Texas Civil
41-18 Statutes)>, Chapter 119, Local Government Code, or other applicable
41-19 law in at least the minimum amounts required by the Texas Motor
41-20 Vehicle Safety-Responsibility Act (Article 6701h, Vernon's Texas
41-21 Civil Statutes) to provide proof of financial responsibility
41-22 covering at least the period required by Subsection (a) of this
41-23 section;
41-24 (2) a standard proof of motor vehicle insurance
41-25 <liability> form promulgated by the Texas Department of Insurance
42-1 and issued by an <a liability> insurer that includes:
42-2 (A) the name of the insurer;
42-3 (B) the insurance policy or other coverage
42-4 document number;
42-5 (C) the policy or other coverage document
42-6 coverage period;
42-7 (D) the name and address of each insured or
42-8 covered person;
42-9 (E) the policy or other coverage document
42-10 benefits and liability limits or a statement that the coverage of
42-11 the policy complies with at least the minimum amounts of motor
42-12 vehicle <liability> insurance coverage required by the Texas Motor
42-13 Vehicle Safety-Responsibility Act (Article 6701h, Vernon's Texas
42-14 Civil Statutes); and
42-15 (F) the make and model of each covered vehicle;
42-16 (3) an insurance binder that confirms to the
42-17 satisfaction of the county tax collector that the owner of the
42-18 motor vehicle to be registered is in compliance with the Texas
42-19 Motor Vehicle Safety-Responsibility Act (Article 6701h, Vernon's
42-20 Texas Civil Statutes) for at least the period required by
42-21 Subsection (a) of this section;
42-22 (4) a copy of a certificate issued by the Department
42-23 of Public Safety that shows that the vehicle to be registered is
42-24 covered by self-insurance;
42-25 (5) a certificate issued by the state treasurer that
43-1 shows that the owner of the vehicle has on deposit with the
43-2 treasurer money or securities in at least the amount required by
43-3 Section 25 of the Texas Motor Vehicle Safety-Responsibility Act
43-4 (Article 6701h, Vernon's Texas Civil Statutes);
43-5 (6) a certificate issued by the Department of Public
43-6 Safety that shows that the vehicle is a vehicle for which a bond is
43-7 on file with the Department as provided by Section 24 of the Texas
43-8 Motor Vehicle Safety-Responsibility Act (Article 6701h, Vernon's
43-9 Texas Civil Statutes); or
43-10 (7) a copy of a certificate issued by the county judge
43-11 of a county in which the vehicle is registered that shows that the
43-12 owner of the vehicle has on deposit with the county judge cash or a
43-13 cashier's check in at least the amount required by Section 1A(b)(6)
43-14 of the Texas Motor Vehicle Safety-Responsibility Act (Article
43-15 6701h, Vernon's Texas Civil Statutes).
43-16 (e) At the time the county tax collector registers a motor
43-17 vehicle, the tax collector shall provide to the person registering
43-18 the motor vehicle a separate document that contains a statement
43-19 that the motor vehicle being registered may not be operated in this
43-20 state unless motor vehicle <liability> insurance coverage for the
43-21 vehicle in at least the minimum amounts required by law remains in
43-22 effect to insure against potential losses or unless the motor
43-23 vehicle is exempt from the insurance requirement by Section
43-24 1A<(b)>, Texas Motor Vehicle Safety-Responsibility Act (Article
43-25 6701h, Vernon's Texas Civil Statutes).
44-1 SECTION 20. Article 5.01(e), Insurance Code, is amended to
44-2 read as follows:
44-3 (e) Motor vehicle or automobile insurance as referred to in
44-4 this subchapter means <shall be taken and construed to mean> every
44-5 form of insurance on any automobile or other vehicle hereinafter
44-6 enumerated and its operating equipment or necessitated by reason of
44-7 the liability imposed by law for damages arising out of the
44-8 ownership, operation, maintenance, or use in this State of any
44-9 automobile, motorcycle, motorbicycle, truck, truck-tractor,
44-10 tractor, traction engine, or any other self-propelled vehicle, and
44-11 including also every vehicle, trailer or semi-trailer pulled or
44-12 towed by a motor vehicle, but excluding every motor vehicle running
44-13 only upon fixed rails or tracks. Workers' Compensation Insurance
44-14 is excluded from the foregoing definition, but motor vehicle
44-15 insurance under Chapter 26 of this code is included.
44-16 SECTION 21. Article 5.01B(a), Insurance Code, is amended to
44-17 read as follows:
44-18 (a) Information filed or otherwise provided by an insurer to
44-19 the State Board of Insurance for the purpose of determining,
44-20 fixing, prescribing, promulgating, altering, or amending commercial
44-21 automobile <liability> insurance rates under Article 5.01 of this
44-22 code, obtaining a rate deviation under Article 5.03 of this code,
44-23 or reporting losses under Article 5.04-1 of this code is public
44-24 information unless it is exempt under Section 3(a), Chapter 424,
44-25 Acts of the 63rd Legislature, Regular Session, 1973 (Article
45-1 6252-17a, Vernon's Texas Civil Statutes), or Section (b) of this
45-2 article.
45-3 SECTION 22. Article 5.06-4(a), Insurance Code, is amended to
45-4 read as follows:
45-5 (a) Any insurer desiring to write commercial automobile
45-6 <liability> insurance in this state must provide loss control
45-7 information as a prerequisite for a license to write that
45-8 insurance.
45-9 SECTION 23. Article 5.06-6, Insurance Code, is amended to
45-10 read as follows:
45-11 Art. 5.06-6. Coverages for Spouses and Former Spouses. A
45-12 personal automobile policy or any similar policy form adopted or
45-13 approved by the State Board of Insurance under Article 5.06 of this
45-14 code that provides coverage to <covers liability arising out of
45-15 ownership, maintenance, or use of a motor vehicle of> a spouse, who
45-16 is otherwise insured by the policy, shall contain a provision to
45-17 continue coverage for the spouse during a period of separation in
45-18 contemplation of divorce.
45-19 SECTION 24. Section 11(a), Chapter 270, Acts of the 40th
45-20 Legislature, Regular Session, 1927 (Article 911a, Vernon's Texas
45-21 Civil Statutes), as amended by Chapters 377, 624, and 1050, Acts of
45-22 the 70th Legislature, Regular Session, 1987, is amended to read as
45-23 follows:
45-24 (a) The Commission shall, in the granting of any certificate
45-25 to any motor bus company for regularly transporting persons as
46-1 passengers for compensation or hire, require the owner or operator
46-2 to first procure insurance covering bodily injury <liability> and
46-3 property damage <insurance> from a company holding a certificate of
46-4 authority to transact such kinds of insurance business in the State
46-5 of Texas or, with the approval of the Commissioner, from <by> a
46-6 surplus lines insurer <licensed to make and issue such insurance
46-7 policy in the State of Texas or, if the owner or operator is unable
46-8 to procure insurance from an insurance company authorized to
46-9 conduct business in this state, to first procure, with the
46-10 Commission's approval, liability and property damage insurance from
46-11 a surplus lines insurer that meets> meeting the requirements of
46-12 Article 1.14-2, Insurance Code, and rules adopted by the State
46-13 Board of Insurance under that article, covering each and every
46-14 motor propelled vehicle while actually being operated by such
46-15 applicant. The Commission shall adopt rules governing the coverage
46-16 limits and terms of the insurance policy, except that the coverage
46-17 provided under the policy must meet the requirements of Chapter 26,
46-18 Insurance Code <The amount of such policy or policies of insurance
46-19 shall be fixed by the Commission by general order or otherwise, and
46-20 the terms and conditions of said policy or policies covering said
46-21 motor vehicle are to be such as to indemnify the applicant against
46-22 loss by reason of any personal injury to any person or loss or
46-23 damage to the property of any person other than the assured and his
46-24 employees>. Such policy or policies shall furthermore provide that
46-25 the insurer will pay benefits under the policy and any judgment
47-1 <all judgments> which may be recovered against the insured motor
47-2 bus company based on claims for loss or damage from personal injury
47-3 or loss of or injury to property occurring during the term of the
47-4 said policy or policies and arising out of the actual operation of
47-5 such motor bus or busses, and such policy or policies shall also
47-6 provide for successive recoveries to the complete exhaustion of the
47-7 face amount thereof, and that such judgment will be paid by the
47-8 insurer irrespective of the solvency or insolvency of the insured.
47-9 Such bodily injury <liability> and property damage insurance as
47-10 required by the Commission shall be continuously maintained in
47-11 force on each and every motor propelled vehicle while being
47-12 operated in common carrier service. In addition to the insurance
47-13 hereinabove set forth, the owner or operator shall also protect his
47-14 employees by taking out workmen's compensation insurance either as
47-15 provided by the Workmen's Compensation Laws of the State of Texas
47-16 or in a reliable insurance company approved by the <Railroad>
47-17 Commission <of the State of Texas>. The taking out of such
47-18 indemnity policy or policies shall be a condition precedent to any
47-19 operation and such policy or policies as required under this Act,
47-20 shall be approved and filed with the Commission and failure to file
47-21 and keep such policy or policies in force and effect as provided
47-22 herein shall be cause for the revocation of the certificate and
47-23 shall subject the motor bus company so failing to the penalties
47-24 prescribed herein.
47-25 SECTION 25. Section 13, Chapter 314, Acts of the 41st
48-1 Legislature, Regular Session, 1929 (Article 911b, Vernon's Texas
48-2 Civil Statutes), as amended by Chapters 377 and 1050, Acts of the
48-3 70th Legislature, Regular Session, 1987, and by Chapter 894, Acts
48-4 of the 72nd Legislature, Regular Session, 1991, is amended to read
48-5 as follows:
48-6 Sec. 13. Before any permit or certificate of public
48-7 convenience and necessity may be issued to any motor carrier and
48-8 before any motor carrier may lawfully operate under such permit or
48-9 certificate as the case may be, such motor carrier shall file with
48-10 the Commission bonds and/or insurance policies issued by some
48-11 insurance company including mutuals and reciprocals or bonding
48-12 company holding a certificate of authority to transact such kinds
48-13 of insurance business in Texas or, with the approval of the
48-14 Commissioner, by a surplus lines insurer meeting <authorized by law
48-15 to transact business in Texas or, if the motor carrier is unable to
48-16 obtain insurance from an insurance company authorized to do
48-17 business in this state, with the Commission's approval, insurance
48-18 policies issued by a surplus lines insurer that meet> the
48-19 requirements of Article 1.14-2, Insurance Code, and rules adopted
48-20 by the State Board of Insurance under that article. The Commission
48-21 shall adopt rules governing the coverage limits and terms of the
48-22 policies and bonds, except that the coverage provided under the
48-23 policies must meet the requirements of Chapter 26, Insurance Code.
48-24 The bonds or<, in an amount to be fixed by the Commission under
48-25 such rules and regulations as it may prescribe, which bonds and>
49-1 insurance policies shall provide that the obligor therein will pay
49-2 to the extent of the face amount of such insurance policies and
49-3 bonds benefits under the policies or bonds and any judgment <all
49-4 judgments> which may be recovered against the motor carrier so
49-5 filing said insurance policies and bonds, based on claims for loss
49-6 or damages from personal injury or loss of, or injury to property
49-7 occurring during the term of said bonds and policies and arising
49-8 out of the actual operation of such motor carrier; and such bonds
49-9 and policies shall also provide for successive recoveries to the
49-10 complete exhaustion of the face amount thereof and that such
49-11 benefits and judgments will be paid by the obligor in said bonds
49-12 and insurance policies irrespective of the solvency or insolvency
49-13 of the motor carrier; provided, however, such bonds and policies
49-14 shall not cover personal injuries sustained by the servants, agents
49-15 or employees of such motor carrier. Provided further, that in the
49-16 event the insured shall abandon his permit or certificate and leave
49-17 the state, a claimant, asserting a claim within the provisions of
49-18 said bonds or policies, may file suit against the sureties
49-19 executing such bond or the company issuing such policies in a court
49-20 of competent jurisdiction without the necessity of making the
49-21 insured a party to said suit. Provided, however, that the
49-22 Commission shall not require insurance covering loss of or damage
49-23 to cargo in amount excessive for the class of service to be
49-24 rendered by any motor carrier. Each such motor carrier shall, on
49-25 or before the date of the expiration of the term of any policy or
50-1 bond so filed by him, file a renewal thereof, or new bonds or
50-2 policies containing the same terms and obligations of the preceding
50-3 bonds and policies, and shall each year thereafter on or before the
50-4 expiration date of the existing bonds and policies, file such
50-5 renewal policies and bonds so as to provide continuous and unbroken
50-6 protection to the public having legal claims against such motor
50-7 carrier; and in the event such renewal bonds and policies are not
50-8 so filed, the Commission, after notice to the motor carrier, and
50-9 hearing, may, within its discretion if it shall find and determine
50-10 that the ends of justice will be better subserved thereby, cancel
50-11 such permit or certificate for failure to furnish and provide such
50-12 bonds or insurance as herein required. The Commission may accept
50-13 in lieu of the filing of the original policies of insurance, a
50-14 certificate of insurance, in such form as may be prescribed by the
50-15 Commission, which certificate, when filed with the Commission, will
50-16 bind the obligor thereunder and satisfy the requirements of this
50-17 section as if the original policies of insurance had been filed.
50-18 Each motor carrier shall also protect his employees by
50-19 obtaining workers' compensation insurance coverage as defined
50-20 under the Texas Workers' Compensation Act (Article 8308-1.01 et
50-21 seq., Vernon's Texas Civil Statutes) or accidental insurance
50-22 coverage in an amount fixed by the Commission from a reliable
50-23 insurance company or companies authorized to write such policies in
50-24 this state approved by the Commission.
50-25 SECTION 26. (a) Article 5.06-1, Insurance Code, is
51-1 repealed.
51-2 (b) Article 5.06-3, Insurance Code, is repealed.
51-3 SECTION 27. (a) Articles 26.01 through 26.09 and Articles
51-4 26.11 through 26.19, Insurance Code, as added by this Act, would
51-5 not have been enacted if Article 26.10, Insurance Code, had not
51-6 been enacted. If Article 26.10, Insurance Code, is held invalid,
51-7 Articles 26.01 through 26.09 and Articles 26.11 through 26.19,
51-8 Insurance Code, as added by this Act, are invalid.
51-9 (b) Section 26 of this Act would not have been enacted if
51-10 Article 26.10, Insurance Code, had not been enacted. If Article
51-11 26.10, Insurance Code, is held invalid, Section 26 of this Act is
51-12 invalid.
51-13 SECTION 28. (a) This Act takes effect September 1, 1995,
51-14 and applies only to motor vehicle insurance policies delivered,
51-15 issued for delivery, or renewed to be effective on or after January
51-16 1, 1996, and to other conduct occurring on or after that date.
51-17 Policies delivered, issued for delivery, or renewed to be effective
51-18 before January 1, 1996, and other conduct occurring before that
51-19 date, are governed by the law that existed immediately before the
51-20 effective date of this Act, and that law is continued in effect for
51-21 that purpose.
51-22 (b) The State Board of Insurance may approve an endorsement
51-23 to motor vehicle policies delivered, issued for delivery, or
51-24 renewed before the effective date of this Act that conforms the
51-25 policies to this Act. An insurer may attach the endorsement to
52-1 such a policy only with the consent of the named insured.
52-2 SECTION 29. The importance of this legislation and the
52-3 crowded condition of the calendars in both houses create an
52-4 emergency and an imperative public necessity that the
52-5 constitutional rule requiring bills to be read on three several
52-6 days in each house be suspended, and this rule is hereby suspended.