By McCall H.B. No. 212
74R2097 DLF-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to motor vehicle and motorcycle insurance coverage and
1-3 liability for 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 Chapters
1-6 27 and 28 to read as follows:
1-7 CHAPTER 27. MOTOR VEHICLE ACCIDENT COMPENSATION
1-8 SUBCHAPTER A. GENERAL PROVISIONS
1-9 Art. 27.01. DEFINITIONS. In this chapter:
1-10 (1) "Accidental damage to property" means physical
1-11 injury to, destruction of, or loss of use of tangible property that
1-12 arises out of the ownership, operation, maintenance, or use of a
1-13 motor vehicle. The term does not include damage that the person
1-14 causing the damage knows is substantially certain to be caused by
1-15 the person's act, unless the person acts to avoid injury to
1-16 property or to any person.
1-17 (2) "Accidental injury" means a bodily injury,
1-18 sickness, or disease that arises out of the ownership, operation,
1-19 maintenance, or use of a motor vehicle. The term includes a death
1-20 resulting from the injury, sickness, or disease. The term also
1-21 includes loss of a person's prosthetic devices in connection with
1-22 the injury. The term does not include an injury that the injured
1-23 person knows is substantially certain to be caused by the person's
1-24 act, unless the person acts to avoid injury to property or to any
2-1 person.
2-2 (3) "Dependent" means:
2-3 (A) the injured person's spouse who lives with
2-4 the injured person;
2-5 (B) the injured person's child under 18 years of
2-6 age who:
2-7 (i) lives with the injured person; or
2-8 (ii) receives substantial regular support
2-9 from the injured person;
2-10 (C) the injured person's child who is 18 years
2-11 of age or older and has a physical or mental impairment that limits
2-12 the child's ability to earn a living and who:
2-13 (i) lives with the injured person; or
2-14 (ii) receives substantial regular support
2-15 from the injured person; or
2-16 (D) another person who is actually dependent on
2-17 the injured person.
2-18 (4) "Health care provider" means a person licensed in
2-19 this state to provide health care services. The term includes a
2-20 health care facility.
2-21 (5) "Injured person" means a person who has suffered
2-22 an accidental injury.
2-23 (6) "Motorcycle" has the meaning assigned by Section
2-24 1, Chapter 329, Acts of the 60th Legislature, Regular Session, 1967
2-25 (Article 6701c-3, Vernon's Texas Civil Statutes), except that the
2-26 term does not include a moped, as defined by Section 2, Uniform Act
2-27 Regulating Traffic on Highways (Article 6701d, Vernon's Texas Civil
3-1 Statutes), or an all-terrain vehicle as defined by Section 1,
3-2 Article 6701c-5, Revised Statutes.
3-3 (7) "Motor vehicle" has the meaning assigned by
3-4 Section 1, Texas Motor Vehicle Safety-Responsibility Act (Article
3-5 6701h, Vernon's Texas Civil Statutes), except that the term does
3-6 not include a motorcycle.
3-7 (8) "Motor vehicle accident" means an accident that
3-8 arises out of the ownership, operation, maintenance, or use of a
3-9 motor vehicle. The term includes an accident that involves a motor
3-10 vehicle and a motorcycle, but not an accident that involves only a
3-11 motorcycle.
3-12 (9) "Motor vehicle insurance" means insurance that
3-13 provides coverage for accidental injury and accidental damage to
3-14 property that arises out of the ownership, operation, maintenance,
3-15 or use of a motor vehicle, including a policy issued under an
3-16 assignment distribution plan established under Article 21.81 of
3-17 this code.
3-18 (10) "Motor vehicle insurer" means any insurer writing
3-19 motor vehicle insurance in this state, including:
3-20 (A) an insurance company;
3-21 (B) an interinsurance exchange;
3-22 (C) a mutual insurance company, including a
3-23 county mutual insurance company;
3-24 (D) a reciprocal insurance company or
3-25 interinsurance exchange;
3-26 (E) a Lloyd's plan insurer; and
3-27 (F) a person qualified as a self-insurer under
4-1 Section 34, Texas Motor Vehicle Safety-Responsibility Act (Article
4-2 6701h, Vernon's Texas Civil Statutes).
4-3 (11) "Motor vehicle repair facility" means a business
4-4 that performs maintenance, diagnosis, body work, or repair services
4-5 on motor vehicles for compensation. The term does not include a
4-6 person who is repairing the person's own motor vehicle or a motor
4-7 vehicle owned by a family member of that person.
4-8 (12) "Operator" and "owner" have the meanings
4-9 assigned by Section 1, Texas Motor Vehicle Safety-Responsibility
4-10 Act (Article 6701h, Vernon's Texas Civil Statutes).
4-11 (13) "Ownership, operation, maintenance, or use" does
4-12 not include use of a motor vehicle that is not directly related to
4-13 the transportation function of the motor vehicle.
4-14 (14) "Person" means an individual, institution,
4-15 corporation, government or governmental subdivision or agency,
4-16 business trust, estate, trust, partnership, association, or any
4-17 other legal entity.
4-18 Art. 27.02. SCOPE OF CHAPTER. This chapter applies only to
4-19 motor vehicle insurance used to satisfy the requirements of the
4-20 Texas Motor Vehicle Safety-Responsibility Act (Article 6701h,
4-21 Vernon's Texas Civil Statutes) for a motor vehicle.
4-22 Art. 27.03. INSURER CERTIFICATE. (a) A motor vehicle
4-23 insurer authorized to transact motor vehicle insurance in this
4-24 state shall file and maintain with the commissioner a written
4-25 statement that certifies that any accidental injury or accidental
4-26 damage to property occurring in this state and arising out of the
4-27 ownership, operation, maintenance, or use of a motor vehicle by a
5-1 person is covered under this chapter if the person:
5-2 (1) is not a resident of this state; and
5-3 (2) is insured by the insurer under a motor vehicle
5-4 insurance policy.
5-5 (b) A motor vehicle insurer that is not authorized to
5-6 transact motor vehicle insurance in this state may file and
5-7 maintain the certificate described by Subsection (a) of this
5-8 article.
5-9 (c) In the event of an accidental injury or accidental
5-10 damage to property that is covered by a certificate filed under
5-11 Subsection (a) or (b) of this article, the motor vehicle insurer
5-12 and the insureds and any claimants under the policy are entitled to
5-13 the benefits provided under this chapter and have the rights and
5-14 immunities established under this chapter.
5-15 Art. 27.04. OTHER COVERAGES. Subject to the approval of the
5-16 commissioner, a motor vehicle insurance policy may include
5-17 coverages in addition to those described by this chapter, including
5-18 comprehensive coverage.
5-19 Art. 27.05. APPLICATION OF OTHER LAW. Except to the extent
5-20 of any conflict with this chapter, a statute referring to or
5-21 purporting to apply to "motor vehicle liability insurance,"
5-22 "automobile liability insurance," or similar insurance coverage
5-23 refers to and applies to insurance issued under this chapter.
5-24 (Articles 27.06-27.20 reserved for expansion
5-25 SUBCHAPTER B. PERSONAL PROTECTION INSURANCE COVERAGE
5-26 Art. 27.21. PERSONAL PROTECTION INSURANCE COVERAGE REQUIRED.
5-27 A motor vehicle insurance policy used to satisfy the requirements
6-1 of the Texas Motor Vehicle Safety-Responsibility Act (Article
6-2 6701h, Vernon's Texas Civil Statutes) for a motor vehicle shall
6-3 provide personal protection insurance benefits as described by this
6-4 chapter.
6-5 Art. 27.22. BENEFITS PAYABLE WITHOUT REGARD TO FAULT. A
6-6 benefit under personal protection insurance coverage is payable
6-7 without regard to the fault of the insured in the accident that
6-8 caused the injury.
6-9 Art. 27.23. COVERAGE. Personal protection insurance
6-10 coverage shall provide:
6-11 (1) medical benefits;
6-12 (2) work loss benefits;
6-13 (3) replacement services benefits;
6-14 (4) survivor's benefits; and
6-15 (5) funeral benefits.
6-16 Art. 27.24. PARKED VEHICLES; EXCLUSION. (a) Except as
6-17 provided by Subsection (b) of this article, personal protection
6-18 insurance coverage for a motor vehicle does not provide benefits
6-19 for accidental injury that arises out of a motor vehicle accident
6-20 that occurred when the vehicle was parked unless:
6-21 (1) the vehicle was parked in a manner that caused
6-22 unreasonable risk of the injury;
6-23 (2) the injury is a direct result of physical contact
6-24 with:
6-25 (A) equipment permanently mounted on the vehicle
6-26 while the equipment was being operated or used; or
6-27 (B) property being lifted onto or lowered from
7-1 the vehicle; or
7-2 (3) the injury was sustained by a person while
7-3 occupying, entering, or exiting the vehicle.
7-4 (b) Personal protection insurance coverage for a motor
7-5 vehicle does not provide benefits for accidental injury arising out
7-6 of a motor vehicle accident that occurred when the vehicle was
7-7 parked, or out of the use of a parked vehicle, if benefits for the
7-8 injury are provided under the workers' compensation laws of any
7-9 state for an injury sustained by an employee in the course and
7-10 scope of employment while:
7-11 (1) loading, unloading, or repairing the vehicle,
7-12 unless the injury arose out of the use or operation of another
7-13 vehicle; or
7-14 (2) entering or exiting the vehicle, unless the injury
7-15 was sustained while entering or exiting the vehicle immediately
7-16 after the vehicle became disabled.
7-17 (c) For purposes of Subsection (b)(1) of this article, "use
7-18 or operation of another vehicle" does not include a vehicle that is
7-19 being loaded onto, unloaded from, or secured to another motor
7-20 vehicle.
7-21 Art. 27.25. ASSIGNMENT VOID. An agreement that purports to
7-22 assign a right to personal protection insurance benefits payable in
7-23 the future is void.
7-24 Art. 27.26. DEDUCTIBLES. (a) A motor vehicle insurer that
7-25 provides personal protection insurance benefits shall offer, at
7-26 appropriately reduced premium rates, deductibles and exclusions
7-27 that are reasonably related to other health and accident coverage
8-1 on the insured.
8-2 (b) The deductibles and exclusions required by this article
8-3 are subject to prior approval by the commissioner and apply only to
8-4 benefits payable to:
8-5 (1) the named insured;
8-6 (2) the named insured's spouse; or
8-7 (3) a relative of either the named insured or the
8-8 named insured's spouse who is domiciled in the same household as
8-9 the named insured or the named insured's spouse.
8-10 Art. 27.27. DISCOVERY. (a) A court may enter a discovery
8-11 order to allow a motor vehicle insurer to discover facts relating
8-12 to an injured person's earnings, history, condition, and treatment
8-13 that are relevant to payment of a personal protection insurance
8-14 claim.
8-15 (b) An order under this article may be made only on a motion
8-16 for good cause after notice to all interested persons. The notice
8-17 must specify the time, place, manner, conditions, and scope of the
8-18 discovery.
8-19 (c) The court in the interests of justice may enter an order
8-20 refusing discovery, specifying the conditions of the discovery, or
8-21 requiring the payment of the costs and expenses of the proceeding,
8-22 including reasonable attorney's fees.
8-23 (Articles 27.28-27.30 reserved for expansion
8-24 SUBCHAPTER C. PAYMENT OF BENEFITS; COORDINATION OF PAYMENTS;
8-25 ALLOCATION OF LOSS
8-26 Art. 27.31. COVERED PERSONS. (a) Except as provided by
8-27 Subsection (b) of this article and Articles 27.32 and 27.33 of this
9-1 code, personal protection insurance provides benefits for
9-2 accidental injury to:
9-3 (1) the named insured;
9-4 (2) the named insured's spouse; and
9-5 (3) a relative of either the named insured or the
9-6 named insured's spouse who is domiciled in the same household as
9-7 the named insured or the named insured's spouse.
9-8 (b) An injured person who is an employee, the employee's
9-9 spouse, or a relative of either the employee or the employee's
9-10 spouse who is domiciled in the same household as the named insured
9-11 or the named insured's spouse and who is injured while an occupant
9-12 of a motor vehicle owned by the employer shall receive personal
9-13 protection insurance benefits from the insurer of the vehicle.
9-14 (c) Subject to Article 27.32 of this code, an injured person
9-15 who is not a named insured, a spouse of a named insured, or a
9-16 relative described by Subsection (a)(3) of this article and who was
9-17 an occupant of a motor vehicle at the time of the accident shall
9-18 claim personal protection insurance benefits from motor vehicle
9-19 insurers in the following order of priority:
9-20 (1) the insurer of the owner of the vehicle; and
9-21 (2) the insurer of the operator of the vehicle.
9-22 Art. 27.32. OCCUPANT OF COMMERCIAL VEHICLE. (a) An injured
9-23 person who was an operator or passenger of a motor vehicle operated
9-24 in the business of transporting passengers shall receive personal
9-25 protection insurance benefits from the insurer of the motor
9-26 vehicle.
9-27 (b) This article does not apply to a person who:
10-1 (1) is entitled to benefits under another motor
10-2 vehicle insurance policy in accordance with Article 27.31(a) or (b)
10-3 of this code; and
10-4 (2) was a passenger of:
10-5 (A) a school bus;
10-6 (B) a bus operated as a common carrier of
10-7 passengers;
10-8 (C) a bus operated under a government-sponsored
10-9 transportation program;
10-10 (D) a bus operated by or providing service to a
10-11 nonprofit corporation;
10-12 (E) a taxicab; or
10-13 (F) a bus operated by watercraft, bicycle, or
10-14 horse livery and used only to transport passengers to or from a
10-15 point of departure or destination.
10-16 Art. 27.33. OCCUPANT OF MOTORCYCLE. (a) This article
10-17 applies to a person who suffers accidental injury arising out of a
10-18 motor vehicle accident in which:
10-19 (1) the person is an operator or passenger of a
10-20 motorcycle; and
10-21 (2) a motor vehicle, in addition to the motorcycle, is
10-22 involved.
10-23 (b) The injured person shall claim personal protection
10-24 insurance benefits from insurers in the following order of
10-25 priority:
10-26 (1) the insurer of the owner of the motor vehicle;
10-27 (2) the insurer of the operator of the motor vehicle;
11-1 (3) the insurer of the operator of the motorcycle; and
11-2 (4) the insurer of the owner of the motorcycle.
11-3 (c) If two or more insurers are in the same order of
11-4 priority under Subsection (b) of this article, an insurer that pays
11-5 the benefits is entitled to partial recoupment from the other
11-6 insurers in the same order of priority to accomplish equitable
11-7 distribution of the loss among those insurers. The insurer may
11-8 also collect a reasonable amount of partial recoupment of the
11-9 expense of processing the claim.
11-10 Art. 27.34. PERSON WHO IS NOT OCCUPANT OF VEHICLE. (a) An
11-11 injured person who was not an occupant of a motor vehicle at the
11-12 time of the accident shall claim personal protection insurance
11-13 benefits from motor vehicle insurers in the following order of
11-14 priority:
11-15 (1) insurers of owners of vehicles involved in the
11-16 accident; and
11-17 (2) insurers of operators of vehicles involved in the
11-18 accident.
11-19 (b) If two or more motor vehicle insurers are in the same
11-20 order of priority under Subsection (a) of this article, an insurer
11-21 that pays the benefits is entitled to partial recoupment from the
11-22 other insurers in the same order of priority to accomplish
11-23 equitable distribution of the loss among those insurers. The
11-24 insurer may also collect a reasonable amount of partial recoupment
11-25 of the expense of processing the claim.
11-26 (c) This article does not apply to a person who is entitled
11-27 to benefits under another motor vehicle insurance policy in
12-1 accordance with Article 27.31(a) of this code.
12-2 Art. 27.35. OUT-OF-STATE ACCIDENTS. (a) Personal
12-3 protection insurance benefits are payable for accidental injury
12-4 suffered in an accident that occurs in another state, a territory
12-5 or possession of the United States, Canada, or the United Mexican
12-6 States.
12-7 (b) Benefits under this article are payable only to:
12-8 (1) the named insured;
12-9 (2) the named insured's spouse;
12-10 (3) a relative of either the named insured or the
12-11 named insured's spouse who is domiciled in the same household as
12-12 the named insured or the named insured's spouse; or
12-13 (4) an occupant of a motor vehicle involved in the
12-14 accident whose owner or operator was insured under a personal
12-15 protection insurance policy.
12-16 (c) Personal protection insurance benefits are not payable
12-17 to a person who is not a resident of this state and who is injured
12-18 in an accident that occurs outside this state to the extent the
12-19 nonresident recovers medical or disability benefits under any other
12-20 policy.
12-21 (d) If personal protection insurance benefits are payable to
12-22 a person who is not a resident of this state under Subsection (c)
12-23 of this article, medical benefits are subject to the limit under
12-24 Article 27.62 of this code.
12-25 Art. 27.36. PERSONS NOT ENTITLED TO BENEFITS. (a) A person
12-26 is not entitled to benefits payable under personal protection
12-27 insurance coverage if:
13-1 (1) the person was using a motor vehicle that the
13-2 person took unlawfully;
13-3 (2) the person was the owner or operator of a motor
13-4 vehicle involved in an accident and the vehicle was not covered by
13-5 insurance or other evidence of financial responsibility as required
13-6 by the Texas Motor Vehicle Safety-Responsibility Act (Article
13-7 6701h, Vernon's Texas Civil Statutes); or
13-8 (3) the person, at the time of the accident:
13-9 (A) was not a resident of this state;
13-10 (B) was an occupant of a motor vehicle that was
13-11 not registered in this state; and
13-12 (C) was not covered by insurance issued by an
13-13 insurer that has filed a certificate under Article 27.03 of this
13-14 code.
13-15 (b) Subsection (a)(1) of this article does not apply to a
13-16 person who reasonably believed that the person was entitled to take
13-17 and use the motor vehicle.
13-18 Art. 27.37. RECOVERY FROM UNINSURED MOTORIST. A motor
13-19 vehicle insurer that pays personal protection insurance benefits
13-20 for an accidental injury that arises out of the ownership,
13-21 operation, maintenance, or use of an uninsured motor vehicle may
13-22 recover the benefits paid and other costs incurred from the owner
13-23 of the vehicle or the owner's estate.
13-24 Art. 27.38. DUPLICATE BENEFITS. An injured person may not
13-25 recover duplicate benefits for the same expenses or losses for
13-26 which benefits are recovered under this chapter. This article
13-27 applies without regard to:
14-1 (1) the number of motor vehicles insured;
14-2 (2) the number of motor vehicle insurers providing
14-3 security in accordance with this chapter; and
14-4 (3) another law providing for direct benefits without
14-5 regard to fault for accidents.
14-6 Art. 27.39. COORDINATION WITH CERTAIN HEALTH AND ACCIDENT
14-7 COVERAGE. (a) Health and accident coverage that does not take
14-8 effect until a date after the date on which the accidental injury
14-9 occurs is secondary to personal protection insurance benefits for
14-10 all services related to the injury.
14-11 (b) This article does not apply to a health and welfare
14-12 benefit plan provided under the Employee Retirement Income Security
14-13 Act of 1974 (29 U.S.C. Section 1001 et seq.).
14-14 (c) In this article, "health and accident coverage" does not
14-15 include:
14-16 (1) coverage under 42 U.S.C. Sections 1395 to 1395b,
14-17 1395b-2, 1395c to 1395i, 1395i-2 to 1395i-4, and 1395j to 1395ccc
14-18 or under 42 U.S.C. Sections 1396 to 1396f and 1396i to 1396u; or
14-19 (2) coverage under a medicare supplemental policy or
14-20 certificate or under a contract issued by a health maintenance
14-21 organization to an individual eligible for medicare.
14-22 Art. 27.40. LIMITS NOT STACKED. (a) The limits applicable
14-23 to personal protection insurance benefits available because of
14-24 accidental injury to one person arising from one motor vehicle
14-25 accident shall be determined without regard to the number of
14-26 policies applicable to the accident.
14-27 (b) The benefit limits applicable to two or more motor
15-1 vehicles or two or more policies may not be added together,
15-2 combined, or stacked to determine the limit of insurance coverage
15-3 available for each injured person covered under a policy. This
15-4 subsection applies without regard to the number of motor vehicles
15-5 insured under the policy.
15-6 Art. 27.41. BENEFICIARIES; PAYMENTS IN GOOD FAITH. (a)
15-7 Personal protection insurance benefits are payable to or for the
15-8 benefit of the injured person. In the case of the death of an
15-9 injured person, benefits are payable to or for the benefit of the
15-10 dependents of the injured person.
15-11 (b) A motor vehicle insurer that pays benefits to or for the
15-12 benefit of a person who the insurer believes is entitled to the
15-13 benefits has discharged the insurer's liability to the extent of
15-14 the payment unless the insurer has been notified in writing of
15-15 another claim to the benefits.
15-16 (c) A motor vehicle insurer, a named insured, an injured
15-17 person, or another interested person may apply to a district court
15-18 for an order for the proper apportionment of benefit payments. The
15-19 court may designate the persons to whom payment will be made and
15-20 may make an equitable apportionment of the benefits after
15-21 consideration of the relationship of those persons to the injured
15-22 person and any other relevant factors.
15-23 (d) In the absence of a court order, a motor vehicle insurer
15-24 may:
15-25 (1) pay benefits that accrued before the death of an
15-26 injured person to the dependents of the injured person without
15-27 appointment of an administrator or executor; and
16-1 (2) pay to a deceased injured person's surviving
16-2 spouse benefits due to a dependent child of the injured person if
16-3 the child lives with the surviving spouse.
16-4 (Articles 27.42-27.60 reserved for expansion
16-5 SUBCHAPTER D. MEDICAL BENEFITS
16-6 Art. 27.61. MEDICAL BENEFITS. (a) Medical benefits are
16-7 payable for an accidental injury that arises out of a motor vehicle
16-8 accident involving a covered motor vehicle.
16-9 (b) Subject to the limits of this chapter, medical benefits
16-10 are payable for charges incurred for medically appropriate
16-11 products, services, and accommodations for an injured person's
16-12 care, recovery, or rehabilitation.
16-13 Art. 27.62. MEDICAL BENEFITS; MINIMUM COVERAGE. Medical
16-14 benefits are subject to a minimum coverage limit of at least $1
16-15 million.
16-16 Art. 27.63. MEDICAL BENEFITS; ADJUSTMENT OF LIMIT. (a) The
16-17 commissioner annually shall adjust the limit established by Article
16-18 27.62 of this code so that 99 percent of medical benefit claims are
16-19 fully covered by the limit. The commissioner may not lower the
16-20 limit.
16-21 (b) An adjustment made under this article applies only to
16-22 benefits that are payable for accidents that occur after the date
16-23 of the change in the limit.
16-24 Art. 27.64. MEDICAL BENEFITS; OPTIONAL COVERAGE. (a) A
16-25 motor vehicle insurer shall offer medical benefits subject to
16-26 coverage limits of $2 million, $3 million, $4 million, or $5
16-27 million, as selected by the insured.
17-1 (b) A motor vehicle insurer may offer medical benefit limits
17-2 different from those described by Subsection (a) of this article.
17-3 A limit may not be less than $1 million.
17-4 (c) A change in a limit applies only to benefits that are
17-5 payable for an accident that occurs after the date of the change in
17-6 the limit.
17-7 (d) Coverage provided under this article applies only to
17-8 benefits payable to:
17-9 (1) the named insured;
17-10 (2) the named insured's spouse; or
17-11 (3) a relative of either the named insured or the
17-12 named insured's spouse who is domiciled in the same household as
17-13 the named insured or the named insured's spouse.
17-14 Art. 27.65. NONRESIDENTS. The limit on medical benefits
17-15 under Article 27.62 of this code applies to an injured person who
17-16 is not a resident of this state who is injured in an accident that
17-17 occurs in this state if:
17-18 (1) the injured person's benefits are payable under a
17-19 policy delivered outside this state; and
17-20 (2) the insurer that issued the policy has filed the
17-21 certificate required by Article 27.03 of this code.
17-22 Art. 27.66. APPLICATION OF LIMITS. Coverage limits on
17-23 medical benefits apply on a per-individual, per-loss-occurrence
17-24 basis.
17-25 Art. 27.67. SCHEDULE OF CHARGES FOR CERTAIN SERVICES;
17-26 ADVISORY COMMITTEE. (a) The commissioner shall adopt a schedule
17-27 of charges applicable to persons that provide:
18-1 (1) treatment to an injured person; or
18-2 (2) rehabilitative occupational training following an
18-3 injury.
18-4 (b) A health care provider under Subsection (a) of this
18-5 article shall accept the amount specified in the fee schedule for
18-6 the treatment or training as payment in full.
18-7 (c) Notwithstanding the fee schedule adopted under this
18-8 article, a motor vehicle insurer is not required to pay more than
18-9 the health care provider's usual and customary charge.
18-10 (d) A health care provider may contract with a motor vehicle
18-11 insurer for reimbursement levels that vary from those established
18-12 by the fee schedule.
18-13 (e) The commissioner shall appoint an advisory committee to
18-14 assist the commissioner in establishing the schedules of maximum
18-15 fees under this article. The advisory committee members serve at
18-16 the pleasure of the commissioner.
18-17 Art. 27.68. MEDICALLY APPROPRIATE. (a) A product, service,
18-18 or accommodation is medically appropriate if it is:
18-19 (1) rendered or prescribed by a provider; and
18-20 (2) medically necessary.
18-21 (b) Medically appropriate products, services, or
18-22 accommodations do not include a product, service, or accommodation
18-23 that would have been needed or used by the injured person or a
18-24 member of the injured person's household in the absence of the
18-25 accidental injury.
18-26 (c) A motor vehicle insurer is not required to provide
18-27 coverage for a product, service, or accommodation unless it is:
19-1 (1) medically appropriate for an injured person's
19-2 care, recovery, or rehabilitation; and
19-3 (2) reasonably likely to continue to be effective for
19-4 the injured person's care, recovery, or rehabilitation.
19-5 Art. 27.69. DURABLE MEDICAL EQUIPMENT. If an insured wants
19-6 durable medical equipment that is more expensive than the equipment
19-7 the motor vehicle insurer has determined is medically appropriate,
19-8 the insurer shall pay only the portion of the cost of the equipment
19-9 that the insurer has determined to be medically appropriate. The
19-10 insured may pay the remainder to obtain the desired equipment.
19-11 Art. 27.70. REEXAMINATION OF DETERMINATION. (a) If a motor
19-12 vehicle insurer rejects as not medically appropriate any part of a
19-13 claim for reimbursement for a product, service, or accommodation
19-14 rendered or prescribed, the insurer, at the provider's request,
19-15 shall have the insurer's decision reexamined by a provider who
19-16 holds the same type of license, certification, or registration and,
19-17 if appropriate, who has the same scope of practice as the provider
19-18 who provided the product, service, or accommodation that is
19-19 reexamined.
19-20 (b) A motor vehicle insurer shall designate a person with
19-21 whom providers can discuss insurer determinations of what is
19-22 medically appropriate.
19-23 Art. 27.71. HOSPITAL ROOMS. Medical expense benefits are
19-24 not payable for a hospital room in excess of a reasonable and
19-25 customary charge for semiprivate accommodations unless the injured
19-26 person requires intensive or special care, including care provided
19-27 by a psychiatric unit.
20-1 Art. 27.72. EXPERIMENTAL TREATMENT OR RESEARCH. Medical
20-2 expense benefits are not payable for experimental treatment or
20-3 participation in research projects.
20-4 Art. 27.73. ATTENDANT CARE. (a) Medical expense benefits
20-5 payable for attendant care provided by a home health agency are
20-6 limited to the reasonable and customary charge of the agency for
20-7 the appropriate skill level and time intensity of service.
20-8 (b) Benefits for attendant care services for home health
20-9 care not provided by a home health agency are limited to the
20-10 customary wage an individual with the same qualifications would
20-11 receive if employed by a home health agency.
20-12 (c) Benefits paid under Subsection (b) of this article are
20-13 payable without regard to whether the services are provided by
20-14 licensed or unlicensed persons, including a member of the injured
20-15 person's household.
20-16 (d) Benefits for attendant care for supervision by members
20-17 of the injured person's household are limited to the amount payable
20-18 for 16 hours a day.
20-19 (e) Benefits for attendant care provided continuously for
20-20 more than six months may be limited to spinal cord injuries
20-21 resulting in quadriplegia, brain injuries, or similar injuries as
20-22 diagnosed by the injured person's physician.
20-23 (f) Attendant care may be provided by a nurse or nursing
20-24 assistant. A nurse or nursing assistant who provides attendant
20-25 care may not be reimbursed at the level required for provision of
20-26 professional nursing care.
20-27 (g) In this article, "attendant care" means assistance to
21-1 the injured person with activities of daily living, including
21-2 ambulating, feeding, grooming, dressing, and toileting, and
21-3 transportation and supervision that may be required for safety of
21-4 the injured person.
21-5 Art. 27.74. SKILLED HOME CARE. (a) Medical benefits
21-6 payable for skilled home care provided by a home health agency are
21-7 limited to the reasonable and customary charge of the agency for
21-8 the appropriate skill level and time intensity of service.
21-9 (b) Benefits for skilled home care not provided by a home
21-10 health agency are limited to the customary wage an individual with
21-11 the same qualifications would receive if employed by a home health
21-12 agency.
21-13 (c) Benefits paid under Subsection (b) of this article are
21-14 payable without regard to whether the services are provided by
21-15 licensed or unlicensed persons, including a member of the injured
21-16 person's household.
21-17 (d) Benefits for skilled home care by members of the injured
21-18 person's household are limited to the amount payable for 16 hours a
21-19 day.
21-20 Art. 27.75. PSYCHOLOGICAL SERVICES. (a) Medical expense
21-21 benefits are payable for medically appropriate psychological
21-22 services that are:
21-23 (1) reasonably likely to produce significant
21-24 measurable improvement in the injured person's psychological
21-25 status; and
21-26 (2) prescribed by a physician or licensed
21-27 psychologist.
22-1 (b) Medical benefits are payable under Subsection (a) of
22-2 this article for services provided during a period of not more than
22-3 26 weeks. The benefit period may be extended to cover services
22-4 provided during an additional period of not more than 26 weeks if
22-5 the additional services are reasonably likely to produce
22-6 significant measurable improvement in the injured person's
22-7 psychological status. The benefit period may be extended a second
22-8 time to cover services provided during an additional period if it
22-9 is reasonably likely that treatment of a longer duration, which may
22-10 be intermittent over the years the case is managed, may produce
22-11 significant measurable improvement in the injured person's
22-12 psychological or neuropsychological status.
22-13 (c) Medical expense benefits payable under Subsection (a) of
22-14 this article are payable only if the need for the services arose
22-15 out of an accidental injury covered by the policy.
22-16 (d) Psychological services shall be provided by a person
22-17 licensed to practice psychology by the Texas State Board of
22-18 Examiners of Psychologists or by a person licensed as a social
22-19 worker by the Texas State Board of Social Worker Examiners.
22-20 Art. 27.76. VOCATIONAL REHABILITATION SERVICES. (a)
22-21 Medical benefits are payable for medically appropriate vocational
22-22 rehabilitation services that are reasonably likely to produce
22-23 significant rehabilitation.
22-24 (b) Subject to Subsection (c) of this article, medical
22-25 benefits are payable under Subsection (a) of this article for
22-26 services provided during a period of not more than 52 weeks. The
22-27 benefit period may be extended to cover services provided during an
23-1 additional period of not more than 52 weeks if the services are
23-2 reasonably likely to produce significant rehabilitation.
23-3 (c) Medical expense benefits payable under Subsection (a) of
23-4 this article terminate at the time the injured person has acquired
23-5 employment skills.
23-6 Art. 27.77. HOME MODIFICATION. (a) Medical expense
23-7 benefits are payable for home modifications that are functionally
23-8 necessary to meet the injured person's treatment, rehabilitation,
23-9 maintenance, and daily living needs that are a result of the
23-10 accidental injury.
23-11 (b) Medical expense benefits payable under Subsection
23-12 (a) of this article may not exceed $50,000.
23-13 (c) The limit established under Subsection (b) of this
23-14 article shall be adjusted annually to reflect changes in the cost
23-15 of living under rules adopted by the commissioner. An adjustment
23-16 to the limit applies only to benefits payable for an accidental
23-17 injury occurring after the date of adjustment.
23-18 Art. 27.78. SPECIAL MOTOR VEHICLE; MOTOR VEHICLE
23-19 MODIFICATION. (a) Medical benefits are payable for a special
23-20 motor vehicle or modification of a motor vehicle if the special
23-21 motor vehicle or modification is functionally necessary for the
23-22 vehicular mobility of the injured person.
23-23 (b) Medical expense benefits payable under Subsection (a) of
23-24 this article are limited to the cost of:
23-25 (1) necessary modifications to an existing motor
23-26 vehicle; or
23-27 (2) a special vehicle, if required, and the
24-1 functionally necessary modifications to that vehicle that are
24-2 directly required by and related to the accidental injury.
24-3 (c) Benefits payable for replacement special motor vehicles
24-4 or motor vehicle modifications are payable not more frequently than
24-5 once every seven years. Benefits under this subsection are limited
24-6 to $50,000 every seven years, adjusted annually to reflect changes
24-7 in the cost of living under rules adopted by the commissioner.
24-8 Art. 27.79. DIRECT REIMBURSEMENT. A motor vehicle insurer
24-9 shall directly reimburse a provider of products, services, or
24-10 accommodations provided under this chapter unless the insured has
24-11 already directly reimbursed the provider of products, services, or
24-12 accommodations.
24-13 Art. 27.80. DISPUTED AMOUNT. A health care provider may not
24-14 bill an insured or report to a credit reporting agency an insured's
24-15 failure to pay for products, services, or accommodations rendered
24-16 if the amount is disputed by the motor vehicle insurer or exceeds
24-17 the payment made by the insurer.
24-18 Art. 27.81. ASSIGNMENT OF RIGHT TO ENFORCE COVERAGE. An
24-19 insured's right to enforce coverage and collect medical expense
24-20 benefits for services rendered or products or accommodations
24-21 provided by a health care provider is assigned to the health care
24-22 provider that rendered the services or provided the products or
24-23 accommodations at the time the services are rendered or products
24-24 are provided.
24-25 Art. 27.82. UTILIZATION REVIEW. (a) A motor vehicle
24-26 insurer shall implement a utilization review system.
24-27 (b) The utilization review system must be automated and
25-1 include:
25-2 (1) a provider enrollment file;
25-3 (2) uniform claims forms;
25-4 (3) uniform diagnosis and procedure code systems;
25-5 (4) uniform place-of-service codes that indicate the
25-6 setting at which the service was rendered;
25-7 (5) uniform codes to identify other liable third-party
25-8 payers;
25-9 (6) type-of-service codes;
25-10 (7) quantification of the dollar amounts of all claims
25-11 rejected to and paid by other liable parties;
25-12 (8) a mechanism for identifying and rejecting claims
25-13 that fail to meet the requirements of the statute of limitations;
25-14 and
25-15 (9) a mechanism for identifying and rejecting
25-16 non-accident-related claims for review.
25-17 (c) Each motor vehicle insurer shall report annually to the
25-18 commissioner on a form prescribed by the commissioner the results
25-19 of the insurer's utilization review system. The report must
25-20 include a statement of:
25-21 (1) the savings derived through coordination of
25-22 benefits with health care insurance carriers;
25-23 (2) the savings derived from identification of
25-24 duplicate claims;
25-25 (3) the savings derived from identification and
25-26 rejection of non-accident-related claims;
25-27 (4) any procedures identified as having been performed
26-1 at facilities not licensed for those procedures, including the
26-2 names of the facilities involved; and
26-3 (5) the number of claims and amounts expended, by type
26-4 of medical and rehabilitative and therapeutic services, for claims
26-5 processed and paid for the year.
26-6 (d) A motor vehicle insurer may not use the utilization
26-7 review system in bad faith or to:
26-8 (1) unduly delay payment of legitimate claims; or
26-9 (2) harass or discriminate against health care
26-10 providers or injured persons.
26-11 (e) A motor vehicle insurer is not required to establish a
26-12 utilization review system under this article if the insurer can
26-13 demonstrate to the commissioner's satisfaction that the system
26-14 would not be cost-effective.
26-15 Art. 27.83. MENTAL OR PHYSICAL EXAMINATIONS. (a) If the
26-16 mental or physical condition of an injured person is material to a
26-17 claim that has been made or that may be made for medical benefits,
26-18 the injured person shall submit to mental or physical examinations
26-19 by a physician or physicians designated by the motor vehicle
26-20 insurer.
26-21 (b) A personal protection insurance policy may include
26-22 reasonable provisions relating to mental or physical examinations.
26-23 Art. 27.84. REPORTS AND RECORDS OF TREATMENT. At the
26-24 request of a motor vehicle insurer liable to pay benefits under
26-25 this subchapter for a product, service, or accommodation provided
26-26 to an injured person, the health care provider that provided the
26-27 product, service, or accommodation shall provide a written report
27-1 of the history, condition, treatment, and dates and costs of
27-2 treatment for which the insurer may be liable under this chapter
27-3 and shall permit inspection and copying of the provider's records
27-4 regarding these matters.
27-5 Art. 27.85. HEALTH CARE PROVIDER. This subchapter may not
27-6 be interpreted to exclude coverage for services provided by a
27-7 health care provider who provides services within the scope of the
27-8 provider's license, certification, or registration.
27-9 (Articles 27.86-27.100 reserved for expansion
27-10 SUBCHAPTER E. WORK LOSS BENEFITS
27-11 Art. 27.101. WORK LOSS BENEFITS. (a) Work loss benefits
27-12 are payable for loss of income from work an injured person would
27-13 have performed before the third anniversary of the date of the
27-14 accident had the person not been injured.
27-15 (b) "Work loss" does not include a loss that occurs after
27-16 the date on which the injured person dies.
27-17 Art. 27.102. WORK LOSS BENEFITS; LIMIT. (a) The work
27-18 income an individual receives during a 30-day period may not exceed
27-19 $1,000.
27-20 (b) The limit under Subsection (a) of this article applies
27-21 pro rata to a shorter period of work loss.
27-22 (c) In this article, "work income" means the total of:
27-23 (1) the work loss benefits paid to an individual for
27-24 loss sustained in a single 30-day period; and
27-25 (2) the income earned by the individual during the
27-26 period.
27-27 Art. 27.103. ADJUSTMENT OF LIMIT. (a) The limit on work
28-1 income under Article 27.102 of this code shall be adjusted annually
28-2 to reflect changes in the cost of living. The adjustment shall be
28-3 made under rules prescribed by the commissioner.
28-4 (b) An adjustment made under this article applies only to
28-5 benefits that are payable for an accident that occurs on or after
28-6 the date of the change in the limit.
28-7 Art. 27.104. REDUCTION IN BENEFITS. Work loss benefits
28-8 payable for loss of income shall be reduced 15 percent unless the
28-9 injured person presents to the motor vehicle insurer evidence that
28-10 shows that the reduction is not justified by a tax advantage
28-11 realized because the benefits are not taxable. If the injured
28-12 person presents this evidence, the insurer shall lower the amount
28-13 of the reduction in work loss benefits appropriately.
28-14 Art. 27.105. STATEMENT OF EARNINGS; REPORTS AND RECORDS. At
28-15 the request of a motor vehicle insurer liable to pay benefits under
28-16 this subchapter, an employer of an injured person shall provide a
28-17 statement of the earnings of the injured person. The statement
28-18 must cover the period following the accidental injury and a
28-19 reasonable period before the injury. The form of the statement
28-20 shall be approved by the commissioner.
28-21 Art. 27.106. PERSONS 60 YEARS OF AGE AND OVER. (a) A motor
28-22 vehicle insurer shall offer a waiver of work loss benefits coverage
28-23 to a person who:
28-24 (1) is at least 60 years old; and
28-25 (2) would not be eligible to receive work loss
28-26 benefits.
28-27 (b) A motor vehicle insurer shall offer a reduced premium
29-1 rate to a person who waives coverage under this article.
29-2 (c) The waiver of coverage applies only to work loss
29-3 benefits payable to a person who has signed the waiver form.
29-4 (Articles 27.107-27.110 reserved for expansion
29-5 SUBCHAPTER F. REPLACEMENT SERVICES BENEFITS
29-6 Art. 27.111. REPLACEMENT SERVICES BENEFITS. (a)
29-7 Replacement services benefits are payable for expenses reasonably
29-8 incurred in obtaining ordinary and necessary services in lieu of
29-9 those that an injured person would have performed, had the person
29-10 not been injured, for the benefit of the injured person or a
29-11 dependent of the injured person.
29-12 (b) Replacement services benefits are not payable for
29-13 services the injured person would have performed for compensation.
29-14 (c) Benefits under this article are not payable for services
29-15 that would have been performed after the third anniversary of the
29-16 date of the accident.
29-17 Art. 27.112. LIMIT. Replacement services benefits are
29-18 subject to a limit of $20 a day.
29-19 (Articles 27.113-27.120 reserved for expansion
29-20 SUBCHAPTER G. SURVIVOR'S BENEFITS
29-21 Art. 27.121. SURVIVOR'S BENEFITS. (a) Survivor's benefits
29-22 are payable for:
29-23 (1) contributions of tangible items of economic value
29-24 that dependents of a deceased injured person would have received
29-25 for support from the injured person had the injured person not
29-26 died; and
29-27 (2) expenses reasonably incurred in obtaining ordinary
30-1 and necessary services in lieu of those that the deceased injured
30-2 person would have performed had the injured person not died.
30-3 (b) Benefits payable under this article are payable only for
30-4 contributions of tangible items that would have been made and
30-5 services that would have been rendered after the date of the
30-6 injured person's death and during the period that the dependent
30-7 would have been a dependent of the injured person.
30-8 (c) Benefits payable under this article are not payable for
30-9 contributions that would have been made or services that would have
30-10 been performed after the third anniversary of the date of the
30-11 accident.
30-12 Art. 27.122. LIMIT. (a) Survivor's benefits payable under
30-13 Article 27.121(a)(2) of this code are subject to a limit of $20 a
30-14 day.
30-15 (b) The aggregate of benefits payable to all survivors under
30-16 Article 27.121 of this code for the death of one person may not
30-17 exceed $1,475 for a 30-day period.
30-18 Art. 27.123. ADJUSTMENT OF LIMIT. (a) The total survivor's
30-19 benefits payable under Article 27.122(b) of this code shall be
30-20 adjusted annually to reflect changes in the cost of living. The
30-21 adjustment shall be made under rules adopted by the commissioner.
30-22 (b) An adjustment made under this article applies only to
30-23 benefits that are payable for accidents that occur after the date
30-24 of the change in the limit.
30-25 Art. 27.124. DEPENDENT AT TIME OF DEATH. To be eligible to
30-26 receive survivor's benefits under this subchapter, the survivor
30-27 must have been a dependent at the time of the injured person's
31-1 death.
31-2 Art. 27.125. TERMINATION OF BENEFITS. (a) A survivor's
31-3 benefit payable to an injured person's spouse terminates on the
31-4 death or remarriage of the spouse.
31-5 (b) A survivor's benefit payable to a person other than the
31-6 injured person's spouse is payable until the latest of:
31-7 (1) the person's 18th birthday;
31-8 (2) the date on which the person no longer has a
31-9 physical or mental impairment that limits the person's ability to
31-10 earn a living; or
31-11 (3) the date on which the person ceases to be engaged
31-12 full-time in a formal program of academic or vocational education
31-13 or training.
31-14 (Articles 27.126-27.130 reserved for expansion
31-15 SUBCHAPTER H. FUNERAL BENEFITS
31-16 Art. 27.131. FUNERAL BENEFITS. Funeral benefits are payable
31-17 for funeral and burial expenses that arise out of an accidental
31-18 injury, subject to the limit stated in the policy.
31-19 Art. 27.132. LIMITS. The limits applicable to funeral
31-20 benefits may not be less than $1,750 or more than $5,000.
31-21 (Articles 27.133-27.140 reserved for expansion
31-22 SUBCHAPTER I. PROMPT PAYMENT OF CLAIMS
31-23 Art. 27.141. ACCRUAL OF PERSONAL PROTECTION BENEFITS. (a)
31-24 Benefits payable under personal protection insurance coverage
31-25 accrue on the date on which:
31-26 (1) the expense for which the benefits are payable is
31-27 incurred; or
32-1 (2) the loss of income or services for which the
32-2 benefits are payable occurs.
32-3 (b) Loss of income or services occurs on the date on which
32-4 the income would have been paid or the services would have been
32-5 rendered, not on the date of the accidental injury.
32-6 Art. 27.142. OVERDUE PERSONAL PROTECTION INSURANCE BENEFITS.
32-7 (a) Personal protection insurance benefits are overdue if not paid
32-8 before the 31st day after the date on which the insurer receives
32-9 reasonable proof of the fact and of the amount of loss sustained.
32-10 (b) If reasonable proof is not supplied as to the entire
32-11 claim, the amount supported by reasonable proof is overdue if not
32-12 paid within the period specified by Subsection (a) of this article.
32-13 The remaining part of the claim is overdue if not paid before the
32-14 31st day after the date on which sufficient reasonable proof is
32-15 received by the insurer.
32-16 (c) For the purpose of computing the extent to which
32-17 benefits are overdue, payment shall be treated as made on the date
32-18 on which a draft or other valid instrument is placed in the United
32-19 States mail in a properly addressed, postpaid envelope or, if not
32-20 properly posted, on the date of delivery.
32-21 (d) An overdue payment bears interest at the rate specified
32-22 by Section 6, Article 21.55, of this code.
32-23 Art. 27.143. NOTICE OF ACCIDENT. A motor vehicle insurer
32-24 may require written notice of an accident to be provided to the
32-25 insurer as soon as practicable after an accident involving an
32-26 insured motor vehicle.
32-27 (Articles 27.144-27.150 reserved for expansion
33-1 SUBCHAPTER J. CLINICAL CARE MANAGEMENT
33-2 Art. 27.151. CLINICAL CARE. (a) A motor vehicle insurer
33-3 shall use clinical care management for each insured whose personal
33-4 protection insurance benefits are expected to exceed the applicable
33-5 indemnification limit under Article 27.310 of this code.
33-6 (b) A motor vehicle insurer may use clinical care management
33-7 for each insured whose personal protection insurance benefits are
33-8 not expected to exceed the limit specified in Subsection (a) of
33-9 this article.
33-10 Art. 27.152. CLINICAL CARE PROGRAM ENROLLMENT. A motor
33-11 vehicle insurer shall:
33-12 (1) develop clinical care management enrollment forms
33-13 and procedures;
33-14 (2) develop procedures for an injured person to select
33-15 a clinical care manager and for the insurer to appoint a clinical
33-16 care manager for those injured persons who do not select a clinical
33-17 care manager;
33-18 (3) require an injured person to designate a clinical
33-19 care manager before authorizing payment for services; and
33-20 (4) reimburse each clinical care manager reasonable
33-21 fees for the development, management, and update of a clinical care
33-22 management plan.
33-23 Art. 27.153. CONFLICT OF INTEREST. A motor vehicle insurer
33-24 may not appoint or contract for clinical care management services
33-25 with itself, an entity in which it has a financial interest, or
33-26 another motor vehicle insurer.
33-27 Art. 27.154. CLINICAL CARE MANAGEMENT PLAN. (a) A clinical
34-1 care management plan is a written plan developed by a clinical care
34-2 manager.
34-3 (b) A clinical care management plan must cover a period of
34-4 not longer than 180 days and must identify the care required by an
34-5 injured person and the products, services, and accommodations
34-6 necessary for the injured person's care, treatment, recovery, and
34-7 rehabilitation. The plan must explain all services that are to be
34-8 provided.
34-9 (c) A clinical care management plan must include a schedule
34-10 for review of the plan at appropriate intervals determined by the
34-11 clinical care manager.
34-12 (d) A revised clinical care management plan may be developed
34-13 before 180 days have expired if an injured person's condition or
34-14 needs change. An injured person, an individual authorized to act
34-15 on the injured person's behalf, or a health care provider may
34-16 initiate a written request for a revised plan. The request must
34-17 include the reason for the requested revision.
34-18 Art. 27.155. CLINICAL CARE MANAGER. (a) A clinical care
34-19 manager must be a licensed physician, psychologist, nurse, social
34-20 worker, or physical or occupational therapist who provides the type
34-21 of care necessary for the injured person's care, treatment,
34-22 recovery, or rehabilitation.
34-23 (b) A clinical care manager shall:
34-24 (1) submit an initial clinical care management plan to
34-25 a motor vehicle insurer not later than the 60th day after the date
34-26 on which the clinical care manager receives a request for a plan
34-27 from the insurer;
35-1 (2) develop a new clinical care management plan for an
35-2 injured person expected to incur medical expenses for a period that
35-3 will exceed the duration of an initial or succeeding clinical care
35-4 management plan; and
35-5 (3) maintain patient-physician confidentiality.
35-6 (Articles 27.156-27.160 reserved for expansion
35-7 SUBCHAPTER K. PROPERTY PROTECTION INSURANCE COVERAGE
35-8 Art. 27.161. PROPERTY PROTECTION INSURANCE COVERAGE
35-9 REQUIRED. A motor vehicle insurance policy used to satisfy the
35-10 requirements of the Texas Motor Vehicle Safety-Responsibility Act
35-11 (Article 6701h, Vernon's Texas Civil Statutes) for a motor vehicle
35-12 shall provide property protection insurance benefits as described
35-13 by this chapter.
35-14 Art. 27.162. BENEFITS PAYABLE WITHOUT REGARD TO FAULT. A
35-15 benefit under property protection insurance coverage is payable
35-16 without regard to the fault of the insured in the accident that
35-17 caused the accidental damage to property.
35-18 Art. 27.163. COVERAGE. Property protection insurance
35-19 coverage shall provide benefits for accidental damage to property.
35-20 Art. 27.164. LIMIT. (a) Property protection benefits are
35-21 subject to a limit of the lesser of:
35-22 (1) the cost of repair of the property; or
35-23 (2) the cost of replacing the property, less
35-24 depreciation in the value of the property.
35-25 (b) Except as provided by Subsection (c) of this article,
35-26 the aggregate property protection benefits paid under a policy for
35-27 accidental damage to property that arises out of one accident is
36-1 subject to a limit of $20,000.
36-2 (c) A motor vehicle insurer may offer property protection
36-3 benefits with a limit in excess of that described by Subsection (b)
36-4 of this article, subject to a maximum limit of $1 million for
36-5 accidental damage to property that arises out of one accident.
36-6 Art. 27.165. EXCLUSIONS. (a) Property protection insurance
36-7 coverage does not provide benefits for accidental damage to:
36-8 (1) motor vehicles and the contents of motor vehicles,
36-9 including trailers, except as provided by Subsection (b) of this
36-10 article;
36-11 (2) property owned by the named insured, the named
36-12 insured's spouse, or a relative of either the named insured or the
36-13 named insured's spouse who is domiciled in the same household as
36-14 the named insured or the named insured's spouse, if the named
36-15 insured, the named insured's spouse, or the relative was the owner
36-16 or operator of a motor vehicle involved in the accident out of
36-17 which the accidental damage to property arose; and
36-18 (3) utility transmission lines, wires, or cables that
36-19 arises out of the failure of a municipality, utility company, or
36-20 cable television company to comply with applicable law.
36-21 (b) Notwithstanding Subsection (a)(1) of this article,
36-22 property protection insurance provides benefits for accidental
36-23 damage to motor vehicles that are parked in a manner that does not
36-24 cause an unreasonable risk of the damage that occurred.
36-25 Art. 27.166. PRIORITY. (a) A person entitled to property
36-26 protection benefits shall claim the benefits from motor vehicle
36-27 insurers in the following order of priority:
37-1 (1) insurers of owners of vehicles involved in the
37-2 accident; and
37-3 (2) insurers of operators of vehicles involved in the
37-4 accident.
37-5 (b) Loss shall be distributed among the motor vehicle
37-6 insurers in the same manner as personal protection insurance loss
37-7 is distributed under this chapter, and the insurers are entitled to
37-8 reimbursement and indemnification in the same manner as provided
37-9 for personal protection insurance loss.
37-10 (Articles 27.167-27.180 reserved for expansion
37-11 SUBCHAPTER L. COLLISION COVERAGE
37-12 Art. 27.181. SCOPE OF SUBCHAPTER. This chapter applies only
37-13 to motor vehicle insurance offered to cover a private passenger
37-14 nonfleet motor vehicle in compliance with the Texas Motor Vehicle
37-15 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
37-16 Statutes).
37-17 Art. 27.182. COLLISION COVERAGE OFFERED. (a) At the time a
37-18 new applicant for motor vehicle insurance makes an initial written
37-19 application for the insurance, the motor vehicle insurer shall
37-20 offer the limited collision coverage and broad form collision
37-21 coverage described by Articles 27.184 and 27.185 of this code.
37-22 (b) At the time of the initial written application, the
37-23 motor vehicle insurer or an agent of the insurer shall provide the
37-24 applicant with a written explanation of collision coverage options.
37-25 The explanation must be made in easily understandable language.
37-26 The explanation may be in the application form.
37-27 Art. 27.183. NOT COMPREHENSIVE COVERAGE. The collision
38-1 coverage required by this subchapter does not include coverage for
38-2 losses customarily insured under comprehensive motor vehicle
38-3 insurance coverages.
38-4 Art. 27.184. LIMITED COLLISION COVERAGE. (a) Limited
38-5 collision coverage must pay for collision damage to the insured
38-6 vehicle if the operator of the vehicle is not substantially at
38-7 fault in the accident from which the damage arose.
38-8 (b) Except as provided by Article 27.187 of this code,
38-9 limited collision coverage is not subject to a deductible.
38-10 Art. 27.185. BROAD FORM COLLISION COVERAGE. (a) Broad form
38-11 collision coverage must pay for collision damage to the insured
38-12 vehicle without regard to fault.
38-13 (b) Except as provided by Subsection (c) of this article,
38-14 broad form collision coverage is subject to deductibles in amounts
38-15 approved by the commissioner.
38-16 (c) Except as provided by Article 27.187 of this code, the
38-17 motor vehicle insurer shall waive the deductible applicable to
38-18 broad form collision coverage if the operator of the vehicle is not
38-19 substantially at fault in the accident from which the damage arose.
38-20 Art. 27.186. SUBSTANTIALLY AT FAULT. A person is
38-21 substantially at fault for purposes of Article 27.184 or 27.185 of
38-22 this code if the person's action or inaction was more than 50
38-23 percent of the cause of the accident.
38-24 Art. 27.187. OPTIONAL DEDUCTIBLES. In addition to the
38-25 coverages offered under Articles 27.184 and 27.185 of this code,
38-26 limited collision coverage and broad form collision coverage may be
38-27 offered with deductibles approved by the commissioner.
39-1 Art. 27.188. REJECTION OF COLLISION COVERAGE. (a) An
39-2 applicant for motor vehicle insurance may reject the collision
39-3 coverages described by this subchapter.
39-4 (b) The rejection must be made in writing in a form approved
39-5 by the commissioner. The rejection statement shall inform the
39-6 applicant of the applicant's rights if damage occurs to the insured
39-7 vehicle under the alternative coverage option selected. The
39-8 rejection may be included in the application.
39-9 Art. 27.189. RENEWAL. (a) At least annually in conjunction
39-10 with the renewal of a motor vehicle insurance policy, and at the
39-11 time of an addition, deletion, or substitution of a vehicle under a
39-12 motor vehicle insurance policy, other than a group policy, the
39-13 motor vehicle insurer may notify the policyholder of:
39-14 (1) the status of the collision coverage applicable to
39-15 the vehicle or vehicles affected by the renewal or change and the
39-16 rights of the insured if damage occurs to an insured vehicle under
39-17 that coverage;
39-18 (2) the collision coverages available under the policy
39-19 and the rights of the insured if damage occurs to an insured
39-20 vehicle under each collision option; and
39-21 (3) the procedures the policyholder must follow if the
39-22 policyholder wishes to change the collision coverage.
39-23 (b) The notice required by this article must be made on a
39-24 form approved by the commissioner.
39-25 Art. 27.190. PAYMENT OF CLAIM. A motor vehicle insurer
39-26 shall pay a claim under the collision coverages described by this
39-27 subchapter jointly to the policyholder and to a motor vehicle
40-1 repair facility.
40-2 Art. 27.191. ESTIMATE AND SERVICES. Except as provided by
40-3 Article 27.192 of this code, an insured may use any motor vehicle
40-4 repair facility to provide:
40-5 (1) an estimate for repair services covered by the
40-6 motor vehicle insurance policy; or
40-7 (2) the repair services.
40-8 Art. 27.192. DIRECT REPAIR PROGRAM. (a) A motor vehicle
40-9 insurer may establish a direct repair program and may require an
40-10 insured to use a repair facility that participates in the program.
40-11 (b) A motor vehicle insurer that establishes a direct repair
40-12 program shall make available to all motor vehicle repair facilities
40-13 the criteria necessary to participate in the direct repair program.
40-14 (c) A motor vehicle repair facility that meets the criteria
40-15 is eligible to participate in the direct repair program.
40-16 (d) A motor vehicle insurer may not:
40-17 (1) prohibit a motor vehicle repair facility from
40-18 participation in a direct repair program; or
40-19 (2) limit the number of repair facilities that
40-20 participate in a direct repair program.
40-21 (Articles 27.193-27.210 reserved for expansion
40-22 SUBCHAPTER M. RESIDUAL LIABILITY COVERAGE
40-23 Art. 27.211. RESIDUAL LIABILITY INSURANCE COVERAGE REQUIRED.
40-24 A motor vehicle insurance policy used to satisfy the requirements
40-25 of the Texas Motor Vehicle Safety-Responsibility Act (Article
40-26 6701h, Vernon's Texas Civil Statutes) for a motor vehicle must
40-27 provide residual liability coverage as provided by this subchapter.
41-1 Art. 27.212. COVERAGE. Residual liability insurance
41-2 coverage must provide:
41-3 (1) coverage equivalent to that required as evidence
41-4 of financial responsibility under the law of the place in which the
41-5 injury or damage occurs; and
41-6 (2) liability coverage for motor vehicle accidents in
41-7 this state to the extent that the liability is retained by the
41-8 insured under Subchapter O of this chapter.
41-9 (Articles 27.213-27.230 reserved for expansion
41-10 SUBCHAPTER N. RESOLUTION OF DISPUTES
41-11 Art. 27.231. APPEAL. A person who believes that a motor
41-12 vehicle insurer has improperly denied the person's claim for
41-13 benefits must appeal the denial under this subchapter before filing
41-14 an action in court for recovery of insurance benefits.
41-15 Art. 27.232. INTERNAL PROCEDURES; INFORMAL CONFERENCE.
41-16 (a) A motor vehicle insurer shall establish reasonable internal
41-17 procedures to provide claimants with a private informal conference
41-18 regarding a dispute over a claim for benefits.
41-19 (b) The procedures must include:
41-20 (1) a notice to the claimant at the time of the denial
41-21 of all or a part of the claim that:
41-22 (A) advises the claimant that the claimant may
41-23 appeal the denial before the 91st day after the date on which the
41-24 denial was mailed to the claimant; and
41-25 (B) describes the procedure to follow to obtain
41-26 a private informal conference with the insurer;
41-27 (2) a method of providing the claimant, on request and
42-1 payment of a reasonable copying charge, with information relevant
42-2 to the denial; and
42-3 (3) a method for resolving the dispute promptly and
42-4 informally, while protecting the interests of both the claimant and
42-5 the insurer.
42-6 (c) A motor vehicle insurer shall file with the commissioner
42-7 a list of the persons that the insurer has designated to conduct
42-8 the informal conferences required by this article.
42-9 (d) A motor vehicle insurer shall provide a conference not
42-10 later than the 30th day after the date on which a claimant mails a
42-11 written request for a conference.
42-12 (e) A motor vehicle insurer shall inform the claimant in
42-13 writing of the insurer's decision not later than the 30th day after
42-14 the date of the conference. The insurer shall advise the claimant
42-15 in writing that, if the claimant is not satisfied with the
42-16 insurer's decision at the conference, the claimant may not file a
42-17 court action for recovery of insurance benefits until the claimant
42-18 complies with Article 27.233 of this code.
42-19 Art. 27.233. CONCILIATION CONFERENCE. (a) A claimant may
42-20 not file a court action for recovery of insurance benefits unless
42-21 the claimant makes a timely request for a conciliation conference
42-22 with the commissioner and attends that conference.
42-23 (b) A claimant must make a request for a conciliation
42-24 conference not later than the 30th day after the date on which the
42-25 notice of the insurer's decision under Article 27.232 of this code
42-26 was mailed.
42-27 (c) The commissioner shall provide a conciliation conference
43-1 not later than the 30th day after the date on which the written
43-2 request by a claimant is received by the commissioner and shall
43-3 inform the claimant in writing of the commissioner's decision not
43-4 later than the 30th day after the date of the conciliation
43-5 conference.
43-6 (d) The commissioner's recommendation following a
43-7 conciliation conference is admissible in a court action.
43-8 (e) The commissioner shall adopt rules to establish a
43-9 procedure for a conciliation conference under this article. The
43-10 conference must be reasonably designed to resolve matters
43-11 informally and as rapidly as possible, while protecting the
43-12 interests of both the claimant and the insurer.
43-13 Art. 27.234. ATTORNEY NOT REQUIRED. A claimant is not
43-14 required to have an attorney present at a conference under this
43-15 subchapter.
43-16 Art. 27.235. ACTION FOR WRONGFUL DENIAL OF BENEFITS. (a) A
43-17 claimant may not bring an action for recovery of insurance benefits
43-18 payable under this chapter unless the claimant has appealed the
43-19 denial of benefits through the informal dispute resolution process
43-20 provided by this subchapter.
43-21 (b) The statute of limitations period applicable to the
43-22 recovery of insurance benefits payable under this chapter is tolled
43-23 until the claimant has appealed the denial of benefits through the
43-24 informal dispute resolution process. This subsection does not toll
43-25 the limitations period established under Article 27.236 of this
43-26 code.
43-27 Art. 27.236. SPECIAL LIMITATIONS PERIOD. (a) A claimant
44-1 must bring an action for the recovery of personal protection
44-2 insurance benefits payable under this chapter before the first
44-3 anniversary of the date of the accident that resulted in the injury
44-4 unless:
44-5 (1) written notice of the injury has been given to the
44-6 motor vehicle insurer before the first anniversary of the date of
44-7 the accident; or
44-8 (2) the insurer has made a payment of personal
44-9 protection insurance benefits for the injury.
44-10 (b) If the notice has been given or a payment has been made
44-11 under Subsection (a) of this article, the action must be brought
44-12 before the first anniversary of the date on which the most recent
44-13 personal protection insurance loss is incurred. The claimant may
44-14 not recover benefits for a portion of the loss incurred more than
44-15 one year before the date on which the action was commenced.
44-16 (c) The notice of injury required by Subsection (a)(1) of
44-17 this article may be given to the motor vehicle insurer or to any of
44-18 the insurer's authorized agents by a person claiming to be entitled
44-19 to benefits or by a person acting on the claimant's behalf. The
44-20 notice must give the name and address of the claimant and indicate
44-21 in ordinary language the name of the person injured and the time,
44-22 place, and nature of the injury.
44-23 (d) A claimant must bring an action for recovery of property
44-24 protection insurance benefits before the first anniversary of the
44-25 date of the accident.
44-26 Art. 27.237. ATTORNEY'S FEES. A court shall award
44-27 reasonable attorney's fees to a person who prevails in an action
45-1 against a motor vehicle insurer for the wrongful denial of benefits
45-2 due under this chapter.
45-3 (Articles 27.238-27.260 reserved for expansion
45-4 SUBCHAPTER O. CIVIL LIABILITY
45-5 Art. 27.261. TORT ACTION LIMITED. (a) Except as provided
45-6 by this subchapter, a person may not recover damages for an
45-7 accidental injury or accidental damage to property that arises
45-8 wholly or partly out of the ownership, operation, maintenance, or
45-9 use of a motor vehicle in this state.
45-10 (b) Except as provided by this subchapter, each person
45-11 involved in a motor vehicle accident in this state is subject to
45-12 the tort and liability limitations of this subchapter.
45-13 (c) This subchapter applies to a claim made against a person
45-14 who, in the absence of this subchapter, would be vicariously liable
45-15 for the negligent conduct or intentional misconduct of another
45-16 person.
45-17 Art. 27.262. DAMAGES IN EXCESS OF PERSONAL PROTECTION
45-18 INSURANCE BENEFITS. (a) Article 27.261(a) of this code does not
45-19 apply to damages for medical expenses, replacement services loss,
45-20 work loss, and survivor's loss sustained in excess of the benefit
45-21 limits of the applicable policy.
45-22 (b) Damages recoverable under this article are reduced by an
45-23 amount equal to the taxes that would have been payable on income
45-24 the injured person would have received had the injured person not
45-25 been injured.
45-26 Art. 27.263. DAMAGES IN EXCESS OF PROPERTY PROTECTION
45-27 INSURANCE BENEFITS. Article 27.261(a) of this code does not apply
46-1 to damages for accidental damage to property for which property
46-2 protection benefits may be paid to the extent the damages exceed
46-3 the benefit limits of the applicable policy.
46-4 Art. 27.264. NONECONOMIC LOSS. (a) A person is subject to
46-5 tort liability for noneconomic loss caused by the ownership,
46-6 operation, maintenance, or use of a motor vehicle only if the
46-7 injured person has suffered:
46-8 (1) death;
46-9 (2) serious impairment of a bodily function; or
46-10 (3) permanent serious disfigurement.
46-11 (b) The injured person has not suffered serious impairment
46-12 of a bodily function unless the person has suffered an objectively
46-13 manifested impairment of an important bodily function that affects
46-14 the general ability of the person to lead a normal life.
46-15 Art. 27.265. INJURY TO CERTAIN PERSONS WHO ARE NOT OCCUPANTS
46-16 OF VEHICLES. Article 27.261(a) of this code does not apply to
46-17 accidental injury to or accidental damage to property belonging to
46-18 a person who:
46-19 (1) is not the operator of a motor vehicle or
46-20 motorcycle involved in the accident;
46-21 (2) is not the owner of a motor vehicle or motorcycle;
46-22 (3) is not a named insured, a named insured's spouse,
46-23 or a relative of either a named insured or a named insured's spouse
46-24 who is domiciled in the same household as a named insured or the
46-25 named insured's spouse; and
46-26 (4) will not receive personal protection insurance
46-27 benefits and property protection insurance benefits because each
47-1 motor vehicle involved in the accident is not covered as required
47-2 under the Texas Motor Vehicle Safety-Responsibility Act (Article
47-3 6701h, Vernon's Texas Civil Statutes).
47-4 Art. 27.266. DAMAGE TO MOTOR VEHICLES. (a) Article
47-5 27.261(a) of this code does not apply to damage to a motor vehicle
47-6 to the extent that the damage is not covered by insurance. Damages
47-7 recoverable under this subsection may not exceed $500.
47-8 (b) Liability for damages under this article is not a
47-9 component of residual liability, required by Subchapter M of this
47-10 chapter, for which evidence of financial security is required by
47-11 the Texas Motor Vehicle Safety-Responsibility Act (Article 6701h,
47-12 Vernon's Texas Civil Statutes).
47-13 (c) An action under this article shall be brought in small
47-14 claims court. If a party removes the action to a higher court and
47-15 does not prevail, the judge may assess costs to that party.
47-16 (d) A decision of a court made under this article is not
47-17 res judicata in another proceeding to determine liability arising
47-18 from the same accident.
47-19 Art. 27.267. EXAMINATION OF VERDICT. (a) In an action to
47-20 recover damages subject to Article 27.262, 27.263, 27.264, or
47-21 27.265 of this code, the court presiding over the action shall, not
47-22 later than the 21st day after the date of a jury verdict:
47-23 (1) concur in the award; or
47-24 (2) on its own motion or on the motion of any party,
47-25 review the excessiveness or inadequacy of the amount awarded.
47-26 (b) In determining the excessiveness or inadequacy of the
47-27 amount awarded, the court shall consider:
48-1 (1) the evidence presented at trial;
48-2 (2) whether the amount awarded was within the limits
48-3 of what reasonable minds would consider just compensation for the
48-4 injury and damages sustained;
48-5 (3) whether the amount awarded is comparable to awards
48-6 in similar cases in this state and in other jurisdictions; and
48-7 (4) whether the amount awarded was the result of
48-8 improper methods, prejudice, passion, partiality, sympathy,
48-9 corruption, or mistake of law or fact.
48-10 (c) If the court finds that the only error in the trial is
48-11 the inadequacy or excessiveness of the amount awarded, the court
48-12 shall grant a new trial on the issue of the amount of damages only.
48-13 The new trial shall not be held if, not later than the 14th day
48-14 after the date of the court's order, the parties consent in writing
48-15 to the entry of a judgment in an amount determined by the court.
48-16 Art. 27.268. FAILURE TO MAINTAIN FINANCIAL SECURITY.
48-17 Damages may not be awarded under this subchapter to a person who
48-18 was operating a motor vehicle owned by the person at the time the
48-19 damage occurred and who, at the time of the accident, did not have
48-20 in effect for the motor vehicle involved in the accident evidence
48-21 of financial security required by the Texas Motor Vehicle
48-22 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
48-23 Statutes).
48-24 Art. 27.269. VALUE OF TORT CLAIM. (a) Except as provided
48-25 by Subsection (b) of this article, a motor vehicle insurer may not
48-26 subtract from personal protection insurance benefits the value of a
48-27 tort claim based on the same accidental injury.
49-1 (b) A motor vehicle insurer may subtract the amount of a
49-2 tort recovery from benefits payable under this chapter, and is
49-3 entitled to reimbursement for benefits paid under this chapter,
49-4 only if the recovery is realized on a tort claim that:
49-5 (1) arises out of an accident that occurs outside this
49-6 state;
49-7 (2) is brought in this state against the owner or
49-8 operator of a motor vehicle for which the financial security
49-9 required by the Texas Motor Vehicle Safety-Responsibility Act
49-10 (Article 6701h, Vernon's Texas Civil Statutes) was not in effect;
49-11 or
49-12 (3) is brought in this state based on intentionally
49-13 caused harm to persons or property.
49-14 (c) A motor vehicle insurer may reduce the amount paid as
49-15 benefits or obtain reimbursement under Subsection (b) of this
49-16 article only to the extent that the recovery is for damages to
49-17 which the claimant would be entitled or for which the claimant has
49-18 received personal protection insurance benefits.
49-19 (d) A motor vehicle insurer may reduce the amount paid as
49-20 benefits under Subsection (b) of this article only to the extent of
49-21 the recovery, excluding reasonable attorney's fees and other
49-22 reasonable expenses incurred in obtaining the recovery.
49-23 (e) If personal protection insurance benefits have already
49-24 been received, the claimant shall repay to the motor vehicle
49-25 insurer an amount equal to the benefits received. The amount paid
49-26 under this subsection may not exceed the recovery, excluding
49-27 reasonable attorney's fees and other reasonable expenses incurred
50-1 in obtaining the recovery. The insurer has a lien on the recovery
50-2 to this extent.
50-3 (f) A recovery by an injured person or the injured person's
50-4 estate for a loss suffered by the person may not be subtracted in
50-5 computing benefits owed to a dependent after the injured person's
50-6 death, and a recovery by a dependent for a loss suffered by the
50-7 dependent after the death may not be subtracted in computing
50-8 benefits owed to the injured person's estate.
50-9 (g) A motor vehicle insurer with a right to reimbursement
50-10 under this article may notify a person subject to a tort claim of
50-11 the insurer's interest in the claim. The person subject to the
50-12 claim may make payment to the claimant jointly with the insurer.
50-13 An insurer is entitled to indemnity from a person who, with notice
50-14 of the insurer's interest, made the payment to the claimant without
50-15 making the claimant and the insurer joint payees or without
50-16 obtaining the insurer's consent to a different method of payment.
50-17 (h) A motor vehicle insurer is not entitled to a subtraction
50-18 or reimbursement under this article from the portion of the
50-19 recovery that is attributable to:
50-20 (1) a noneconomic loss; or
50-21 (2) a loss in excess of the benefits recovered from
50-22 the insurer.
50-23 (i) A motor vehicle insurer must bring an action to enforce
50-24 a right to reimbursement or indemnity under this article not later
50-25 than the first anniversary of the date on which the claimant has
50-26 received payment for the tort claim for which the insurer has a
50-27 right to reimbursement or indemnity.
51-1 (Articles 27.270-27.300 reserved for expansion
51-2 SUBCHAPTER P. PERSONAL PROTECTION INSURANCE ASSOCIATION
51-3 Art. 27.301. DEFINITIONS. In this subchapter:
51-4 (1) "Association" means the personal protection
51-5 insurance association established under this subchapter.
51-6 (2) "Board" means the board of directors of the
51-7 association.
51-8 (3) "Consumer price index" means the Consumer Price
51-9 Index for All Urban Consumers published by the United States
51-10 Department of Labor, or a successor index established under federal
51-11 law for a 12-month period.
51-12 (4) "Member insurer" means a motor vehicle insurer
51-13 that is a member of the association.
51-14 (5) "Ultimate loss" means the actual loss that a
51-15 member insurer is obligated to pay and that is paid or payable by
51-16 the member insurer. The term does not include claim expenses.
51-17 Art. 27.302. ASSOCIATION CREATED. (a) The personal
51-18 protection insurance association is created.
51-19 (b) The association is an unincorporated, nonprofit
51-20 association.
51-21 Art. 27.303. BOARD OF DIRECTORS. (a) The association is
51-22 operated by a board of directors.
51-23 (b) The board is responsible for the operation of the
51-24 association consistent with the plan of operation and this
51-25 subchapter.
51-26 Art. 27.304. APPOINTMENT OF BOARD. (a) The board is
51-27 composed of the commissioner and six directors appointed by the
52-1 commissioner. The commissioner shall designate one director to
52-2 serve as presiding officer.
52-3 (b) Each director is entitled to one vote. The commissioner
52-4 shall serve as an ex officio member of the board without voting
52-5 rights.
52-6 (c) Directors are appointed for six-year staggered terms,
52-7 with two directors' terms expiring on February 1 of each
52-8 odd-numbered year. A director shall serve until that director's
52-9 successor is selected and qualified. The board shall include
52-10 representatives of member insurers that would contribute a total of
52-11 at least 40 percent of the total premium computed under Article
52-12 27.311 of this code.
52-13 (d) The board shall meet as required by the presiding
52-14 officer, the commissioner, or the plan of operation. The board
52-15 shall meet at the request of three directors.
52-16 (e) The presiding officer may vote on any issue.
52-17 (f) Four directors constitute a quorum.
52-18 Art. 27.305. MEMBERSHIP REQUIRED. Each motor vehicle
52-19 insurer that provides motor vehicle insurance to comply with the
52-20 requirements of the Texas Motor Vehicle Safety-Responsibility Act
52-21 (Article 6701h, Vernon's Texas Civil Statutes) shall be a member of
52-22 the association and is bound by the plan of operation of the
52-23 association. To the extent that a motor vehicle insurer is
52-24 providing coverage under Chapter 28 of this code, the insurer is a
52-25 member only for the purpose of assessments under Article 27.311 of
52-26 this code.
52-27 Art. 27.306. ASSOCIATION NOT SUBJECT TO INSURANCE LAWS. (a)
53-1 Except as provided by this subchapter, the association is not
53-2 subject to the insurance laws of this state.
53-3 (b) The association is subject to reporting, loss reserve,
53-4 and investment requirements of this code and other insurance laws
53-5 of this state to the same extent as a member insurer.
53-6 Art. 27.307. POWERS AND DUTIES OF ASSOCIATION. (a) The
53-7 association shall:
53-8 (1) assume liability for payment of indemnification as
53-9 required by Article 27.310 of this code;
53-10 (2) establish procedures for prompt reporting to the
53-11 association of each claim as required by Article 27.314 of this
53-12 code;
53-13 (3) maintain loss and expense information relevant to
53-14 the liabilities of the association;
53-15 (4) collect premiums from the member insurers as
53-16 provided by Article 27.311 of this code; and
53-17 (5) receive and distribute money as required by the
53-18 plan of operation of the association.
53-19 (b) The association may:
53-20 (1) reinsure any portion of its potential liability
53-21 with reinsurers licensed to transact insurance in this state or
53-22 approved by the commissioner;
53-23 (2) provide for a facility and equipment and personnel
53-24 as necessary for the efficient operation of the association;
53-25 (3) adopt reasonable rules for the administration of
53-26 the association in accordance with the plan of operation and
53-27 enforce the rules;
54-1 (4) delegate authority as the board considers
54-2 necessary to assure the proper administration and operation of the
54-3 association consistent with the plan of operation;
54-4 (5) contract for goods and services, including
54-5 independent claims management and actuarial, investment, and legal
54-6 services, for the efficient operation of the association;
54-7 (6) hear and determine complaints of a member insurer
54-8 or other interested party concerning the operation of the
54-9 association; and
54-10 (7) perform other acts as necessary to accomplish the
54-11 purposes of the association.
54-12 Art. 27.308. POWER TO SUE AND BE SUED. (a) The association
54-13 may sue and be sued in the name of the association.
54-14 (b) A judgment against the association does not create a
54-15 direct liability against an individual member insurer.
54-16 (c) The association may provide for the indemnification of
54-17 its members, members of the board, and officers, employees, and
54-18 other persons acting on behalf of the association.
54-19 Art. 27.309. PLAN OF OPERATION. (a) The board shall adopt
54-20 a plan of operation that provides for the economical, fair, and
54-21 nondiscriminatory administration of the association and for the
54-22 prompt and efficient provision of indemnity under this subchapter.
54-23 (b) The plan of operation shall provide for:
54-24 (1) the establishment of facilities necessary for the
54-25 operation of the association;
54-26 (2) the management and operation of the association;
54-27 (3) procedures for charging premiums and making
55-1 adjustments in accordance with Article 27.311 of this code;
55-2 (4) procedures governing the payment of premiums to
55-3 the association;
55-4 (5) reimbursement of each member of the board by the
55-5 association for actual and necessary expenses incurred in
55-6 performing association business;
55-7 (6) the investment policy of the association;
55-8 (7) the method of appointment of the board by the
55-9 commissioner and the composition of the board, consistent with
55-10 Article 27.304 of this code; and
55-11 (8) any other matter necessary to implement this
55-12 subchapter.
55-13 (c) The plan of operation and amendments to the plan of
55-14 operation must be ratified by a majority of the member insurers
55-15 with voting rights. Voting rights are apportioned among member
55-16 insurers according to each member's share of the total premium
55-17 charged under Article 27.311 of this code.
55-18 (d) After ratification by member insurers, the plan of
55-19 operation and any amendment to the plan of operation is subject to
55-20 approval by the commissioner.
55-21 (e) The plan of operation and any amendment to the plan of
55-22 operation is effective on the earlier of:
55-23 (1) the date on which the commissioner approves the
55-24 plan in writing; or
55-25 (2) the 30th day after the date on which the plan of
55-26 operation is filed with the commissioner, unless the plan is
55-27 disapproved by written order of the commissioner before that date.
56-1 (f) Before disapproval of any part of the plan of operation
56-2 or an amendment to the plan of operation, the commissioner may
56-3 notify the board in what respect the plan of operation fails to
56-4 meet the requirements of this subchapter.
56-5 (g) If the board fails to submit a revised plan of operation
56-6 that has been ratified by the member insurers and that meets the
56-7 requirements of this subchapter before the 30th day after the date
56-8 on which the board receives the notification under Subsection (e)
56-9 of this article, the commissioner shall adopt a plan consistent
56-10 with the requirements of this subchapter.
56-11 Art. 27.310. INDEMNIFICATION FOR LOSSES. (a) The
56-12 association shall provide indemnification for the amount of
56-13 ultimate loss sustained for a loss occurrence covered under a
56-14 personal protection insurance coverage that exceeds:
56-15 (1) for a motor vehicle insurance policy issued or
56-16 renewed before September 1, 1997, $250,000;
56-17 (2) for a motor vehicle insurance policy issued or
56-18 renewed after August 31, 1997, but before September 1, 1998,
56-19 $300,000;
56-20 (3) for a motor vehicle insurance policy issued or
56-21 renewed after August 31, 1998, but before September 1, 1999,
56-22 $400,000; and
56-23 (4) for a motor vehicle insurance policy issued or
56-24 renewed after August 31, 2000, $500,000.
56-25 (b) The commissioner annually shall adjust the amount of
56-26 indemnification to be paid under Subsection (a)(4) of this article.
56-27 The first annual adjustment shall be made not later than August 31,
57-1 2001. The adjustment shall equal the lesser of 5 percent or the
57-2 consumer price index, rounded up to the nearest $25,000.
57-3 (c) A member insurer shall accept indemnification provided
57-4 under this article.
57-5 (d) An ultimate loss is incurred by the association on the
57-6 date on which the loss occurs.
57-7 Art. 27.311. PREMIUM. (a) Each member insurer shall pay to
57-8 the association a premium sufficient to cover the expected losses
57-9 and expenses of the association for the period to which the premium
57-10 applies.
57-11 (b) The premium shall include an amount to cover incurred
57-12 but not reported losses for the period and may be adjusted for any
57-13 excess or deficient premiums from previous periods.
57-14 (c) The premium for a single period may be adjusted for the
57-15 total excess or deficiency from previous periods, or the adjustment
57-16 may be staggered over several periods in accordance with the plan
57-17 of operation.
57-18 (d) Each member insurer shall be charged an amount equal to
57-19 that member's total earned motor vehicle or motorcycle years of
57-20 insurance in providing the security required by the Texas Motor
57-21 Vehicle Safety-Responsibility Act (Article 6701h, Vernon's Texas
57-22 Civil Statutes) and written during the period to which the premium
57-23 applies, multiplied by the average premium per motor vehicle or
57-24 motorcycle. The charge shall be adjusted to reflect the amount of
57-25 coverage selected by each member's insureds. The average premium
57-26 per motor vehicle or motorcycle shall be the total premium required
57-27 divided by the total earned motor vehicle or motorcycle years of
58-1 insurance of all members during the period to which the premium
58-2 applies.
58-3 (e) The association shall require payment of a premium from
58-4 member insurers as provided by the plan of operation. The plan of
58-5 operation may:
58-6 (1) require payment of the premium in full within 45
58-7 days after the date of the premium charge; or
58-8 (2) require periodic payment of the premium to cover
58-9 the cash obligations of the association.
58-10 (f) The association shall compute and collect premiums under
58-11 this article in accordance with the plan of operation.
58-12 (g) The commissioner shall consider the premiums charged a
58-13 member insurer by the association in the rate-making procedures for
58-14 insurance rates in the same manner that expenses and premium taxes
58-15 are considered.
58-16 Art. 27.312. MAY NOT LIST PREMIUM. An insurer may not
58-17 separately list the premium paid to the association from the
58-18 personal protection premium stated on a motor vehicle or motorcycle
58-19 insurance declaration page.
58-20 Art. 27.313. REVIEW OF CLAIMS PRACTICES. (a) The
58-21 association shall establish procedures for reviewing claims
58-22 practices of member insurers.
58-23 (b) If the association determines that the claims practices
58-24 of a member insurer are inadequate to properly service the
58-25 liabilities of the association, the association may adjust or
58-26 assist in the adjustment of claims for the member insurer on claims
58-27 that create a potential liability to the association.
59-1 (c) The association may contract with another person,
59-2 including a member insurer, to adjust or assist in the adjustment
59-3 of claims of a member insurer under Subsection (b) of this article.
59-4 (d) The association may charge to the member insurer the
59-5 cost of any action taken under Subsection (b) or (c) of this
59-6 article.
59-7 Art. 27.314. REPORTING OF CLAIMS. (a) A member insurer
59-8 shall report to the association each claim that reasonably may be
59-9 anticipated to require indemnification from the association if the
59-10 member is held liable for the injuries or damages.
59-11 (b) The member insurer shall report the claim without regard
59-12 to whether the member believes that it will be held liable for the
59-13 injuries or damages.
59-14 (c) After the member insurer has reported the claim, the
59-15 member shall report to the association subsequent developments
59-16 likely to materially affect the interest of the association in the
59-17 claim.
59-18 Art. 27.315. CLAIMS STATISTICS. Each member insurer shall
59-19 furnish statistics relevant to the liabilities of the association
59-20 at the times and in the form and detail required by the plan of
59-21 operation.
59-22 Art. 27.316. ANNUAL REPORT. (a) The board shall furnish an
59-23 annual report of the operations of the association.
59-24 (b) The board shall determine the form and content of the
59-25 report.
59-26 (c) The board shall forward a copy of the annual report to
59-27 the commissioner.
60-1 Art. 27.317. EXAMINATION BY COMMISSIONER. The commissioner
60-2 or an authorized representative of the commissioner may visit the
60-3 association at any time and may examine the operations of the
60-4 association.
60-5 Art. 27.318. WITHDRAWAL FROM ASSOCIATION. (a) A member
60-6 insurer may withdraw from the association only on ceasing to write
60-7 motor vehicle insurance that provides the security required under
60-8 the Texas Motor Vehicle Safety-Responsibility Act (Article 6701h,
60-9 Vernon's Texas Civil Statutes).
60-10 (b) The withdrawing member insurer shall pay all unpaid
60-11 premiums that have been charged to the withdrawing member on the
60-12 effective date of the withdrawal.
60-13 (c) An insurer that has withdrawn from the association is
60-14 bound by the plan of operation.
60-15 Art. 27.319. LIABILITY OF INSOLVENT MEMBER INSURER. (a)
60-16 The member insurers shall assume an unsatisfied net liability to
60-17 the association of an insolvent member. The liability shall be
60-18 apportioned among the remaining members under the plan of
60-19 operation.
60-20 (b) The association has the legal rights of a member insurer
60-21 against the estate or funds of the insolvent member for money due
60-22 to the association.
60-23 Art. 27.320. MERGER OR CONSOLIDATION OF MEMBER INSURER. If
60-24 a member insurer has been merged or consolidated into another
60-25 insurer or another insurer has reinsured a member's entire business
60-26 that provides the security required by the Texas Motor Vehicle
60-27 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
61-1 Statutes), the member and the successors in interest of the member
61-2 are liable for the member's obligations.
61-3 CHAPTER 28. MOTORCYCLE ACCIDENT COMPENSATION
61-4 Art. 28.01. DEFINITIONS. In this chapter:
61-5 (1) "Motorcycle" has the meaning assigned by Article
61-6 27.01 of this code.
61-7 (2) "Operator" and "owner" have the meanings assigned
61-8 by Section 1, Texas Motor Vehicle Safety-Responsibility Act
61-9 (Article 6701h, Vernon's Texas Civil Statutes).
61-10 (3) "Ownership, operation, maintenance, or use" has
61-11 the meaning assigned by Article 27.01 of this code, except that the
61-12 term relates to the use of a motorcycle.
61-13 Art. 28.02. SCOPE OF CHAPTER. This chapter applies only to
61-14 motor vehicle insurance used to satisfy the requirements of the
61-15 Texas Motor Vehicle Safety-Responsibility Act (Article 6701h,
61-16 Vernon's Texas Civil Statutes) for a motorcycle.
61-17 Art. 28.03. COVERAGE REQUIRED. (a) An insurance policy
61-18 used to satisfy the requirements of the Texas Motor Vehicle
61-19 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
61-20 Statutes) for a motorcycle shall provide security against loss
61-21 resulting from liability imposed by law for property damage, bodily
61-22 injury, or death that arises out of the ownership, operation,
61-23 maintenance, or use of that motorcycle.
61-24 (b) The liability coverage required by Subsection (a) of
61-25 this article is subject to a limit, excluding interest and costs,
61-26 of:
61-27 (1) at least $20,000 because of bodily injury to or
62-1 death of one person in one accident;
62-2 (2) at least $40,000 because of bodily injury to or
62-3 death of two or more persons in one accident; and
62-4 (3) at least $10,000 because of injury to or
62-5 destruction of property of others in one accident.
62-6 Art. 28.04. FIRST-PARTY COVERAGE. (a) An insurer that
62-7 offers insurance coverage for motorcycles as described by Article
62-8 28.03 of this code shall also offer coverage for first-party
62-9 medical benefits.
62-10 (b) The first-party medical benefits required by this
62-11 article are payable in the event the owner or operator of the
62-12 vehicle is involved in a motor vehicle accident that does not
62-13 involve a motor vehicle other than a motorcycle.
62-14 (c) The motor vehicle insurer shall offer the first-party
62-15 benefits in increments of $5,000.
62-16 Art. 28.05. POLICY PROVISIONS. (a) Subject to the approval
62-17 of the commissioner, an insurer may offer deductibles, provisions
62-18 for the coordination of benefits, provisions for the subtraction of
62-19 other benefits provided by law, and other policy provisions
62-20 approved by the commissioner.
62-21 (b) The deductibles and other policy provisions described by
62-22 this article may apply only to benefits payable to the named
62-23 insured, the named insured's spouse, or a relative of the named
62-24 insured who lives in the named insured's household.
62-25 SECTION 2. Articles 5.01(b) and (e), Insurance Code, are
62-26 amended to read as follows:
62-27 (b) The Board shall have the sole and exclusive power and
63-1 authority, and it shall be its duty, to determine, fix, prescribe,
63-2 and promulgate just, reasonable, and adequate rates of premiums to
63-3 be charged and collected by all insurers writing any form of
63-4 insurance on motor vehicles in this State, including insurance
63-5 written under Chapters 27 and 28 of this code, fleet or other
63-6 rating plans designed to discourage losses from fire and theft and
63-7 similar hazards, and any rating plans designed to encourage the
63-8 prevention of accidents. In promulgating any such rating plans the
63-9 Board shall give due consideration to the peculiar hazards and
63-10 experience of individual risks, past and prospective, within and
63-11 outside the State and to all other relevant factors, within and
63-12 outside the State. The Board shall have the authority also to
63-13 alter or amend any and all of such rates of premiums so fixed and
63-14 determined and adopted by it, and to raise or lower the same or any
63-15 part thereof.
63-16 (e) Motor vehicle or automobile insurance as referred to in
63-17 this subchapter shall be taken and construed to mean insurance
63-18 providing coverage for motor vehicles and motorcycles under
63-19 Chapters 27 and 28 of this code and every form of insurance on any
63-20 <automobile or> other vehicle hereinafter enumerated and its
63-21 operating equipment or necessitated by reason of the liability
63-22 imposed by law for damages arising out of the ownership, operation,
63-23 maintenance, or use in this State of any <automobile, motorcycle,
63-24 motorbicycle, truck, truck-tractor, tractor, traction engine, or
63-25 any other> self-propelled vehicle, and including also every
63-26 vehicle, trailer or semi-trailer pulled or towed by a motor
63-27 vehicle, but excluding every motor vehicle running only upon fixed
64-1 rails or tracks. Workers' Compensation Insurance is excluded from
64-2 the foregoing definition.
64-3 SECTION 3. Article 5.01B(a), Insurance Code, is amended to
64-4 read as follows:
64-5 (a) Information filed or otherwise provided by an insurer to
64-6 the State Board of Insurance for the purpose of determining,
64-7 fixing, prescribing, promulgating, altering, or amending commercial
64-8 automobile <liability> insurance rates under Article 5.01 of this
64-9 code, obtaining a rate deviation under Article 5.03 of this code,
64-10 or reporting losses under Article 5.04-1 of this code is public
64-11 information unless it is exempt under Subchapter C, Chapter 552,
64-12 Government Code <Section 3(a), Chapter 424, Acts of the 63rd
64-13 Legislature, Regular Session, 1973 (Article 6252-17a, Vernon's
64-14 Texas Civil Statutes)>, or Section (b) of this article.
64-15 SECTION 4. Article 5.04-1(a), Insurance Code, is amended to
64-16 read as follows:
64-17 (a) A report filed under Article 5.01(a) of this code must
64-18 include the information necessary to compute a Texas automobile
64-19 experience modifier as provided by this code or a rule adopted by
64-20 the State Board of Insurance. In reporting losses under Article
64-21 5.01(a) of this code, an insurer may include only the following as
64-22 basic limits losses:
64-23 (1) indemnity losses, up to the basic limits for the
64-24 losses;
64-25 (2) losses based on payments for immediate medical or
64-26 surgical treatment;
64-27 (3) fees paid to an attorney who is not an employee of
65-1 the insurer, if the fees were for services rendered in the trial of
65-2 an action arising under a covered claim;
65-3 (4) specific expenses incurred as a direct result of
65-4 defending an action in connection with which the expense is
65-5 claimed;
65-6 (5) specific expenses, other than claims adjustment
65-7 expenses, incurred in connection with the settlement of a claim
65-8 with respect to which the expense is claimed;
65-9 (6) <all medical payments coverage; and>
65-10 <(7)> personal <injury> protection coverage losses;
65-11 and
65-12 (7) property protection coverage losses.
65-13 SECTION 5. Article 5.06(1), Insurance Code, is amended to
65-14 read as follows:
65-15 (1) The Board shall adopt a policy form and endorsements for
65-16 each type of motor vehicle insurance subject to this subchapter.
65-17 The coverage provided by a policy form adopted under this
65-18 subsection is the minimum coverage that may be provided under an
65-19 insurance policy for that type of insurance in this State. <Each
65-20 policy form must provide the coverages mandated under Articles
65-21 5.06-1 and 5.06-3 of this code, except that the coverages may be
65-22 rejected by the named insured as provided by those articles.>
65-23 SECTION 6. Article 5.06-6, Insurance Code, is amended to
65-24 read as follows:
65-25 Art. 5.06-6. COVERAGES FOR SPOUSES AND FORMER SPOUSES. A
65-26 personal automobile policy or any similar policy form adopted or
65-27 approved by the State Board of Insurance under Article 5.06 of this
66-1 code that provides coverage for an injury <covers liability>
66-2 arising out of ownership, maintenance, or use of a motor vehicle of
66-3 a spouse, who is otherwise insured by the policy, shall contain a
66-4 provision to continue coverage for the spouse during a period of
66-5 separation in contemplation of divorce.
66-6 SECTION 7. Article 5.07-1(a), Insurance Code, is amended to
66-7 read as follows:
66-8 (a) Except as provided by Subchapter L, Chapter 27, of this
66-9 code and by rules duly promulgated by the board, under an auto
66-10 insurance policy that is delivered, issued for delivery, or renewed
66-11 in this state an insurer may not, directly or indirectly, limit its
66-12 coverage under a policy covering damage to a motor vehicle by
66-13 specifying the brand, type, kind, age, or condition of parts or
66-14 products that may be used to repair the vehicle or by limiting the
66-15 beneficiary of the policy from selecting a person or shop to repair
66-16 damage to the motor vehicle covered under the policy.
66-17 SECTION 8. Section 1(a), Article 5.101, Insurance Code, is
66-18 amended to read as follows:
66-19 (a) The pilot program on flexible rating is created to help
66-20 stabilize the rates charged for insurance in all lines of <property
66-21 and casualty> insurance covered by Subchapters A through L of this
66-22 chapter, except ocean marine insurance, inland marine insurance,
66-23 fidelity, surety and guaranty bond insurance, errors and omissions
66-24 insurance, directors' and officers' liability insurance, general
66-25 liability insurance, commercial property insurance, workers'
66-26 compensation insurance, professional liability insurance for
66-27 physicians and health care providers as defined in Article 5.15-1
67-1 of this code, and attorney's professional liability insurance.
67-2 SECTION 9. Section 1, Texas Motor Vehicle
67-3 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
67-4 Statutes), is amended to read as follows:
67-5 Sec. 1. The following words and phrases, when used in this
67-6 Act, shall, for the purposes of this Act, have the meanings
67-7 respectively ascribed to them in this section, except in those
67-8 instances where the context clearly indicates a different meaning:
67-9 1. "Highway" means the entire width between property
67-10 lines of any road, street, way, thoroughfare, or bridge in the
67-11 State of Texas not privately owned or controlled, when any part
67-12 thereof is open to the public for vehicular traffic and over which
67-13 the State has legislative jurisdiction under its police power.
67-14 2. "Judgment"--Any judgment which shall have become
67-15 final by expiration without appeal of the time within which an
67-16 appeal might have been perfected, or by final affirmation on
67-17 appeal, rendered by a court of competent jurisdiction of any state
67-18 or of the United States, upon a cause of action arising out of the
67-19 ownership, maintenance or use of any motor vehicle, for damages,
67-20 including damages for care and loss of services, because of bodily
67-21 injury to or death of any person, or for damages because of injury
67-22 to or destruction of property, including the loss of use thereof,
67-23 or upon a cause of action on an agreement of settlement for such
67-24 damages.
67-25 3. "Motor Vehicle"--Every self-propelled vehicle which
67-26 is designed for use upon a highway, including trailers and
67-27 semitrailers designed for use with such vehicles (except traction
68-1 engines, road rollers and graders, tractor cranes, power shovels,
68-2 well drillers and implements of husbandry) and every vehicle which
68-3 is propelled by electric power obtained from overhead wires but not
68-4 operated upon rails.
68-5 4. "License"--Any driver's, operator's, commercial
68-6 operator's, or chauffeur's license, temporary instruction permit or
68-7 temporary license, or restricted license, issued under Article
68-8 6687b, Texas Revised Civil Statutes, pertaining to the licensing of
68-9 persons to operate motor vehicles.
68-10 5. "Nonresident"--Every person who is not a resident
68-11 of the State of Texas.
68-12 6. "Nonresident's Operating Privilege"--The privilege
68-13 conferred upon a nonresident by the laws of Texas pertaining to the
68-14 operation by him of a motor vehicle, or the use of a motor vehicle
68-15 owned by him, in the State of Texas.
68-16 7. "Operator"--Every person who is in actual physical
68-17 control of a motor vehicle.
68-18 8. "Owner"--A person who holds the legal title of a
68-19 motor vehicle, or in the event a motor vehicle is the subject of an
68-20 agreement for the conditional sale or lease thereof with the right
68-21 of purchase upon performance of the conditions stated in the
68-22 agreement and with an immediate right of possession vested in the
68-23 conditional vendee or lessee or in the event a mortgagor of a
68-24 vehicle is entitled to possession, then such conditional vendee or
68-25 lessee or mortgagor shall be deemed the owner for the purposes of
68-26 this Act.
68-27 9. "Person"--Every natural person, firm,
69-1 copartnership, association or corporation.
69-2 10. "Proof of Financial Responsibility" means evidence
69-3 of compliance with or exemption from Section 1A of this Act and
69-4 includes any document that may be furnished to a peace officer or
69-5 person involved in an accident in compliance with Section 1B of
69-6 this Act. <--Proof of ability to respond in damages for liability,
69-7 on account of accidents occurring subsequent to the effective date
69-8 of said proof, arising out of the ownership, maintenance or use of
69-9 a motor vehicle, in the following amounts: effective January 1,
69-10 1984, Fifteen Thousand Dollars ($15,000) because of bodily injury
69-11 to or death of one person in any one accident, and, subject to said
69-12 limit for one person, Thirty Thousand Dollars ($30,000) because of
69-13 bodily injury to or death of two (2) or more persons in any one
69-14 accident, and Fifteen Thousand Dollars ($15,000) because of injury
69-15 to or destruction of property of others in any one accident and
69-16 effective January 1, 1986, Twenty Thousand Dollars ($20,000)
69-17 because of bodily injury to or death of one person in any one
69-18 accident, and, subject to said limit for one person, Forty Thousand
69-19 Dollars ($40,000) because of bodily injury to or death of two (2)
69-20 or more persons in any one accident, and Fifteen Thousand Dollars
69-21 ($15,000) because of injury to or destruction of property of others
69-22 in any one accident. The proof of ability to respond in damages
69-23 may exclude the first Two Hundred Fifty Dollars ($250) of liability
69-24 for bodily injury to or death of any one person in any one
69-25 accident, and, subject to that exclusion for one person, may
69-26 exclude the first Five Hundred Dollars ($500) of liability for the
69-27 bodily injury to or death of two (2) or more persons in any one
70-1 accident and may exclude the first Two Hundred Fifty Dollars ($250)
70-2 of liability for the injury to or destruction of property of others
70-3 in any one accident.>
70-4 11. "Registration"--Registration or license
70-5 certificate or license receipt or dealer's license and registration
70-6 or number plates issued under Article 6675a or Article 6686, Texas
70-7 Revised Civil Statutes, pertaining to the registration of motor
70-8 vehicles.
70-9 12. "Department" means the Department of Public Safety
70-10 of the State of Texas, acting directly or through its authorized
70-11 officers and agents, except in such sections of this Act in which
70-12 some other State Department is specifically named.
70-13 13. "State"--Any state, territory or possession of the
70-14 United States, the District of Columbia, or any province of the
70-15 Dominion of Canada.
70-16 14. "Volunteer Fire Department" means a company,
70-17 department, or association whose members receive no or nominal
70-18 compensation and that is organized in an unincorporated area for
70-19 the purpose of answering fire alarms and extinguishing fires or
70-20 answering fire alarms, extinguishing fires, and providing emergency
70-21 medical services.
70-22 SECTION 10. Sections 1A(a), (b), and (d), Texas Motor
70-23 Vehicle Safety-Responsibility Act (Article 6701h, Vernon's Texas
70-24 Civil Statutes), are amended to read as follows:
70-25 (a) On and after January 1, 1982, no motor vehicle may be
70-26 operated in this State unless a policy of motor vehicle <automobile
70-27 liability> insurance that complies with Section 1A-1 of <in at
71-1 least the minimum amounts to provide evidence of financial
71-2 responsibility under> this Act is in effect to insure against
71-3 potential losses which may arise out of the operation of that
71-4 vehicle.
71-5 (b) The following vehicles are exempt from the requirement
71-6 of Subsection (a) of this section:
71-7 (1) vehicles exempt by Section 33 of this Act;
71-8 (2) any vehicles for which the title is held in the
71-9 name of a volunteer fire department;
71-10 (3) <vehicles for which a bond is on file with the
71-11 Department as provided by Section 24 of this Act, or for which a
71-12 certificate has been obtained from the State Treasurer stating that
71-13 the owner and/or operator has deposited with the State Treasurer
71-14 Fifty-Five Thousand Dollars ($55,000) in cash or securities as
71-15 provided by Section 25 of this Act. Such bond or deposit may be
71-16 filed in lieu of carrying automobile liability insurance where
71-17 proof is required;>
71-18 <(4)> vehicles that are self-insured under Section 34
71-19 of this Act; and
71-20 (4) <(5)> implements of husbandry<; and>
71-21 <(6) vehicles for which a valid certificate certifying
71-22 that cash or a cashier's check in the amount of at least Fifty-Five
71-23 Thousand Dollars ($55,000) is deposited with the county judge of
71-24 the county in which the vehicle is registered has been:>
71-25 <(A) issued by the county judge and acknowledged
71-26 by the sheriff of that county; and>
71-27 <(B) filed with the Department>.
72-1 (d) Subsection (b) of this section may not be construed to
72-2 exempt a person who is operating a vehicle for which title is held
72-3 in the name of a volunteer fire department from the <liability>
72-4 insurance requirements of this Act.
72-5 SECTION 11. Article I, Texas Motor Vehicle
72-6 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
72-7 Statutes), is amended by adding Section 1A-1 to read as follows:
72-8 Sec. 1A-1. The owner or operator of a motor vehicle may
72-9 satisfy the financial responsibility requirement of this Act with a
72-10 motor vehicle insurance policy providing at least the coverage
72-11 required by Chapter 27, Insurance Code, or, in the case of a
72-12 motorcycle, the coverage required by Chapter 28, Insurance Code.
72-13 SECTION 12. Sections 1B(a) and (d), Texas Motor Vehicle
72-14 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
72-15 Statutes), are amended to read as follows:
72-16 (a) As a condition of operating a motor vehicle in this
72-17 state, the operator of the motor vehicle shall furnish, on request
72-18 of a peace officer or a person involved in an accident with the
72-19 operator:
72-20 (1) an <a liability> insurance policy that complies
72-21 with Section 1A-1 of <in at least the minimum amounts required by>
72-22 this Act, or a photocopy of that policy, that covers the vehicle;
72-23 (2) a standard proof of <liability> insurance form
72-24 promulgated by the Texas Department of Insurance and issued by an
72-25 <a liability> insurer that:
72-26 (A) includes the name of the insurer;
72-27 (B) includes the insurance policy number;
73-1 (C) includes the policy period;
73-2 (D) includes the name and address of each
73-3 insured;
73-4 (E) includes the policy limits or a statement
73-5 that the coverage of the policy complies with Section 1A-1 of <at
73-6 least the minimum amounts of liability insurance required by> this
73-7 Act; and
73-8 (F) includes the make and model of each covered
73-9 vehicle;
73-10 (3) an insurance binder that confirms that the
73-11 operator is in compliance with this Act; or
73-12 (4) a certificate or copy of a certificate issued by
73-13 the department that shows the vehicle is covered by
73-14 self-insurance<;>
73-15 <(5) a certificate issued by the state treasurer that
73-16 shows that the owner of the vehicle has on deposit with the
73-17 treasurer money or securities in at least the amount required by
73-18 Section 25 of this Act;>
73-19 <(6) a certificate issued by the department that shows
73-20 that the vehicle is a vehicle for which a bond is on file with the
73-21 department as provided by Section 24 of this Act; or>
73-22 <(7) a copy of a certificate issued by the county
73-23 judge of a county in which the vehicle is registered that shows
73-24 that the owner of the vehicle has on deposit with the county judge
73-25 cash or a cashier's check in at least the amount required by
73-26 Section 1A(b)(6) of this Act>.
73-27 (d) A standard proof of <liability> insurance form described
74-1 in Subsection (a)(2) <(A)(2)> of this section, or a document that
74-2 is an unauthorized version of the form, is a governmental record
74-3 for purposes of Chapter 37, Penal Code. A standard proof of
74-4 <liability> insurance form is unauthorized for purposes of this
74-5 subsection if it is not issued by an insurer authorized to transact
74-6 motor vehicle <liability> insurance in this state.
74-7 SECTION 13. Sections 1D and 1E, Texas Motor Vehicle
74-8 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
74-9 Statutes), are amended to read as follows:
74-10 Sec. 1D. It is a defense to prosecution under this Act if
74-11 the person charged produces in court an <automobile liability>
74-12 insurance policy that complies with Section 1A-1 of this Act or a
74-13 certificate of self-insurance previously issued to that person that
74-14 was valid at the time that the offense is alleged to have occurred
74-15 and the charge shall be dismissed.
74-16 Sec. 1E. When notified of an accident by the Department in
74-17 which an owner or operator has reported evidence of financial
74-18 responsibility with an insurance company, the insurance company so
74-19 notified shall be required to respond to the Department only if
74-20 there is not a policy of <liability> insurance that complies with
74-21 Section 1A-1 of this Act in effect, as reported.
74-22 SECTION 14. Sections 1F(a) and (f), Texas Motor Vehicle
74-23 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
74-24 Statutes), are amended to read as follows:
74-25 (a) The department shall suspend the driver's license and
74-26 motor vehicle registration of a person convicted of an offense
74-27 under Section 1C(a) of this Act, if a prior conviction of the
75-1 person under Section 1C(a) of this Act has been previously reported
75-2 to the department by a magistrate or the judge or clerk of a court,
75-3 unless the person establishes and maintains proof of financial
75-4 responsibility for two years from the date of the second or
75-5 subsequent conviction. The requirement for filing proof of
75-6 financial responsibility may be waived if satisfactory evidence is
75-7 filed with the Department that the party convicted was at the time
75-8 of arrest covered by a policy of <liability> insurance that
75-9 complies with Section 1A-1 of this Act or was otherwise exempt as
75-10 provided in Section 1A(b) of this Act.
75-11 (f) The following evidence of financial responsibility or a
75-12 photocopy of the evidence satisfies the requirement of Subsection
75-13 (e) of this section:
75-14 (1) an <a liability> insurance policy that complies
75-15 with Section 1A-1 of <in at least the minimum amounts required by>
75-16 this Act to provide proof of financial responsibility covering at
75-17 least the period required by Subsection (e) of this section;
75-18 (2) a standard proof of <liability> insurance form
75-19 promulgated by the Texas Department of Insurance and issued by an
75-20 <a liability> insurer that includes:
75-21 (A) the name of the insurer;
75-22 (B) the insurance policy number;
75-23 (C) the policy period, which must equal or
75-24 exceed the period required by Subsection (e) of this section;
75-25 (D) the name and address of each insured; and
75-26 (E) the policy limits or a statement that the
75-27 coverage of the policy complies with Section 1A-1 of <at least the
76-1 minimum amounts of liability insurance required by> this Act;
76-2 (3) an insurance binder that confirms to the
76-3 satisfaction of the court that the defendant is in compliance with
76-4 this Act for at least the period required by Subsection (e) of this
76-5 section; or
76-6 (4) a copy of a certificate issued by the Department
76-7 of Public Safety that shows that the vehicle to be registered is
76-8 covered by self-insurance<;>
76-9 <(5) a certificate issued by the state treasurer that
76-10 shows that the owner of the vehicle has on deposit with the
76-11 treasurer money or securities in at least the amount required by
76-12 Section 25 of this Act;>
76-13 <(6) a certificate issued by the Department that shows
76-14 that the vehicle is a vehicle for which a bond is on file with the
76-15 Department as provided by Section 24 of this Act; or>
76-16 <(7) a copy of a certificate issued by the county
76-17 judge of a county in which the vehicle is registered that shows
76-18 that the owner of the vehicle has on deposit with the county judge
76-19 cash or a cashier's check in at least the amount required by
76-20 Section 1A(b)(6) of this Act>.
76-21 SECTION 15. Section 36(a), Texas Motor Vehicle
76-22 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
76-23 Statutes), is amended to read as follows:
76-24 (a) The <Except for fees collected under Section 1C(e) of
76-25 this Act, the> fees and charges required by this Act shall be
76-26 remitted without deduction to the Department at Austin, Texas, and
76-27 all such fees so collected shall be deposited in the Treasury of
77-1 the State of Texas to the credit of an account in the general
77-2 revenue <a> fund to be known as the Operator's and Chauffeur's
77-3 License Account <Fund>. A <In addition to statutory recording fees
77-4 of county clerks required in Section 24, any> request for a
77-5 certified abstract of operating record required in Section 3 shall
77-6 be accompanied by a fee of Twenty Dollars ($20) for each
77-7 transaction. Statutory fees required by the Texas <State>
77-8 Department of <Highways and Public> Transportation in furnishing
77-9 certified abstracts or in connection with suspension of
77-10 registrations<, or such statutory fees which shall become due the
77-11 State Treasurer for issuance of certificates of deposits required
77-12 in Section 25,> shall be remitted from that account <such Fund>.
77-13 SECTION 16. Section 3, Article 21.28-C, Insurance Code, is
77-14 amended to read as follows:
77-15 Sec. 3. Scope. (a) This Act applies to all kinds of direct
77-16 insurance, and except as provided in Section 12 of this Act, is not
77-17 applicable to the following:
77-18 (1) life, annuity, health, or disability insurance;
77-19 (2) mortgage guaranty, financial guaranty, or other
77-20 forms of insurance offering protection against investment risks;
77-21 (3) fidelity or surety bonds, or any other bonding
77-22 obligations;
77-23 (4) credit insurance, vendors' single-interest
77-24 insurance, collateral protection insurance, or any similar
77-25 insurance protecting the interests of a creditor arising out of a
77-26 creditor-debtor transaction;
77-27 (5) insurance of warranties or service contracts;
78-1 (6) title insurance;
78-2 (7) ocean marine insurance;
78-3 (8) any transaction or combination of transactions
78-4 between a person, including an affiliate of such a person, and an
78-5 insurer, including an affiliate of such an insurer, that involves
78-6 the transfer of investment or credit risk unaccompanied by the
78-7 transfer of insurance risk; or
78-8 (9) any insurance provided by or guaranteed by
78-9 government.
78-10 (b) This Act applies to motor vehicle and motorcycle
78-11 insurance issued under Chapters 27 and 28 of this code.
78-12 SECTION 17. Article 21.49-2A(a)(1), Insurance Code, is
78-13 amended to read as follows:
78-14 (1) "Liability insurance" means the following types of
78-15 insurance:
78-16 (A) general liability;
78-17 (B) professional liability other than medical
78-18 professional liability;
78-19 (C) commercial automobile coverage, including
78-20 coverage issued under Chapter 27 of this code <liability>;
78-21 (D) commercial multiperil coverage; and
78-22 (E) any other types or lines of liability
78-23 insurance designated by the State Board of Insurance.
78-24 SECTION 18. Section 5(a), Article 21.55, Insurance Code, is
78-25 amended to read as follows:
78-26 (a) This article does not apply to:
78-27 (1) workers' compensation insurance;
79-1 (2) mortgage guaranty insurance;
79-2 (3) title insurance;
79-3 (4) fidelity, surety, or guaranty bonds;
79-4 (5) marine insurance other than inland marine
79-5 insurance governed by Article 5.53 of this code; <or>
79-6 (6) a guaranty association created and operating under
79-7 Article 9.48 of this code; or
79-8 (7) personal protection insurance coverage benefits
79-9 payable under a motor vehicle insurance policy.
79-10 SECTION 19. Sections 3(a) and (f), Article 21.81, Insurance
79-11 Code, are amended to read as follows:
79-12 (a) The governing committee has the responsibility for the
79-13 administration of the association through the plan of operation.
79-14 The association may collect funds from the member companies to
79-15 provide for the operation of the association. Assessments must be
79-16 made upon member companies in proportion to their writings of motor
79-17 vehicle <liability> insurance in this state. If an assessment made
79-18 upon a member insurer is not paid within a reasonable time, the
79-19 association may bring an action to collect the assessment. In
79-20 addition, the association may report the failure to pay to the
79-21 commissioner, who may institute a disciplinary action under Article
79-22 1.10 of this code. The association has the powers granted to
79-23 nonprofit corporations under the Texas Non-Profit Corporation Act
79-24 (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes).
79-25 (f) The plan of operation must include a voluntary,
79-26 competitive limited assignment distribution plan that allows
79-27 members to contract directly with a servicing carrier to accept
80-1 assignments to that carrier by the association. A servicing
80-2 carrier must be an insurance company licensed to write automobile
80-3 insurance in this state and is qualified if it has written
80-4 automobile <liability> insurance in Texas for at least five years
80-5 or is currently engaged as a servicing carrier for assigned risk
80-6 automobile business in at least one other state. After notice and
80-7 hearing, the commissioner may prohibit an insurer from acting as a
80-8 servicing carrier. The terms of the contract between the servicing
80-9 carrier and the insurer, including the buy-out fee, shall be
80-10 determined by negotiation between the parties. The governing
80-11 committee may adopt reasonable rules for the conduct of business
80-12 under the contract and may establish reasonable standards of
80-13 eligibility for servicing carriers.
80-14 SECTION 20. Section 4(c), Article 21.81, Insurance Code, is
80-15 amended to read as follows:
80-16 (c) A person who obtains, from any source, excess private
80-17 passenger auto <liability> insurance coverage over the minimum auto
80-18 <liability> coverage required by law shall be ineligible for
80-19 insurance through the association. The coverage for the excess and
80-20 basic limits policies is not affected by a violation of this
80-21 section unless the insurer shows that the insured had actual
80-22 knowledge that the insured was <they were> ineligible for coverage
80-23 through the association. An agent may not knowingly write excess
80-24 private passenger auto <liability> insurance coverage if the
80-25 minimum <auto liability> coverage required by law is provided
80-26 through the association. If an agent violates this section, the
80-27 agent, after notice and hearing, is subject to the penalties
81-1 provided by Section 7, Article 1.10, of this code.
81-2 SECTION 21. Sections 2a(d) and (e), Chapter 88, General
81-3 Laws, Acts of the 41st Legislature, 2nd Called Session, 1929
81-4 (Article 6675a-2a, Vernon's Texas Civil Statutes), are amended to
81-5 read as follows:
81-6 (d) The following evidence of financial responsibility or a
81-7 photocopy of the evidence satisfies the requirement of this
81-8 section:
81-9 (1) an <a liability> insurance policy or <liability>
81-10 self-insurance or pool coverage document issued by a political
81-11 subdivision or governmental pool pursuant to the authority
81-12 contained in The Interlocal Cooperation Act (Article 4413(32c),
81-13 Vernon's Texas Civil Statutes), Chapter 119, Local Government Code,
81-14 or other applicable law in at least the minimum amounts required by
81-15 the Texas Motor Vehicle Safety-Responsibility Act (Article 6701h,
81-16 Vernon's Texas Civil Statutes) to provide proof of financial
81-17 responsibility covering at least the period required by Subsection
81-18 (a) of this section;
81-19 (2) a standard proof of insurance <liability> form
81-20 promulgated by the Texas Department of Insurance and issued by an
81-21 <a liability> insurer that includes:
81-22 (A) the name of the insurer;
81-23 (B) the insurance policy or other coverage
81-24 document number;
81-25 (C) the policy or other coverage document
81-26 coverage period;
81-27 (D) the name and address of each insured or
82-1 covered person;
82-2 (E) the policy or other coverage document limits
82-3 or a statement that the coverage of the policy complies with at
82-4 least the minimum amounts of <liability> insurance required by the
82-5 Texas Motor Vehicle Safety-Responsibility Act (Article 6701h,
82-6 Vernon's Texas Civil Statutes); and
82-7 (F) the make and model of each covered vehicle;
82-8 (3) an insurance binder that confirms to the
82-9 satisfaction of the county tax collector that the owner of the
82-10 motor vehicle to be registered is in compliance with the Texas
82-11 Motor Vehicle Safety-Responsibility Act (Article 6701h, Vernon's
82-12 Texas Civil Statutes) for at least the period required by
82-13 Subsection (a) of this section; or
82-14 (4) a copy of a certificate issued by the Department
82-15 of Public Safety that shows that the vehicle to be registered is
82-16 covered by self-insurance<;>
82-17 <(5) a certificate issued by the state treasurer that
82-18 shows that the owner of the vehicle has on deposit with the
82-19 treasurer money or securities in at least the amount required by
82-20 Section 25 of the Texas Motor Vehicle Safety-Responsibility Act
82-21 (Article 6701h, Vernon's Texas Civil Statutes);>
82-22 <(6) a certificate issued by the Department of Public
82-23 Safety that shows that the vehicle is a vehicle for which a bond is
82-24 on file with the Department as provided by Section 24 of the Texas
82-25 Motor Vehicle Safety-Responsibility Act (Article 6701h, Vernon's
82-26 Texas Civil Statutes); or>
82-27 <(7) a copy of a certificate issued by the county
83-1 judge of a county in which the vehicle is registered that shows
83-2 that the owner of the vehicle has on deposit with the county judge
83-3 cash or a cashier's check in at least the amount required by
83-4 Section 1A(b)(6) of the Texas Motor Vehicle Safety-Responsibility
83-5 Act (Article 6701h, Vernon's Texas Civil Statutes)>.
83-6 (e) At the time the county tax collector registers a motor
83-7 vehicle, the tax collector shall provide to the person registering
83-8 the motor vehicle a separate document that contains a statement
83-9 that the motor vehicle being registered may not be operated in this
83-10 state unless <liability> insurance coverage for the vehicle in at
83-11 least the minimum amounts required by law remains in effect <to
83-12 insure against potential losses> or unless the motor vehicle is
83-13 exempt from the insurance requirement by Section 1A(b), Texas Motor
83-14 Vehicle Safety-Responsibility Act (Article 6701h, Vernon's Texas
83-15 Civil Statutes).
83-16 SECTION 22. Section 6(c), Chapter 173, Acts of the 47th
83-17 Legislature, Regular Session, 1941 (Article 6687b, Vernon's Texas
83-18 Civil Statutes), is amended to read as follows:
83-19 (c) An application for an original or renewal driver's
83-20 license must be accompanied by evidence of financial responsibility
83-21 or a statement that the applicant does not own a motor vehicle for
83-22 which maintenance of financial responsibility is required under the
83-23 Texas Motor Vehicle Safety-Responsibility Act (Article 6701h,
83-24 Vernon's Texas Civil Statutes). Evidence of financial
83-25 responsibility presented under this subsection must comply with
83-26 Section 1A-1 <be in at least the minimum amounts required by
83-27 Subdivision 10, Section 1>, Texas Motor Vehicle
84-1 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
84-2 Statutes), must cover each motor vehicle that the applicant owns
84-3 and for which the applicant is required to maintain financial
84-4 responsibility, and may be shown in the manner specified under
84-5 Section 1B(a) of that Act. A personal automobile insurance policy
84-6 used as evidence of financial responsibility under this subsection
84-7 must be written for a term of 30 days or more as required by
84-8 Article 5.06, Insurance Code. A statement that the applicant does
84-9 not own an applicable motor vehicle must be sworn to and signed by
84-10 the applicant.
84-11 SECTION 23. The following laws are repealed:
84-12 (1) Articles 5.06-1 and 5.06-3, Insurance Code;
84-13 (2) Articles III and IV, Texas Motor Vehicle
84-14 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
84-15 Statutes);
84-16 (3) Sections 32(a) and (b), Texas Motor Vehicle
84-17 Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
84-18 Statutes); and
84-19 (4) Sections 37, 39, 40, 41, and 42, Texas Motor
84-20 Vehicle Safety-Responsibility Act (Article 6701h, Vernon's Texas
84-21 Civil Statutes).
84-22 SECTION 24. This Act takes effect September 1, 1995.
84-23 SECTION 25. This Act applies only to a motor vehicle or
84-24 motorcycle insurance policy that is delivered, issued for delivery,
84-25 or renewed on or after January 1, 1995. A policy that is
84-26 delivered, issued for delivery, or renewed before January 1, 1995,
84-27 is governed by the law as it existed immediately before the
85-1 effective date of this Act, and that law is continued in effect for
85-2 that purpose.
85-3 SECTION 26. In each case in which Chapter 27, Insurance
85-4 Code, as added by Section 1 of this Act, requires an annual
85-5 adjustment to be made to a benefit limit, the first annual
85-6 adjustment shall be made effective September 1, 1997.
85-7 SECTION 27. (a) In making the initial appointments to the
85-8 board of directors of the personal protection insurance association
85-9 created under Subchapter P, Chapter 27, Insurance Code, as added by
85-10 Section 1 of this Act, the commissioner of insurance shall appoint
85-11 two members for terms expiring February 1, 1997, two members for
85-12 terms expiring February 1, 1999, and two members for terms expiring
85-13 February 1, 2001.
85-14 (b) Not more than 60 days after the date of the initial
85-15 organizational meeting of the board of directors of the personal
85-16 protection insurance association, the board shall submit to the
85-17 commissioner of insurance for approval a proposed plan of operation
85-18 that has been ratified by a majority of the member insurers and
85-19 that meets the requirements of Subchapter P, Chapter 27, Insurance
85-20 Code, as added by Section 1 of this Act. For purposes of ratifying
85-21 the initial plan of operation, voting rights are apportioned among
85-22 the member insurers according to each member insurer's share of
85-23 total premium that would be charged under the proposed plan of
85-24 operation and Article 27.311, Insurance Code, as added by Section 1
85-25 of this Act. If a plan is not submitted within the 60-day period,
85-26 the commissioner of insurance, after consultation with the board of
85-27 directors, shall adopt a plan that meets the requirements of
86-1 Chapter 27, Insurance Code, as added by Section 1 of this Act.
86-2 (c) The personal protection insurance association
86-3 established under Subchapter P, Chapter 27, Insurance Code, as
86-4 added by Section 1 of this Act, may not indemnify an insurer for a
86-5 loss occurring before September 1, 1996.
86-6 SECTION 28. (a) The repeal of Articles III and IV, Texas
86-7 Motor Vehicle Safety-Responsibility Act (Article 6701h, Vernon's
86-8 Texas Civil Statutes), by Section 23(2) of this Act applies only to
86-9 an event that occurs on or after the effective date of this Act.
86-10 For purposes of this section, an event occurs before the effective
86-11 date of this Act if any element of the event occurs before the
86-12 effective date.
86-13 (b) An event that occurs before the effective date of this
86-14 Act is covered by the law in effect on the date of the event, and
86-15 the former law is continued in effect for this purpose.
86-16 SECTION 29. The importance of this legislation and the
86-17 crowded condition of the calendars in both houses create an
86-18 emergency and an imperative public necessity that the
86-19 constitutional rule requiring bills to be read on three several
86-20 days in each house be suspended, and this rule is hereby suspended.