By Duncan H.B. No. 1511
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to maximum liability under underinsured motorist insurance
1-3 coverage and resulting rate reductions.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section (5), Article 5.06-1, Insurance Code, is
1-6 amended to read as follows:
1-7 (5) The underinsured motorist coverage shall provide for
1-8 payment to the insured of all sums which the insured is <he shall
1-9 be> legally entitled to recover as damages from owners or operators
1-10 of underinsured motor vehicles because of bodily injury or property
1-11 damage in an amount up to the limit specified in the policy. That
1-12 limit shall be<,> reduced by the amount recovered or recoverable by
1-13 the insured from the insurer of the underinsured motor vehicle.
1-14 SECTION 2. This Act takes effect September 1, 1995, and
1-15 applies only to a motor vehicle insurance policy that is delivered,
1-16 issued for delivery, or renewed on or after January 1, 1996. A
1-17 policy that is delivered, issued for delivery, or renewed before
1-18 January 1, 1996, is governed by the law as it existed immediately
1-19 before the effective date of this Act, and that law is continued in
1-20 effect for that purpose.
1-21 SECTION 3. On or before December 31, 1995, the commissioner
1-22 shall hold a hearing for the purpose of determining the impact on
1-23 rate reduction resulting from the passage of this Act. After such
1-24 hearing, the commissioner shall order a reduction if appropriate in
2-1 underinsured and uninsured motorist coverage rates for each
2-2 insurance company operating in this state. If the commissioner has
2-3 not issued an order in accordance with this section by March 1,
2-4 1996, or the order has not become final because of judicial
2-5 intervention or any other reason, such rates for underinsured and
2-6 uninsured motorist coverage shall be reduced 10 percent below the
2-7 rates in effect on April 1, 1995. If an insurance company can show
2-8 that such a rate reduction is confiscatory, that company's
2-9 underinsured and uninsured motorist coverage rates shall be reduced
2-10 by an amount that is not confiscatory.
2-11 SECTION 4. The importance of this legislation and the
2-12 crowded condition of the calendars in both houses create an
2-13 emergency and an imperative public necessity that the
2-14 constitutional rule requiring bills to be read on three several
2-15 days in each house be suspended, and this rule is hereby suspended.