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.