By Nelson                                             S.B. No. 1048
       74R2246 DLF-D
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to motor vehicle insurance coverage and liability for
    1-3  motor vehicle accidents.
    1-4        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-5        SECTION 1.  The Insurance Code is amended by adding Chapter
    1-6  27 to read as follows:
    1-7    CHAPTER 27.  COMPREHENSIVE MOTOR VEHICLE INSURANCE REPARATIONS
    1-8                   SUBCHAPTER A.  GENERAL PROVISIONS
    1-9        Art. 27.01.  DEFINITIONS.  In this chapter:
   1-10              (1)  "Bus" means:
   1-11                    (A)  a motor vehicle, owned by a governmental
   1-12  agency or privately owned and operated for compensation, used to
   1-13  transport children to or from school; or
   1-14                    (B)  a motor vehicle that has a seating capacity
   1-15  for 15 or more passengers in addition to the driver and that is
   1-16  used for the transportation of persons.
   1-17              (2)  "Covered economic loss" means a loss for which
   1-18  first-party benefits must be paid under Article 27.17 of this code.
   1-19              (3)  "Covered person" means a person entitled to
   1-20  benefits under Article 27.11(a) of this code or covered by a
   1-21  certificate of self-insurance under Section 34, Texas Motor Vehicle
   1-22  Safety-Responsibility Act (Section 6701h, Vernon's Texas Civil
   1-23  Statutes).
   1-24              (4)  "First-party benefits" means payments made to a
    2-1  covered person to reimburse the person for a covered economic loss.
    2-2              (5)  "Insurer" means an insurance company, a
    2-3  corporation, an interinsurance exchange, a mutual, a county mutual,
    2-4  a reciprocal, an association, a Lloyd's, or other insurer that
    2-5  writes any form of motor vehicle insurance that is delivered,
    2-6  issued for delivery, or renewed in this state.
    2-7              (6)  "Medical expenses" means all necessary expenses
    2-8  incurred for any professional health service, including expenses
    2-9  incurred for:
   2-10                    (A)  medical, hospital, surgical, nursing,
   2-11  dental, ambulance, X-ray, prescription drug, and prosthetic
   2-12  products or services;
   2-13                    (B)  psychiatric, physical, and occupational
   2-14  therapy and rehabilitation services; and
   2-15                    (C)  nonmedical remedial care or treatment
   2-16  rendered in accordance with a religious method of healing
   2-17  recognized by the laws of this state.
   2-18              (7)  "Member of named insured's household" means a
   2-19  spouse, child, or relative of the named insured who regularly
   2-20  resides in the named insured's household.
   2-21              (8)  "Motorcycle" has the meaning assigned by Section
   2-22  1, Texas Motor Vehicle Safety-Responsibility Act (Article 6701h,
   2-23  Vernon's Texas Civil Statutes).
   2-24              (9)  "Motor vehicle" has the meaning assigned by
   2-25  Section 1, Texas Motor Vehicle Safety-Responsibility Act (Article
   2-26  6701h, Vernon's Texas Civil Statutes).
   2-27              (10)  "Motor vehicle insurance" means a policy of
    3-1  insurance delivered, issued for delivery, or renewed in this state
    3-2  that provides coverage for bodily injury resulting from the use of
    3-3  a motor vehicle.
    3-4              (11)  "Noneconomic loss" means a detriment caused by
    3-5  bodily injury that arises out of the use of a motor vehicle other
    3-6  than economic loss, and includes pain and suffering.
    3-7              (12)  "Operator" has the meaning assigned by Section 1,
    3-8  Texas Motor Vehicle Safety-Responsibility Act (Article 6701h,
    3-9  Vernon's Texas Civil Statutes).
   3-10              (13)  "Owner" has the meaning assigned by Section 1,
   3-11  Texas Motor Vehicle Safety-Responsibility Act (Article 6701h,
   3-12  Vernon's Texas Civil Statutes).
   3-13              (14)  "Speed contest" means a competition or race
   3-14  formally or otherwise arranged between the driver of a motor
   3-15  vehicle covered by the insurance policy and the driver of another
   3-16  vehicle, without regard to whether the competition or race is for
   3-17  compensation.  The term does not include operation of a vehicle at
   3-18  a speed that exceeds the legal speed limit if the driver is not
   3-19  engaged in such a competition or race.
   3-20              (15)  "Uninsured motor vehicle" means a motor vehicle
   3-21  that is:
   3-22                    (A)  not covered by a policy of insurance that
   3-23  meets the requirements of this chapter; or
   3-24                    (B)  owned by a person whose identity is unknown
   3-25  and unascertainable.
   3-26             (Sections 27.02-27.10 reserved for expansion
   3-27                   SUBCHAPTER B.  REQUIRED COVERAGE
    4-1        Art. 27.11.  FIRST-PARTY BENEFITS; ADDITIONAL FINANCIAL
    4-2  SECURITY REQUIRED.  (a)  Each motor vehicle insurance policy must
    4-3  provide for the payment of first-party benefits:
    4-4              (1)  for bodily injury that arises out of the use in
    4-5  this state of a motor vehicle covered by the policy and sustained
    4-6  by:
    4-7                    (A)  the named insured;
    4-8                    (B)  a member of the named insured's household;
    4-9                    (C)  a passenger or operator of a motor vehicle
   4-10  covered by the policy;
   4-11                    (D)  a person who is a passenger of a motor
   4-12  vehicle operated by the named insured or by a member of the named
   4-13  insured's household and who is not covered by another motor vehicle
   4-14  insurance policy that provides first-party benefits under this
   4-15  article;
   4-16                    (E)  a pedestrian injured through the use of a
   4-17  motor vehicle covered by the policy; and
   4-18                    (F)  a pedestrian injured through the use of a
   4-19  motor vehicle that is:
   4-20                          (i)  not owned by the pedestrian;
   4-21                          (ii)  operated by the named insured or a
   4-22  member of the named insured's household; and
   4-23                          (iii)  not covered by another motor vehicle
   4-24  insurance policy that meets the requirements of this article;
   4-25              (2)  to the named insured and members of the named
   4-26  insured's household, for bodily injury that arises out of the use,
   4-27  outside of this state, but in the United States, its territories or
    5-1  possessions, or Canada, of a motor vehicle covered by the policy or
    5-2  covered by another policy;
    5-3              (3)  to the named insured and members of the named
    5-4  insured's household, for bodily injury that arises out of the use,
    5-5  in the United States, its territories or possessions, or Canada, of
    5-6  an uninsured motor vehicle, including a motorcycle; and
    5-7              (4)  a resident of this state who is not the owner of a
    5-8  motor vehicle for which coverage for first-party benefits is
    5-9  required by the Texas Motor Vehicle Safety-Responsibility Act
   5-10  (Article 6701h, Vernon's Texas Civil Statutes) and who is not a
   5-11  member of a named insured's household covered by another policy
   5-12  providing first-party benefits under this article, for bodily
   5-13  injury that arises out of the use, outside of this state, but in
   5-14  the United States, its territories or possessions, or Canada, of a
   5-15  motor vehicle covered by the policy.
   5-16        (b)  A motor vehicle insurance policy under this article must
   5-17  provide at least $50,000 in first-party benefits for each covered
   5-18  person in one accident.
   5-19        (c)  Each motor vehicle insurance policy under this article
   5-20  must provide liability coverage in an amount of at least $15,000,
   5-21  indemnifying the named insured, a member of the named insured's
   5-22  household, and an operator of a motor vehicle owned by the named
   5-23  insured who is operating the vehicle with the permission of the
   5-24  named insured for liability imposed by law for injury to or
   5-25  destruction of property of others that arises out of the use of a
   5-26  motor vehicle.  Coverage under this subsection may be subject to a
   5-27  deductible of not more than $250.
    6-1        (d)  This article does not apply to a motor vehicle insurance
    6-2  policy issued to the owner or operator of a motorcycle.  Except as
    6-3  provided by Subsection (a)(3) of this article, the benefits
    6-4  required by this article may not be paid to a person for bodily
    6-5  injury arising out of the use of a motorcycle.
    6-6        Art. 27.12.  MOTORCYCLE INSURANCE.  (a)  Each policy of
    6-7  liability insurance covering a motorcycle and issued to satisfy the
    6-8  requirements of the Texas Motor Vehicle Safety-Responsibility Act
    6-9  (Article 6701h, Vernon's Texas Civil Statutes) must also provide
   6-10  for the payment of first-party benefits to persons, other than the
   6-11  occupants of the covered motorcycle, another motorcycle, or a motor
   6-12  vehicle, for a loss that arises out of the use or operation of the
   6-13  motorcycle in this state.
   6-14        (b)  A motorcycle insurance policy under this article must
   6-15  provide at least $50,000 in first-party benefits for each covered
   6-16  person in one accident.
   6-17        Art. 27.13.  DEATH BENEFIT.  Each motor vehicle insurance
   6-18  policy must provide a death benefit in the amount of $2,000 for the
   6-19  death of a person who would have been entitled to first-party
   6-20  benefits under Article 27.11(a) or 27.12 of this code had the
   6-21  person survived.  The death benefit required by this article is in
   6-22  addition to first-party benefits payable as a result of the use of
   6-23  the motor vehicle, including a motorcycle, and is payable to the
   6-24  estate of the deceased.
   6-25        Art. 27.14.  EXCLUSIONS.  A policy of motor vehicle insurance
   6-26  under Article 27.11 or 27.13 of this code may exclude payment of
   6-27  first-party benefits to a covered person whose conduct contributed
    7-1  to the injury sustained if:
    7-2              (1)  the injury was caused intentionally;
    7-3              (2)  the injury was caused while the covered person was
    7-4  committing a felony, seeking to evade lawful apprehension by a law
    7-5  enforcement officer, operating a motor vehicle in a speed contest,
    7-6  or operating or occupying a motor vehicle known by the covered
    7-7  person to be stolen; or
    7-8              (3)  the injury was caused while the covered person was
    7-9  under the influence of:
   7-10                    (A)  alcohol;
   7-11                    (B)  a controlled substance, as defined by
   7-12  Section 481.002, Health and Safety Code;
   7-13                    (C)  a volatile chemical listed in Section
   7-14  484.002, Health and Safety Code; or
   7-15                    (D)  an abusable glue or aerosol paint, as
   7-16  defined by Section 485.001, Health and Safety Code.
   7-17        Art. 27.15.  DEDUCTIBLES.  (a)  Each insurer who offers motor
   7-18  vehicle insurance that provides first-party benefits under Article
   7-19  27.11 of this code shall offer that insurance both:
   7-20              (1)  without a deductible; and
   7-21              (2)  with a deductible of not more than $200 applicable
   7-22  only to the covered economic loss of the named insured and members
   7-23  of the named insured's household.
   7-24        (b)  The commissioner shall approve a higher deductible for
   7-25  policies providing additional benefits or to coordinate first-party
   7-26  benefits with other benefits provided under the policy or provided
   7-27  by other policies.  A deductible approved by the commissioner
    8-1  applies only to the claims of the named insured and members of the
    8-2  named insured's household.
    8-3        Art. 27.16.  ADDITIONAL BENEFITS.  This chapter does not
    8-4  prevent an insurer from providing benefits broader than or in
    8-5  addition to the minimum benefits enumerated in this subchapter,
    8-6  subject to the rules and forms approved by the commissioner.
    8-7        Art. 27.17.  COVERED ECONOMIC LOSS.  (a)  First party
    8-8  benefits required by this subchapter must provide coverage for
    8-9  expenses and losses, other than loss incurred because of death,
   8-10  resulting from bodily injury that arises out of the use of a motor
   8-11  vehicle.  Benefits for covered economic loss paid under this
   8-12  article are limited to:
   8-13              (1)  medical expenses incurred not later than the first
   8-14  anniversary of the accident causing injury, except as provided by
   8-15  Subsection (b) of this article;
   8-16              (2)  loss of earnings not to exceed $1,000 per month,
   8-17  for the period ending on the third anniversary of the accident
   8-18  causing injury; and
   8-19              (3)  other reasonable and necessary expenses, not to
   8-20  exceed $25 per day, incurred not later than the first anniversary
   8-21  of the accident causing injury.
   8-22        (b)  The policy must provide first-party benefits for medical
   8-23  expenses incurred after the first anniversary of the accident
   8-24  causing injury if, before the first anniversary of the accident, it
   8-25  appeared that additional medical expenses might be incurred after
   8-26  that date.
   8-27        Art. 27.18.  LOSS OF EARNINGS.  (a)  In computing covered
    9-1  economic loss under Article 27.17(a)(2) of this code, "loss of
    9-2  earnings" means 70 percent of the sum of:
    9-3              (1)  the amount actually incurred of loss of earnings
    9-4  from work that a person would have performed had the person not
    9-5  been injured; and
    9-6              (2)  the amount of reasonable and necessary expenses
    9-7  incurred by the injured person in obtaining services in lieu of
    9-8  those that the person would have performed for income.
    9-9        (b)  A covered person is not entitled to receive first-party
   9-10  benefits for loss of earnings to the extent the person's loss of
   9-11  earnings is offset by payments from that person's employer, whether
   9-12  the payments are required by statute or contract or are made
   9-13  voluntarily by the employer, unless the payments from the employer
   9-14  reduce the covered person's income or level of future benefits that
   9-15  arise from a subsequent illness or injury.
   9-16        Art. 27.19.  USE OF COVERED VEHICLE OUTSIDE STATE.  A policy
   9-17  of insurance that provides first-party benefits under Article 27.11
   9-18  of this code must provide that a covered motor vehicle used in
   9-19  another state or a Canadian province is covered by at least the
   9-20  minimum amount of insurance coverage required by the laws of that
   9-21  state or province.
   9-22        Art. 27.20.  COVERAGE FOR NONRESIDENT MOTORISTS.  (a)  Each
   9-23  insurer authorized to transact or transacting business in this
   9-24  state, and each insurer controlling, controlled by, or under common
   9-25  control by or with an insurer authorized to transact or transacting
   9-26  business in this state, that sells a policy providing motor vehicle
   9-27  insurance coverage or similar coverage in any state or Canadian
   10-1  province shall include in each policy coverage to satisfy the
   10-2  requirements of Article 27.11 of this code applicable to a motor
   10-3  vehicle covered by the policy when the vehicle is used in this
   10-4  state.
   10-5        (b)  A policy sold by an insurer subject to Subsection (a) of
   10-6  this article shall be construed to provide coverage described in
   10-7  Article 27.11 of this code.
   10-8        Art. 27.21.  PRIMARY COVERAGE.  (a)  Coverage provided by
   10-9  insurance under this chapter is the primary coverage for bodily
  10-10  injury to a named insured or to a member of the named insured's
  10-11  household and must be exhausted before the covered person may
  10-12  collect benefits from a different policy.
  10-13        (b)  A policy form approved by the commissioner for motor
  10-14  vehicle insurance under this chapter may limit or prohibit recovery
  10-15  for one occurrence from more than one coverage or policy or from a
  10-16  coverage or policy and a tortfeasor.
  10-17        Art. 27.22.  PAYMENT OF FIRST-PARTY BENEFITS TO PASSENGER ON
  10-18  BUS.  First-party benefits for a bus passenger, other than the
  10-19  operator or owner of the bus or an employee of the owner or
  10-20  operator, who is injured in a motor vehicle accident in this state
  10-21  must be provided by each motor vehicle insurance policy under which
  10-22  the injured person is a named insured or a member of a named
  10-23  insured's household.  If the injured person is not a named insured
  10-24  or a member of a named insured's household on a motor vehicle
  10-25  insurance policy, first-party benefits shall be provided by the
  10-26  insurer of the bus.
  10-27        Art. 27.23.  PROMPT PAYMENT OF CLAIMS.  Payment of
   11-1  first-party benefits under this chapter is subject to Article 21.55
   11-2  of this code.
   11-3        Art. 27.24.  NONCONFORMING POLICIES.  A policy of insurance
   11-4  represented by an insurer as meeting the requirements of the Texas
   11-5  Motor Vehicle Safety-Responsibility Act (Article 6701h, Vernon's
   11-6  Texas Civil Statutes) shall be construed to meet the requirements
   11-7  of this chapter.
   11-8             (Sections 27.25-27.50 reserved for expansion
   11-9                    SUBCHAPTER C.  CIVIL LIABILITY
  11-10        Art. 27.51.  ACCEPTANCE OF SUBCHAPTER.  By registering,
  11-11  maintaining, or using a motor vehicle in this state, a person
  11-12  accepts the provisions of this subchapter.
  11-13        Art. 27.52.  LIABILITY FOR USE OF MOTOR VEHICLE.  (a)
  11-14  Notwithstanding any other law and except as provided by Articles
  11-15  27.53, 27.54, and 27.55 of this code, a covered person is not
  11-16  liable for covered economic loss or noneconomic loss resulting from
  11-17  bodily injury that arises out of the use in this state of a motor
  11-18  vehicle.  This subsection does not apply to a loss that arises out
  11-19  of the use of a motorcycle operated by any person.
  11-20        (b)  Notwithstanding any other law and except as provided by
  11-21  Articles 27.53, 27.54, and 27.55 of this code, a covered person may
  11-22  not recover for covered economic loss that arises out of the use of
  11-23  a motorcycle in this state from the owner, operator, or occupant of
  11-24  a motorcycle that is covered by a policy of insurance that meets
  11-25  the requirements of Article 27.12 of this code and the financial
  11-26  responsibility requirements of the Texas Motor Vehicle
  11-27  Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
   12-1  Statutes).
   12-2        Art. 27.53.  EXCEPTION; COVERED ECONOMIC LOSS IN EXCESS OF
   12-3  $50,000.  A covered person may be held liable for the amount of
   12-4  covered economic loss that exceeds $50,000.
   12-5        Art. 27.54.  EXCEPTION; SERIOUS INJURY.  A covered person may
   12-6  be held liable for noneconomic loss if the injured person has
   12-7  suffered a bodily injury that results in:
   12-8              (1)  death;
   12-9              (2)  dismemberment;
  12-10              (3)  permanent and serious disfigurement;
  12-11              (4)  a fracture;
  12-12              (5)  loss of a fetus;
  12-13              (6)  permanent loss of the use of a body organ, member,
  12-14  function, or system;
  12-15              (7)  permanent and significant limitation of use of a
  12-16  body organ, member, function, or system; or
  12-17              (8)  a medically determined injury or impairment that
  12-18  prevents the injured person from performing substantially all of
  12-19  the material acts that constitute the person's usual and customary
  12-20  activities for at least 90 days during the 180-day period beginning
  12-21  on the date of the accident causing the injury or impairment.
  12-22        Art. 27.55.  EXCEPTION; CONDUCT OF TORTFEASOR.  A covered
  12-23  person may recover damages for bodily injury arising out of a motor
  12-24  vehicle accident if the defendant caused the injury:
  12-25              (1)  intentionally;
  12-26              (2)  under the influence of:
  12-27                    (A)  alcohol;
   13-1                    (B)  a controlled substance, as defined by
   13-2  Section 481.002, Health and Safety Code;
   13-3                    (C)  a volatile chemical listed in Section
   13-4  484.002, Health and Safety Code; or
   13-5                    (D)  an abusable glue or aerosol paint, as
   13-6  defined by Section 485.001, Health and Safety Code; or
   13-7              (3)  while committing a felony, seeking to evade lawful
   13-8  apprehension by a law enforcement official, operating a motor
   13-9  vehicle in a speed contest, or operating or occupying a motor
  13-10  vehicle known by the person to be stolen.
  13-11        Art. 27.56.  LIEN ON RECOVERY; RIGHTS OF INSURER.  (a)  In an
  13-12  action by or on behalf of a covered person, against a noncovered
  13-13  person, in which damages for bodily injury arising out of a motor
  13-14  vehicle accident, including a motorcycle accident, are recovered,
  13-15  an insured that paid or is liable to pay benefits for the injury
  13-16  has a lien against any recovery to the extent of first-party
  13-17  benefits paid or payable by the insured to the covered person.
  13-18        (b)  A covered person may not settle an action for bodily
  13-19  injury brought against a noncovered person unless:
  13-20              (1)  the insurer consents in writing;
  13-21              (2)  the settlement is approved by a court of competent
  13-22  jurisdiction; or
  13-23              (3)  the amount of the settlement exceeds the amount of
  13-24  first-party benefits paid or payable by an insurer.
  13-25        (c)  At any time within the limitations period fixed for an
  13-26  action for personal injury under Section 16.003, Civil Practice and
  13-27  Remedies Code, an insurer may bring an action for the amount of
   14-1  first-party benefits paid or payable to a covered person against a
   14-2  person who may be liable for the covered person's injury.  An
   14-3  insurer may not bring an action under this subsection if the
   14-4  covered person has commenced an action against the person for the
   14-5  injury.  A covered person may bring a cause of action against any
   14-6  person who may be liable for the covered person's injury, without
   14-7  regard to whether an action has been brought by an insurer.  In an
   14-8  action brought by the covered person after an action has been
   14-9  commenced by the insurer, the covered person's recovery for covered
  14-10  economic loss shall be reduced by the amount of first-party
  14-11  benefits recovered by the insurer.
  14-12        Art. 27.57.  PROOF IN CERTAIN ACTIONS.  In an action to
  14-13  recover the amount of economic loss that exceeds $50,000, or to
  14-14  recover noneconomic loss, or both, the first $50,000 of economic
  14-15  loss may be pleaded and proved to the extent it is relevant to the
  14-16  action.
  14-17             (Sections 27.58-27.70 reserved for expansion
  14-18                SUBCHAPTER D.  ARBITRATION OF DISPUTES
  14-19        Art. 27.71.  RIGHT TO ELECT ARBITRATION.  A policy of motor
  14-20  vehicle insurance must authorize the claimant to elect arbitration
  14-21  of a dispute involving the insurer's liability to pay first-party
  14-22  benefits or additional first-party benefits, the amount of the
  14-23  benefits, or a matter that arises under Article 21.55 of this code.
  14-24        Art. 27.72.  SETTLEMENT BETWEEN INSURERS.  (a)  This article
  14-25  applies only to payment of first-party benefits for injury that
  14-26  arises out of a motor vehicle accident involving at least one motor
  14-27  vehicle that:
   15-1              (1)  weighs more than 6,500 pounds unloaded; or
   15-2              (2)  is used primarily for the transportation of
   15-3  persons or property for hire.
   15-4        (b)  For the purposes of this article, the weight of a motor
   15-5  vehicle is the actual weight of the vehicle fully equipped with
   15-6  body and other equipment, as certified by an official public
   15-7  weigher or a license and weight inspector of the Texas Department
   15-8  of Public Safety.
   15-9        (c)  Except as provided by Subsection (d) of this article, an
  15-10  insurer liable for the payment of first-party benefits, as
  15-11  described by Subsection (a) of this article, to or on behalf of a
  15-12  covered person, may recover from the insurer of another covered
  15-13  person to the extent that the other covered person would be liable
  15-14  if Subchapter C of this chapter did not bar recovery from the
  15-15  covered person.
  15-16        (d)  An insurer who pays first-party benefits under Article
  15-17  27.22 of this code to the occupants of a bus, other than the
  15-18  operator or owner of the bus or employees of the operator or owner,
  15-19  does not have a right to recover the amount of those benefits from
  15-20  the insurer of the bus.
  15-21        (e)  An insurer seeking to recover on a disputed claim
  15-22  arising under Subsection (c) of this article shall submit the
  15-23  controversy to arbitration.
  15-24        (f)  The liability of an insurer imposed by this article does
  15-25  not affect or diminish that insurer's obligations under a policy of
  15-26  bodily injury liability insurance.
  15-27        Art. 27.73.  ARBITRATION OF DISPUTES BETWEEN INSURERS.  A
   16-1  dispute between insurers concerning their respective
   16-2  responsibilities for payment of first-party benefits shall be
   16-3  submitted to arbitration.
   16-4        Art. 27.74.  ARBITRATION.  (a)  Arbitration under Article
   16-5  27.71, 27.72, or 27.73 of this code shall be conducted under rules
   16-6  adopted by the commissioner.
   16-7        (b)  An award entered in arbitration under this article is
   16-8  final and binding on all parties.  Except as provided by Subsection
   16-9  (c) of this article, a party to arbitration may not appeal the
  16-10  award.
  16-11        (c)  A suit to vacate an arbitrator's award must be filed not
  16-12  later than the earlier of:
  16-13              (1)  the first anniversary of the arbitrator's award;
  16-14  or
  16-15              (2)  the later of:
  16-16                    (A)  the 30th day after the date of the award; or
  16-17                    (B)  the 30th day after the date the appealing
  16-18  party knew or should have known of a basis for suit under this
  16-19  article.
  16-20        (d)  Venue for a suit to vacate an arbitrator's award is in
  16-21  the county in which arbitration was conducted or where the accident
  16-22  occurred.
  16-23        (e)  In an appeal, the court is confined to the record
  16-24  developed before the arbitrator and may vacate the arbitrator's
  16-25  award only on a finding that:
  16-26              (1)  the award was obtained by corruption, fraud, or
  16-27  misrepresentation;
   17-1              (2)  the decision of the arbitrator was arbitrary and
   17-2  capricious; or
   17-3              (3)  the decision of the arbitrator was not based on
   17-4  substantial evidence.
   17-5        SECTION 2.  Articles 5.01(b) and (e), Insurance Code, are
   17-6  amended to read as follows:
   17-7        (b)  The Board shall have the sole and exclusive power and
   17-8  authority, and it shall be its duty to determine, fix, prescribe,
   17-9  and promulgate just, reasonable and adequate rates of premiums to
  17-10  be charged and collected by all insurers writing any form of
  17-11  insurance on motor vehicles in this State, including insurance
  17-12  providing coverage under Chapter 27 of this code, fleet or other
  17-13  rating plans designed to discourage losses from fire and theft and
  17-14  similar hazards, and any rating plans designed to encourage the
  17-15  prevention of accidents.  In promulgating any such rating plans the
  17-16  Board shall give due consideration to the peculiar hazards and
  17-17  experience of individual risks, past and prospective, within and
  17-18  outside the State and to all other relevant factors, within and
  17-19  outside the State.  The Board shall have the authority also to
  17-20  alter or amend any and all of such rates of premiums so fixed and
  17-21  determined and adopted by it, and to raise or lower the same or any
  17-22  part thereof.
  17-23        (e)  Motor vehicle or automobile insurance as referred to in
  17-24  this subchapter shall be taken and construed to mean insurance
  17-25  providing coverage under Chapter 27 of this code and every form of
  17-26  insurance on any automobile or other vehicle hereinafter enumerated
  17-27  and its operating equipment or necessitated by reason of the
   18-1  liability imposed by law for damages arising out of the ownership,
   18-2  operation, maintenance, or use in this State of any automobile,
   18-3  motorcycle, motorbicycle, truck, truck-tractor, tractor, traction
   18-4  engine, or any other self-propelled vehicle, and including also
   18-5  every vehicle, trailer or semi-trailer pulled or towed by a motor
   18-6  vehicle, but excluding every motor vehicle running only upon fixed
   18-7  rails or tracks.  Workers' Compensation Insurance is excluded from
   18-8  the foregoing definition.
   18-9        SECTION 3.  Section 5.01B(a), Insurance Code, is amended to
  18-10  read as follows:
  18-11        (a)  Information filed or otherwise provided by an insurer to
  18-12  the State Board of Insurance for the purpose of determining,
  18-13  fixing, prescribing, promulgating, altering, or amending commercial
  18-14  automobile <liability> insurance rates under Article 5.01 of this
  18-15  code, obtaining a rate deviation under Article 5.03 of this code,
  18-16  or reporting losses under Article 5.04-1 of this code is public
  18-17  information unless it is exempt under Subchapter C, Chapter 552,
  18-18  Government Code <Section 3(a), Chapter 424, Acts of the 63rd
  18-19  Legislature, Regular Session, 1973 (Article 6252-17a, Vernon's
  18-20  Texas Civil Statutes)>, or Section (b) of this article.
  18-21        SECTION 4.  Section 5.06-4(a), Insurance Code, is amended to
  18-22  read as follows:
  18-23        (a)  Any insurer desiring to write commercial automobile
  18-24  <liability> insurance in this state must provide loss control
  18-25  information as a prerequisite for a license to write that
  18-26  insurance.
  18-27        SECTION 5.  Article 5.06-6, Insurance Code, is amended to
   19-1  read as follows:
   19-2        Art. 5.06-6.  COVERAGES FOR SPOUSES AND FORMER SPOUSES.  A
   19-3  personal automobile policy or any similar policy form adopted or
   19-4  approved by the State Board of Insurance under Article 5.06 of this
   19-5  code that provides coverage for an injury <covers liability>
   19-6  arising out of ownership, maintenance, or use of a motor vehicle of
   19-7  a spouse, who is otherwise insured by the policy, shall contain a
   19-8  provision to continue coverage for the spouse during a period of
   19-9  separation in contemplation of divorce.
  19-10        SECTION 6.  Section 1(a), Article 5.101, Insurance Code, is
  19-11  amended to read as follows:
  19-12        (a)  The pilot program on flexible rating is created to help
  19-13  stabilize the rates charged for insurance in all lines of <property
  19-14  and casualty> insurance covered by Subchapters A through L of this
  19-15  chapter, except ocean marine insurance, inland marine insurance,
  19-16  fidelity, surety and guaranty bond insurance, errors and omissions
  19-17  insurance, directors' and officers' liability insurance, general
  19-18  liability insurance, commercial property insurance, workers'
  19-19  compensation insurance, professional liability insurance for
  19-20  physicians and health care providers as defined in Article 5.15-1
  19-21  of this code, and attorney's professional liability insurance.
  19-22        SECTION 7.  Section 1(2), Article 21.81, Insurance Code, is
  19-23  amended to read as follows:
  19-24              (2)  "Authorized insurer" means any insurer authorized
  19-25  by the Texas Department of Insurance to write motor vehicle
  19-26  insurance <liability> coverage under the provisions of Chapter 5 of
  19-27  this code.  The term does not include an insurer organized under
   20-1  Chapter 17 of this code.
   20-2        SECTION 8.  Section 2(a), Article 21.81, Insurance Code, is
   20-3  amended to read as follows:
   20-4        (a)  The Texas Automobile Insurance Plan Association is
   20-5  established.  The association is a nonprofit corporate body
   20-6  composed of all authorized insurers.  Each authorized insurer shall
   20-7  be a member of the association and shall remain a member of the
   20-8  association so long as the association is in existence as a
   20-9  condition of its authority to write motor vehicle <liability>
  20-10  insurance in this state.
  20-11        SECTION 9.  Sections 3(a) and (f), Article 21.81, Insurance
  20-12  Code, are amended to read as follows:
  20-13        (a)  The governing committee has the responsibility for the
  20-14  administration of the association through the plan of operation.
  20-15  The association may collect funds from the member companies to
  20-16  provide for the operation of the association.  Assessments must be
  20-17  made upon member companies in proportion to their writings of motor
  20-18  vehicle <liability> insurance in this state.  If an assessment made
  20-19  upon a member insurer is not paid within a reasonable time, the
  20-20  association may bring an action to collect the assessment.  In
  20-21  addition, the association may report the failure to pay to the
  20-22  commissioner, who may institute a disciplinary action under Article
  20-23  1.10 of this code.  The association has the powers granted to
  20-24  nonprofit corporations under the Texas Non-Profit Corporation Act
  20-25  (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes).
  20-26        (f)  The plan of operation must include a voluntary,
  20-27  competitive limited assignment distribution plan that allows
   21-1  members to contract directly with a servicing carrier to accept
   21-2  assignments to that carrier by the association.  A servicing
   21-3  carrier must be an insurance company licensed to write automobile
   21-4  insurance in this state and is qualified if it has written
   21-5  automobile <liability> insurance in Texas for at least five years
   21-6  or is currently engaged as a servicing carrier for assigned risk
   21-7  automobile business in at least one other state.  After notice and
   21-8  hearing, the commissioner may prohibit an insurer from acting as a
   21-9  servicing carrier.  The terms of the contract between the servicing
  21-10  carrier and the insurer, including the buy-out fee, shall be
  21-11  determined by negotiation between the parties.  The governing
  21-12  committee may adopt reasonable rules for the conduct of business
  21-13  under the contract and may establish reasonable standards of
  21-14  eligibility for servicing carriers.
  21-15        SECTION 10.  Section 4(c), Article 21.81, Insurance Code, is
  21-16  amended to read as follows:
  21-17        (c)  A person who obtains, from any source, excess private
  21-18  passenger automobile <auto liability> insurance coverage over the
  21-19  minimum automobile <auto liability> coverage required by law shall
  21-20  be ineligible for insurance through the association.  The coverage
  21-21  for the excess and basic limits policies is not affected by a
  21-22  violation of this section unless the insurer shows that the insured
  21-23  had actual knowledge that they were ineligible for coverage through
  21-24  the association.  An agent may not knowingly write excess private
  21-25  passenger automobile <auto liability> insurance coverage if the
  21-26  minimum automobile <auto liability> coverage required by law is
  21-27  provided through the association.  If an agent violates this
   22-1  section, the agent, after notice and hearing, is subject to the
   22-2  penalties provided by Section 7, Article 1.10, of this code.
   22-3        SECTION 11.  Section 1, Texas Motor Vehicle
   22-4  Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
   22-5  Statutes), is amended to read as follows:
   22-6        Sec. 1.  The following words and phrases, when used in this
   22-7  Act, shall, for the purposes of this Act, have the meanings
   22-8  respectively ascribed to them in this section, except in those
   22-9  instances where the context clearly indicates a different meaning:
  22-10              1.  "Highway" means the entire width between property
  22-11  lines of any road, street, way, thoroughfare, or bridge in the
  22-12  State of Texas not privately owned or controlled, when any part
  22-13  thereof is open to the public for vehicular traffic and over which
  22-14  the State has legislative jurisdiction under its police power.
  22-15              2.  "Judgment"--Any judgment which shall have become
  22-16  final by expiration without appeal of the time within which an
  22-17  appeal might have been perfected, or by final affirmation on
  22-18  appeal, rendered by a court of competent jurisdiction of any state
  22-19  or of the United States, upon a cause of action arising out of the
  22-20  ownership, maintenance or use of any motor vehicle, for damages,
  22-21  including damages for care and loss of services, because of bodily
  22-22  injury to or death of any person, or for damages because of injury
  22-23  to or destruction of property, including the loss of use thereof,
  22-24  or upon a cause of action on an agreement of settlement for such
  22-25  damages.
  22-26              3.  "Motor Vehicle"--Every self-propelled vehicle which
  22-27  is designed for use upon a highway, including trailers and
   23-1  semitrailers designed for use with such vehicles (except traction
   23-2  engines, road rollers and graders, tractor cranes, power shovels,
   23-3  well drillers and implements of husbandry) and every vehicle which
   23-4  is propelled by electric power obtained from overhead wires but not
   23-5  operated upon rails.
   23-6              4.  "License"--Any driver's, operator's, commercial
   23-7  operator's, or chauffeur's license, temporary instruction permit or
   23-8  temporary license, or restricted license, issued under Article
   23-9  6687b, Texas Revised Civil Statutes, pertaining to the licensing of
  23-10  persons to operate motor vehicles.
  23-11              5.  "Nonresident"--Every person who is not a resident
  23-12  of the State of Texas.
  23-13              6.  "Nonresident's Operating Privilege"--The privilege
  23-14  conferred upon a nonresident by the laws of Texas pertaining to the
  23-15  operation by him of a motor vehicle, or the use of a motor vehicle
  23-16  owned by him, in the State of Texas.
  23-17              7.  "Operator"--Every person who is in actual physical
  23-18  control of a motor vehicle.
  23-19              8.  "Owner"--A person who holds the legal title of a
  23-20  motor vehicle, or in the event a motor vehicle is the subject of an
  23-21  agreement for the conditional sale or lease thereof with the right
  23-22  of purchase upon performance of the conditions stated in the
  23-23  agreement and with an immediate right of possession vested in the
  23-24  conditional vendee or lessee or in the event a mortgagor of a
  23-25  vehicle is entitled to possession, then such conditional vendee or
  23-26  lessee or mortgagor shall be deemed the owner for the purposes of
  23-27  this Act.
   24-1              9.  "Person"--Every natural person, firm,
   24-2  copartnership, association or corporation.
   24-3              10.  "Proof of Financial Responsibility" means evidence
   24-4  of compliance with or exemption from Section 1A of this Act and
   24-5  includes any document that may be furnished to a peace officer or
   24-6  person involved in an accident in compliance with Section 1B of
   24-7  this Act.  <Proof of ability to respond in damages for liability,
   24-8  on account of accidents occurring subsequent to the effective date
   24-9  of said proof, arising out of the ownership, maintenance or use of
  24-10  a motor vehicle, in the following amounts: effective January 1,
  24-11  1984, Fifteen Thousand Dollars ($15,000) because of bodily injury
  24-12  to or death of one person in any one accident, and, subject to said
  24-13  limit for one person, Thirty Thousand Dollars ($30,000) because of
  24-14  bodily injury to or death of two (2) or more persons in any one
  24-15  accident, and Fifteen Thousand Dollars ($15,000) because of injury
  24-16  to or destruction of property of others in any one accident and
  24-17  effective January 1, 1986, Twenty Thousand Dollars ($20,000)
  24-18  because of bodily injury to or death of one person in any one
  24-19  accident, and, subject to said limit for one person, Forty Thousand
  24-20  Dollars ($40,000) because of bodily injury to or death of two (2)
  24-21  or more persons in any one accident, and Fifteen Thousand Dollars
  24-22  ($15,000) because of injury to or destruction of property of others
  24-23  in any one accident.  The proof of ability to respond in damages
  24-24  may exclude the first Two Hundred Fifty Dollars ($250) of liability
  24-25  for bodily injury to or death of any one person in any one
  24-26  accident, and, subject to that exclusion for one person, may
  24-27  exclude the first Five Hundred Dollars ($500) of liability for the
   25-1  bodily injury to or death of two (2) or more persons in any one
   25-2  accident and may exclude the first Two Hundred Fifty Dollars ($250)
   25-3  of liability for the injury to or destruction of property of others
   25-4  in any one accident.>
   25-5              11.  "Registration"--Registration or license
   25-6  certificate or license receipt or dealer's license and registration
   25-7  or number plates issued under Article 6675a or Article 6686, Texas
   25-8  Revised Civil Statutes, pertaining to the registration of motor
   25-9  vehicles.
  25-10              12.  "Department" means the Department of Public Safety
  25-11  of the State of Texas, acting directly or through its authorized
  25-12  officers and agents, except in such sections of this Act in which
  25-13  some other State Department is specifically named.
  25-14              13.  "State"--Any state, territory or possession of the
  25-15  United States, the District of Columbia, or any province of the
  25-16  Dominion of Canada.
  25-17              14.  "Volunteer Fire Department" means a company,
  25-18  department, or association whose members receive no or nominal
  25-19  compensation and that is organized in an unincorporated area for
  25-20  the purpose of answering fire alarms and extinguishing fires or
  25-21  answering fire alarms, extinguishing fires, and providing emergency
  25-22  medical services.
  25-23              15.  "Motorcycle" means each motor vehicle that has a
  25-24  saddle for the use of the rider and is designed to propel itself
  25-25  with not more than three wheels in contact with the ground, but
  25-26  does not include a tractor or any three-wheeled vehicle equipped
  25-27  with a cab, seat, and seat belt and designed to contain the
   26-1  operator of the vehicle in the cab.
   26-2        SECTION 12.  Sections 1A(a), (b), and (d), Texas Motor
   26-3  Vehicle Safety-Responsibility Act    (Article 6701h, Vernon's Texas
   26-4  Civil Statutes), are amended to read as follows:
   26-5        (a)  On and after January 1, 1982, no motor vehicle may be
   26-6  operated in this State unless a policy of motor vehicle <automobile
   26-7  liability> insurance that complies with Section 1A-1 of <in at
   26-8  least the minimum amounts to provide evidence of financial
   26-9  responsibility under> this Act is in effect to insure against
  26-10  potential losses which may arise out of the operation of that
  26-11  vehicle.
  26-12        (b)  The following vehicles are exempt from the requirement
  26-13  of Subsection (a) of this section:
  26-14              (1)  vehicles exempt by Section 33 of this Act;
  26-15              (2)  any vehicles for which the title is held in the
  26-16  name of a volunteer fire department;
  26-17              (3)  <vehicles for which a bond is on file with the
  26-18  Department as provided by Section 24 of this Act, or for which a
  26-19  certificate has been obtained from the State Treasurer stating that
  26-20  the owner and/or operator has deposited with the State Treasurer
  26-21  Fifty-Five Thousand Dollars ($55,000) in cash or securities as
  26-22  provided by Section 25 of this Act.  Such bond or deposit may be
  26-23  filed in lieu of carrying automobile liability insurance where
  26-24  proof is required;>
  26-25              <(4)>  vehicles that are self-insured under Section 34
  26-26  of this Act; and
  26-27              (4) <(5)>  implements of husbandry<; and>
   27-1              <(6)  vehicles for which a valid certificate certifying
   27-2  that cash or a cashier's check in the amount of at least Fifty-Five
   27-3  Thousand Dollars ($55,000) is deposited with the county judge of
   27-4  the county in which the vehicle is registered has been:>
   27-5                    <(A)  issued by the county judge and acknowledged
   27-6  by the sheriff of that county; and>
   27-7                    <(B)  filed with the Department>.
   27-8        (d)  Subsection (b) of this section may not be construed to
   27-9  exempt a person who is operating a vehicle for which title is held
  27-10  in the name of a volunteer  fire department from the <liability>
  27-11  insurance requirements of this Act.
  27-12        SECTION 13.  The Texas Motor Vehicle Safety-Responsibility
  27-13  Act (Article 6701h, Vernon's Texas Civil Statutes) is amended by
  27-14  adding Section 1A-1 to read as follows:
  27-15        Sec. 1A-1.  REQUIRED COVERAGE.  (a)  The owner or operator of
  27-16  a motor vehicle, other than a motorcycle, may satisfy the financial
  27-17  responsibility requirement of this Act with a motor vehicle
  27-18  insurance policy providing at least the minimum coverage required
  27-19  by Article 27.11, Insurance Code.
  27-20        (b)  The owner or operator of a motorcycle may satisfy the
  27-21  financial responsibility requirement of this Act with a motor
  27-22  vehicle insurance policy that provides:
  27-23              (1)  the minimum coverage required by Article 27.12,
  27-24  Insurance Code; and
  27-25              (2)  coverage for the liability of the owner or
  27-26  operator for damages arising out of the use of the motor vehicle in
  27-27  the amount of:
   28-1                    (A)  $20,000 for bodily injury to or death of one
   28-2  person in one accident;
   28-3                    (B)  $40,000 for bodily injury to or death of two
   28-4  or more persons in one accident, subject to the amount provided by
   28-5  Paragraph (A) for bodily injury to or death of one of the persons;
   28-6  and
   28-7                    (C)  $15,000 for damage to or destruction of
   28-8  property of others in one accident.
   28-9        SECTION 14.  Section 1B(a), Texas Motor Vehicle
  28-10  Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
  28-11  Statutes), is amended to read as follows:
  28-12        (a)  As a condition of operating a motor vehicle in this
  28-13  state, the operator of the motor vehicle shall furnish, on request
  28-14  of a peace officer or a person involved in an accident with the
  28-15  operator:
  28-16              (1)  an <a liability> insurance policy that complies
  28-17  with Section 1A-1 of <in at least the minimum amounts required by>
  28-18  this Act, or a photocopy of that policy, that covers the vehicle;
  28-19              (2)  a standard proof of <liability> insurance form
  28-20  promulgated by the Texas Department of Insurance and issued by an
  28-21  <a liability> insurer that:
  28-22                    (A)  includes the name of the insurer;
  28-23                    (B)  includes the insurance policy number;
  28-24                    (C)  includes the policy period;
  28-25                    (D)  includes the name and address of each
  28-26  insured;
  28-27                    (E)  includes the policy limits or a statement
   29-1  that the coverage of the policy complies with Section 1A-1 of <at
   29-2  least the minimum amounts of liability insurance required by> this
   29-3  Act; and
   29-4                    (F)  includes the make and model of each covered
   29-5  vehicle;
   29-6              (3)  an insurance binder that confirms that the
   29-7  operator is in compliance with this Act; or
   29-8              (4)  a certificate or copy of a certificate issued by
   29-9  the department that shows the vehicle is covered by
  29-10  self-insurance<;>
  29-11              <(5)  a certificate issued by the state treasurer that
  29-12  shows that the owner of the vehicle has on deposit with the
  29-13  treasurer money or securities in at least the amount required by
  29-14  Section 25 of this Act;>
  29-15              <(6)  a certificate issued by the department that shows
  29-16  that the vehicle is a vehicle for which a bond is on file with the
  29-17  department as provided by Section 24 of this Act; or>
  29-18              <(7)  a copy of a certificate issued by the county
  29-19  judge of a county in which the vehicle is registered that shows
  29-20  that the owner of the vehicle has on deposit with the county judge
  29-21  cash or a cashier's check in at least the amount required by
  29-22  Section 1A(b)(6) of this Act>.
  29-23        SECTION 15.  Sections 1D and 1E, Texas Motor Vehicle
  29-24  Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
  29-25  Statutes), are amended to read as follows:
  29-26        Sec. 1D.  It is a defense to prosecution under this Act if
  29-27  the person charged produces in court an  <automobile liability>
   30-1  insurance policy that complies with Section 1A-1 of this Act or a
   30-2  certificate of self-insurance previously issued to that person that
   30-3  was valid at the time that the offense is alleged to have occurred
   30-4  and the charge shall be dismissed.
   30-5        Sec. 1E.  When notified of an accident by the Department in
   30-6  which an owner or operator has reported evidence of financial
   30-7  responsibility with an insurance company, the insurance company so
   30-8  notified shall be required to respond to the Department only if
   30-9  there is not a policy of <liability> insurance that complies with
  30-10  Section 1A-1 of this Act in effect, as reported.
  30-11        SECTION 16.  Sections 1F(a) and (f), Texas Motor Vehicle
  30-12  Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
  30-13  Statutes), are amended to read as follows:
  30-14        (a)  The department shall suspend the driver's license and
  30-15  motor vehicle registration of a person convicted of an offense
  30-16  under Section 1C(a) of this Act, if a prior conviction of the
  30-17  person under Section 1C(a) of this Act has been previously reported
  30-18  to the department by a magistrate or the judge or clerk of a court,
  30-19  unless the person establishes and maintains proof of financial
  30-20  responsibility for two years from the date of the second or
  30-21  subsequent conviction.  The requirement for filing proof of
  30-22  financial responsibility may be waived if satisfactory evidence is
  30-23  filed with the Department that the party convicted was at the time
  30-24  of arrest covered by a policy of <liability> insurance that
  30-25  complies with Section 1A-1 of this Act or was otherwise exempt as
  30-26  provided in Section <Sec.> 1A(b) of this Act.
  30-27        (f)  The following evidence of financial responsibility or a
   31-1  photocopy of the evidence satisfies the requirement of Subsection
   31-2  (e) of this section:
   31-3              (1)  an <a liability> insurance policy that complies
   31-4  with Section 1A-1 of <in at least the minimum amounts required by>
   31-5  this Act to provide proof of financial responsibility covering at
   31-6  least the period required by Subsection (e) of this section;
   31-7              (2)  a standard proof of <liability> insurance form
   31-8  promulgated by the Texas Department of Insurance and issued by an
   31-9  <a liability> insurer that includes:
  31-10                    (A)  the name of the insurer;
  31-11                    (B)  the insurance policy number;
  31-12                    (C)  the policy period, which must equal or
  31-13  exceed the period required by Subsection (e) of this section;
  31-14                    (D)  the name and address of each insured; and
  31-15                    (E)  the policy limits or a statement that the
  31-16  coverage of the policy complies with Section 1A-1 of <at least the
  31-17  minimum amounts of liability insurance required by> this Act;
  31-18              (3)  an insurance binder that confirms to the
  31-19  satisfaction of the court that the defendant is in compliance with
  31-20  this Act for at least the period required by Subsection (e) of this
  31-21  section; or
  31-22              (4)  a copy of a certificate issued by the Department
  31-23  of Public Safety that shows that the vehicle to be registered is
  31-24  covered by self-insurance<;>
  31-25              <(5)  a certificate issued by the state treasurer that
  31-26  shows that the owner of the vehicle has on deposit with the
  31-27  treasurer money or securities in at least the amount required by
   32-1  Section 25 of this Act;>
   32-2              <(6)  a certificate issued by the Department that shows
   32-3  that the vehicle is a vehicle for which a bond is on file with the
   32-4  Department as provided by Section 24 of this Act; or>
   32-5              <(7)  a copy of a certificate issued by the county
   32-6  judge of a county in which the vehicle is registered that shows
   32-7  that the owner of the vehicle has on deposit with the county judge
   32-8  cash or a cashier's check in at least the amount required by
   32-9  Section 1A(b)(6) of this Act>.
  32-10        SECTION 17.  Section 5(c), Texas Motor Vehicle
  32-11  Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
  32-12  Statutes), is amended to read as follows:
  32-13        (c)  This section shall not apply under the conditions stated
  32-14  in Section 6 nor:
  32-15              1.  To a motor vehicle operator or owner against whom
  32-16  the Department or a person presiding at a hearing finds there is
  32-17  not a reasonable probability of a judgment being rendered as a
  32-18  result of the accident;
  32-19              2.  To such operator or owner if such owner had in
  32-20  effect at the time of such accident a motor vehicle insurance
  32-21  <liability> policy with   respect to the motor vehicle involved in
  32-22  such accident;
  32-23              3.  To such operator, if not the owner of such motor
  32-24  vehicle, if there was in effect at the time of such accident a
  32-25  motor vehicle insurance <liability> policy <or bond> with respect
  32-26  to his operation of motor vehicles not owned by him;
  32-27              4.  To any person employed by the government of the
   33-1  United States, when such person is acting within the scope or
   33-2  office of his employment;
   33-3              5.  To such operator or owner if the liability of such
   33-4  operator or owner for damages resulting from such accident is, in
   33-5  the judgment of the Department, covered by any other form of
   33-6  liability insurance policy or bond; nor
   33-7              6.  To any person qualifying as a self-insurer under
   33-8  Section 34 of this Act, or to any person operating a motor vehicle
   33-9  for such self-insurer.
  33-10        No such policy or bond shall be effective under this section
  33-11  or under Section 7 unless issued by an insurance company or surety
  33-12  company authorized to write motor vehicle <liability> insurance in
  33-13  this State, except that if such motor vehicle was not registered in
  33-14  this State, or was a motor vehicle which was registered elsewhere
  33-15  than in this State at the effective date of the policy, or the most
  33-16  recent renewal thereof, such policy or bond shall not be effective
  33-17  under this section unless the insurance company or surety company
  33-18  if not authorized to do business in this State shall execute a
  33-19  power of attorney authorizing the Department to accept service on
  33-20  its behalf of notice or process in any action upon such policy or
  33-21  bond arising out of such accident.  The policy or bond must provide
  33-22  coverage at least equivalent to that required under Section 1A-1 of
  33-23  this Act<; providing, however, every such policy or bond is
  33-24  subject, if the accident has resulted in bodily injury or death, to
  33-25  a limit, exclusive of interest and costs, as follows:  effective
  33-26  January 1, 1984, not less than Fifteen Thousand Dollars ($15,000)
  33-27  because of bodily injury to or death of one person in any one
   34-1  accident and, subject to said limit for one person, to a limit of
   34-2  not less than Thirty Thousand Dollars ($30,000) because of bodily
   34-3  injury to or death of two (2) or more persons in any one accident,
   34-4  and, if the accident has resulted in injury to or destruction of
   34-5  property, to a limit of not less than Fifteen Thousand Dollars
   34-6  ($15,000) because of injury to or destruction of property of others
   34-7  in any one accident and effective January 1, 1986, not less than
   34-8  Twenty Thousand Dollars ($20,000) because of bodily injury to or
   34-9  death of one person in any one accident, and, subject to said limit
  34-10  for one person, to a limit of not less than Forty Thousand Dollars
  34-11  ($40,000) because of bodily injury to or death of two (2) or more
  34-12  persons in any one accident, and, if the accident has resulted in
  34-13  injury to or destruction of property, to a limit of not less than
  34-14  Fifteen Thousand Dollars ($15,000) because of injury to or
  34-15  destruction of property of others in any one accident.  The policy
  34-16  or bond may exclude coverage of the first Two Hundred Fifty Dollars
  34-17  ($250) of liability for bodily injury to or death of any one person
  34-18  in any one accident, and, subject to that exclusion for one person,
  34-19  may exclude coverage for the first Five Hundred Dollars ($500) of
  34-20  liability for the bodily injury to or death of two (2) or more
  34-21  persons in any one accident and may exclude coverage for the first
  34-22  Two Hundred Fifty Dollars ($250) of liability for the injury to or
  34-23  destruction of property of others in any one accident>.
  34-24              7.  Wherever the word "bond" appears in this section or
  34-25  this Act, it shall mean a bond filed with and approved by the
  34-26  Department of Public Safety.
  34-27        SECTION 18.  Section 8(c), Texas Motor Vehicle
   35-1  Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
   35-2  Statutes), is amended to read as follows:
   35-3        (c)  Upon receipt of certification by the Department that the
   35-4  operating privilege of a Texas resident has been suspended or
   35-5  revoked in another state pursuant to a law providing for its
   35-6  suspension or revocation for failure to deposit security for the
   35-7  payment of judgments arising out of a motor vehicle accident, for
   35-8  failure to satisfy any judgment, or for failure to file proof of
   35-9  financial responsibility, the Department shall contact the official
  35-10  who issued the certification and request information pertaining to
  35-11  the specific nature of the Texas resident's noncompliance.  If the
  35-12  alleged noncompliance is based on the failure of the Texas
  35-13  resident's insurance company or surety company to obtain
  35-14  authorization to write motor vehicle <liability> insurance in the
  35-15  other state and for failure of the insurance or surety company to
  35-16  execute a power of attorney directing the appropriate official in
  35-17  the other state to accept service on its behalf of notice or
  35-18  process in any action upon the policy arising out of the accident,
  35-19  then the Department shall not suspend the Texas resident's license
  35-20  and other registrations.  If the evidence shows that the Texas
  35-21  resident's operating privilege was suspended in the other state for
  35-22  any other violation of another state's laws providing for
  35-23  suspension or revocation for failure to deposit security for the
  35-24  payment of judgments arising out of motor vehicle accidents, for
  35-25  failure to satisfy any judgment, or for failure to file proof of
  35-26  financial responsibility, under circumstances that would require
  35-27  the Department to suspend a nonresident's operating privilege had
   36-1  the accident occurred in this state, then the Department shall
   36-2  suspend the Texas resident's license and registrations.  The
   36-3  suspension shall continue until the resident furnishes evidence of
   36-4  his compliance with the law of the other state relating to the
   36-5  deposit of security, satisfaction of judgment, or proof of
   36-6  financial responsibility.
   36-7        SECTION 19.  Section 13(c), Texas Motor Vehicle
   36-8  Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
   36-9  Statutes), is amended to read as follows:
  36-10        (c)  Notwithstanding any other provision of this Act any
  36-11  person whose license, registration or nonresident's operating
  36-12  privilege has been suspended, or is about to be suspended or shall
  36-13  become subject to suspension under this Article, may relieve
  36-14  himself from the effect of the judgment by filing with the
  36-15  Department satisfactory evidence that there was in effect at the
  36-16  time of the accident out of which the judgment arose a policy of
  36-17  <liability> insurance covering the operation of the motor vehicle
  36-18  involved and filing with the Department an affidavit stating that
  36-19  at the time of the accident upon which the judgment has been
  36-20  rendered he was insured, that the insurer is liable to pay such
  36-21  judgment, and the reason, if known, why the insurance company has
  36-22  not paid the judgment.  He shall also file the original policy of
  36-23  insurance or a certified copy thereof, if available, and such other
  36-24  documents as the Department may require to show that the loss,
  36-25  injury, or damage for which the judgment was rendered, was covered
  36-26  by the policy of insurance.
  36-27        If the Department is satisfied from such papers that the
   37-1  insurer was authorized to issue the policy of insurance in this
   37-2  State at the time of issuing the policy and that such insurer is
   37-3  liable to pay such judgment, at least to the extent and for the
   37-4  amounts provided in this Article, the Department shall not suspend
   37-5  the license, registration or nonresident's operating privilege, or
   37-6  if already suspended, shall reinstate them.
   37-7        Any person whose license, registration or nonresident's
   37-8  operating privilege has heretofore been suspended under the
   37-9  provisions of this Article may take advantage of this Section.
  37-10        SECTION 20.  Section 15, Texas Motor Vehicle
  37-11  Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
  37-12  Statutes), is amended to read as follows:
  37-13        Sec. 15.  Judgments herein referred to shall, for the purpose
  37-14  of this Act only, be deemed satisfied:
  37-15              1.  When $20,000 <the amount set out in Subdivision (6)
  37-16  of Subsection (c) of Section 5 of this Act for bodily injury to or
  37-17  death of one person in any one accident> has been credited upon any
  37-18  judgment or judgments rendered in excess of that amount because of
  37-19  bodily injury to or death of one person as the result of any one
  37-20  accident;
  37-21              2.  When $40,000<, subject to the limit set out in
  37-22  Subdivision (6) of Subsection (c) of Section 5 of this Act because
  37-23  of bodily injury to or death of one person, the sum set out in
  37-24  Subdivision (6) of Subsection (c) of Section 5 of this Act for
  37-25  bodily injury to or death of two (2) or more persons in any one
  37-26  accident> has been credited upon any judgment or judgments rendered
  37-27  in excess of that amount because of bodily injury to or death of
   38-1  two (2) or more persons as the result of any one accident, subject
   38-2  to a limit of $20,000 for any one person in the accident; or
   38-3              3.  When $15,000 <the sum set out in Subdivision (6) of
   38-4  Subsection (c) of Section 5 of this Act for injury to or
   38-5  destruction of property of others in any one accident> has been
   38-6  credited upon any judgment or judgments rendered in excess of that
   38-7  amount because of injury to or destruction of property of others as
   38-8  a result of any one accident;
   38-9        Provided, however, payments made in settlement of any claims
  38-10  because of bodily injury, death or property damage arising from a
  38-11  motor vehicle accident shall be credited in reduction of the
  38-12  amounts provided for in this Section.
  38-13        SECTION 21.  Section 20(a), Texas Motor Vehicle
  38-14  Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
  38-15  Statutes), is amended to read as follows:
  38-16        (a)  The non-resident owner or operator of a motor vehicle
  38-17  not registered in this State may give proof of financial
  38-18  responsibility by filing with the Department a certificate or
  38-19  certificates of an insurance company authorized to transact
  38-20  business in the state in which the motor vehicle or motor vehicles
  38-21  covered in such certificate are registered, or if such non-resident
  38-22  does not own a motor vehicle, then in the state in which the
  38-23  insured resides, provided such certificate otherwise conforms to
  38-24  the provisions of this Act, and the Department shall accept the
  38-25  same upon condition that said insurance company complies with the
  38-26  following provisions with respect to the policies so certified:
  38-27              1.  Said insurance company shall execute a power of
   39-1  attorney authorizing the Department to accept service on its behalf
   39-2  of notice or process in any action arising out of a motor vehicle
   39-3  accident in this State; and
   39-4              2.  Said insurance company shall agree in writing that
   39-5  such policies shall be deemed to conform with the laws of this
   39-6  State relating to the terms of motor vehicle insurance <liability>
   39-7  policies issued herein.
   39-8        SECTION 22.  Section 21, Texas Motor Vehicle
   39-9  Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
  39-10  Statutes), is amended to read as follows:
  39-11        Sec. 21.  MOTORCYCLE <MOTOR VEHICLE> LIABILITY POLICY
  39-12  DEFINED.  (a)  A "motorcycle <motor vehicle> liability policy" as
  39-13  said term is used in this Act shall mean an owner's or an
  39-14  operator's policy of liability insurance, certified as provided in
  39-15  Section 19 or Section 20 as proof of financial responsibility, and
  39-16  issued, except as otherwise provided in Section 20, by an insurance
  39-17  company duly authorized to write motor vehicle liability insurance
  39-18  in this State, to or for the benefit of the person named therein as
  39-19  insured.
  39-20        (b)  Such owner's policy of liability insurance:
  39-21              1.  Shall cover each motorcycle <all motor vehicles>
  39-22  with respect to which coverage is thereby to be granted; and
  39-23              2.  Shall pay on behalf of the insured named therein
  39-24  and any other person, as insured, using a covered motorcycle <any
  39-25  such motor vehicle or motor vehicles> with the express or implied
  39-26  permission of such named insured, all sums which the insured shall
  39-27  become legally obligated to pay as damages arising out of the
   40-1  ownership, maintenance or use of the motorcycle <such motor vehicle
   40-2  or motor vehicles> within the United States of America or the
   40-3  Dominion of Canada, subject to limits exclusive of interest and
   40-4  costs, for each motorcycle <with respect to each such motor
   40-5  vehicle>, as set out in <Subdivision (6) of Subsection (c) of>
   40-6  Section 1A-1 <5> of this Act.  The policy may exclude coverage of
   40-7  the first Two Hundred Fifty Dollars ($250) of liability for bodily
   40-8  injury to or death of any one person in any one accident, and,
   40-9  subject to that exclusion for one person, may exclude coverage for
  40-10  the first Five Hundred Dollars ($500) of liability for the bodily
  40-11  injury to or death of two (2) or more persons in any one accident
  40-12  and may exclude coverage for the first Two Hundred Fifty Dollars
  40-13  ($250) of liability for the injury to or destruction of property of
  40-14  others in any one accident.
  40-15        (c)  Such operator's policy of liability insurance shall pay
  40-16  on behalf of the insured named therein all sums which the insured
  40-17  shall become legally obligated to pay as damages arising out of the
  40-18  use by the insured <him> of a motorcycle <any motor vehicle> not
  40-19  owned by the insured <him>, within the same territorial limits and
  40-20  subject to the same limits of liability as are set forth above with
  40-21  respect to an owner's policy of liability insurance.
  40-22        (d)  A motorcycle <Such motor vehicle> liability policy shall
  40-23  state the name and address of the named insured, the coverage
  40-24  afforded by the policy, the premium charged therefor, the policy
  40-25  period and the limits of liability, and shall contain an agreement
  40-26  or be endorsed that insurance is provided thereunder in accordance
  40-27  with the coverage defined in this Act as respects bodily injury and
   41-1  death or property damage, or both, and is subject to all the
   41-2  provisions of this Act.
   41-3        (e)  A motorcycle <Such motor vehicle> liability policy shall
   41-4  not insure:
   41-5              1.  Any obligation for which the insured or any company
   41-6  as his insurer may be held liable under any workmen's compensation
   41-7  law;
   41-8              2.  Any liability on account of bodily injury to or
   41-9  death of any employee of the insured while engaged in the
  41-10  employment, other than domestic, of the insured, or in domestic
  41-11  employment if benefits therefor are either payable or required to
  41-12  be provided under any workmen's compensation law; nor
  41-13              3.  Any liability because of injury to or destruction
  41-14  of property owned by, rented to, in charge of or transported by the
  41-15  insured.
  41-16        (f)  A motorcycle <Every motor vehicle> liability policy
  41-17  shall be subject to the following provisions which need not be
  41-18  contained therein:
  41-19              1.  The liability of the insurance company with respect
  41-20  to the insurance required by this Act shall become absolute
  41-21  whenever injury or damage covered by said <motor vehicle liability>
  41-22  policy occurs; said policy may not be canceled or annulled as to
  41-23  such liability by any agreement between the insurance company and
  41-24  the insured after the occurrence of the injury or damage; no
  41-25  statement made by the insured or on his behalf and no violation of
  41-26  said policy shall defeat or void said policy;
  41-27              2.  The satisfaction by the insured of a judgment for
   42-1  such injury or damage shall not be a condition precedent to the
   42-2  right or duty of the insurance company to make payment on account
   42-3  of such injury or damage;
   42-4              3.  The insurance company shall have the right to
   42-5  settle any claim covered by the policy, and if such settlement is
   42-6  made in good faith, the amount thereof shall be deductible from the
   42-7  limits of liability specified in Subdivision 2 of Subsection (b) of
   42-8  this Section;
   42-9              4.  The policy, the written application therefor, if
  42-10  any, and any rider or endorsement which does not conflict with the
  42-11  provisions of the Act shall constitute the entire contract between
  42-12  the parties.
  42-13        (g)  Any policy which grants the coverage required for a
  42-14  motorcycle <motor vehicle> liability policy may also grant any
  42-15  lawful coverage in excess of or in addition to the coverage
  42-16  specified for a motorcycle <motor vehicle> liability policy and
  42-17  such excess or additional coverage shall not be subject to the
  42-18  provisions of this Act.  With respect to a policy which grants such
  42-19  excess or additional coverage the term "motorcycle <motor vehicle>
  42-20  liability policy" shall apply only to that part of the coverage
  42-21  which is required by this Section.
  42-22        (h)  A motorcycle <Any motor vehicle> liability policy may
  42-23  provide that the insured shall reimburse the insurance company for
  42-24  any payment the insurance company would not have been obligated to
  42-25  make under the terms of the policy except for the provisions of
  42-26  this Act.
  42-27        (i)  A motorcycle <Any motor vehicle> liability policy may
   43-1  provide for the prorating of the insurance thereunder with other
   43-2  valid and collectible insurance.
   43-3        (j)  The requirements for a motorcycle <motor vehicle>
   43-4  liability policy may be fulfilled by the policies of one (1) or
   43-5  more insurance companies which policies together meet such
   43-6  requirements.
   43-7        (k)  Any binder issued pending the issuance of a motorcycle
   43-8  <motor vehicle> liability policy shall be deemed to fulfill the
   43-9  requirements for such a policy.
  43-10        SECTION 23.  Section 29, Texas Motor Vehicle
  43-11  Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
  43-12  Statutes), is amended to read as follows:
  43-13        Sec. 29.  DURATION OF PROOF--WHEN PROOF MAY BE CANCELLED <OR
  43-14  RETURNED>.  The Department shall upon request consent to the
  43-15  immediate cancellation of any bond or certificate of insurance, <or
  43-16  the Department shall direct and the State Treasurer shall return to
  43-17  the person entitled thereto any money or securities deposited
  43-18  pursuant to this Act as proof of financial responsibility,> or the
  43-19  Department shall waive the requirement of filing proof, in any of
  43-20  the following events:
  43-21              1.  At any time after two (2) years from the date such
  43-22  proof was required when, during the two-year period preceding the
  43-23  request, the Department has not received record of a conviction or
  43-24  a forfeiture of bail which would require or permit the suspension
  43-25  or revocation of the license, registration or nonresident's
  43-26  operating privilege of the person by or for whom such proof was
  43-27  furnished; or
   44-1              2.  In the event of the death of the person on whose
   44-2  behalf such proof was filed or the permanent incapacity of such
   44-3  person to operate a motor vehicle; or
   44-4              3.  In the event the person who has given proof
   44-5  surrenders his license and registration to the Department. <;>
   44-6        <Provided, however, that the Department shall not consent to
   44-7  the cancellation of any bond or the return of any money or
   44-8  securities in the event any action for damages upon a liability
   44-9  covered by such proof is then pending or any judgment upon any such
  44-10  liability is then unsatisfied, or in the event the person who has
  44-11  filed such bond or deposited such money or securities has, within
  44-12  two (2) years immediately preceding such request, been involved as
  44-13  an operator or owner in any motor vehicle accident resulting in
  44-14  injury or damage to the person or property of others.  An affidavit
  44-15  of the applicant as to the nonexistence of such facts, or that he
  44-16  has been released from all of his liability, or has been finally
  44-17  adjudicated not to be liable, for such injury or damage, shall be
  44-18  sufficient evidence thereof in the absence of evidence to the
  44-19  contrary in the records of the Department.>
  44-20        Whenever any person whose proof has been cancelled <or
  44-21  returned> under Subdivision 3 of this Section applies for a license
  44-22  or registration within a period of two (2) years from the date
  44-23  proof was originally required, any such application shall be
  44-24  refused unless the applicant shall re-establish such proof for the
  44-25  remainder of such two-year period.
  44-26        SECTION 24.  Sections 34(b) and (c), Texas Motor Vehicle
  44-27  Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
   45-1  Statutes), are amended to read as follows:
   45-2        (b)  An applicant for a certificate of self-insurance shall
   45-3  submit to the Department, in a form approved by the Department, an
   45-4  undertaking binding the person to provide benefits for bodily
   45-5  injury that meet the requirements of Chapter 27, Insurance Code.
   45-6  The Department may, in its discretion, <upon the application of a
   45-7  person,> issue a certificate of self-insurance when it is satisfied
   45-8  that such person is possessed and will continue to be possessed of
   45-9  ability to pay benefits meeting the requirements of Chapter 27,
  45-10  Insurance Code, and judgments for destruction of or damage to
  45-11  property obtained against such person.
  45-12        (c)  Upon not less than five (5) days notice and a hearing
  45-13  pursuant to such notice, the Department may upon reasonable grounds
  45-14  cancel a certificate of self-insurance.  Failure to pay any
  45-15  required benefit or judgment within thirty (30) days after the
  45-16  injured person has supplied proof of loss or the <such> judgment is
  45-17  <shall have become> final is <shall constitute> a reasonable ground
  45-18  for the cancellation of a certificate of self-insurance.
  45-19        SECTION 25.  Sections 2a(d) and (e), Chapter 88, General
  45-20  Laws, Acts of the 41st Legislature, 2nd Called Session, 1929
  45-21  (Article 6675a-2a, Vernon's Texas Civil Statutes), are amended to
  45-22  read as follows:
  45-23        (d)  The following evidence of financial responsibility or a
  45-24  photocopy of the evidence satisfies the requirement of this
  45-25  section:
  45-26              (1)  an <a liability> insurance policy or <liability>
  45-27  self-insurance or pool coverage document issued by a political
   46-1  subdivision or governmental pool pursuant to the authority
   46-2  contained in Chapter 791, Government Code <The Interlocal
   46-3  Cooperation Act (Article 4413(32c), Vernon's Texas Civil
   46-4  Statutes)>, Chapter 119, Local Government Code, or other applicable
   46-5  law in at least the minimum amounts required by the Texas Motor
   46-6  Vehicle Safety-Responsibility Act (Article 6701h, Vernon's Texas
   46-7  Civil Statutes) to provide proof of financial responsibility
   46-8  covering at least the period required by Subsection (a) of this
   46-9  section;
  46-10              (2)  a standard proof of insurance <liability> form
  46-11  promulgated by the Texas Department of Insurance and issued by an
  46-12  <a liability> insurer that includes:
  46-13                    (A)  the name of the insurer;
  46-14                    (B)  the insurance policy or other coverage
  46-15  document number;
  46-16                    (C)  the policy or other coverage document
  46-17  coverage period;
  46-18                    (D)  the name and address of each insured or
  46-19  covered person;
  46-20                    (E)  the policy or other coverage document limits
  46-21  or a statement that the coverage of the policy complies with at
  46-22  least the minimum amounts of <liability> insurance required by the
  46-23  Texas Motor Vehicle Safety-Responsibility Act (Article 6701h,
  46-24  Vernon's Texas Civil Statutes); and
  46-25                    (F)  the make and model of each covered vehicle;
  46-26              (3)  an insurance binder that confirms to the
  46-27  satisfaction of the county tax collector that the owner of the
   47-1  motor vehicle to be registered is in compliance with the Texas
   47-2  Motor Vehicle Safety-Responsibility Act (Article 6701h, Vernon's
   47-3  Texas Civil Statutes) for at least the period required by
   47-4  Subsection (a) of this section; or
   47-5              (4)  a copy of a certificate issued by the Department
   47-6  of Public Safety that shows that the vehicle to be registered is
   47-7  covered by self-insurance<;>
   47-8              <(5)  a certificate issued by the state treasurer that
   47-9  shows that the owner of the vehicle has on deposit with the
  47-10  treasurer money or securities in at least the amount required by
  47-11  Section 25 of the Texas Motor Vehicle Safety-Responsibility Act
  47-12  (Article 6701h, Vernon's Texas Civil Statutes);>
  47-13              <(6)  a certificate issued by the Department of Public
  47-14  Safety that shows that the vehicle is a vehicle for which a bond is
  47-15  on file with the Department as provided by Section 24 of the Texas
  47-16  Motor Vehicle Safety-Responsibility Act (Article 6701h, Vernon's
  47-17  Texas Civil Statutes); or>
  47-18              <(7)  a copy of a certificate issued by the county
  47-19  judge of a county in which the vehicle is registered that shows
  47-20  that the owner of the vehicle has on deposit with the county judge
  47-21  cash or a cashier's check in at least the amount required by
  47-22  Section 1A(b)(6) of the Texas Motor Vehicle Safety-Responsibility
  47-23  Act (Article 6701h, Vernon's Texas Civil Statutes)>.
  47-24        (e)  At the time the county tax collector registers a motor
  47-25  vehicle, the tax collector shall provide to the person registering
  47-26  the motor vehicle a separate document that contains a statement
  47-27  that the motor vehicle being registered may not be operated in this
   48-1  state unless <liability> insurance coverage for the vehicle in at
   48-2  least the minimum amounts required by law remains in effect <to
   48-3  insure against potential losses> or unless the motor vehicle is
   48-4  exempt from the insurance requirement by Section 1A(b), Texas Motor
   48-5  Vehicle Safety-Responsibility Act (Article 6701h, Vernon's Texas
   48-6  Civil Statutes).
   48-7        SECTION 26.  Section 6(c), Chapter 173, Acts of the 47th
   48-8  Legislature, Regular Session, 1941 (Article 6687b, Vernon's Texas
   48-9  Civil Statutes), is amended to read as follows:
  48-10        (c)  An application for an original or renewal driver's
  48-11  license must be accompanied by evidence of financial responsibility
  48-12  or a statement that the applicant does not own a motor vehicle for
  48-13  which maintenance of financial responsibility is required under the
  48-14  Texas Motor Vehicle Safety-Responsibility Act (Article 6701h,
  48-15  Vernon's Texas Civil Statutes).  Evidence of financial
  48-16  responsibility presented under this subsection must comply with
  48-17  Section 1A-1 <be in at least the minimum amounts required by
  48-18  Subdivision 10, Section 1>, Texas Motor Vehicle
  48-19  Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
  48-20  Statutes), must cover each motor vehicle that the applicant owns
  48-21  and for which the applicant is required to maintain financial
  48-22  responsibility, and may be shown in the manner specified under
  48-23  Section 1B(a) of that Act.  A personal automobile insurance policy
  48-24  used as evidence of financial responsibility under this subsection
  48-25  must be written for a term of 30 days or more as required by
  48-26  Article 5.06, Insurance Code.  A statement that the applicant does
  48-27  not own an applicable motor vehicle must be sworn to and signed by
   49-1  the applicant.
   49-2        SECTION 27.  (a)  Section 11(a), Chapter 270, Acts of the
   49-3  40th Legislature, Regular Session, 1927 (Article 911a, Vernon's
   49-4  Texas Civil Statutes), as amended by Chapters 377 and 624, Acts of
   49-5  the 70th Legislature, Regular Session, 1987, is amended to read as
   49-6  follows:
   49-7        (a)  The Commission shall, in the granting of any certificate
   49-8  to any motor bus company for regularly transporting persons as
   49-9  passengers for compensation or hire, require the owner or operator
  49-10  to first procure insurance covering bodily injury <liability> and
  49-11  property damage <insurance> from a company holding a certificate of
  49-12  authority to transact such kinds of insurance business in the State
  49-13  of Texas or, with the approval of the Commission <Commissioner>, by
  49-14  a surplus lines insurer meeting the requirements of Article 1.14-2,
  49-15  Insurance Code, and rules adopted by the commissioner of insurance
  49-16  <State Board of Insurance> under that article, covering each and
  49-17  every motor propelled vehicle while actually being operated by such
  49-18  applicant.  The Commission shall adopt rules covering the coverage
  49-19  limits and terms of the insurance policy, except that the coverage
  49-20  provided under the policy must meet the requirements of Chapter 27,
  49-21  Insurance Code.  <The amount of such policy or policies of
  49-22  insurance shall be fixed by the Commission by general order or
  49-23  otherwise, and the terms and conditions of said policy or policies
  49-24  covering said motor vehicle are to be such as to indemnify the
  49-25  applicant against loss by reason of any personal injury to any
  49-26  person or loss or damage to the property of any person other than
  49-27  the assured and his employees.>  Such policy or policies shall
   50-1  furthermore provide that the insurer will pay benefits under the
   50-2  policy and any judgment that <all judgements which> may be
   50-3  recovered against the insured motor bus company based on claims for
   50-4  loss or damage from personal injury or loss of or injury to
   50-5  property occurring during the term of the said policy or policies
   50-6  and arising out of the actual operation of such motor bus or
   50-7  busses, and such policy or policies shall also provide for
   50-8  successive recoveries to the complete exhaustion of the face amount
   50-9  thereof, and that the benefits or <such> judgment will be paid by
  50-10  the insurer irrespective of the solvency or insolvency of the
  50-11  insured.  Such <liability and property damage> insurance as
  50-12  required by the Commission shall be continuously maintained in
  50-13  force on each and every motor propelled vehicle while being
  50-14  operated in common carrier service.  In addition to the insurance
  50-15  hereinabove set forth, the owner or operator shall also protect his
  50-16  employees by taking out workmen's compensation insurance either as
  50-17  provided by the Workmen's Compensation Laws of the State of Texas
  50-18  or in a reliable insurance company approved by the Railroad
  50-19  Commission of the State of Texas.  The taking out of such indemnity
  50-20  policy or policies shall be a condition precedent to any operation
  50-21  and such policy or policies as required under this Act, shall be
  50-22  approved and filed with the Commission and failure to file and keep
  50-23  such policy or policies in force and effect as provided herein
  50-24  shall be cause for the revocation of the certificate and shall
  50-25  subject the motor bus company so failing to the penalties
  50-26  prescribed herein.
  50-27        (b)  Section 4, Chapter 1050, Acts of the 70th Legislature,
   51-1  Regular Session, 1987, is repealed.
   51-2        SECTION 28.  (a)  Section 13, Chapter  314, Acts of the 41st
   51-3  Legislature, Regular Session, 1929 (Article 911b, Vernon's Texas
   51-4  Civil Statutes), as amended by Chapter 377, Acts of the 70th
   51-5  Legislature, Regular Session, 1987, and by Chapter 894, Acts of the
   51-6  72nd Legislature, Regular Session, 1991, is amended to read as
   51-7  follows:
   51-8        Sec. 13.  Before any permit or certificate of public
   51-9  convenience and necessity may be issued to any motor carrier and
  51-10  before any motor carrier may lawfully operate under such permit or
  51-11  certificate as the case may be, such motor carrier shall file with
  51-12  the Commission bonds and/or insurance policies issued by some
  51-13  insurance company including mutuals and reciprocals or bonding
  51-14  company holding a certificate of authority to transact such kinds
  51-15  of insurance business in Texas or, with the approval of the
  51-16  Commission <Commissioner>, by a surplus lines insurer meeting the
  51-17  requirements of Article 1.14-2, Insurance Code, and rules adopted
  51-18  by the commissioner of insurance <State Board of Insurance> under
  51-19  that article.  The commission shall adopt rules covering the
  51-20  coverage limits and terms of the insurance policy, except that the
  51-21  coverage provided under the policy must meet the requirements of
  51-22  Chapter 27, Insurance Code.  The bonds or<, in an amount to be
  51-23  fixed by the Commission under such rules and regulations as it may
  51-24  prescribe, which bonds and> insurance policies shall provide that
  51-25  the obligor therein will pay to the extent of the face amount of
  51-26  such insurance policies and bonds benefits under the policy and any
  51-27  judgment that <all judgments which> may be recovered against the
   52-1  motor carrier so filing said insurance policies and bonds, based on
   52-2  claims for loss or damages from personal injury or loss of, or
   52-3  injury to property occurring during the term of said bonds and
   52-4  policies and arising out of the actual operation of such motor
   52-5  carrier; and such bonds and policies shall also provide for
   52-6  successive recoveries to the complete exhaustion of the face amount
   52-7  thereof and that the benefits and <such> judgments will be paid by
   52-8  the obligor in said bonds and insurance policies irrespective of
   52-9  the solvency or insolvency of the motor carrier; provided, however,
  52-10  such bonds and policies shall not cover personal injuries sustained
  52-11  by the servants, agents or employees of such motor carrier.
  52-12  Provided further, that in the event the insured shall abandon his
  52-13  permit or certificate and leave the state, a claimant, asserting a
  52-14  claim within the provisions of said bonds or policies, may file
  52-15  suit against the sureties executing such bond or the company
  52-16  issuing such policies in a court of competent jurisdiction without
  52-17  the necessity of making the insured a party to said suit.
  52-18  Provided, however, that the Commission shall not require insurance
  52-19  covering loss of or damage to cargo in amount excessive for the
  52-20  class of service to be rendered by any motor carrier.  Each such
  52-21  motor carrier shall, on or before the date of the expiration of the
  52-22  term of any policy or bond so filed by him, file a renewal thereof,
  52-23  or new bonds or policies containing the same terms and obligations
  52-24  of the preceding bonds and policies, and shall each year thereafter
  52-25  on or before the expiration date of the existing bonds and
  52-26  policies, file such renewal policies and bonds so as to provide
  52-27  continuous and unbroken protection to the public having legal
   53-1  claims against such motor carrier; and in the event such renewal
   53-2  bonds and policies are not so filed, the Commission, after notice
   53-3  to the motor carrier, and hearing, may, within its discretion if it
   53-4  shall find and determine that the ends of justice will be better
   53-5  subserved thereby, cancel such permit or certificate for failure to
   53-6  furnish and provide such bonds or insurance as herein required.
   53-7  The Commission may accept in lieu of the filing of the original
   53-8  policies of insurance, a certificate of insurance, in such form as
   53-9  may be prescribed by the Commission, which certificate, when filed
  53-10  with the Commission, will bind the obligor thereunder and satisfy
  53-11  the requirements of this section as if the original policies of
  53-12  insurance had been filed.
  53-13        Each motor carrier shall also protect his employees by
  53-14  obtaining workers' compensation insurance coverage as defined under
  53-15  Subtitle A, Title 5, Labor Code, <the Texas Workers' Compensation
  53-16  Act (Article 8308-1.01 et seq., Vernon's Texas Civil Statutes)> or
  53-17  accidental insurance coverage in an amount fixed by the Commission
  53-18  from a reliable insurance company or companies authorized to write
  53-19  such policies in this state approved by the Commission.
  53-20        (b)  Section 5, Chapter 1050, Acts of the 70th Legislature,
  53-21  Regular Session, 1987, is repealed.
  53-22        SECTION 29.  (a)  Articles 5.06-1 and 5.06-3, Insurance Code,
  53-23  are repealed.
  53-24        (b)  Sections 18, 19, 22, 24, and 25, Texas Motor Vehicle
  53-25  Safety-Responsibility Act (Article 6701h, Vernon's Texas Civil
  53-26  Statutes), are repealed.
  53-27        SECTION 30.  Chapter 27, Insurance Code, as added by this
   54-1  Act, would not have been enacted if Article 27.52, Insurance Code,
   54-2  had not been enacted.  If Article 27.52, Insurance Code, is held
   54-3  invalid, Chapter 27, Insurance Code, as added by this Act, is
   54-4  invalid.
   54-5        SECTION 31.  (a)  The commissioner of insurance shall adjust
   54-6  the benchmark rate or other applicable premium rate attributable to
   54-7  coverage for bodily injury arising out of the use of a motor
   54-8  vehicle other than a motorcycle for all motor vehicle insurance
   54-9  policies under Chapter 27, Insurance Code, as added by this Act,
  54-10  issued on or after January 1, 1996, and before January 1, 1997, to
  54-11  reflect at least a 12 percent reduction in the overall premium rate
  54-12  for bodily injury liability coverage that was effective on January
  54-13  1, 1995, distributed among rate classifications in accordance with
  54-14  sound actuarial principles.
  54-15        (b)  The reductions in rates required by this section take
  54-16  effect only on a finding by the commissioner of insurance that:
  54-17              (1)  the reductions would be consistent with the
  54-18  encouragement of the prevention of accidents;
  54-19              (2)  the reductions are appropriate after consideration
  54-20  of the peculiar hazard and experience of individual risks, past and
  54-21  prospective, in and out of the state, and all other relevant
  54-22  factors, in and out of the state;
  54-23              (3)  the reductions are fair, reasonable, and not
  54-24  confiscatory as to any class of insurer authorized by law to write
  54-25  motor vehicle insurance in this state; and
  54-26              (4)  the statistical data and other information
  54-27  provided to justify the reductions indicate that approval of the
   55-1  reductions is reasonable.
   55-2        SECTION 32.  (a)  Except as provided by Subsection (b) of
   55-3  this section, this Act takes effect September 1, 1995.
   55-4        (b)  Sections 11 through 29 of this Act take effect January
   55-5  1, 1996.
   55-6        (c)  This Act applies only to an insurance policy that is
   55-7  delivered, issued for delivery, or renewed on or after January 1,
   55-8  1996.  A policy that is delivered, issued for delivery, or renewed
   55-9  before January 1, 1996, is governed by the law as it existed
  55-10  immediately before the effective date of this Act, and that law is
  55-11  continued in effect for that purpose.
  55-12        (d)  Subchapter C, Chapter 27, Insurance Code, as added by
  55-13  this Act, applies only to an action to recover damages for
  55-14  accidental injury that accrues on or after January 1, 1996.  An
  55-15  action that accrues before January 1, 1996, is governed by the law
  55-16  in effect at the time the action accrues, and that law is continued
  55-17  in effect for that purpose.
  55-18        SECTION 33.  The importance of this legislation and the
  55-19  crowded condition of the calendars in both houses create an
  55-20  emergency   and   an   imperative   public   necessity   that   the
  55-21  constitutional rule requiring bills to be read on three several
  55-22  days in each house be suspended, and this rule is hereby suspended.