RS C.S.H.B. 18 75(R) BILL ANALYSIS INSURANCE C.S.H.B. 18 By: Corte 5-6-97 Committee Report (Substituted) BACKGROUND Texas law requires that all drivers have proof of financial responsibility (liability). This proof must be provided in order to renew a driver's license, have a car inspected or register a car. However, many drivers are circumventing the law by purchasing liability insurance in order to accomplish the above and then canceling the policy thereby driving uninsured. The penalties for uninsured drivers are relatively minor and have done little to ensure compliance with state law. Further, Texas law states that driving while intoxicated is a crime, and one or the leading causes for all fatal traffic accidents. PURPOSE To limit the amount of recovery a driver could receive for automobile injuries if he was not able to show proof of financial responsibility at the time of the accident, or was driving while intoxicated at the time of the accident and received a conviction. If an uninsured driver or an intoxicated driver is involved in an accident which is not his fault, he would only be able to recover economic damages (that is property damages, medical expenses and lost wages). Noneconomic damages would not be recoverable. In the instance that an uninsured driver is hit by an intoxicated driver, that person would still retain the right to sue under this legislation. The intent of this legislation is to prevent a person who is violating state law from recovering large damage awards. RULEMAKING AUTHORITY It is the opinion of the committee that this bill does grant additional rulemaking authority to the Commissioner of Insurance in SECTION 1 of the bill (Sec. 92.001(e), Title 4, Civil Practice and Remedies Code). Additional rulemaking authority is granted to the Texas Education Agency in SECTION 1 of the bill (Sec. 92.001(g), Title 4, Civil Practices and Remedies Code). SECTION BY SECTION ANALYSIS SECTION 1. Amends Title 4, Civil Practices and Remedies Code by adding Chapter 92 as follows: CHAPTER 92. LIABILITY FOR CERTAIN MOTOR VEHICLE ACCIDENTS Sec. 92.001. LIABILITY FOR INJURY TO CERTAIN OPERATORS. (a) A person may not obtain non-economic or exemplary damages in a civil action for injury, death, or damage or destruction of property arising from an auto accident if: the person was operating the vehicle while intoxicated in violation of Sec. 49.04, Penal Code, or similar law of another state, and convicted of an offense described in paragraph (A); or if the person knowingly operated the vehicle in violation of Sec. 601.051, Transportation Code. (b) Subsection (a) does not apply to a person described by Subsection (a)(2) if the person was injured by another person who was operating a vehicle while intoxicated and convicted of this offense. (c) Except as provided by Subsection (d), Subsection (a) applies to a claim for damages made by a person whose right to recovery derives from an injury to another person whose right to recovery of noneconomic and exemplary damages would be barred by subsection (a). Including wrongful death or loss of consortium or companionship. (d) This section does not prohibit recovery of damages for a wilful act, omission, or gross neglect in a wrongful death action brought on behalf of a surviving spouse or heirs of the decedent. A claim for exemplary damages in this subsection is governed by Chapter 41. (e) Requires each insurer that issues a policy of motor vehicle insurance in this state to comply with the requirements of Chapter 601, Transportation Code, including a Lloyd's plan insurer, county mutual, reciprocal, or interinsurance exchange insurer to notify the insured of sections (a) - (d). Notice shall be made at the time of issuance and termination of the policy. The commissioner by rule shall adopt the form and content of notice. (f) The Department of Public Safety shall post notice of Subsections (a) - (d) at each facility where a license may be issued or renewed. (g) A person who offers a driving safety course approved by the Texas Education Agency (TEA) under the Texas Driver and Traffic Safety Education Act shall notify each student of Subsections (a) - (d). The TEA shall adopt the form and content of the notice required under this subsection. The notice may be included in the approved course materials or may be separate. (h) This section does not prohibit the person described by subsection (a) from acting in a representative capacity to bring suit on behalf of another person injured in the accident. (i) Defines "Exemplary damages," and "Noneconomic damages." SECTION 2. This act applies only to a cause of action that accrues on or after the effective date. SECTION 3. Emergency Clause; Effective date upon passage. COMPARISON OF ORIGINAL TO SUBSTITUTE CSHB 18 amends the caption by removing "a driver who fails to maintain financial responsibility." CSHB 18 amends the original language in SECTION 1 of HB 18, by changing from the Transportation Code to the Civil Practices and Remedies Code. SECTION 1. New SECTION 1 adds Chapter 92 to Title 4, Civil Practices and Remedies Code, and makes the following changes in the new language: (a) Language stays the same in subsection (a), changes bill to amend Civil Practices and Remedies Code. Adds language to subdivision (A) about operating vehicle while intoxicated in violation of Section 49.04, Penal Code, or similar law of another state. Adds subdivision (B) requiring conviction of an offense from paragraph (A). Adds "at the time of the accident" to subsection (2). (b) Adds new subsection (b) to do the following: Subsection (a) does not apply if the person was injured by another person who was operating a vehicle while intoxicated and convicted of this. (c) Changed from subsection (b) in HB 18. Adds exception as provided by subsection (d). (d) Adds new subsection (d) to say the following: This act does not prohibit the recovery of damages for gross negligence or a wilful act of omission in a wrongful death action brought by or on behalf of a surviving spouse or heirs of decedent. A claim for damages described under this subsection is governed by Chapter 41. Adds new subsections (e), (f), and (g) to lay out how the insurance companies should inform their clients of this legislation. The DPS must post notice of these provisions where license renewals are made. Requires persons who offer certified driving safety courses to provide to students written information of this law. (h) Adds new subsection (h) to say the following: Specifies that the person that is described in Subsection (a) is not prohibited from acting in a representative capacity to bring suit on behalf of another person injured in the accident, as next friend or otherwise. (i)(1) remains the same. (i)(2) Rewords the first part of the definition. Adds sentence to the end, saying definition does not include exemplary damages. SECTION 2. Changes bill from effective date of September 1, 1997, to a new section applying this act to a cause of action that arises on or after the effective date of this act. SECTION 3. Changes the Emergency Clause. Makes effective date upon passage.