By Cuellar                                      H.B. No. 2404

      75R7458 PB-F                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to motor vehicle insurance coverage written through the

 1-3     Texas Automobile Insurance Plan Association.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Section 1(2), Article 21.81, Insurance Code, is

 1-6     amended to read as follows:

 1-7                 (2)  "Authorized insurer" means any insurer authorized

 1-8     by the Texas Department of Insurance to write motor vehicle

 1-9     liability coverage under the provisions of Chapter 5 of this code.

1-10     The term includes [does not include] an insurer organized under

1-11     Chapter 17 of this code for the portion of that insurer's voluntary

1-12     market insurance policies for which the rates for bodily injury

1-13     liability coverage are at or below the rates that are provided by

1-14     the association for that coverage  and that are in effect on the

1-15     effective date of the  voluntary market policy issued by the

1-16     insurer.

1-17           SECTION 2.  Section 4, Article 21.81, Insurance Code, is

1-18     amended by adding Subsections (c) and (d) to read as follows:

1-19           (c)  A person who obtains, from any source, private passenger

1-20     auto liability insurance coverage that exceeds the minimum

1-21     automobile liability coverage required by law is ineligible for

1-22     insurance coverage through the association.  The coverage for the

1-23     excess and basic limits policies is not affected by a violation of

1-24     this subsection unless the insurer demonstrates to the satisfaction

 2-1     of the commissioner that the insured had actual knowledge that the

 2-2     insured was ineligible for coverage through the association.

 2-3           (d)  An agent may not write excess private passenger

 2-4     automobile liability insurance coverage for an insured whom the

 2-5     agent knows to have coverage provided through the association for

 2-6     the minimum automobile liability coverage required by law.  An

 2-7     agent who violates this subsection is subject to sanctions as

 2-8     provided by Section 7, Article 1.10, of this code.

 2-9            SECTION 3.  Section 5, Article 21.81, Insurance Code, is

2-10     amended by adding Subsection (c) to read as follows:

2-11           (c)  Notwithstanding Subsection (a)  of this section, the

2-12     commissioner shall set rates charged for  insurance provided

2-13     through the association at 145 percent of the benchmark rate

2-14     established by the commissioner under Article 5.101 of this code,

2-15     and shall set surcharges for insurance provided through the

2-16     association for at-fault accidents and convictions at 200 percent

2-17     of the surcharges authorized by Rule 42, Texas Automobile Rules and

2-18     Rating Manual, as that rule existed on February 1, 1997.  This

2-19     subsection expires September 1, 2001.

2-20           SECTION 4.  Article 21.81, Insurance Code, as amended by this

2-21     Act, applies only to an insurance policy that is delivered, issued

2-22     for delivery, or renewed on or after January 1, 1998.  A policy

2-23     that is delivered, issued for delivery, or renewed before January

2-24     1, 1998, is governed by the law as it existed immediately before

2-25     the effective date of this Act, and that law is continued in effect

2-26     for this purpose.

2-27           SECTION 5.  The importance of this legislation and the

 3-1     crowded condition of the calendars in both houses create an

 3-2     emergency and an imperative public necessity that the

 3-3     constitutional rule requiring bills to be read on three several

 3-4     days in each house be suspended, and this rule is hereby suspended.