HBA-ATS H.B. 1866 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1866 By: Gutierrez Insurance 3/30/1999 Introduced BACKGROUND AND PURPOSE The Texas Motor Vehicle Safety Responsibility Act prohibits a person from operating a motor vehicle in Texas unless financial responsibility is established for that vehicle through a motor vehicle liability insurance policy, or by other enumerated means. Nevertheless, it is estimated that as many as one of four motorists drives without liability insurance. Under the current "fault" system in Texas, a driver who causes damage in an automobile accident pays for it. However, uninsured drivers who are involved in motor vehicle accidents with insured drivers may be unable to pay. The result is that insured drivers must file claims against their insurance companies for all damages, even if they were not at fault. This could lead to increased premiums or canceled policies. H.B. 1866 prohibits a motor vehicle insurer from canceling or nonrenewing a policy of motor vehicle insurance, or increase the premium or deductible applicable to an insured, solely because the insured has been involved in an accident with an uninsured or underinsured motorist and has presented a claim. Under this bill, an insured is only entitled to this protection if the damages for which the claim is presented were incurred in an accident with an uninsured or underinsured motorist in which the named insured or other covered person was determined by the insurer not to be at fault. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the commissioner of insurance in SECTION 1 (Article 5.06-1, Insurance Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Article 5.06-1, Insurance Code, as follows: (1) Prohibits the delivery or issuance of any automobile liability insurance, including insurance issued through the Texas Automobile Insurance Plan Association under Article 21.81 (Texas Automobile Insurance Plan Association), rather than an Assigned Risk Plan established under the authority of Section 35 of the Texas Motor Vehicle Safety Responsibility Act, unless coverage is provided in at least the limits described by Chapter 601 (Motor Vehicle Safety Responsibility Act), Transportation Code, under provisions prescribed by the commissioner of insurance. (2) Makes conforming and nonsubstantive changes. (3) Makes a conforming change. (4) Makes a conforming change. (5) Requires uninsured motorist coverage to provide for payment to the insured of all sums that the insured is, rather than that the insured is required to be, legally entitled to recover as damages. (6) Makes nonsubstantive changes. (7) Provides that, if a dispute exists as to whether a motor vehicle is uninsured, the insurer has the burden of proof, rather than the burden is required to be placed upon the insurer, as to that issue. (9) Adds Subdivision (a) to prohibit a motor vehicle insurer from canceling or nonrenewing a policy of motor vehicle insurance, or increase the premium or deductible applicable to an insured, solely because the insured has been involved in an accident with an uninsured or underinsured motorist and has presented a claim under the coverages provided under this article. Adds Subdivision (b) to provide that an insured is only entitled to the protections provided under Subdivision (a) if the damages for which the claim is presented were incurred in an accident with an uninsured or underinsured motorist in which the named insured or other covered person was determined by the insurer not to be at fault. Adds Subdivision (c) to require the commissioner to adopt rules as necessary to implement this subsection. SECTION 2.Effective date: September 1, 1999. Makes application of this Act prospective for a policy of motor vehicle insurance that is delivered, issued for delivery, or renewed on or after January 1, 2000. SECTION 3.Emergency clause.