By Chavez H.B. No. 476
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to motor vehicle insurance coverage requirements for
1-3 operation of certain motor vehicles; providing a penalty.
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. INSURANCE FOR PASSENGER VEHICLES
1-8 SUBCHAPTER A. GENERAL PROVISIONS
1-9 Art. 27.001. DEFINITIONS. In this chapter:
1-10 (1) "Driver's license" has the meaning assigned by
1-11 Section 521.001, Transportation Code.
1-12 (2) "Highway" means the entire width between property
1-13 lines of a road, street, or way in this state that is not privately
1-14 owned or controlled:
1-15 (A) some part of which is open to the public for
1-16 vehicular traffic; and
1-17 (B) over which the state has legislative
1-18 jurisdiction under its police power.
1-19 (3) "Passenger vehicle" means a vehicle described by
1-20 Section 521.083 or 521.084, Transportation Code.
1-21 Art. 27.002. EXCEPTION TO APPLICATION. This chapter does
1-22 not apply to a person while the person is operating a government
1-23 vehicle in the course of the person's employment.
1-24 Art. 27.003. REFERENCES TO PRIOR LAW. A reference in
2-1 another law to the Motor Vehicle Safety-Responsibility Act (Article
2-2 6701h, Vernon's Texas Civil Statutes), as that law existed on
2-3 August 31, 1995, or to Chapter 601, Transportation Code, as that
2-4 law existed on August 31, 1997, means, insofar as it is applicable
2-5 to a passenger vehicle, this chapter.
2-6 SUBCHAPTER B. INSURANCE REQUIREMENT
2-7 Art. 27.051. INSURANCE REQUIRED. A person may not operate a
2-8 passenger vehicle on a highway unless the person is covered for
2-9 damages arising from that person's use of a passenger vehicle by a
2-10 passenger vehicle liability insurance policy that complies with
2-11 Subchapter C of this chapter.
2-12 SUBCHAPTER C. PASSENGER VEHICLE INSURANCE
2-13 Art. 27.101. PASSENGER VEHICLE LIABILITY INSURANCE;
2-14 REQUIREMENTS. (a) To satisfy the requirement of Article 27.051 of
2-15 this code, a passenger vehicle liability insurance policy must:
2-16 (1) except as provided by Subsection (b) of this
2-17 article, be issued by an insurance company authorized to write
2-18 motor vehicle liability insurance in this state;
2-19 (2) be written to or for the benefit of each person
2-20 named in the policy as the insured; and
2-21 (3) meet the requirements of this subchapter.
2-22 (b) A person who is not a resident of this state and who
2-23 does not hold a driver's license issued by this state may satisfy
2-24 the requirements of Article 27.051 of this code through a motor
2-25 vehicle liability insurance policy written by an insurance company
2-26 that is not authorized to do business in this state if the
2-27 insurance company:
3-1 (1) is authorized to do business in another state of
3-2 the United States;
3-3 (2) executes a power of attorney authorizing the
3-4 department to accept on its behalf service of notice or process in
3-5 an action arising out of a motor vehicle accident in this state;
3-6 and
3-7 (3) agrees in writing that its policies will be
3-8 treated as conforming to the laws of this state relating to the
3-9 terms of a passenger vehicle liability insurance policy.
3-10 Art. 27.102. MINIMUM COVERAGE AMOUNTS. (a) The minimum
3-11 amounts of passenger vehicle liability insurance coverage required
3-12 by this chapter are:
3-13 (1) $30,000 for bodily injury to or death of one
3-14 person in one accident;
3-15 (2) $60,000 for bodily injury to or death of two or
3-16 more persons in one accident, subject to the amount provided by
3-17 Subdivision (1) of this subsection for bodily injury to or death of
3-18 one of the persons; and
3-19 (3) $20,000 for damage to or destruction of property
3-20 of others in one accident.
3-21 (b) The coverage required under Subsection (a) of this
3-22 article may exclude, with respect to one accident:
3-23 (1) the first $250 of liability for bodily injury to
3-24 or death of one person;
3-25 (2) the first $500 of liability for bodily injury to
3-26 or death of two or more persons, subject to the amount provided by
3-27 Subdivision (1) of this subsection for bodily injury to or death of
4-1 one of the persons; and
4-2 (3) the first $250 of liability for damage to or
4-3 destruction of property of others.
4-4 Art. 27.103. REQUIRED TERMS. A passenger vehicle liability
4-5 insurance policy required by this chapter must pay, on behalf of
4-6 each named insured, amounts the insured becomes obligated to pay as
4-7 damages arising out of the use by the insured of any passenger
4-8 vehicle in the United States or Canada, subject to the amounts and
4-9 exclusions of Article 27.102 of this code.
4-10 Art. 27.104. PROHIBITED TERMS. A passenger vehicle
4-11 liability insurance policy required by this chapter may not insure
4-12 against liability:
4-13 (1) for which the insured or the insured's insurer may
4-14 be held liable under a workers' compensation law;
4-15 (2) for bodily injury to or death of an employee of
4-16 the insured while engaged in the employment, other than domestic,
4-17 of the insured, or in domestic employment if benefits for the
4-18 injury are payable or required to be provided under a workers'
4-19 compensation law; or
4-20 (3) for injury to or destruction of property owned by,
4-21 rented to, in the care of, or transported by the insured.
4-22 Art. 27.105. ADDITIONAL COVERAGE. (a) Subject to Article
4-23 27.104 of this code, an insurance policy that provides the coverage
4-24 required for a passenger vehicle liability insurance policy by this
4-25 chapter may also provide other coverage in excess of or in addition
4-26 to the required coverage. The additional coverage may include:
4-27 (1) comprehensive coverage applicable to a passenger
5-1 vehicle owned by the insured; or
5-2 (2) coverage for liability incurred by the insured
5-3 arising out of the use of a passenger vehicle owned by the insured
5-4 by another person who holds a driver's license issued by another
5-5 state.
5-6 (b) The excess or additional coverage is not subject to this
5-7 chapter.
5-8 Art. 27.106. POLICY FORM. The policy form and any
5-9 endorsement to the policy form shall be adopted by the commissioner
5-10 in accordance with Article 5.06 of this code. The form must state
5-11 the dollar amount of coverage provided, including any optional
5-12 coverage provided.
5-13 Art. 27.107. MULTIPLE POLICIES. This chapter's requirements
5-14 for a passenger vehicle liability insurance policy may be satisfied
5-15 by a combination of policies of one or more insurance companies if
5-16 the policies in combination meet the requirements.
5-17 Art. 27.108. NOTICE TO TEXAS DEPARTMENT OF PUBLIC SAFETY;
5-18 CONTINUATION OF COVERAGE; CONSIDERATION OF DRIVING RECORD. (a) A
5-19 motor vehicle insurance company that writes a policy of passenger
5-20 vehicle insurance that the company represents as satisfying the
5-21 requirements of this chapter shall notify the Texas Department of
5-22 Public Safety of:
5-23 (1) the issuance of the policy;
5-24 (2) the termination of the policy by the company or by
5-25 an insured; or
5-26 (3) a claim made under the policy.
5-27 (b) Coverage under a passenger vehicle insurance policy
6-1 written to satisfy this chapter that is terminated continues until
6-2 the fifth day after the date notice is mailed under Subsection
6-3 (a)(2) of this article.
6-4 (c) On receipt of notice of termination of coverage under
6-5 the policy under Subsection (a)(2) of this article, the Texas
6-6 Department of Public Safety shall suspend the person's driver's
6-7 license under Subchapter T, Chapter 521, Transportation Code.
6-8 (d) On receipt of notice under Subsection (a)(3) of this
6-9 article of five or more claims against an insured's policy during
6-10 three year period, the public safety director of the Texas
6-11 Department of Public Safety shall review the insured's record and
6-12 may initiate proceedings to consider suspension or revocation of
6-13 the insured's license under Subchapter N, Chapter 521,
6-14 Transportation Code.
6-15 Art. 27.109. PROOF OF COVERAGE. The commissioner shall
6-16 prescribe a standard proof of insurance form to be used by an
6-17 insured to comply with Section 521.143, Transportation Code.
6-18 SUBCHAPTER D. GUARANTEED ISSUE AND RENEWABILITY; RATES
6-19 Art. 27.151. ISSUANCE TO LICENSED DRIVER. An insurance
6-20 company authorized to write motor vehicle liability insurance in
6-21 this state may not refuse to issue or renew a passenger vehicle
6-22 insurance policy in the minimum amounts required by this chapter to
6-23 a person who holds a driver's license or who has been certified by
6-24 the Texas Department of Public Safety as eligible to hold a license
6-25 under Section 21.143, Transportation Code.
6-26 Art. 27.152. RATES. (a) The commissioner, after notice and
6-27 hearing, shall establish the minimum base rates for passenger
7-1 vehicle liability insurance issued under this chapter and shall
7-2 annually adjust the minimum base rates as is actuarially
7-3 justifiable. The commissioner shall adopt rules governing the
7-4 procedures for establishing and adjusting minimum base rates under
7-5 this section. Subchapter A, Chapter 5, of this code does not apply
7-6 to rates for passenger vehicle liability insurance governed by this
7-7 chapter. The flexible rating program and flexibility bands
7-8 established by Subchapter M, Chapter 5, of this code do not apply
7-9 to rates for passenger vehicle liability insurance governed by this
7-10 chapter.
7-11 (b) The minimum base rates may not vary because of the
7-12 insured's area of residence, age, or gender.
7-13 (c) Except as provided by this section, an insurer may not
7-14 charge a rate that exceeds the applicable minimum base rate
7-15 established under this section for passenger vehicle liability
7-16 insurance issued under this chapter.
7-17 (d) If an insured was covered by one or more passenger
7-18 vehicle liability insurance policies issued under this chapter
7-19 that, during the period that began three years before the date on
7-20 which a premium is due, paid one liability claim, the rate
7-21 applicable to that insured is two times the minimum base rate that
7-22 would otherwise be applicable to the insured.
7-23 (e) If an insured was covered by one or more passenger
7-24 vehicle liability insurance policies issued under this chapter
7-25 that, during the period that began three years before the date on
7-26 which a premium is due, paid two liability claims, the rate
7-27 applicable to that insured is four times the minimum base rate that
8-1 would otherwise be applicable to the insured.
8-2 (f) If an insured was covered by one or more passenger
8-3 vehicle liability insurance policies issued under this chapter
8-4 that, during the period that began three years before the date on
8-5 which a premium is due, paid three liability claims, the rate
8-6 applicable to that insured is eight times the minimum base rate
8-7 that would otherwise be applicable to the insured.
8-8 (g) If an insured was covered by one or more passenger
8-9 vehicle liability insurance policies issued under this chapter
8-10 during the period that began three years before the date on which a
8-11 premium is due, paid four liability claims, the rate applicable to
8-12 that insured is 16 times the minimum base rate that would otherwise
8-13 be applicable to the insured.
8-14 (h) If an insured was covered by one or more passenger
8-15 vehicle liability insurance policies issued under this chapter
8-16 that, during the period that began three years before the date on
8-17 which a premium is due, paid five or more liability claims, the
8-18 rate applicable to that insured is 32 times the minimum base rate
8-19 that would otherwise be applicable to the insured. An insurer that
8-20 knows of five or more liability claims against an insured during a
8-21 three year period shall notify the department and the department
8-22 shall review the insured's record as provided by Article 27.108(d)
8-23 of this code.
8-24 SUBCHAPTER E. PENALTIES
8-25 Art. 27.201. OPERATION OF PASSENGER VEHICLE IN VIOLATION OF
8-26 INSURANCE REQUIREMENT; OFFENSE. (a) A person commits an offense
8-27 if the person operates a passenger vehicle in violation of Article
9-1 27.051 of this code.
9-2 (b) Except as provided by Subsection (c) of this section, an
9-3 offense under this section is a Class A misdemeanor.
9-4 (c) If it is shown on the trial of an offense under
9-5 Subsection (a) of this section that the person has been previously
9-6 convicted of an offense under that subsection, an offense under
9-7 this section is a state jail felony.
9-8 SECTION 2. Chapter 521, Transportation Code, is amended by
9-9 adding Subchapter T to read as follows:
9-10 SUBCHAPTER T. SUMMARY SUSPENSION AFTER TERMINATION OF
9-11 PASSENGER VEHICLE INSURANCE
9-12 Sec. 521.501. NOTICE OF TERMINATION OF INSURANCE; SUSPENSION
9-13 OF LICENSE. (a) On receipt of notice under Article 27.108,
9-14 Insurance Code, that the passenger vehicle insurance issued to a
9-15 license holder has been canceled, the director shall mail a notice
9-16 of that fact and of the provisions of this subchapter to the
9-17 license holder.
9-18 (b) The person's license is suspended on the 10th day after
9-19 the date that notice under this subsection is mailed unless, before
9-20 that date, the person:
9-21 (1) submits evidence of substitute passenger vehicle
9-22 liability insurance that complies with the requirements of Chapter
9-23 27, Insurance Code; or
9-24 (2) requests a hearing under this subchapter.
9-25 Sec. 521.502. HEARING. (a) A hearing under this subchapter
9-26 shall be conducted in the same manner as a hearing under Section
9-27 521.293.
10-1 (b) The hearing must be conducted not later than the fifth
10-2 day after the date that the request for hearing is received by the
10-3 department.
10-4 (c) The sole issue to be determined at the hearing is
10-5 whether the license holder is covered by a policy of passenger
10-6 vehicle liability insurance that complies with the requirements of
10-7 Chapter 27, Insurance Code.
10-8 (d) If the license holder is not covered by a policy of
10-9 passenger vehicle liability insurance that complies with the
10-10 requirements of Chapter 27, Insurance Code, the presiding officer
10-11 shall recommend that the license be suspended and the director
10-12 shall suspend the license.
10-13 (e) A person may appeal the suspension of a driver's license
10-14 under this section in the manner provided for an appeal under
10-15 Section 521.302. The sole issue in an appeal is whether the
10-16 license holder was, at the time of the suspension, covered by
10-17 passenger vehicle liability insurance that complies with the
10-18 requirements of Chapter 27, Insurance Code. Section 521.302(f)
10-19 does not apply to an appeal under this subsection and the
10-20 suspension of the license is not stayed pending the appeal.
10-21 Sec. 521.503. PERIOD OF SUSPENSION. (a) Suspension of a
10-22 license under this subchapter continues until the license holder:
10-23 (1) submits to the director satisfactory evidence of
10-24 passenger vehicle liability insurance that complies with the
10-25 requirements of Chapter 27, Insurance Code; and
10-26 (2) complies with each requirement for renewal of the
10-27 license.
11-1 (b) A license may not be renewed during the period of
11-2 suspension.
11-3 Sec. 521.504. SURRENDER OF LICENSE; RETURN. (a) On
11-4 suspension of a license under this subchapter, the department shall
11-5 require the license holder to surrender the license to the
11-6 department.
11-7 (b) The department shall return a suspended license to the
11-8 license holder at the time the suspension is terminated unless,
11-9 during the period of suspension, the license expired or was
11-10 revoked.
11-11 SECTION 3. Section 521.143, Transportation Code, is amended
11-12 to read as follows:
11-13 Sec. 521.143. EVIDENCE OF FINANCIAL RESPONSIBILITY REQUIRED.
11-14 (a) An application for an original or renewal of a driver's
11-15 license must be accompanied by evidence that the applicant is
11-16 covered by a policy of passenger vehicle liability insurance that
11-17 complies with the requirements of Article 5.06, Insurance Code, and
11-18 Chapter 27, Insurance Code (of financial responsibility or a
11-19 statement that the applicant does not own a motor vehicle for which
11-20 evidence of financial responsibility is required under Chapter
11-21 601).
11-22 (b) If an application for an original or renewal driver's
11-23 license satisfies each requirement for issuance of a license, other
11-24 than the requirement of Subsection (a), the department shall issue
11-25 to the person a certificate of eligibility for a driver's license.
11-26 On presentation of evidence that the applicant has satisfied the
11-27 requirement of Subsection (a), the department shall issue the
12-1 license in accordance with Subchapter I [Evidence of financial
12-2 responsibility presented under this section must be in at least the
12-3 minimum amounts required by Section 601.072 and must cover each
12-4 motor vehicle owned by the applicant for which the applicant is
12-5 required to maintain evidence of financial responsibility. The
12-6 evidence may be shown in the manner provided by Section 601.053(a).]
12-7 [(c) A personal automobile insurance policy used as evidence
12-8 of financial responsibility under this section must comply with
12-9 Article 5.06, Insurance Code.]
12-10 [(d) A statement that an applicant does not own a motor
12-11 vehicle to which the evidence of financial responsibility
12-12 requirement applies must be sworn to and signed by the applicant].
12-13 SECTION 4. Subchapter A, Chapter 601, Transportation Code,
12-14 is amended by adding Section 601.0025:
12-15 Sec. 601.0025. PASSENGER VEHICLES EXCLUDED. Notwithstanding
12-16 any other law, this chapter does not apply to the operation,
12-17 maintenance, or use of a passenger vehicle, as that term is defined
12-18 by Article 27.001, Insurance Code, and the term "motor vehicle," as
12-19 used in this chapter, does not include a passenger vehicle.
12-20 SECTION 5. Articles 5.01(e) and (f), Insurance Code, are
12-21 amended to read as follows:
12-22 (e) Motor vehicle or automobile insurance as referred to in
12-23 this subchapter shall be taken and construed to mean every form of
12-24 insurance on any automobile or other vehicle hereinafter enumerated
12-25 and its operating equipment or necessitated by reason of the
12-26 liability imposed by law for damages arising out of the ownership,
12-27 operation, maintenance, or use in this State of any automobile,
13-1 motorcycle, motor-driven cycle [motorbicycle], truck,
13-2 truck-tractor, tractor, traction engine, or any other
13-3 self-propelled vehicle, and including also every vehicle, trailer
13-4 or semi-trailer pulled or towed by a motor vehicle, but excluding
13-5 every motor vehicle running only upon fixed rails or tracks. The
13-6 term includes a policy of passenger vehicle insurance written to
13-7 comply with Chapter 27 of this code. Workers' Compensation
13-8 Insurance is excluded from the foregoing definition.
13-9 (f) Notwithstanding Subsections (a) through (d) of this
13-10 article, (on and after March 1, 1992,) rates for motor vehicle
13-11 insurance in this state, other than passenger vehicle liability
13-12 insurance, are determined as provided by the flexible rating
13-13 program adopted under Subchapter M of this chapter.
13-14 SECTION 6. Article 5.01-2(b), Insurance Code, is amended to
13-15 read as follows:
13-16 (b) Rates [On and after March 1, 1992, rates] for motor
13-17 vehicle insurance written by a Lloyd's plan insurer or a reciprocal
13-18 or interinsurance exchange, other than passenger vehicle liability
13-19 insurance, are determined as provided by the flexible rating
13-20 program adopted under Subchapter M of this chapter.
13-21 SECTION 7. Article 5.03(g), Insurance Code, is amended to
13-22 read as follows:
13-23 (g) Notwithstanding Sections (a) through (e) of this
13-24 article, [on and after March 1, 1992,] rates for motor vehicle
13-25 insurance, other than passenger vehicle liability insurance,
13-26 [vehicles] are determined as provided by Subchapter M of this
13-27 chapter.
14-1 SECTION 8. Sections 1 and 2, Article 5.03-3, Insurance Code,
14-2 are amended to read as follows:
14-3 Sec. 1. DEFINITIONS. In this article:
14-4 (1) "Honor student" means an individual who, according
14-5 to the official scholastic records for the preceding academic
14-6 semester, quarter, or other grade reporting period, has a:
14-7 (A) "B" average or better; or
14-8 (B) 3.0 average or better on a 4.0 scale.
14-9 (2) "Insurer" means an insurance company,
14-10 interinsurance exchange, mutual, capital stock company, fraternal
14-11 benefit society, local mutual aid association, county mutual,
14-12 reciprocal, association, Lloyd's plan, or other entity writing
14-13 motor vehicle insurance in this state. The term includes a company
14-14 affiliated with an insurer.
14-15 (3) ["Motor vehicle" means any private passenger
14-16 vehicle that:]
14-17 [(A) is registered in this state; and]
14-18 [(B) has a gross weight of 25,000 pounds or
14-19 less.]
14-20 [(4)] "Traffic safety regulation" means a law or
14-21 ordinance of this state or a political subdivision of this state
14-22 relating to the operation of motor vehicles other than a regulation
14-23 relating to pedestrians or to the parking of motor vehicles.
14-24 Sec. 2. DISCOUNT AUTHORIZED. (a) An insurer who delivers
14-25 or issues for delivery in this state a motor vehicle insurance
14-26 policy, on receipt of written verification from the insured that
14-27 the insured [or a family member covered by the policy] is eligible
15-1 under Subsection (b), and that the motor vehicle available for use
15-2 by the insured satisfies the requirements of Subsection (c), may
15-3 grant a discount in the amount provided by Subsection (d) [(c)] in
15-4 the premiums charged for the liability, medical payments, and
15-5 personal injury protection coverage for the insured. If the insured
15-6 is the owner of the motor vehicle and the coverage is provided
15-7 under an owner's policy of passenger vehicle insurance, the
15-8 discount may apply to [, and] collision coverage [only for the
15-9 motor vehicle designated to be driven by the honor student].
15-10 (b) To be eligible for a discount under this article, an
15-11 applicant for a discount must file with the insurer annually the
15-12 grade report issued by the school and other information that
15-13 presents evidence satisfactory to establish that the person covered
15-14 by the discount:
15-15 (1) is licensed to drive in this state;
15-16 (2) is under 25 years of age and qualifies as a
15-17 youthful driver under the Texas Department of Insurance automobile
15-18 classification plan; and
15-19 (3) is enrolled as a full-time student in:
15-20 (A) the junior or senior year of high school; or
15-21 (B) academic courses in an institution of higher
15-22 education.
15-23 (c) The motor vehicle available for use by the insured, if
15-24 any, must be a private passenger vehicle that:
15-25 (1) is registered in this state; and
15-26 (2) has a gross weight of 25,000 pounds or less.
15-27 (d) The commissioner by rule shall set the amount of the
16-1 discounts applicable under this article and may adopt other rules
16-2 necessary for the implementation of this article.
16-3 SECTION 9. Article 5.04(c), Insurance Code, is amended to
16-4 read as follows:
16-5 (c) Notwithstanding Subsections (a) and (b) of this article,
16-6 [on and after March 1, 1992,] rates for motor vehicle insurance,
16-7 other than passenger vehicle liability insurance, [vehicles] are
16-8 determined as provided by Subchapter M of this chapter.
16-9 SECTION 10. Articles 5.06(9) and (10), Insurance Code, are
16-10 amended to read as follows:
16-11 (9) An insurance policy or other document evidencing
16-12 proof of purchase of a passenger vehicle liability [personal
16-13 automobile] insurance policy written for a term of less than 30
16-14 days may not be used to obtain an original or renewal driver's
16-15 license [an automobile registration or license plates, or a motor
16-16 vehicle inspection certificate] and must contain a statement as
16-17 follows:
16-18 "TEXAS LAW PROHIBITS USE OF THIS DOCUMENT TO OBTAIN [A MOTOR
16-19 VEHICLE INSPECTION CERTIFICATE,] AN ORIGINAL OR RENEWAL DRIVER'S
16-20 LICENSE[, OR AN AUTOMOBILE REGISTRATION OR LICENSE PLATES]."
16-21 (10) Before accepting any premium or fee for a
16-22 passenger vehicle liability [personal automobile] insurance policy
16-23 or binder for a term of less than 30 days, an agent or insurer must
16-24 make the following written disclosure to the applicant or insured:
16-25 "TEXAS LAW PROHIBITS USE OF THIS POLICY OR BINDER TO OBTAIN [A
16-26 MOTOR VEHICLE INSPECTION CERTIFICATE,] AN ORIGINAL OR RENEWAL
16-27 DRIVER'S LICENSE[, OR AN AUTOMOBILE REGISTRATION OR LICENSE
17-1 PLATES]."
17-2 SECTION 11. Sections 1, 2, and 3, Article 5.06-1, Insurance
17-3 Code, are amended to read as follows:
17-4 (1) No automobile liability insurance [(including
17-5 insurance issued pursuant to an Assigned Risk Plan established
17-6 under authority of Section 35 of the Texas Motor Vehicle
17-7 Safety-Responsibility Act),] covering liability arising out of the
17-8 insured's ownership, maintenance, or use of any motor vehicle shall
17-9 be delivered or issued for delivery in this state unless coverage
17-10 is provided therein or supplemental thereto, in at least the limits
17-11 described in Chapter 27 of this code or Chapter 601, Transportation
17-12 Code, as applicable [the Texas Motor Vehicle Safety-Responsibility
17-13 Act], under provisions prescribed by the Board, for the protection
17-14 of persons insured thereunder who are legally entitled to recover
17-15 damages from uninsured or underinsured owners or operators of
17-16 [uninsured or underinsured] motor vehicles because of bodily
17-17 injury, sickness, or disease, including death, or property damage
17-18 resulting therefrom. The coverages required under this Article
17-19 shall not be applicable where any insured named in the policy shall
17-20 reject the coverage in writing; provided that unless the named
17-21 insured thereafter requests such coverage in writing, such coverage
17-22 need not be provided in or supplemental to a renewal policy where
17-23 the named insured has rejected the coverage in connection with a
17-24 policy previously issued to the insured [him] by the same insurer
17-25 or by an affiliated insurer.
17-26 (2) For the purpose of these coverages: (a) the term
17-27 "uninsured motorist [motor vehicle]" shall, subject to the terms
18-1 and conditions of such coverage, be deemed to include an individual
18-2 who is insured under a policy issued by a [motor vehicle where the]
18-3 liability insurer that [thereof] is unable to make payment with
18-4 respect to the legal liability of its insured within the limits
18-5 specified therein because of insolvency.
18-6 (b) The term "underinsured motorist [motor vehicle]" means
18-7 an insured operator with respect to [motor vehicle on] which there
18-8 is valid and collectible liability insurance coverage with limits
18-9 of liability for the owner or operator which were originally lower
18-10 than, or have been reduced by payment of claims arising from the
18-11 same accident to, an amount less than the limit of liability stated
18-12 in the underinsured coverage of the insured's policy.
18-13 (c) The Board may, in the policy forms adopted under Article
18-14 5.06 of this code, define "uninsured motorist [motor vehicle]" to
18-15 exclude certain [motor vehicles whose] operators who are in fact
18-16 uninsured.
18-17 (d) The portion of a policy form adopted under Article 5.06
18-18 of this code to provide coverage under this article shall include
18-19 provisions that, regardless of the number of persons insured,
18-20 policies or bonds applicable, vehicles involved, or claims made,
18-21 the total aggregate limit of liability to any one person who
18-22 sustains bodily injury or property damage as the result of any one
18-23 occurrence shall not exceed the limit of liability for these
18-24 coverages as stated in the policy and the total aggregate limit of
18-25 liability to all claimants, if more than one, shall not exceed the
18-26 total limit of liability per occurrence as stated in the policy;
18-27 and shall provide for the exclusion of the recovery of damages for
19-1 bodily injury or property damage or both resulting from the
19-2 intentional acts of the insured. The portion of a policy form
19-3 adopted under Article 5.06 of this code to provide coverage under
19-4 this article shall require that in order for the insured to recover
19-5 under the uninsured motorist coverages where the owner or operator
19-6 of any motor vehicle which causes bodily injury or property damage
19-7 to the insured is unknown, actual physical contact must have
19-8 occurred between the motor vehicle owned or operated by such
19-9 unknown person and the person or property of the insured.
19-10 (3) The limits of liability for bodily injury,
19-11 sickness, or disease, including death, shall be offered to the
19-12 insured in amounts not less than those prescribed in Chapter 27 of
19-13 this code or Chapter 601, Transportation Code, as applicable, [the
19-14 Texas Motor Vehicle Safety-Responsibility Act] and such higher
19-15 available limits as may be desired by the insured, but not greater
19-16 than the limits of liability specified in the bodily injury
19-17 liability provisions of the insured's policy.
19-18 SECTION 12. Section 4(a), Article 5.06-1, Insurance Code, is
19-19 amended to read as follows:
19-20 (a) Coverage for property damage shall be offered to the
19-21 insured in amounts not less than those prescribed in Chapter 27 of
19-22 this code or Chapter 601, Transportation Code, as applicable, [the
19-23 Texas Motor Vehicle Safety-Responsibility Act] and such higher
19-24 available limits as may be desired by the insured, but not greater
19-25 than limits of liability specified in the property damage liability
19-26 provisions of the insured's policy, subject to a deductible amount
19-27 of $250.
20-1 SECTION 13. Sections (7) and (8), Article 5.06-1, Insurance
20-2 Code, are amended to read as follows:
20-3 (7) If a dispute exists as to whether a motorist
20-4 [motor vehicle] is uninsured, the burden of proof as to that issue
20-5 shall be upon the insurer.
20-6 (8) Notwithstanding Section 15.032, Civil Practice and
20-7 Remedies Code, an action against an insurer in relation to the
20-8 coverage provided under this article, including an action to
20-9 enforce that coverage, may be brought only:
20-10 (a) in the county in which the policyholder or
20-11 beneficiary instituting the suit resided at the time of the
20-12 accident; or
20-13 (b) in the county in which the accident
20-14 involving the uninsured or underinsured motorist [motor vehicle]
20-15 occurred.
20-16 SECTION 14. Subsections (a), (b), and (c), Article 5.06-3,
20-17 Insurance Code, are amended to read as follows:
20-18 (a) No automobile liability insurance policy[, including
20-19 insurance issued pursuant to an assigned risk plan established
20-20 under authority of Section 35 of the Texas Motor Vehicle
20-21 Safety-Responsibility Act,] covering liability arising out of the
20-22 ownership, maintenance, or use of any motor vehicle shall be
20-23 delivered or issued for delivery in this state unless personal
20-24 injury protection coverage is provided therein or supplemental
20-25 thereto. The coverage required by this article shall not be
20-26 applicable if any insured named in the policy shall reject the
20-27 coverage in writing; provided, unless the named insured thereafter
21-1 requests such coverage in writing, such coverage need not be
21-2 provided in or supplemental to a renewal policy if the named
21-3 insured has rejected the coverage in connection with a policy
21-4 previously issued to the named insured [him] by the same insurer or
21-5 by an affiliated insurer.
21-6 (b) "Personal injury protection" consists of provisions of a
21-7 motor vehicle liability policy which provide for payment to the
21-8 named insured in the motor vehicle liability policy and [members of
21-9 the insured's household,] any authorized [operator or] passenger of
21-10 a [the named insured's] motor vehicle operated by the named insured
21-11 including a guest occupant, up to an amount of $2,500 for each such
21-12 person for payment of all reasonable expenses arising from the
21-13 accident and incurred within three years from the date thereof for
21-14 necessary medical, surgical, X-ray and dental services, including
21-15 prosthetic devices, and necessary ambulance, hospital, professional
21-16 nursing and funeral services, and in the case of an income
21-17 producer, payment of benefits for loss of income as the result of
21-18 the accident; and where the person injured in the accident was not
21-19 an income or wage producer at the time of the accident, payments of
21-20 benefits must be made in reimbursement of necessary and reasonable
21-21 expenses incurred for essential services ordinarily performed by
21-22 the injured person for care and maintenance of the family or family
21-23 household. The insurer providing loss of income benefits may
21-24 require, as a condition of receiving such benefits, that the
21-25 insured person furnish the insurer reasonable medical proof of the
21-26 [his] injury causing loss of income. The personal injury
21-27 protection in this paragraph specified shall not exceed $2,500 for
22-1 all benefits, in the aggregate, for each person.
22-2 (c) The benefits required by this Act shall be payable
22-3 without regard to the fault or non-fault of the named insured or
22-4 the recipient in causing or contributing to the accident.
22-5 Medical[, and without regard to any collateral source of medical],
22-6 hospital, [or] wage continuation benefits, or similar benefits
22-7 available to the injured person provide primary coverage for the
22-8 injury. Except as provided by this subsection, an [An] insurer
22-9 paying benefits pursuant to this Act shall have no right of
22-10 subrogation and no claim against any other person or insurer to
22-11 recover any such benefits by reason of the alleged fault of such
22-12 other person in causing or contributing to the accident.
22-13 SECTION 15. Article 5.09(c), Insurance Code, is amended to
22-14 read as follows:
22-15 (c) Notwithstanding Subsection (a) of this article, [on and
22-16 after March 1, 1992,] rates for motor vehicle insurance, other than
22-17 passenger vehicle liability insurance, [vehicles] are determined as
22-18 provided by Subchapter M of this chapter.
22-19 SECTION 16. Article 5.11(c), Insurance Code, is amended to
22-20 read as follows:
22-21 (c) Notwithstanding Subsections (a) and (b) of this article,
22-22 [on and after March 1, 1992,] rates for motor vehicle insurance,
22-23 other than passenger vehicle insurance [vehicles] are determined as
22-24 provided by Subchapter M of this chapter.
22-25 SECTION 17. Article 5.96(a-1), Insurance Code, is amended to
22-26 read as follows:
22-27 (a-1) Except as provided by Section 5(d), Article 5.101, of
23-1 this code, this article does not apply to the setting of rates for
23-2 passenger vehicles or benchmark rates for other motor vehicle
23-3 insurance or for [and] fire or [and] allied lines insurance under
23-4 Subchapter M of this chapter.
23-5 SECTION 18. Section 1, Article 5.101, Insurance Code, is
23-6 amended to read as follows:
23-7 Sec. 1. PURPOSE. The program on flexible rating is designed
23-8 to help stabilize the rates charged for insurance in lines of
23-9 property and casualty insurance covered by Subchapters A and C of
23-10 this chapter. This article does not apply to:
23-11 (1) ocean marine insurance;
23-12 (2) inland marine insurance;
23-13 (3) fidelity, surety and guaranty bond insurance;
23-14 (4) errors and omissions insurance;
23-15 (5) directors' and officers' liability insurance;
23-16 (6) general liability insurance;
23-17 (7) commercial property insurance;
23-18 (8) workers' compensation insurance;
23-19 (9) professional liability insurance for physicians
23-20 and health care providers as defined in Article 5.15-1 of this
23-21 code; [or]
23-22 (10) attorney's professional liability insurance; or
23-23 (11) passenger vehicle liability insurance.
23-24 SECTION 19. The following laws are repealed:
23-25 (1) Section 502.153, Transportation Code;
23-26 (2) Section 548.105, Transportation Code;
23-27 (3) Section 29, Chapter 705, Acts of the 74th
24-1 Legislature, Regular Session, 1995;
24-2 (4) Section 4, Chapter 443, Acts of the 74th
24-3 Legislature, Regular Session, 1995;
24-4 (5) Section 5, Chapter 621, Acts of the 74th
24-5 Legislature, Regular Session, 1995; and
24-6 (6) Article 21.81, Insurance Code.
24-7 SECTION 20. (a) Except as provided by Subsection (b) of
24-8 this section, this Act takes effect September 1, 1999.
24-9 (b) Section 19 of this Act takes effect January 1, 2000.
24-10 (c) This Act applies only to the operation of a passenger
24-11 vehicle on or after January 1, 2000. Operation of a passenger
24-12 vehicle before January 1, 2000 is governed by the law in effect
24-13 immediately before the effective date of this Act, and that law is
24-14 continued in effect for that purpose.
24-15 (d) This Act applies only to an insurance policy that is
24-16 delivered, issued for delivery, or renewed on or after January 1,
24-17 2000. A policy that is delivered, issued for delivery, or renewed
24-18 before January 1, 2000, is governed by the law as it existed
24-19 immediately before the effective date of this Act, and that law is
24-20 continued in effect for that purpose.
24-21 SECTION 21. The importance of this legislation and the
24-22 crowded condition of the calendars in both houses create an
24-23 emergency and an imperative public necessity that the
24-24 constitutional rule requiring bills to be read on three several
24-25 days in each house be suspended, and this rule is hereby suspended.