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