By Gutierrez                                          H.B. No. 1866
         76R6742 PB-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to uninsured and underinsured motorist insurance coverage.
 1-4           SECTION 1.  Article 5.06-1, Insurance Code, is amended to
 1-5     read as follows:
 1-7     (1)  No automobile liability insurance, [(]including insurance
 1-8     issued through the Texas Automobile Insurance Plan Association
 1-9     under  Article 21.81 of this code [pursuant to an Assigned Risk
1-10     Plan established under authority of Section 35 of the Texas Motor
1-11     Vehicle Safety-Responsibility Act)], covering liability arising out
1-12     of the ownership, maintenance, or use of any motor vehicle may
1-13     [shall] be delivered or issued for delivery in this state unless
1-14     coverage is provided therein or supplemental thereto, in at least
1-15     the limits described by Chapter 601, Transportation Code [in the
1-16     Texas Motor Vehicle Safety-Responsibility Act], under provisions
1-17     prescribed by the commissioner [Board], for the protection of
1-18     persons insured thereunder who are legally entitled to recover
1-19     damages from owners or operators of uninsured or underinsured motor
1-20     vehicles because of bodily injury, sickness, or disease, including
1-21     death, or property damage resulting therefrom.  The coverages
1-22     required under this Article shall not be applicable where any
1-23     insured named in the policy shall reject the coverage in writing;
1-24     provided that unless the named insured thereafter requests such
 2-1     coverage in writing, such coverage need not be provided in or
 2-2     supplemental to a renewal policy where the named insured has
 2-3     rejected the coverage in connection with a policy previously issued
 2-4     to him by the same insurer or by an affiliated insurer.
 2-5           (2)  For the purpose of this article [these coverages]:
 2-6                 (a)  The [the] term "uninsured motor vehicle" shall,
 2-7     subject to the terms and conditions of such coverage, be deemed to
 2-8     include an insured motor vehicle where the liability insurer
 2-9     thereof is unable to make payment with respect to the legal
2-10     liability of its insured within the limits specified therein
2-11     because of insolvency.
2-12                 (b)  The term "underinsured motor vehicle" means an
2-13     insured motor vehicle on which there is valid and collectible
2-14     liability insurance coverage with limits of liability for the owner
2-15     or operator which were originally lower than, or have been reduced
2-16     by payment of claims arising from the same accident to, an amount
2-17     less than the limit of liability stated in the underinsured
2-18     coverage of the insured's policy.
2-19                 (c)  The commissioner [Board] may, in the policy forms
2-20     adopted under Article 5.06 of this code, define "uninsured motor
2-21     vehicle" to exclude certain motor vehicles whose operators are in
2-22     fact uninsured.
2-23                 (d)  The portion of a policy form adopted under Article
2-24     5.06 of this code to provide coverage under this article shall
2-25     include provisions that, regardless of the number of persons
2-26     insured, policies or bonds applicable, vehicles involved, or claims
2-27     made, the total aggregate limit of liability to any one person who
 3-1     sustains bodily injury or property damage as the result of any one
 3-2     occurrence shall not exceed the limit of liability for these
 3-3     coverages as stated in the policy and the total aggregate limit of
 3-4     liability to all claimants, if more than one, shall not exceed the
 3-5     total limit of liability per occurrence as stated in the policy;
 3-6     and shall provide for the exclusion of the recovery of damages for
 3-7     bodily injury or property damage or both resulting from the
 3-8     intentional acts of the insured.  The portion of a policy form
 3-9     adopted under Article 5.06 of this code to provide coverage under
3-10     this article shall require that in order for the insured to recover
3-11     under the uninsured motorist coverages where the owner or operator
3-12     of any motor vehicle which causes bodily injury or property damage
3-13     to the insured is unknown, actual physical contact must have
3-14     occurred between the motor vehicle owned or operated by such
3-15     unknown person and the person or property of the insured.
3-16           (3)  The limits of liability for bodily injury, sickness, or
3-17     disease, including death, shall be offered to the insured in
3-18     amounts not less than those prescribed by Chapter 601,
3-19     Transportation Code, [in the Texas Motor Vehicle
3-20     Safety-Responsibility Act] and such  higher available limits as may
3-21     be desired by the insured, but not greater than the limits of
3-22     liability specified in the bodily injury liability provisions of
3-23     the insured's policy.
3-24           (4)(a)  Coverage for property damage shall be offered to the
3-25     insured in amounts not less than those prescribed by Chapter 601,
3-26     Transportation  Code, [in the Texas Motor Vehicle
3-27     Safety-Responsibility Act] and such higher available limits as  may
 4-1     be desired by the insured, but not greater than limits of liability
 4-2     specified in the property damage liability provisions of the
 4-3     insured's policy, subject to a deductible amount of $250.
 4-4                 (b)  If the insured has collision coverage and
 4-5     uninsured or underinsured property damage liability coverage, the
 4-6     insured may recover under the policy coverage chosen by the
 4-7     insured.  In the event neither coverage is sufficient alone to
 4-8     cover all damage resulting from a single occurrence, the insured
 4-9     may recover under both coverages.  When recovering under both
4-10     coverages, the insured shall designate one coverage as the primary
4-11     coverage and pay the deductible applicable to that coverage.  The
4-12     primary coverage must be exhausted before any recovery is made
4-13     under the secondary coverage.  If both coverages are utilized in
4-14     the payment of damages from a single occurrence, the insured shall
4-15     not be required to pay the deductible applicable to the secondary
4-16     coverage when the amount of the deductible otherwise applicable to
4-17     the secondary coverage is the same as or less than the amount of
4-18     the deductible applicable to the primary coverage.  If both
4-19     coverages are utilized in the payment of damages from a single
4-20     occurrence and the amount of the deductible otherwise applicable to
4-21     the secondary coverage is greater than the amount of the deductible
4-22     applicable to the primary coverage, the insured shall be required
4-23     to pay in respect of the secondary coverage only the difference
4-24     between the amount of the two deductibles.  In no event shall the
4-25     insured recover under both coverages more than the actual damages
4-26     suffered.
4-27           (5)  The underinsured motorist coverage shall provide for
 5-1     payment to the insured of all sums that the insured is [which he
 5-2     shall be] legally  entitled to recover as damages from owners or
 5-3     operators of underinsured motor vehicles because of bodily injury
 5-4     or property damage in an amount up to the limit specified in the
 5-5     policy, reduced by the amount recovered or recoverable from the
 5-6     insurer of the underinsured motor vehicle.
 5-7           (6)  In the event of payment to any person under any coverage
 5-8     required by this Section and subject to the terms and conditions of
 5-9     such coverage, the insurer making such payment shall, to the extent
5-10     thereof, be entitled to the proceeds of any settlement or judgment
5-11     resulting from the exercise of any rights of recovery of such
5-12     person against any person or organization legally responsible for
5-13     the bodily injury, sickness or disease, or death for which such
5-14     payment is made, including the proceeds recoverable from the assets
5-15     of the insolvent insurer;  provided, however, whenever an insurer
5-16     shall make payment under a policy of insurance issued under this
5-17     article [pursuant to this Act], which payment is occasioned by the
5-18     insolvency  of an insurer, the insured of said insolvent insurer
5-19     shall be given credit in any judgment obtained against the insured
5-20     [him], with respect to the insured's [his] legal liability for such
5-21     damages, to the extent of such payment, but, subject to Section 12
5-22     of Article 21.28-C of this code, such paying insurer shall have the
5-23     right to proceed directly against the insolvent insurer or its
5-24     receiver, and in pursuance of such right such paying insurer shall
5-25     possess any rights which the insured of the insolvent company might
5-26     otherwise have had if the insured of the insolvent insurer had made
5-27     the payment.
 6-1           (7)  If a dispute exists as to whether a motor vehicle is
 6-2     uninsured, the insurer has the burden of proof as to that issue
 6-3     [shall be upon the  insurer].
 6-4           (8)  Notwithstanding Section 15.032, Civil Practice and
 6-5     Remedies Code, an action against an insurer in relation to the
 6-6     coverage provided under this article, including an action to
 6-7     enforce that coverage, may be brought only:
 6-8                 (a)  in the county in which the policyholder or
 6-9     beneficiary instituting the suit resided at the time of the
6-10     accident; or
6-11                 (b)  in the county in which the accident involving the
6-12     uninsured or underinsured motor vehicle occurred.
6-13           (9)(a)  A motor vehicle insurer may not cancel or nonrenew a
6-14     policy of motor vehicle insurance, or increase the  premium or
6-15     deductible applicable to an insured, solely because the insured has
6-16     been involved in an accident with an uninsured or underinsured
6-17     motorist and has presented a claim under the coverages provided
6-18     under this article.
6-19                 (b)  An insured is only entitled to the protections
6-20     provided under Subdivision (a) of this subsection if the damages
6-21     for which the claim is presented were incurred in an accident with
6-22     an uninsured or underinsured motorist in which the named insured or
6-23     other covered person was determined by the insurer not to be at
6-24     fault.
6-25                 (c)  The commissioner shall adopt rules as necessary to
6-26     implement this subsection.
6-27           SECTION 2.  This Act takes effect September 1, 1999, and
 7-1     applies only to a policy of motor vehicle insurance  that is
 7-2     delivered, issued for delivery, or renewed on or after January 1,
 7-3     2000.  A policy that is delivered, issued for delivery, or renewed
 7-4     before January 1, 2000, is governed by the law as it existed
 7-5     immediately before the effective date of this Act, and that law is
 7-6     continued in effect for that purpose.
 7-7           SECTION 3.  The importance of this legislation and the
 7-8     crowded condition of the calendars in both houses create an
 7-9     emergency and an imperative public necessity that the
7-10     constitutional rule requiring bills to be read on three several
7-11     days in each house be suspended, and this rule is hereby suspended.