By Burnam H.B. No. 3098 76R7262 DB-D A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to establishment of the Texas Motor Vehicle Insurance 1-3 System and to liability for motor vehicle accidents. 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 30 to read as follows: 1-7 CHAPTER 30. TEXAS MOTOR VEHICLE INSURANCE SYSTEM 1-8 SUBCHAPTER A. GENERAL PROVISIONS 1-9 Art. 30.01. DEFINITIONS. In this chapter: 1-10 (1) "Covered person" means a person entitled to 1-11 benefits under this chapter. 1-12 (2) "Dealer" has the meaning assigned by Chapter 153, 1-13 Tax Code. 1-14 (3) "Account" means the Texas Motor Vehicle Insurance 1-15 System account. 1-16 (4) "Motor fuel" has the meaning assigned by Chapter 1-17 153, Tax Code. 1-18 (5) "Motor vehicle insurer" means an insurer 1-19 authorized to write motor vehicle insurance in this state, 1-20 including: 1-21 (A) an insurance company; 1-22 (B) a mutual insurance company, including a 1-23 county mutual insurance company; 1-24 (C) a reciprocal insurance company or 2-1 interinsurance exchange; and 2-2 (D) a Lloyd's plan insurer. 2-3 (6) "Motor vehicle" has the meaning assigned by 2-4 Section 541.201, Transportation Code. 2-5 (7) "System" means the Texas Motor Vehicle Insurance 2-6 System established by this chapter. 2-7 Art. 30.02. TEXAS MOTOR VEHICLE INSURANCE SYSTEM. (a) The 2-8 Texas Motor Vehicle Insurance System is established to provide 2-9 motor vehicle insurance coverage in accordance with this chapter. 2-10 (b) The system is administered by the department in 2-11 accordance with rules adopted by the commissioner. 2-12 Art. 30.03. RULES. The commissioner may adopt rules as 2-13 necessary to implement this chapter. 2-14 Art. 30.04. AUTHORITY TO CONTRACT. The department may 2-15 contract with a private accounting firm or other entity as 2-16 appropriate to administer some or all of the functions of the 2-17 department under this chapter. 2-18 Art. 30.05. TEXAS MOTOR VEHICLE INSURANCE ACCOUNT. (a) The 2-19 Texas Motor Vehicle Insurance System account is an account in the 2-20 general revenue fund. 2-21 (b) The account is composed of premiums and premium 2-22 surcharges collected under this chapter. Interest on money in the 2-23 account is credited to the account. 2-24 (c) Money in the account may be used only for the costs of 2-25 administering the system and to pay the cost of providing the 2-26 coverage required by this chapter. 2-27 Art. 30.06. PARTICIPATION OF PUBLIC INSURANCE COUNSEL. The 3-1 public insurance counsel may participate in a proceeding held to 3-2 adopt premium rates or surcharges under this chapter in accordance 3-3 with Article 1.35A of this code. 3-4 SUBCHAPTER B. COVERAGE 3-5 Art. 30.31. SYSTEM COVERAGE; NO FAULT. (a) The system 3-6 shall provide coverage for first party benefits to covered persons 3-7 in accordance with this subchapter. 3-8 (b) A benefit payable under coverage provided through the 3-9 system is payable without regard to the fault of the covered 3-10 person. 3-11 Art. 30.32. COVERED PERSONS. The coverage must provide 3-12 benefits for a person who suffers bodily injury, death, or property 3-13 damage through the maintenance, operation, or use of a motor 3-14 vehicle in this state, without regard to whether the person is a 3-15 resident of this state or whether the motor vehicle is registered 3-16 in this state. 3-17 Art. 30.33. BENEFITS. (a) The coverage must provide first 3-18 party benefits for: 3-19 (1) reasonable and necessary medical expenses, without 3-20 a limit or deductible; 3-21 (2) loss of income from work for a period of one year 3-22 after the date of the accident causing injury, subject to a limit 3-23 of $25,000 and with a deductible equal to one week's wages; 3-24 (3) damage to a motor vehicle, subject to a limit of 3-25 five percent of the value of the motor vehicle, as established by 3-26 rules adopted by the board; and 3-27 (4) damage to property other than a motor vehicle, 4-1 subject to a deductible of $500. 4-2 (b) Coverage through the system for medical expenses under 4-3 Subsection (a)(1) of this article is secondary to any other 4-4 insurance or benefit plan providing coverage for the expenses. 4-5 (c) A benefit for damage to a motor vehicle may not be paid 4-6 under Subsection (a)(3) of this article unless the damage to the 4-7 vehicle exceeds $500. 4-8 (d) A benefit for damage to a motor vehicle under Subsection 4-9 (a)(3) of this article may not include amounts necessary for new 4-10 replacement parts or replacement parts manufactured by a particular 4-11 manufacturer if alternative replacement parts are available at a 4-12 lower cost. 4-13 (e) The system shall offer additional coverage packages 4-14 providing benefits for loss of income from work for a period of one 4-15 year after the date of the accident causing injury, subject to 4-16 benefit limits of $50,000 and $75,000, respectively. The board 4-17 shall adopt premium rates to be charged for the additional coverage 4-18 packages provided under this subsection. The additional premium 4-19 shall be collected by the county tax collector in accordance with 4-20 Article 30.73 of this code. 4-21 Art. 30.34. OUT-OF-STATE EXCLUSION. The system may not 4-22 provide coverage for bodily injury, death, or property damage 4-23 arising out of the maintenance, operation, or use of a motor 4-24 vehicle outside this state. 4-25 Art. 30.35. DUPLICATION OF COVERAGE PROHIBITED; SUPPLEMENTAL 4-26 INSURANCE. (a) A motor vehicle insurer may not issue insurance 4-27 providing benefits that duplicate the benefits provided under this 5-1 chapter except through the system as provided by Subchapter E of 5-2 this chapter. 5-3 (b) A motor vehicle insurer, subject to approval by the 5-4 commissioner and in accordance with rules adopted by the 5-5 commissioner, may issue insurance providing benefits or indemnity 5-6 coverage that supplements the benefits provided under this chapter, 5-7 including insurance providing: 5-8 (1) coverage for bodily injury, death, or property 5-9 damage arising from the maintenance, operation, or use of a vehicle 5-10 outside this state; 5-11 (2) additional coverage for property damage; and 5-12 (3) coverage for liability for damages for a serious 5-13 injury, as defined by rules adopted by the commissioner, arising 5-14 from the maintenance, operation, or use of a motor vehicle in this 5-15 state. 5-16 Art. 30.36. POLICY FORMS AND ENDORSEMENTS. The commissioner 5-17 shall adopt standard policy forms and endorsements for the issuance 5-18 of coverage under this chapter. 5-19 SUBCHAPTER C. LIABILITY FOR MOTOR VEHICLE ACCIDENTS 5-20 Art. 30.51. TORT LIABILITY LIMITED. (a) Except as provided 5-21 by this subchapter, a person may not recover damages for bodily 5-22 injury or property damage arising out of the maintenance, 5-23 operation, or use of a motor vehicle in this state. 5-24 (b) Any person involved in a motor vehicle accident in this 5-25 state is subject to the limitations of this article. 5-26 Art. 30.52. EXCEPTIONS. Article 30.51(a) of this code does 5-27 not apply to a claim: 6-1 (1) for damages for serious bodily injury, as defined 6-2 by rules adopted by the commissioner; 6-3 (2) against a motor vehicle manufacturer alleging 6-4 gross negligence in the manufacture of a motor vehicle; or 6-5 (3) against a governmental or other entity alleging 6-6 gross negligence in the design, construction, or maintenance of a 6-7 public roadway. 6-8 SUBCHAPTER D. COLLECTION OF PREMIUMS 6-9 Art. 30.71. PAY-AT-THE-PUMP PREMIUM. (a) The commissioner 6-10 shall adopt a pay-at-the-pump premium rate in accordance with this 6-11 article. 6-12 (b) The premium rate shall be established as a fixed rate 6-13 collected for each gallon of motor fuel sold in this state and 6-14 shall be in an amount necessary to fund coverage under this 6-15 chapter, adjusted to reflect the additional premiums and premium 6-16 surcharges collected under this subchapter. 6-17 Art. 30.72. COLLECTION OF PAY-AT-THE-PUMP PREMIUM. (a) 6-18 Each dealer in this state shall collect the premium on the first 6-19 sale for use of motor fuel in this state, and shall pay the premium 6-20 to the comptroller. 6-21 (b) The comptroller shall adopt rules governing: 6-22 (1) premium collection under this article; 6-23 (2) dealer recordkeeping and reporting; and 6-24 (3) premium payment to the comptroller. 6-25 (c) To the extent possible, the comptroller by rule shall 6-26 coordinate collection of the premium under this article with 6-27 collection of motor fuel taxes under Chapter 153, Tax Code. 7-1 Art. 30.73. REGISTRATION SURCHARGE; ALTERNATIVE-FUEL VEHICLE 7-2 PREMIUM; COLLECTION OF NECESSARY INFORMATION. (a) The 7-3 commissioner shall adopt premium surcharges to be paid at the time 7-4 a motor vehicle is registered. 7-5 (b) The commissioner shall adopt premium rates for 7-6 alternative-fuel vehicles to be paid at the time an 7-7 alternative-fuel vehicle is registered. 7-8 (c) The commissioner may adopt rules requiring the 7-9 collection of information relating to the motor vehicle and the 7-10 owner and operators of the vehicle at the time the motor vehicle is 7-11 registered. 7-12 (d) The premium surcharges adopted under this article shall 7-13 be in amounts reflecting the insurance risk of the vehicle 7-14 registered and may vary according to the type, average gas mileage, 7-15 and age of the motor vehicle registered, whether the vehicle is 7-16 used as a private passenger vehicle or as a commercial vehicle, and 7-17 other factors that relate to the insurance risk of the vehicle 7-18 registered. 7-19 (e) The commissioner may authorize a premium offset against 7-20 the registration fee for motor vehicles that pose a low insurance 7-21 risk in comparison to other motor vehicles. 7-22 (f) The department shall provide to each county tax 7-23 collector in this state a manual listing the applicable premium, 7-24 premium surcharge, or offset for each motor vehicle. The county 7-25 tax collector shall collect the premium or premium surcharge 7-26 required under this article and any additional premium paid under 7-27 Article 30.33(e) at the time the vehicle is registered and shall 8-1 pay the surcharge and additional premium to the comptroller. The 8-2 county tax collector shall reduce the registration fee by the 8-3 amount of any applicable offset. The comptroller shall transfer 8-4 the amount of the offset from the fund to the account to which 8-5 registration fees are deposited. 8-6 (g) The comptroller shall adopt rules governing the 8-7 collection and payment of the premium and premium surcharge under 8-8 this article and the accounting of offsets against registration 8-9 fees. 8-10 (h) The commissioner shall adopt a system under which the 8-11 owner of a motor vehicle is notified of the insurer to which the 8-12 motor vehicle is assigned at the time the owner registers the motor 8-13 vehicle. 8-14 Art. 30.74. SURCHARGE FOR TRAFFIC VIOLATION. (a) The 8-15 commissioner shall adopt premium surcharges to be paid on 8-16 conviction of an offense under the Transportation Code or Section 8-17 49.08, Penal Code. 8-18 (b) The premium surcharge shall vary with the severity of 8-19 the violation as it relates to the insurance risk of the convicted 8-20 person. The commissioner may not adopt a premium surcharge to be 8-21 paid on conviction of an offense that, in the opinion of the 8-22 commissioner, does not relate to safety or insurance risk. 8-23 (c) The department shall provide to each court in this state 8-24 a manual listing the applicable premium surcharge for each offense 8-25 for which a surcharge is made. The surcharge shall be collected at 8-26 the time of conviction or at the time any other fine or fee is 8-27 collected in connection with the offense. The surcharge shall be 9-1 paid to the comptroller. 9-2 (d) The comptroller shall adopt rules governing the 9-3 collection and payment of the surcharge under this article. 9-4 Art. 30.75. DEPOSIT OF PREMIUM TO ACCOUNT. The comptroller 9-5 shall deposit premiums and premium surcharges collected under this 9-6 subchapter to the credit of the account. 9-7 Art. 30.76. BORDER AREAS. (a) The commissioner, by rule, 9-8 may designate specified areas of the state as border areas. 9-9 (b) The owner or operator of a motor vehicle registered in a 9-10 border area may be required to demonstrate that the owner or 9-11 operator purchases motor fuel for the vehicle on a regular basis in 9-12 this state before benefits are paid to that owner, operator, or a 9-13 member of the owner's family under this chapter. 9-14 (c) For purposes of this article, it is presumed that the 9-15 owner or operator purchases motor fuel for the vehicle on a regular 9-16 basis in this state if, during the seven days preceding the date of 9-17 the accident, the owner or operator purchased motor fuel in this 9-18 state. 9-19 (d) The owner or operator of a motor vehicle registered in a 9-20 border area who is unable to purchase motor fuel in this state on a 9-21 regular basis may apply to the commissioner to pay a premium, in an 9-22 amount adopted by the commissioner, at the time the vehicle is 9-23 registered. 9-24 SUBCHAPTER E. PROVISION OF COVERAGE 9-25 Art. 30.91. PROVISION OF COVERAGE FOR REGISTERED VEHICLES. 9-26 (a) Coverage for motor vehicles registered in this state shall be 9-27 issued by motor vehicle insurers in this state. 10-1 (b) The motor vehicle insurer to which a motor vehicle has 10-2 been assigned shall pay benefits for: 10-3 (1) the owner or operator of the vehicle; 10-4 (2) a member of the owner's family; and 10-5 (3) any other person injured through the maintenance, 10-6 operation, or use of the motor vehicle, including a passenger or 10-7 pedestrian, but not including the owner or operator of another 10-8 vehicle involved in the accident or a member of that owner's 10-9 family. 10-10 (c) If more than one motor vehicle is involved in an 10-11 accident, the motor vehicle insurers to which those vehicles have 10-12 been assigned shall share the cost of benefits paid to a person 10-13 described by Subdivision (b)(3) on a pro rata basis in accordance 10-14 with rules adopted by the commissioner. 10-15 Art. 30.92. MOTOR VEHICLES NOT REGISTERED IN THIS STATE. 10-16 (a) The system shall pay benefits for a covered person injured 10-17 through the maintenance, operation, or use in this state of a motor 10-18 vehicle that is not registered in this state. 10-19 (b) If a motor vehicle that is not registered in this state 10-20 is covered by a policy of motor vehicle insurance, the system shall 10-21 pay benefits only after any first party benefits provided under 10-22 that policy of insurance have been exhausted. 10-23 Art. 30.93. MOTOR VEHICLE INSURER PARTICIPATION. (a) The 10-24 department shall divide all motor vehicles registered in this state 10-25 into random groups of approximately 5,000 motor vehicles each. 10-26 (b) Motor vehicle insurers that satisfy the requirements of 10-27 specifications established by the commissioner may bid to provide 11-1 coverage to a group of motor vehicles in accordance with rules 11-2 adopted by the commissioner. The specifications established by the 11-3 commissioner must include requirements relating to equal employment 11-4 opportunities imposed on employers by state or federal law. The 11-5 specifications may require the motor vehicle insurer to institute 11-6 loss prevention programs. 11-7 (c) The bidding shall be conducted on an annual basis. 11-8 (d) The commissioner shall enter into a group coverage 11-9 agreement with a motor vehicle insurer who is a successful bidder 11-10 under Subsection (b) of this article and shall act as the 11-11 policyholder for each group. 11-12 (e) Not later than the 45th day after the date a motor 11-13 vehicle is registered, the department shall notify the operator of 11-14 the motor vehicle of the insurer to which the vehicle has been 11-15 assigned. 11-16 Art. 30.94. CLAIMS DATA. (a) The commissioner shall adopt 11-17 rules requiring motor vehicle insurers to submit to the department 11-18 data relating to claims for benefits. 11-19 (b) An insurer may not participate in the system unless the 11-20 insurer complies with the claims data reporting requirements of 11-21 this article. 11-22 Art. 30.95. SATISFACTION REPORT CARDS. (a) A motor vehicle 11-23 insurer providing coverage under this chapter shall supply a 11-24 customer satisfaction report card to any person submitting a claim 11-25 to the insurer under this chapter. 11-26 (b) The customer satisfaction report card shall be in a form 11-27 adopted by the commissioner and shall provide the person submitting 12-1 the claim the opportunity to report the person's satisfaction with 12-2 the motor vehicle insurer's settlement and service. The customer 12-3 satisfaction report card shall include instructions for returning 12-4 the card to the department or a designee of the department. 12-5 (c) The department shall compile the results of the customer 12-6 satisfaction report cards and report the results to the 12-7 commissioner. 12-8 (d) The commissioner may restrict or increase a motor 12-9 vehicle insurer's opportunity to bid on the basis of its 12-10 performance as indicated by the customer satisfaction report cards. 12-11 SECTION 2. (a) Chapter 601, Transportation Code, is 12-12 repealed. 12-13 (b) Sections 502.153 and 502.157, Transportation Code, are 12-14 repealed. 12-15 (c) Subchapter A, Chapter 5, Insurance Code, is repealed. 12-16 (d) This section takes effect September 1, 2000. 12-17 SECTION 3. For the first bidding period conducted under 12-18 Article 30.93, Insurance Code, as added by this Act, the board 12-19 shall adopt rules restricting bidding opportunities on the basis of 12-20 the bidder's market share of motor vehicle insurance issued in this 12-21 state. 12-22 SECTION 4. (a) The Texas Motor Vehicle Insurance System 12-23 shall provide motor vehicle insurance coverage in accordance with 12-24 Chapter 30, Insurance Code, as added by this Act, on and after 12-25 September 1, 2000. 12-26 (b) Premiums and premium surcharges may not be collected 12-27 under Subchapter D, Chapter 30, Insurance Code, as added by this 13-1 Act, before September 1, 2000. 13-2 (c) Notwithstanding Article 30.35, Insurance Code, as added 13-3 by this Act, a motor vehicle insurer may issue motor vehicle 13-4 insurance that provides coverage for periods ending before 13-5 September 1, 2000, in accordance with the law as it existed 13-6 immediately before the effective date of this Act, and that law is 13-7 continued in effect for that purpose. 13-8 SECTION 5. This Act takes effect only if the constitutional 13-9 amendment proposed by the 76th Legislature, Regular Session, 1999, 13-10 relating to authorizing the legislature to establish a 13-11 "pay-at-the-pump" motor vehicle insurance system is adopted. If 13-12 that amendment is not adopted, this Act has no effect. 13-13 SECTION 6. Except as provided by Section 2(d) of this Act, 13-14 this Act takes effect November 3, 1999. 13-15 SECTION 7. The importance of this legislation and the 13-16 crowded condition of the calendars in both houses create an 13-17 emergency and an imperative public necessity that the 13-18 constitutional rule requiring bills to be read on three several 13-19 days in each house be suspended, and this rule is hereby suspended.