1-1 By: Cain S.B. No. 522
1-2 (In the Senate - Filed February 16, 1999; February 17, 1999,
1-3 read first time and referred to Committee on Economic Development;
1-4 April 6, 1999, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 5, Nays 0; April 6, 1999,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 522 By: Armbrister
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to insurance coverage on certain rented property.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. Subsections (b), (f), (g), (i), and (j), Section
1-13 21, Article 21.07, Insurance Code, as added by Chapter 820, Acts of
1-14 the 75th Legislature, Regular Session, 1997, are amended to read as
1-15 follows:
1-16 (b) As used in this section:
1-17 (1) "Limited licensee" means a person authorized to
1-18 sell certain insurance coverages relating to the rental of [motor]
1-19 vehicles or vehicle equipment pursuant to the provisions of this
1-20 section.
1-21 (2) "Rental agreement" means any written agreement
1-22 setting forth the terms and conditions governing the use of a
1-23 vehicle or vehicle equipment provided by the rental car company.
1-24 (3) "Rental car company" means any person in the
1-25 business of providing leased or rented vehicles or vehicle
1-26 equipment to the public.
1-27 (4) "Renter" means any person obtaining the use of a
1-28 vehicle or vehicle equipment from a rental car company under the
1-29 terms of a rental agreement.
1-30 (5) "Vehicle" means:
1-31 (A) a motor vehicle of the private passenger
1-32 type including passenger vans and minivans that are primarily
1-33 intended for the transport of persons;
1-34 (B) a motor home;
1-35 (C) a motorcycle;
1-36 (D) a trailer with a gross vehicle weight rating
1-37 of 10,000 pounds or less; or
1-38 (E) a truck with a gross vehicle weight rating
1-39 of 26,000 pounds or less the operation of which does not require a
1-40 commercial driver's license.
1-41 (6) "Vehicle equipment" means a cartop carrier, tow
1-42 bar, or tow dolly specifically designed for use with a vehicle.
1-43 (f) The rental car company, agent, licensee, or franchisee
1-44 licensed pursuant to Subsection (c) of this section may act as
1-45 agent for an authorized insurer only in connection with the rental
1-46 of vehicles or vehicle equipment and only with respect to the
1-47 following kinds of insurance:
1-48 (1) excess liability insurance that provides coverage
1-49 to the rental car company or franchisee and renters and other
1-50 authorized drivers of rental vehicles, in excess of the standard
1-51 liability limits provided by the rental car company in its rental
1-52 agreement, for liability arising from the negligent operation of
1-53 the rental vehicle or vehicle equipment;
1-54 (2) accident and health insurance that provides
1-55 coverage to renters and other vehicle occupants for accidental
1-56 death or dismemberment and for medical expenses resulting from an
1-57 accident involving the rental vehicle or vehicle equipment that
1-58 occurs during the rental period;
1-59 (3) personal effects insurance that provides coverage
1-60 to renters and other rental vehicle occupants for the loss of, or
1-61 damage to, personal effects or household belongings that occurs
1-62 during the rental period; or
1-63 (4) any other coverage that the Commissioner may
1-64 approve as meaningful and appropriate in connection with the rental
2-1 of vehicles or vehicle equipment.
2-2 (g) No insurance may be issued pursuant to this section
2-3 unless:
2-4 (1) the rental period of the rental agreement does not
2-5 exceed 30 consecutive days; and
2-6 (2) at every rental car location where rental [car]
2-7 agreements are executed, brochures or other written materials are
2-8 prominently displayed and readily available to the prospective
2-9 renter that:
2-10 (A) summarize, clearly and correctly, the
2-11 material terms of insurance coverage, including the identity of the
2-12 insurer, offered to renters;
2-13 (B) disclose that these policies offered by the
2-14 rental car company may provide a duplication of coverage already
2-15 provided by a renter's personal automobile insurance policy,
2-16 homeowner's insurance policy, personal liability insurance policy,
2-17 or other source of coverage;
2-18 (C) state that the purchase by the renter of the
2-19 kinds of insurance specified in this section is not required in
2-20 order to rent a vehicle or vehicle equipment;
2-21 (D) describe the process for filing a claim in
2-22 the event the renter elects to purchase coverage and in the event
2-23 of a claim; and
2-24 (E) contain any additional information on the
2-25 price, benefits, exclusions, conditions, or other limitations of
2-26 such policies as the Commissioner may by regulation prescribe; and
2-27 (3) evidence of coverage is provided to every renter
2-28 who elects to purchase such coverage.
2-29 (i) Each rental car company or franchisee licensed pursuant
2-30 to this section shall conduct a training program which shall be
2-31 submitted to the Commissioner for approval prior to use and which
2-32 shall meet the following minimum standards:
2-33 (1) each trainee shall receive basic instruction about
2-34 the kinds of insurance specified in this section offered for
2-35 purchase by prospective renters of rental vehicles or vehicle
2-36 equipment;
2-37 (2) each trainee shall be instructed to acknowledge to
2-38 a prospective renter of a rental vehicle or vehicle equipment that
2-39 purchase of any such insurance specified in this section is not
2-40 required in order for the renter to rent a vehicle or vehicle
2-41 equipment; and
2-42 (3) each trainee shall be instructed to acknowledge to
2-43 a prospective renter of a rental vehicle or vehicle equipment that
2-44 the renter may have insurance policies that already provide the
2-45 coverage being offered by the rental car company pursuant to this
2-46 section.
2-47 (j) Limited licensees acting pursuant to and under the
2-48 authority of this section shall comply with all applicable
2-49 provisions of this Article, except that notwithstanding any other
2-50 provision of this Article, or any rule adopted by the Commissioner,
2-51 a limited licensee pursuant to this section shall not be required
2-52 to treat premiums collected from renters purchasing such insurance
2-53 when renting vehicles or vehicle equipment as funds received in a
2-54 fiduciary capacity, provided that:
2-55 (1) the insurer represented by the limited licensee
2-56 has consented in writing, signed by the insurer's officer, that
2-57 premiums need not be segregated from funds received by the rental
2-58 car company on account of vehicle or vehicle equipment rental; and
2-59 (2) the charges for insurance coverage are itemized
2-60 but not billed to the renter separately from the charges for rental
2-61 vehicles or vehicle equipment.
2-62 SECTION 2. The change in law made by this Act to Section 21,
2-63 Article 21.07, Insurance Code, as added by Chapter 820, Acts of the
2-64 75th Legislature, Regular Session, 1997, does not affect the
2-65 validity of a license issued under that section on or before the
2-66 effective date of this Act.
2-67 SECTION 3. This Act takes effect September 1, 1999, and
2-68 applies to an insurance policy that is delivered, issued for
2-69 delivery, or renewed on or after September 1, 1999. A policy
3-1 delivered, issued for delivery, or renewed before September 1,
3-2 1999, is governed by the law as it existed immediately before the
3-3 effective date of this Act, and that law is continued in effect for
3-4 that purpose.
3-5 SECTION 4. The importance of this legislation and the
3-6 crowded condition of the calendars in both houses create an
3-7 emergency and an imperative public necessity that the
3-8 constitutional rule requiring bills to be read on three several
3-9 days in each house be suspended, and this rule is hereby suspended.
3-10 * * * * *