By Bivins S.B. No. 1787
76R5588 PB-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of insurance and to requirements
1-3 regarding motor vehicle insurance; establishing business offenses;
1-4 providing penalties.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 ARTICLE 1. FINANCIAL RESPONSIBILITY REQUIREMENTS
1-7 SECTION 1.01. Chapter 601, Transportation Code, is amended
1-8 by adding Subchapter N to read as follows:
1-9 SUBCHAPTER N. VERIFICATION OF COMPLIANCE WITH AND ENFORCEMENT
1-10 OF FINANCIAL RESPONSIBILITY REQUIREMENTS
1-11 Sec. 601.501. DEFINITIONS. In this subchapter:
1-12 (1) "Department" means the Texas Department of
1-13 Transportation.
1-14 (2) "Verification date" means the date set by the
1-15 department in the written request to the owner of a motor vehicle
1-16 requiring the owner to state whether the owner has established
1-17 financial responsibility in accordance with Section 601.051.
1-18 Sec. 601.502. VERIFICATION OF ESTABLISHMENT OF FINANCIAL
1-19 RESPONSIBILITY THROUGH RANDOM SAMPLING. (a) The department shall
1-20 randomly select samples of registrations of motor vehicles subject
1-21 to this chapter, or samples of owners of motor vehicles subject to
1-22 this chapter, to verify whether the owner has established financial
1-23 responsibility in accordance with Section 601.051. A sample
1-24 selected under this section may not be classified on the basis of
2-1 the owner's race, color, religion, sex, national origin, age,
2-2 marital status, physical or mental disability, economic status, or
2-3 geographic location.
2-4 (b) In addition to the general random sampling of motor
2-5 vehicle registrations, the department may randomly select other
2-6 persons to verify that the person has established financial
2-7 responsibility, including:
2-8 (1) a person who, during the four years preceding the
2-9 date of selection:
2-10 (A) has been convicted of a violation of Section
2-11 601.051, 601.191, 601.195, 601.196, or 601.509, including a
2-12 violation that occurred while the person was operating a motor
2-13 vehicle owned by another person; or
2-14 (B) has received deferred disposition under
2-15 Article 45.54, Code of Criminal Procedure, for a violation of
2-16 Section 601.051, 601.191, 601.195, 601.196, or 601.509;
2-17 (2) a person whose motor vehicle registration has been
2-18 the subject of a deferred suspension under Section 601.505(a)
2-19 during the preceding four years; or
2-20 (3) a person whose driver's license or motor vehicle
2-21 registration has been suspended during the preceding four years.
2-22 (c) The department shall send to the motor vehicle owner a
2-23 request for information about the motor vehicle and the owner's
2-24 method of establishing financial responsibility. The request must:
2-25 (1) state the verification date; and
2-26 (2) require the owner to state whether the owner has,
2-27 as of the verification date, established financial responsibility
3-1 in accordance with Section 601.051.
3-2 (d) The department by rule shall prescribe:
3-3 (1) the methods employed for the random selection of
3-4 samples and the procedures necessary for implementation of the
3-5 verification process, including the method of sending the
3-6 verification request, which may include certified mail, return
3-7 receipt requested;
3-8 (2) the frequency of sample selection;
3-9 (3) the form for verification of financial
3-10 responsibility; and
3-11 (4) the information to be requested in the prescribed
3-12 form.
3-13 (e) The department may require the information provided by
3-14 the owner to include a statement by the owner that the owner had,
3-15 as of the verification date, established financial responsibility:
3-16 (1) through liability insurance under Subchapter D,
3-17 including:
3-18 (A) the name and address of the insurer;
3-19 (B) the number of the insurance policy; and
3-20 (C) the expiration date of the insurance
3-21 coverage;
3-22 (2) by filing a surety bond with the department under
3-23 Section 601.121, including:
3-24 (A) the name and address of the company issuing
3-25 the bond;
3-26 (B) the identification number of the bond; and
3-27 (C) the expiration date of the bond;
4-1 (3) by depositing cash or securities with the
4-2 comptroller under Section 601.122, including a copy of the
4-3 certificate issued by the comptroller showing compliance;
4-4 (4) by depositing cash or a cashier's check with the
4-5 county judge of the county in which the motor vehicle is registered
4-6 under Section 601.123, including a copy of the certificate issued
4-7 by the county judge showing compliance; or
4-8 (5) through self-insurance under Section 601.124,
4-9 including a copy of the certificate of self-insurance issued by the
4-10 department.
4-11 (f) Not later than the 30th day after the verification date,
4-12 the owner to whom the notice is sent shall furnish the requested
4-13 information to the department in the form prescribed by the
4-14 department, accompanied by the owner's signed affirmation that the
4-15 information is true and correct.
4-16 (g) An owner whose response indicates that the owner had not
4-17 established financial responsibility in accordance with Section
4-18 601.051, or who fails to respond to the request, is subject to
4-19 suspension of the owner's motor vehicle registration in the manner
4-20 provided by Section 601.505.
4-21 (h) If the owner responds to the request for information by
4-22 asserting that the owner had, as of the verification date,
4-23 established financial responsibility in accordance with a method
4-24 authorized by Section 601.051, the department may conduct a
4-25 verification investigation as provided by Section 601.503.
4-26 Sec. 601.503. VERIFICATION INVESTIGATION. (a) To verify a
4-27 response received from an owner under Section 601.502, the
5-1 department may furnish necessary information to the insurer,
5-2 surety, or officer named in the response. Not later than the 30th
5-3 day after the date of receipt of the information, the insurer,
5-4 surety, or officer shall inform the department whether, as of the
5-5 verification date, financial responsibility had been established
5-6 for the affected motor vehicle in accordance with Section 601.051.
5-7 (b) If the response received from an owner under Section
5-8 601.502 states that financial responsibility has been established
5-9 through self-insurance, the department shall examine the
5-10 department's records to verify that a certificate of self-insurance
5-11 has been issued in accordance with Section 601.124.
5-12 Sec. 601.504. WARNING NOTICE. (a) If an owner responds
5-13 under Section 601.502 that the owner has not established financial
5-14 responsibility or the owner fails to respond in a timely manner, or
5-15 if the department otherwise determines that an owner has registered
5-16 or maintained the registration of a motor vehicle without
5-17 establishing financial responsibility in accordance with Section
5-18 601.051, the department shall issue a warning notice to the owner.
5-19 (b) The warning notice must inform the owner that the owner
5-20 is not in compliance with Section 601.051 and that the owner's
5-21 motor vehicle registration is suspended on the 45th day after the
5-22 date on which the warning notice is mailed unless the owner, not
5-23 later than the 30th day after the date of the mailing of the
5-24 warning notice, establishes financial responsibility in the manner
5-25 prescribed by Section 601.505.
5-26 Sec. 601.505. SUSPENSION; REINSTATEMENT. (a) The
5-27 department shall suspend the registration of an owner to whom a
6-1 notice is issued under Section 601.504 unless the owner submits to
6-2 the department, within the period provided by Section 601.504(b),
6-3 proof of financial responsibility evidenced by a motor vehicle
6-4 insurance policy, the premiums of which have been prepaid for a
6-5 term of at least six months. On the earlier of the 180th day after
6-6 the date of the warning notice under Section 601.504 or the
6-7 expiration date of the insurance policy described by this
6-8 subsection, the owner shall submit to the department evidence of
6-9 renewal of the motor vehicle insurance policy, the premiums of
6-10 which have been prepaid for a term of at least six months. If the
6-11 owner fails to submit the required evidence of renewal, the
6-12 department shall immediately suspend the registration of the owner.
6-13 (b) Except as provided by Subsection (c), the department
6-14 shall terminate a suspension of registration under this section on
6-15 payment of a $100 reinstatement fee and submission of proof of
6-16 financial responsibility as prescribed by the department.
6-17 (c) The department may not terminate a suspension under
6-18 Subsection (b) before the 120th day after the effective date of
6-19 the suspension if during the preceding four years the department
6-20 has suspended an owner's registration under this subchapter.
6-21 Sec. 601.506. SUBMISSION OF FALSE PROOF. If the department
6-22 determines that the proof of financial responsibility submitted by
6-23 a motor vehicle owner under Section 601.502 is false, the
6-24 department shall suspend the owner's motor vehicle registration.
6-25 The department shall terminate the suspension on the 180th day
6-26 after the effective date of the suspension on payment by the owner
6-27 of a $200 reinstatement fee and submission of proof of financial
7-1 responsibility as prescribed by the department.
7-2 Sec. 601.507. OPERATION OF MOTOR VEHICLE WHILE REGISTRATION
7-3 SUSPENDED FOR FAILURE TO ESTABLISH FINANCIAL RESPONSIBILITY. (a)
7-4 A person may not operate a motor vehicle if the registration of the
7-5 motor vehicle is suspended under this subchapter.
7-6 (b) A person commits a business offense if the person
7-7 violates Subsection (a). A business offense under this subsection
7-8 is punishable by a fine of not less than $1,000 or more than
7-9 $2,000.
7-10 Sec. 601.508. MAINTENANCE OF EVIDENCE OF FINANCIAL
7-11 RESPONSIBILITY. (a) Each operator of a motor vehicle subject to
7-12 Section 601.051 shall carry within the vehicle a written document
7-13 providing evidence of financial responsibility. The document must
7-14 be legible and provide information sufficient to demonstrate that
7-15 the owner or operator of the motor vehicle has established
7-16 financial responsibility as required under Section 601.051 and may
7-17 include:
7-18 (1) a motor vehicle liability insurance policy
7-19 covering the vehicle that satisfies Subchapter D or a photocopy of
7-20 the policy;
7-21 (2) a standard proof of motor vehicle liability
7-22 insurance form prescribed by the Texas Department of Insurance;
7-23 (3) a liability insurance binder as specified by
7-24 Section 601.080 or a certificate of liability insurance as
7-25 specified by Section 601.083;
7-26 (4) the combination of proof of purchase of the motor
7-27 vehicle within the previous 30 days and current proof of insurance;
8-1 (5) evidence that a surety bond has been filed with
8-2 the department in accordance with Section 601.121;
8-3 (6) a certificate issued by the comptroller stating
8-4 that a deposit has been made with the comptroller that complies
8-5 with Section 601.122;
8-6 (7) a certificate issued by a county judge stating
8-7 that a deposit has been made with the county judge that complies
8-8 with Section 601.123;
8-9 (8) a certificate of self-insurance issued by the
8-10 department in accordance with Section 601.124; or
8-11 (9) a certificate, decal, or other document issued by
8-12 a governmental agency for a motor vehicle that indicates that the
8-13 vehicle is owned by the United States, this state, or a political
8-14 subdivision of this state.
8-15 (b) The operator of a motor vehicle shall surrender the
8-16 evidence of financial responsibility into the possession of a peace
8-17 officer, court, or court officer who requests inspection of the
8-18 evidence of financial responsibility. A person who fails or
8-19 refuses to comply with such a request is presumed to violate
8-20 Section 601.051.
8-21 (c) A person who provides evidence of financial
8-22 responsibility knowing that financial responsibility has not been
8-23 established as required under Section 601.051 or that the evidence
8-24 of financial responsibility is illegally altered, counterfeit, or
8-25 otherwise invalid is presumed to violate Sections 601.196 and
8-26 601.509.
8-27 Sec. 601.509. DISPLAY OF FALSE PROOF OF FINANCIAL
9-1 RESPONSIBILITY; CRIMINAL PENALTY. (a) A person commits an offense
9-2 if the person provides evidence of financial responsibility to a
9-3 peace officer, court, or officer of the court knowing that
9-4 financial responsibility has not been established as required under
9-5 Section 601.051 or that the evidence of financial responsibility is
9-6 illegally altered, counterfeit, or otherwise invalid.
9-7 (b) If a peace officer issues a citation to a motor vehicle
9-8 operator for displaying invalid evidence of financial
9-9 responsibility, the officer shall confiscate the invalid evidence
9-10 of financial responsibility for presentation in court.
9-11 (c) An offense under this section is a misdemeanor
9-12 punishable by:
9-13 (1) a fine not to exceed $1,000;
9-14 (2) confinement in the county jail not to exceed one
9-15 year; or
9-16 (3) both the fine and the confinement.
9-17 Sec. 601.510. DISPOSITION OF FEES. From the reinstatement
9-18 fees collected under this subchapter, the department shall recover
9-19 its costs in implementing and administering the verification
9-20 program. The department shall deposit any amounts collected that
9-21 exceed the administrative costs of the department under this
9-22 subchapter in the general revenue fund.
9-23 SECTION 1.02. Section 601.051, Transportation Code, is
9-24 amended to read as follows:
9-25 Sec. 601.051. REQUIREMENT OF FINANCIAL RESPONSIBILITY. (a)
9-26 A person may not operate, register, or maintain registration of a
9-27 motor vehicle in this state unless financial responsibility is
10-1 established for that vehicle through:
10-2 (1) a motor vehicle liability insurance policy that
10-3 complies with Subchapter D;
10-4 (2) a surety bond filed under Section 601.121;
10-5 (3) a deposit under Section 601.122;
10-6 (4) a deposit under Section 601.123; or
10-7 (5) self-insurance under Section 601.124.
10-8 (b) An owner of a motor vehicle may not permit another
10-9 person to operate, register, or maintain registration of the motor
10-10 vehicle in this state unless financial responsibility is
10-11 established for that vehicle and evidenced through a method
10-12 described by Subsection (a).
10-13 SECTION 1.03. Section 601.191, Transportation Code, is
10-14 amended to read as follows:
10-15 Sec. 601.191. OPERATION OF MOTOR VEHICLE IN VIOLATION OF
10-16 FINANCIAL RESPONSIBILITY REQUIREMENTS [MOTOR VEHICLE LIABILITY
10-17 INSURANCE REQUIREMENT; OFFENSE]. (a) A person commits an offense
10-18 if the person operates a motor vehicle in violation of Section
10-19 601.051.
10-20 (b) An [Except as provided by Subsections (c) and (d), an]
10-21 offense under this section is a business offense [misdemeanor]
10-22 punishable by a fine of not less than $500 [$175] or more than
10-23 $1,000 [$350].
10-24 (c) It is a defense to prosecution under this section and
10-25 Section 601.195 that the person charged with a violation produces
10-26 in court satisfactory evidence that, at the time of the arrest, the
10-27 owner or operator had established financial responsibility in
11-1 accordance with Section 601.051 [If a person has been previously
11-2 convicted of an offense under this section, an offense under this
11-3 section is a misdemeanor punishable by a fine of not less than $350
11-4 or more than $1,000.]
11-5 [(d) If the court determines that a person who has not been
11-6 previously convicted of an offense under this section is
11-7 economically unable to pay the fine, the court may reduce the fine
11-8 to less than $175].
11-9 SECTION 1.04. Section 12.02, Penal Code, is amended to read
11-10 as follows:
11-11 Sec. 12.02. CLASSIFICATION OF OFFENSES. Offenses are
11-12 designated as felonies, [or] misdemeanors, or business offenses.
11-13 SECTION 1.05. Subchapter A, Chapter 12, Penal Code, is
11-14 amended by adding Section 12.05 to read as follows:
11-15 Sec. 12.05. BUSINESS OFFENSE. (a) A business offense is a
11-16 nonmisdemeanor offense for which the penalty is a fine of at least
11-17 $500.
11-18 (b) Conviction of a business offense does not impose any
11-19 legal disability or disadvantage.
11-20 SECTION 1.06. The heading to Subchapter B, Chapter 12, Penal
11-21 Code, is amended to read as follows:
11-22 SUBCHAPTER B. ORDINARY MISDEMEANOR
11-23 AND BUSINESS OFFENSE PUNISHMENTS
11-24 SECTION 1.07. Subchapter B, Chapter 12, Penal Code, is
11-25 amended by adding Section 12.24 to read as follows:
11-26 Sec. 12.24. BUSINESS OFFENSE. An individual adjudged guilty
11-27 of a business offense shall be punished by a fine of at least $500.
12-1 SECTION 1.08. In performing sample selection under Section
12-2 601.502, Transportation Code, as added by this Act, the Texas
12-3 Department of Transportation shall ensure that at least 500,000
12-4 samples are selected on or before September 1, 2001.
12-5 ARTICLE 2. UNINSURED AND UNDERINSURED MOTORIST COVERAGE
12-6 SECTION 2.01. Article 5.06-1, Insurance Code, is amended to
12-7 read as follows:
12-8 Art. 5.06-1. UNINSURED OR UNDERINSURED MOTORIST COVERAGE.
12-9 (a) [(1)] No automobile liability insurance (including insurance
12-10 issued through the Texas Automobile Insurance Plan Association
12-11 [pursuant to an Assigned Risk Plan established under authority of
12-12 Section 35 of the Texas Motor Vehicle Safety-Responsibility Act]),
12-13 covering liability arising out of the ownership, maintenance, or
12-14 use of any motor vehicle shall be delivered or issued for delivery
12-15 in this state unless coverage is provided therein or supplemental
12-16 thereto, [in at least the limits described in the Texas Motor
12-17 Vehicle Safety-Responsibility Act,] under provisions prescribed by
12-18 the commissioner [Board], for the protection of persons insured
12-19 thereunder who are legally entitled to recover damages from owners
12-20 or operators of uninsured or underinsured motor vehicles because of
12-21 bodily injury, sickness, or disease, including death, or property
12-22 damage resulting therefrom. The coverages required under this
12-23 Article shall not be applicable where any insured named in the
12-24 policy shall reject the coverage in writing; provided that unless
12-25 the named insured thereafter requests such coverage in writing,
12-26 such coverage need not be provided in or supplemental to a renewal
12-27 policy where the named insured has rejected the coverage in
13-1 connection with a policy previously issued to the named insured
13-2 [him] by the same insurer or by an affiliated insurer.
13-3 (b) [(2)] For the purpose of these coverages:
13-4 (1) "Exemplary damages" has the meaning assigned by
13-5 Section 41.001, Civil Practice and Remedies Code.
13-6 (2) "Noneconomic damages" means damages other than
13-7 compensatory damages for pecuniary loss. The term includes damages
13-8 for physical pain and mental anguish, loss of consortium,
13-9 disfigurement, physical impairment, or loss of companionship and
13-10 society. The term does not include exemplary damages.
13-11 (3) "Uninsured [(a) the term "uninsured] motor
13-12 vehicle" shall, subject to the terms and conditions of such
13-13 coverage, be deemed to include an insured motor vehicle where the
13-14 liability insurer thereof is unable to make payment with respect to
13-15 the legal liability of its insured within the limits specified
13-16 therein because of insolvency.
13-17 (4) "Underinsured [(b) The term "underinsured] motor
13-18 vehicle" means an insured motor vehicle on which there is valid and
13-19 collectible liability insurance coverage with limits of liability
13-20 for the owner or operator which were originally lower than, or have
13-21 been reduced by payment of claims arising from the same accident
13-22 to, an amount less than the limit of liability stated in the
13-23 underinsured coverage of the insured's policy.
13-24 (c) The commissioner [Board] may, in the policy forms
13-25 adopted under Article 5.06 of this code, define "uninsured motor
13-26 vehicle" to exclude certain motor vehicles whose operators are in
13-27 fact uninsured.
14-1 (d) The portion of a policy form adopted under Article 5.06
14-2 of this code to provide coverage under this article shall include
14-3 provisions that, regardless of the number of persons insured,
14-4 policies or bonds applicable, vehicles involved, or claims made,
14-5 the total aggregate limit of liability to any one person who
14-6 sustains bodily injury or property damage as the result of any one
14-7 occurrence shall not exceed the limit of liability for these
14-8 coverages as stated in the policy and the total aggregate limit of
14-9 liability to all claimants, if more than one, shall not exceed the
14-10 total limit of liability per occurrence as stated in the policy;
14-11 and shall provide for the exclusion of the recovery of damages for
14-12 bodily injury or property damage or both resulting from the
14-13 intentional acts of the insured. The portion of a policy form
14-14 adopted under Article 5.06 of this code to provide coverage under
14-15 this article shall require that in order for the insured to recover
14-16 under the uninsured motorist coverages where the owner or operator
14-17 of any motor vehicle which causes bodily injury or property damage
14-18 to the insured is unknown, actual physical contact must have
14-19 occurred between the motor vehicle owned or operated by such
14-20 unknown person and the person or property of the insured.
14-21 (e) Except as provided by Subsection (f) of this article,
14-22 the [(3) The] limits of liability for bodily injury, sickness, or
14-23 disease, including death, shall be offered to the insured in
14-24 amounts not less than those prescribed in Chapter 601,
14-25 Transportation Code, [the Texas Motor Vehicle Safety-Responsibility
14-26 Act] and such higher available limits as may be desired by the
14-27 insured, but not greater than the limits of liability specified in
15-1 the bodily injury liability provisions of the insured's policy.
15-2 (f) The named insured may elect to waive coverage under this
15-3 article for recovery of noneconomic and exemplary damages resulting
15-4 from bodily injury, sickness, or disease, including death. If an
15-5 insured elects to waive coverage under this subsection, Subsection
15-6 (e) of this article does not apply to the limits of liability that
15-7 are applicable to the coverage provided under the policy issued to
15-8 the named insured for damages resulting from bodily injury,
15-9 sickness, or disease, including death. The commissioner by rule may
15-10 adopt minimum limits of liability applicable to those damages.
15-11 Waiver of coverage under this subsection does not affect the
15-12 insured's right to bring an action for noneconomic and exemplary
15-13 damages against a responsible party.
15-14 (g) [(4) (a)] Coverage for property damage shall be offered
15-15 to the insured in amounts not less than those prescribed in Chapter
15-16 601, Transportation Code, [the Texas Motor Vehicle
15-17 Safety-Responsibility Act] and such higher available limits as may
15-18 be desired by the insured, but not greater than limits of liability
15-19 specified in the property damage liability provisions of the
15-20 insured's policy, subject to a deductible amount of $250.
15-21 (h) [(b)] If the insured has collision coverage and
15-22 uninsured or underinsured property damage liability coverage, the
15-23 insured may recover under the policy coverage chosen by the
15-24 insured. In the event neither coverage is sufficient alone to
15-25 cover all damage resulting from a single occurrence, the insured
15-26 may recover under both coverages. When recovering under both
15-27 coverages, the insured shall designate one coverage as the primary
16-1 coverage and pay the deductible applicable to that coverage. The
16-2 primary coverage must be exhausted before any recovery is made
16-3 under the secondary coverage. If both coverages are utilized in
16-4 the payment of damages from a single occurrence, the insured shall
16-5 not be required to pay the deductible applicable to the secondary
16-6 coverage when the amount of the deductible otherwise applicable to
16-7 the secondary coverage is the same as or less than the amount of
16-8 the deductible applicable to the primary coverage. If both
16-9 coverages are utilized in the payment of damages from a single
16-10 occurrence and the amount of the deductible otherwise applicable to
16-11 the secondary coverage is greater than the amount of the deductible
16-12 applicable to the primary coverage, the insured shall be required
16-13 to pay in respect of the secondary coverage only the difference
16-14 between the amount of the two deductibles. In no event shall the
16-15 insured recover under both coverages more than the actual damages
16-16 suffered.
16-17 (i) [(5)] The underinsured motorist coverage shall provide
16-18 for payment to the insured of all sums which the insured [he] shall
16-19 be legally entitled to recover as damages from owners or operators
16-20 of underinsured motor vehicles because of bodily injury or property
16-21 damage in an amount up to the limit specified in the policy,
16-22 reduced by the amount recovered or recoverable from the insurer of
16-23 the underinsured motor vehicle. If the named insured has waived
16-24 coverage under Subsection (f) of this article for recovery of
16-25 noneconomic and exemplary damages, the amount paid to the insured
16-26 shall be reduced by an amount equal to the amount of damages
16-27 attributable to noneconomic and exemplary damages.
17-1 (j) [(6)] In the event of payment to any person under any
17-2 coverage required by this Section and subject to the terms and
17-3 conditions of such coverage, the insurer making such payment shall,
17-4 to the extent thereof, be entitled to the proceeds of any
17-5 settlement or judgment resulting from the exercise of any rights of
17-6 recovery of such person against any person or organization legally
17-7 responsible for the bodily injury, sickness or disease, or death
17-8 for which such payment is made, including the proceeds recoverable
17-9 from the assets of the insolvent insurer; provided, however,
17-10 whenever an insurer shall make payment under a policy of insurance
17-11 issued pursuant to this Act, which payment is occasioned by the
17-12 insolvency of an insurer, the insured of said insolvent insurer
17-13 shall be given credit in any judgment obtained against the insured
17-14 [him], with respect to the insured's [his] legal liability for such
17-15 damages, to the extent of such payment, but, subject to Section 12
17-16 of Article 21.28-C of this code, such paying insurer shall have the
17-17 right to proceed directly against the insolvent insurer or its
17-18 receiver, and in pursuance of such right such paying insurer shall
17-19 possess any rights which the insured of the insolvent company might
17-20 otherwise have had if the insured of the insolvent insurer had made
17-21 the payment.
17-22 (k) [(7)] If a dispute exists as to whether a motor vehicle
17-23 is uninsured, the burden of proof as to that issue shall be upon
17-24 the insurer.
17-25 (l) [(8)] Notwithstanding Section 15.032, Civil Practice and
17-26 Remedies Code, an action against an insurer in relation to the
17-27 coverage provided under this article, including an action to
18-1 enforce that coverage, may be brought only:
18-2 (1) [(a)] in the county in which the policyholder or
18-3 beneficiary instituting the suit resided at the time of the
18-4 accident; or
18-5 (2) [(b)] in the county in which the accident
18-6 involving the uninsured or underinsured motor vehicle occurred.
18-7 ARTICLE 3. PROOF OF INSURANCE CARDS
18-8 SECTION 3.01. Subchapter A, Chapter 5, Insurance Code, is
18-9 amended by adding Article 5.06-7 to read as follows:
18-10 Art. 5.06-7. FORM AND APPEARANCE OF PROOF OF MOTOR VEHICLE
18-11 LIABILITY INSURANCE. (a) The commissioner shall prescribe by rule
18-12 a standard appearance and form for a card issued by an insurer as
18-13 proof of motor vehicle liability insurance prescribed by Section
18-14 601.081, Transportation Code.
18-15 (b) In prescribing the appearance of a proof of motor
18-16 vehicle liability insurance card under Subsection (a), the
18-17 commissioner shall require an appearance that is:
18-18 (1) difficult to alter, duplicate, or counterfeit; and
18-19 (2) not cost-prohibitive for consumers.
18-20 (c) A card issued as proof of motor vehicle liability
18-21 insurance issued in this state by an insurer must conform to the
18-22 form and appearance prescribed under Subsection (a).
18-23 SECTION 3.02. (a) The commissioner of insurance shall
18-24 prescribe the standard appearance and form of proof of motor
18-25 vehicle liability insurance cards as required by Article 5.06-7,
18-26 Insurance Code, as added by this Act not later than December 1,
18-27 1999.
19-1 (b) A card issued by an insurer as proof of motor vehicle
19-2 liability insurance that is issued on or after January 1, 2000,
19-3 must conform with rules established by the commissioner of
19-4 insurance under Article 5.06-7, Insurance Code, as added by this
19-5 Act. Proof of motor vehicle liability insurance that is issued
19-6 before January 1, 2000, is governed by the law as it existed
19-7 immediately before the effective date of this Act, and that law is
19-8 continued in effect for that purpose.
19-9 ARTICLE 4. UNAUTHORIZED INSURANCE
19-10 SECTION 4.01. The heading to Section 2, Article 1.14-1,
19-11 Insurance Code, is amended to read as follows:
19-12 Sec. 2. ENGAGING IN [INSURANCE] BUSINESS OF INSURANCE;
19-13 DEFINITIONS [DEFINED].
19-14 SECTION 4.02. Section 2, Article 1.14-1, Insurance Code, is
19-15 amended by amending Subsections (a) and (c) and adding Subsection
19-16 (d) to read as follows:
19-17 (a) In this article:
19-18 (1) "Engaging in the business of insurance" includes
19-19 the performance of any [Any] of the following acts in this state,
19-20 whether effected by mail or otherwise: [is defined to be doing an
19-21 insurance business in this state. The venue of an act committed by
19-22 mail is at the point where the matter transmitted by mail is
19-23 delivered and takes effect. Unless otherwise indicated, the term
19-24 insurer as used in this Article includes all corporations,
19-25 associations, partnerships and individuals engaged as principals in
19-26 the business of insurance and also includes interinsurance
19-27 exchanges, mutual benefit societies, and insurance exchanges and
20-1 syndicates as defined by rules promulgated by the State Board of
20-2 Insurance.]
20-3 1. The making of or proposing to make, as an
20-4 insurer, an insurance contract.
20-5 2. The making of or proposing to make, as
20-6 guarantor or surety, any contract of guaranty or suretyship as a
20-7 vocation and not merely incidental to any other legitimate business
20-8 or activity of the guarantor or surety.
20-9 3. The taking or receiving of any application
20-10 for insurance.
20-11 4. The receiving or collection of any premium,
20-12 commission, membership fees, assessments, dues or other
20-13 consideration for any insurance or any part thereof.
20-14 5. The issuance or delivery of contracts of
20-15 insurance to residents of this state or to persons authorized to do
20-16 business in this state.
20-17 6. Directly or indirectly acting as an agent for
20-18 or otherwise representing or aiding on behalf of another any person
20-19 or insurer in the solicitation, negotiation, procurement or
20-20 effectuation of insurance or renewals thereof or in the
20-21 dissemination of information as to coverage or rates, or forwarding
20-22 of applications, or delivery of policies or contracts, or
20-23 inspection of risks, a fixing of rates or investigation or
20-24 adjustment of claims or losses or in the transaction of matters
20-25 subsequent to effectuation of the contract and arising out of it,
20-26 or in any other manner representing or assisting a person or
20-27 insurer in the transaction of insurance with respect to subjects of
21-1 insurance resident, located or to be performed in this state. The
21-2 provisions of this subdivision shall not operate to prohibit
21-3 full-time salaried employees of a corporate insured from acting in
21-4 the capacity of an insurance manager or buyer in placing insurance
21-5 in behalf of such employer, its parent or affiliated companies.
21-6 7. Contracting to provide indemnification or
21-7 expense reimbursement in this state to persons domiciled in this
21-8 state or for risks located in this state, whether as an insurer,
21-9 agent, administrator, trust, funding mechanism, or by any other
21-10 method, for any type of medical expenses including, but not limited
21-11 to surgical, chiropractic, physical therapy, speech pathology,
21-12 audiology, professional mental health, dental, hospital, or
21-13 optometric expenses, whether this coverage is by direct payment,
21-14 reimbursement, or otherwise. This provision shall not apply to:
21-15 (i) any program otherwise authorized by
21-16 law that is established by any political subdivision of this state
21-17 or under Chapter 791, Government Code [the provisions of The
21-18 Interlocal Cooperation Act (Article 4413(32c), Vernon's Texas Civil
21-19 Statutes)] or by a state agency; or
21-20 (ii) a multiple employer welfare
21-21 arrangement which is fully insured as defined in 29 U.S.C.A.
21-22 Section 1144(b)(6) except that the Commissioner may apply any laws
21-23 that regulate the business of insurance in this state to the extent
21-24 that such laws provide [(1)] standards requiring the maintenance of
21-25 specified levels of contributions, which any such plan, or any
21-26 trust established under such a plan, must meet in order to be
21-27 considered under such law able to pay benefits in full when due,
22-1 and [(2)] provisions to enforce such standards.
22-2 8. The doing of any kind of insurance business
22-3 specifically recognized as constituting the doing of an insurance
22-4 business within the meaning of the statutes relating to insurance.
22-5 9. The doing or proposing to do any insurance
22-6 business in substance equivalent to any of the foregoing in a
22-7 manner designed to evade the provisions of the statutes.
22-8 10. Any other transactions of business in this
22-9 state by an insurer.
22-10 11. With respect to policies authorized under
22-11 Article 3.74 of this code, the use, creation, publication, mailing,
22-12 or dissemination of an advertisement relating to any of the acts
22-13 defined in this subsection to be doing an insurance business
22-14 unless:
22-15 (i) that advertisement is used, created,
22-16 published, mailed, or disseminated on behalf of a person or insurer
22-17 authorized under this title to engage in the business of insurance
22-18 in this state, who has actual knowledge of the content of the
22-19 advertisement and has authorized the advertisement to be used,
22-20 created, published, mailed, or disseminated on that person's or
22-21 insurer's behalf; and
22-22 (ii) the person or insurer on whose behalf
22-23 the advertisement is used, created, published, mailed, or
22-24 disseminated is, in that advertisement, clearly identified by name
22-25 as the sponsor of the advertisement.
22-26 (2) "Insurer" means a person engaged as a principal in
22-27 the business of insurance.
23-1 (3) "Person" means:
23-2 (A) an individual;
23-3 (B) a corporation;
23-4 (C) an association;
23-5 (D) a partnership;
23-6 (E) a reciprocal exchange;
23-7 (F) an interinsurance exchange;
23-8 (G) a Lloyd's plan;
23-9 (H) a fraternal benefit society; and
23-10 (I) any other legal entity engaged in the
23-11 business of insurance, including:
23-12 (i) an agent;
23-13 (ii) a broker;
23-14 (iii) an adjuster; or
23-15 (iv) a life insurance counselor.
23-16 (c) The commissioner [State Board of Insurance] shall
23-17 promulgate rules defining insurance exchanges and syndicates
23-18 covered by Subsection (a)(1) of this section.
23-19 (d) The venue of an act described by Section (a)(1) of this
23-20 section that is committed by mail is in the location where the
23-21 matter transmitted by mail is delivered and takes effect.
23-22 SECTION 4.03. Section 3(b), Article 1.14-1, Insurance Code,
23-23 is amended to read as follows:
23-24 (b) A [No] person may not [or insurer shall] directly or
23-25 indirectly engage in the [do any of the acts of an insurance]
23-26 business of insurance [set forth in this Article] except as
23-27 provided by and in accordance with the specific authorization of
24-1 statute. In respect to the insurance of subjects resident, located
24-2 or to be performed within this state this section shall not
24-3 prohibit the collection of premium or other acts performed outside
24-4 of this state by persons or insurers authorized to do business in
24-5 this state provided such transactions and insurance contracts
24-6 otherwise comply with statute.
24-7 SECTION 4.04. Section 13(a), Article 1.14-1, Insurance Code,
24-8 is amended to read as follows:
24-9 (a) A person [who violates Section 3(b) of this article]
24-10 commits an offense if the person engages in the business of
24-11 insurance:
24-12 (1) without:
24-13 (A) holding a certificate of authority, license,
24-14 or other authorization issued by the department; or
24-15 (B) having an exemption that is recognized by
24-16 the department from the requirement to hold a certificate of
24-17 authority, license, or other authorization issued by the
24-18 department; or
24-19 (2) after the person's certificate of authority,
24-20 license, or other authorization has been revoked or suspended by
24-21 the commissioner.
24-22 ARTICLE 5. REPEALER
24-23 SECTION 5.01. The following laws are repealed:
24-24 (1) Section 3(a), Article 1.14-1, Insurance Code;
24-25 (2) Section 13(c), Article 1.14-1, Insurance Code;
24-26 (3) Section 601.053, Transportation Code;
24-27 (4) Section 601.193, Transportation Code;
25-1 (5) Subchapter H, Chapter 601, Transportation Code;
25-2 and
25-3 (6) Subchapter I, Chapter 601, Transportation Code.
25-4 ARTICLE 6. TRANSITION; EFFECTIVE DATE; EMERGENCY
25-5 SECTION 6.01. (a) The change in law made by this Act to
25-6 Section 13, Article 1.14-1, Insurance Code, and to Chapter 601,
25-7 Transportation Code, applies only to punishment for an offense
25-8 committed on or after the effective date of this Act. For purposes
25-9 of this section, an offense is committed before the effective date
25-10 of this Act if any element of the offense occurs before that date.
25-11 (b) An offense committed under Section 13, Article 1.14-1,
25-12 Insurance Code, before the effective date of this Act is covered by
25-13 the law in effect when the offense was committed, and the former
25-14 law is continued in effect for that purpose.
25-15 SECTION 6.02. Article 5.06-1, Insurance Code, as amended by
25-16 this Act, applies only to a motor vehicle liability insurance
25-17 policy that is delivered, issued for delivery, or renewed on or
25-18 after January 1, 2000. A policy that is delivered, issued for
25-19 delivery, or renewed before January 1, 2000, is governed by the law
25-20 as it existed immediately before the effective date of this Act,
25-21 and that law is continued in effect for that purpose.
25-22 SECTION 6.03. (a) Except as provided by Subsection (b) of
25-23 this section, this Act takes effect September 1, 1999.
25-24 (b) Article 1 of this Act takes effect September 1, 2000.
25-25 SECTION 6.04. The importance of this legislation and the
25-26 crowded condition of the calendars in both houses create an
25-27 emergency and an imperative public necessity that the
26-1 constitutional rule requiring bills to be read on three several
26-2 days in each house be suspended, and this rule is hereby suspended.