By Chavez H.B. No. 765
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 28 to read as follows:
1-7 CHAPTER 28. INSURANCE FOR PASSENGER VEHICLES
1-8 SUBCHAPTER A. GENERAL PROVISIONS
1-9 Art. 28.001. 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. 28.002. EXCEPTION TO APPLICATION. This chapter does
1-22 not apply to a person while the person is operating a government
2-1 vehicle in the course of the person's employment.
2-2 Art. 28.003. REFERENCES TO PRIOR LAW. A reference in
2-3 another law to the Motor Vehicle Safety-Responsibility Act (Article
2-4 6701h, Vernon's Texas Civil Statutes), as that law existed on
2-5 August 31, 1995, or to Chapter 601, Transportation Code, as that
2-6 law existed on August 31, 1999, means, insofar as it is applicable
2-7 to a passenger vehicle, this chapter.
2-8 SUBCHAPTER B. INSURANCE REQUIREMENT
2-9 Art. 28.051. INSURANCE REQUIRED. A person may not operate a
2-10 passenger vehicle on a highway unless the person is covered for
2-11 damages arising from that person's use of a passenger vehicle by a
2-12 passenger vehicle liability insurance policy that complies with
2-13 Subchapter C of this chapter.
2-14 SUBCHAPTER C. PASSENGER VEHICLE INSURANCE
2-15 Art. 27.101. PASSENGER VEHICLE LIABILITY INSURANCE;
2-16 REQUIREMENTS. (a) To satisfy the requirement of Article 27.051 of
2-17 this code, a passenger vehicle liability insurance policy must:
2-18 (1) except as provided by Subsection (b) of this
2-19 article, be issued by an insurance company authorized to write
2-20 motor vehicle liability insurance in this state;
2-21 (2) be written to or for the benefit of each person
2-22 named in the policy as the insured; and
2-23 (3) meet the requirements of this subchapter.
2-24 (b) A person who is not a resident of this state and who
2-25 does not hold a driver's license issued by this state may satisfy
2-26 the requirements of Article 27.051 of this code through a motor
3-1 vehicle liability insurance policy written by an insurance company
3-2 that is not authorized to do business in this state if the
3-3 insurance company:
3-4 (1) is authorized to do business in another state of
3-5 the United States;
3-6 (2) executes a power of attorney authorizing the
3-7 department to accept on its behalf service of notice or process in
3-8 an action arising out of a motor vehicle accident in this state;
3-9 and
3-10 (3) agrees in writing that its policies will be
3-11 treated as conforming to the laws of this state relating to the
3-12 terms of a passenger vehicle liability insurance policy.
3-13 Art. 27.102. MINIMUM COVERAGE AMOUNTS. (a) The minimum
3-14 amounts of passenger vehicle liability insurance coverage required
3-15 by this chapter are:
3-16 (1) $30,000 for bodily injury to or death of one
3-17 person in one accident;
3-18 (2) $60,000 for bodily injury to or death of two or
3-19 more persons in one accident, subject to the amount provided by
3-20 Subdivision (1) of this subsection for bodily injury to or death of
3-21 one of the persons; and
3-22 (3) $20,000 for damage to or destruction of property
3-23 of others in one accident.
3-24 (b) The coverage required under Subsection (a) of this
3-25 article may exclude, with respect to one accident:
3-26 (1) the first $250 of liability for bodily injury to
4-1 or death of one person;
4-2 (2) the first $500 of liability for bodily injury to
4-3 or death of two or more persons, subject to the amount provided by
4-4 Subdivision (1) of this subsection for bodily injury to or death of
4-5 one of the persons; and
4-6 (3) the first $250 of liability for damage to or
4-7 destruction of property of others.
4-8 Art. 28.103. REQUIRED TERMS. A passenger vehicle liability
4-9 insurance policy required by this chapter must pay, on behalf of
4-10 each named insured, amounts the insured becomes obligated to pay as
4-11 damages arising out of the use by the insured of any passenger
4-12 vehicle in the United States or Canada, subject to the amounts and
4-13 exclusions of Article 28.102 of this code.
4-14 Art. 28.104. PROHIBITED TERMS. A passenger vehicle
4-15 liability insurance policy required by this chapter may not insure
4-16 against liability:
4-17 (1) for which the insured or the insured's insurer may
4-18 be held liable under a workers' compensation law;
4-19 (2) for bodily injury to or death of an employee of
4-20 the insured while engaged in the employment, other than domestic,
4-21 of the insured, or in domestic employment if benefits for the
4-22 injury are payable or required to be provided under a workers'
4-23 compensation law; or
4-24 (3) for injury to or destruction of property owned by,
4-25 rented to, in the care of, or transported by the insured.
4-26 Art. 28.105. ADDITIONAL COVERAGE. (a) Subject to Article
5-1 28.104 of this code, an insurance policy that provides the coverage
5-2 required for a passenger vehicle liability insurance policy by this
5-3 chapter may also provide other coverage in excess of or in addition
5-4 to the required coverage. The additional coverage may include:
5-5 (1) comprehensive coverage applicable to a passenger
5-6 vehicle owned by the insured; or
5-7 (2) coverage for liability incurred by the insured
5-8 arising out of the use of a passenger vehicle owned by the insured
5-9 by another person who holds a driver's license issued by another
5-10 state.
5-11 (b) The excess or additional coverage is not subject to this
5-12 chapter.
5-13 Art. 28.106. POLICY FORM. The policy form and any
5-14 endorsement to the policy form shall be adopted by the commissioner
5-15 in accordance with Article 5.06 of this code. The form must state
5-16 the dollar amount of coverage provided, including any optional
5-17 coverage provided.
5-18 Art. 28.107. MULTIPLE POLICIES. This chapter's requirements
5-19 for a passenger vehicle liability insurance policy may be satisfied
5-20 by a combination of policies of one or more insurance companies if
5-21 the policies in combination meet the requirements.
5-22 Art. 28.108. NOTICE TO TEXAS DEPARTMENT OF PUBLIC SAFETY;
5-23 CONTINUATION OF COVERAGE; CONSIDERATION OF DRIVING RECORD. (a) A
5-24 motor vehicle insurance company that writes a policy of passenger
5-25 vehicle insurance that the company represents as satisfying the
5-26 requirements of this chapter shall notify the Texas Department of
6-1 Public Safety of:
6-2 (1) the issuance of the policy;
6-3 (2) the termination of the policy by the company or by
6-4 an insured; or
6-5 (3) a claim made under the policy.
6-6 (b) Coverage under a passenger vehicle insurance policy
6-7 written to satisfy this chapter that is terminated continues until
6-8 the fifth day after the date notice is mailed under Subsection
6-9 (a)(2) of this article.
6-10 (c) On receipt of notice of termination of coverage under
6-11 the policy under Subsection (a)(2) of this article, the Texas
6-12 Department of Public Safety shall suspend the person's driver's
6-13 license under Subchapter T, Chapter 521, Transportation Code.
6-14 (d) On receipt of notice under Subsection (a)(3) of this
6-15 article of five or more claims against an insured's policy during
6-16 any three-year period, the public safety director of the Texas
6-17 Department of Public Safety shall review the insured's record and
6-18 may initiate proceedings to consider suspension or revocation of
6-19 the insured's license under Subchapter N, Chapter 521,
6-20 Transportation Code.
6-21 Art. 28.109. PROOF OF COVERAGE. The commissioner shall
6-22 prescribe a standard proof of insurance form to be used by an
6-23 insured to comply with Section 521.143, Transportation Code.
6-24 SUBCHAPTER D. GUARANTEED ISSUE AND RENEWABILITY; RATES
6-25 Art. 28.151. ISSUANCE TO LICENSED DRIVER. An insurance
6-26 company authorized to write motor vehicle liability insurance in
7-1 this state may not refuse to issue or renew a passenger vehicle
7-2 insurance policy in the minimum amounts required by this chapter to
7-3 a person who holds a driver's license or who has been certified by
7-4 the Texas Department of Public Safety as eligible to hold a license
7-5 under Section 521.143, Transportation Code.
7-6 Art. 28.152. RATES. (a) The commissioner, after notice and
7-7 hearing, shall establish the minimum base rates for passenger
7-8 vehicle liability insurance issued under this chapter and shall
7-9 annually adjust the minimum base rates as is actuarially
7-10 justifiable. The commissioner shall adopt rules governing the
7-11 procedures for establishing and adjusting minimum base rates under
7-12 this section. Subchapter A, Chapter 5, of this code does not apply
7-13 to rates for passenger vehicle liability insurance governed by this
7-14 chapter. The flexible rating program and flexibility bands
7-15 established by Subchapter M, Chapter 5, of this code do not apply
7-16 to rates for passenger vehicle liability insurance governed by this
7-17 chapter.
7-18 (b) The minimum base rates may not vary because of the
7-19 insured's area of residence, age, or gender.
7-20 (c) Except as provided by this section, an insurer may not
7-21 charge a rate that exceeds the applicable minimum base rate
7-22 established under this section for passenger vehicle liability
7-23 insurance issued under this chapter.
7-24 (d) If an insured was covered by one or more passenger
7-25 vehicle liability insurance policies issued under this chapter
7-26 that, during the period that began three years before the date on
8-1 which a premium is due, paid one liability claim, the rate
8-2 applicable to that insured is two times the minimum base rate that
8-3 would otherwise be applicable to the insured.
8-4 (e) If an insured was covered by one or more passenger
8-5 vehicle liability insurance policies issued under this chapter
8-6 that, during the period that began three years before the date on
8-7 which a premium is due, paid two liability claims, the rate
8-8 applicable to that insured is four times the minimum base rate that
8-9 would otherwise be applicable to the insured.
8-10 (f) If an insured was covered by one or more passenger
8-11 vehicle liability insurance policies issued under this chapter
8-12 that, during the period that began three years before the date on
8-13 which a premium is due, paid three liability claims, the rate
8-14 applicable to that insured is eight times the minimum base rate
8-15 that would otherwise be applicable to the insured.
8-16 (g) If an insured was covered by one or more passenger
8-17 vehicle liability insurance policies issued under this chapter
8-18 that, during the period that began three years before the date on
8-19 which a premium is due, paid four liability claims, the rate
8-20 applicable to that insured is 16 times the minimum base rate that
8-21 would otherwise be applicable to the insured.
8-22 (h) If an insured was covered by one or more passenger
8-23 vehicle liability insurance policies issued under this chapter
8-24 that, during the period that began three years before the date on
8-25 which a premium is due, paid five or more liability claims, the
8-26 rate applicable to that insured is 32 times the minimum base rate
9-1 that would otherwise be applicable to the insured. An insurer that
9-2 knows of five or more liability claims against an insured during a
9-3 three-year period shall notify the department, and the department
9-4 shall review the insured's record as provided by Article 28.108(d)
9-5 of this code.
9-6 SUBCHAPTER E. PENALTIES
9-7 Art. 28.201. OPERATION OF PASSENGER VEHICLE IN VIOLATION OF
9-8 INSURANCE REQUIREMENT; OFFENSE. (a) A person commits an offense
9-9 if the person operates a passenger vehicle in violation of Article
9-10 28.051 of this code.
9-11 (b) Except as provided by Subsection (c) of this article, an
9-12 offense under this article is a Class A misdemeanor.
9-13 (c) If it is shown on the trial of an offense under
9-14 Subsection (a) of this article that the person has been previously
9-15 convicted of an offense under that subsection, an offense under
9-16 this article is a state jail felony.
9-17 SECTION 2. Chapter 521, Transportation Code, is amended by
9-18 adding Subchapter T to read as follows:
9-19 SUBCHAPTER T. SUMMARY SUSPENSION AFTER TERMINATION OF
9-20 PASSENGER VEHICLE INSURANCE
9-21 Sec. 521.501. NOTICE OF TERMINATION OF INSURANCE; SUSPENSION
9-22 OF LICENSE. (a) On receipt of notice under Article 28.108,
9-23 Insurance Code, that the passenger vehicle insurance issued to a
9-24 license holder has been canceled, the director shall mail a notice
9-25 of that fact and of the provisions of this subchapter to the
9-26 license holder.
10-1 (b) The person's license is suspended on the 10th day after
10-2 the date that notice under this section is mailed unless, before
10-3 that date, the person:
10-4 (1) submits evidence of substitute passenger vehicle
10-5 liability insurance that complies with the requirements of Chapter
10-6 28, Insurance Code; or
10-7 (2) requests a hearing under this subchapter.
10-8 Sec. 521.502. HEARING. (a) A hearing under this subchapter
10-9 shall be conducted in the same manner as a hearing under Section
10-10 521.293.
10-11 (b) The hearing must be conducted not later than the fifth
10-12 day after the date that the request for hearing is received by the
10-13 department.
10-14 (c) The sole issue to be determined at the hearing is
10-15 whether the license holder is covered by a policy of passenger
10-16 vehicle liability insurance that complies with the requirements of
10-17 Chapter 28, Insurance Code.
10-18 (d) If the license holder is not covered by a policy of
10-19 passenger vehicle liability insurance that complies with the
10-20 requirements of Chapter 28, Insurance Code, the presiding officer
10-21 shall recommend that the license be suspended and the director
10-22 shall suspend the license.
10-23 (e) A person may appeal the suspension of a driver's license
10-24 under this section in the manner provided for an appeal under
10-25 Section 521.302. The sole issue in an appeal is whether the
10-26 license holder was, at the time of the suspension, covered by
11-1 passenger vehicle liability insurance that complies with the
11-2 requirements of Chapter 28, Insurance Code. Section 521.302(f)
11-3 does not apply to an appeal under this subsection and the
11-4 suspension of the license is not stayed pending the appeal.
11-5 Sec. 521.503. PERIOD OF SUSPENSION. (a) Suspension of a
11-6 license under this subchapter continues until the license holder:
11-7 (1) submits to the director satisfactory evidence of
11-8 passenger vehicle liability insurance that complies with the
11-9 requirements of Chapter 28, Insurance Code; and
11-10 (2) complies with each requirement for renewal of the
11-11 license.
11-12 (b) A license may not be renewed during the period of
11-13 suspension.
11-14 Sec. 521.504. SURRENDER OF LICENSE; RETURN. (a) On
11-15 suspension of a license under this subchapter, the department shall
11-16 require the license holder to surrender the license to the
11-17 department.
11-18 (b) The department shall return a suspended license to the
11-19 license holder at the time the suspension is terminated unless,
11-20 during the period of suspension, the license expired or was
11-21 revoked.
11-22 SECTION 3. Section 521.143, Transportation Code, is amended
11-23 to read as follows:
11-24 Sec. 521.143. EVIDENCE OF FINANCIAL RESPONSIBILITY REQUIRED.
11-25 (a) An application for an original or renewal of a driver's
11-26 license must be accompanied by evidence that the applicant is
12-1 covered by a policy of passenger vehicle liability insurance that
12-2 complies with the requirements of Article 5.06, Insurance Code, and
12-3 Chapter 28, Insurance Code [of financial responsibility or a
12-4 statement that the applicant does not own a motor vehicle for which
12-5 evidence of financial responsibility is required under Chapter
12-6 601].
12-7 (b) If an application for an original or renewal driver's
12-8 license satisfies each requirement for issuance of a license, other
12-9 than the requirement of Subsection (a), the department shall issue
12-10 to the person a certificate of eligibility for a driver's license.
12-11 On presentation of evidence that the applicant has satisfied the
12-12 requirement of Subsection (a), the department shall issue the
12-13 license in accordance with Subchapter I. [Evidence of financial
12-14 responsibility presented under this section must be in at least the
12-15 minimum amounts required by Section 601.072 and must cover each
12-16 motor vehicle owned by the applicant for which the applicant is
12-17 required to maintain evidence of financial responsibility. The
12-18 evidence may be shown in the manner provided by Section 601.053(a).]
12-19 [(c) A personal automobile insurance policy used as evidence
12-20 of financial responsibility under this section must comply with
12-21 Article 5.06, Insurance Code.]
12-22 [(d) A statement that an applicant does not own a motor
12-23 vehicle to which the evidence of financial responsibility
12-24 requirement applies must be sworn to and signed by the applicant.]
12-25 SECTION 4. Subchapter A, Chapter 601, Transportation Code,
12-26 is amended by adding Section 601.0025 to read as follows:
13-1 Sec. 601.0025. PASSENGER VEHICLES EXCLUDED. Notwithstanding
13-2 any other law, this chapter does not apply to the operation,
13-3 maintenance, or use of a passenger vehicle, as that term is defined
13-4 by Article 28.001, Insurance Code, and the term "motor vehicle," as
13-5 used in this chapter, does not include a passenger vehicle.
13-6 SECTION 5. Articles 5.01(e) and (f), Insurance Code, are
13-7 amended to read as follows:
13-8 (e) Motor vehicle or automobile insurance as referred to in
13-9 this subchapter shall be taken and construed to mean every form of
13-10 insurance on any automobile or other vehicle hereinafter enumerated
13-11 and its operating equipment or necessitated by reason of the
13-12 liability imposed by law for damages arising out of the ownership,
13-13 operation, maintenance, or use in this State of any automobile,
13-14 motorcycle, motor-driven cycle [motorbicycle], truck,
13-15 truck-tractor, tractor, traction engine, or any other
13-16 self-propelled vehicle, and including also every vehicle, trailer
13-17 or semi-trailer pulled or towed by a motor vehicle, but excluding
13-18 every motor vehicle running only upon fixed rails or tracks. The
13-19 term includes a policy of passenger vehicle insurance written to
13-20 comply with Chapter 28 of this code. Workers' Compensation
13-21 Insurance is excluded from the foregoing definition.
13-22 (f) Notwithstanding Subsections (a) through (d) of this
13-23 article, [on and after March 1, 1992,] rates for motor vehicle
13-24 insurance in this state, other than passenger vehicle liability
13-25 insurance, are determined as provided by the flexible rating
13-26 program adopted under Subchapter M of this chapter.
14-1 SECTION 6. Article 5.01-2(b), Insurance Code, is amended to
14-2 read as follows:
14-3 (b) Rates [On and after March 1, 1992, rates] for motor
14-4 vehicle insurance written by a Lloyd's plan insurer or a reciprocal
14-5 or interinsurance exchange, other than passenger vehicle liability
14-6 insurance, are determined as provided by the flexible rating
14-7 program adopted under Subchapter M of this chapter.
14-8 SECTION 7. Article 5.03(g), Insurance Code, is amended to
14-9 read as follows:
14-10 (g) Notwithstanding Sections (a) through (e) of this
14-11 article, [on and after March 1, 1992,] rates for motor vehicle
14-12 insurance, other than passenger vehicle liability insurance,
14-13 [vehicles] are determined as provided by Subchapter M of this
14-14 chapter.
14-15 SECTION 8. Sections 1 and 2, Article 5.03-3, Insurance Code,
14-16 are amended to read as follows:
14-17 Sec. 1. DEFINITIONS. In this article:
14-18 (1) "Honor student" means an individual who, according
14-19 to the official scholastic records for the preceding academic
14-20 semester, quarter, or other grade reporting period, has a:
14-21 (A) "B" average or better; or
14-22 (B) 3.0 average or better on a 4.0 scale.
14-23 (2) "Insurer" means an insurance company,
14-24 interinsurance exchange, mutual, capital stock company, fraternal
14-25 benefit society, local mutual aid association, county mutual,
14-26 reciprocal, association, Lloyd's plan, or other entity writing
15-1 motor vehicle insurance in this state. The term includes a company
15-2 affiliated with an insurer.
15-3 (3) ["Motor vehicle" means any private passenger
15-4 vehicle that:]
15-5 [(A) is registered in this state; and]
15-6 [(B) has a gross weight of 25,000 pounds or
15-7 less.]
15-8 [(4)] "Traffic safety regulation" means a law or
15-9 ordinance of this state or a political subdivision of this state
15-10 relating to the operation of motor vehicles other than a regulation
15-11 relating to pedestrians or to the parking of motor vehicles.
15-12 Sec. 2. DISCOUNT AUTHORIZED. (a) An insurer who delivers
15-13 or issues for delivery in this state a motor vehicle insurance
15-14 policy, on receipt of written verification from the insured that
15-15 the insured [or a family member covered by the policy] is eligible
15-16 under Subsection (b) of this section, and that the motor vehicle
15-17 available for use by the insured satisfies the requirements of
15-18 Subsection (c), may grant a discount in the amount provided by
15-19 Subsection (d) of this section [(c)] in the premiums charged for
15-20 the liability, medical payments, and personal injury protection
15-21 coverage for the insured. If the insured is the owner of the motor
15-22 vehicle and the coverage is provided under an owner's policy of
15-23 passenger vehicle insurance, the discount may apply to [, and]
15-24 collision coverage [only for the motor vehicle designated to be
15-25 driven by the honor student].
15-26 (b) To be eligible for a discount under this article, an
16-1 applicant for a discount must file with the insurer annually the
16-2 grade report issued by the school and other information that
16-3 presents evidence satisfactory to establish that the person covered
16-4 by the discount:
16-5 (1) is licensed to drive in this state;
16-6 (2) is under 25 years of age and qualifies as a
16-7 youthful driver under the Texas Department of Insurance automobile
16-8 classification plan; and
16-9 (3) is enrolled as a full-time student in:
16-10 (A) the junior or senior year of high school;
16-11 or
16-12 (B) academic courses in an institution of higher
16-13 education.
16-14 (c) The motor vehicle available for use by the insured, if
16-15 any, must be a private passenger vehicle that:
16-16 (1) is registered in this state; and
16-17 (2) has a gross weight of 25,000 pounds or less.
16-18 (d) The commissioner by rule shall set the amount of the
16-19 discounts applicable under this article and may adopt other rules
16-20 necessary for the implementation of this article.
16-21 SECTION 9. Sections 1 and 2, Article 5.03-5, Insurance Code,
16-22 are amended to read as follows:
16-23 Sec. 1. DEFINITIONS. In this article:
16-24 (1) "Applicant" means an individual who applies under
16-25 this article for a discount in motor vehicle insurance premiums.
16-26 (2) "Driving record" means an individual's history of
17-1 convictions of violations of traffic safety regulations.
17-2 (3) "Insurer" means an insurance company,
17-3 interinsurance exchange, mutual, capital stock company, fraternal
17-4 benefit society, local mutual aid association, county mutual,
17-5 reciprocal, association, Lloyd's plan, or other entity writing
17-6 motor vehicle insurance in this state. The term includes an
17-7 affiliate, as defined by Section 2, Article 21.49-1, of this code.
17-8 (4) ["Motor vehicle" means any private passenger
17-9 vehicle that:]
17-10 [(A) is registered in this state; and]
17-11 [(B) has a gross weight of 25,000 pounds or
17-12 less.]
17-13 [(5)] "Traffic safety regulation" means a law or
17-14 ordinance of a state or a political subdivision of a state relating
17-15 to the operation of motor vehicles other than a regulation relating
17-16 to pedestrians or to the parking of motor vehicles.
17-17 (5) [(6)] "Youth group" means a nonprofit organization
17-18 that:
17-19 (A) is chartered as a national or statewide
17-20 organization;
17-21 (B) is organized and operated exclusively for
17-22 youth recreational or educational purposes and that includes, as
17-23 part of the group's program, components relating to:
17-24 (i) prevention of drug abuse;
17-25 (ii) character development;
17-26 (iii) citizenship training; and
18-1 (iv) physical and mental fitness;
18-2 (C) has been in existence for at least 10 years;
18-3 and
18-4 (D) has a membership of which at least 65
18-5 percent is younger than 22 years of age.
18-6 Sec. 2. DISCOUNT AUTHORIZED; ELIGIBILITY CONDITIONS FOR
18-7 DRIVERS. (a) An insurer who delivers or issues for delivery in
18-8 this state a motor vehicle insurance policy, on receipt of written
18-9 verification from the insured that the insured [or a family member
18-10 covered by the policy] is eligible under Subsection (b) of this
18-11 section, and that the motor vehicle available for use by the
18-12 insured satisfies the requirements of Subsection (c) of this
18-13 section, may grant a discount in the amount provided by Subsection
18-14 (g) [(f)] of this section in the premiums charged for the
18-15 liability, medical payments, and personal injury protection
18-16 coverage for the insured. If the insured is the owner of the motor
18-17 vehicle and the coverage is provided under an owner's policy of
18-18 passenger vehicle insurance, the discount may apply to [, and]
18-19 collision coverage only for the motor vehicle [designated to be
18-20 driven by the eligible person].
18-21 (b) To be eligible for the discount authorized under
18-22 Subsection (a) of this section, an applicant must:
18-23 (1) be licensed to drive in this state;
18-24 (2) be a member of a youth group, including an adult
18-25 leader, board member, or officer of the group;
18-26 (3) be younger than 22 years of age or an adult
19-1 leader, board member, or officer of the group;
19-2 (4) have held a driver's license for at least three
19-3 years on the date the application is filed;
19-4 (5) have not, during the three years preceding the
19-5 date of the application, been convicted of a violation of a traffic
19-6 safety regulation that involves a moving vehicle; and
19-7 (6) have not, during the three years preceding the
19-8 date of the application, been found at fault in a motor vehicle
19-9 accident.
19-10 (c) The motor vehicle available for use by the insured, if
19-11 any, must be a private passenger vehicle that:
19-12 (1) is registered in this state; and
19-13 (2) has a gross weight of 25,000 pounds or less.
19-14 (d) An applicant is not eligible to receive a discount under
19-15 this article if the applicant has been convicted of an offense
19-16 relating to the operation of a motor vehicle under:
19-17 (1) Chapter 49, Penal Code;
19-18 (2) Article 6701l-1, Revised Statutes, as that statute
19-19 existed before repeal by Chapter 900, Acts of the 73rd Legislature,
19-20 Regular Session, 1993, or Section 19.05, Penal Code, as that
19-21 statute existed before amendment by Chapter 900, Acts of the 73rd
19-22 Legislature, Regular Session, 1993; or
19-23 (3) another state's statute similar to a statute
19-24 described by Subdivision (1) or (2) of this subsection.
19-25 (e) [(d)] For purposes of Subsections (b) and (d) [(c)] of
19-26 this section, an applicant is considered to have been convicted in
20-1 a case if:
20-2 (1) a sentence is imposed; or
20-3 (2) the applicant receives community supervision or
20-4 analogous treatment under the law of another state.
20-5 (f) [(e)] The commissioner by rule may establish additional
20-6 requirements for receipt of a discount under this article.
20-7 (g) [(f)] The commissioner by rule shall set the amount of
20-8 the discount applicable under this article and may adopt other
20-9 rules necessary for the implementation of this article, including
20-10 rules identifying youth groups whose members are eligible for a
20-11 discount under this article.
20-12 SECTION 10. Article 5.04(c), Insurance Code, is amended to
20-13 read as follows:
20-14 (c) Notwithstanding Subsections (a) and (b) of this article,
20-15 [on and after March 1, 1992,] rates for motor vehicle insurance,
20-16 other than passenger vehicle liability insurance, [vehicles] are
20-17 determined as provided by Subchapter M of this chapter.
20-18 SECTION 11. Articles 5.06(9) and (10), Insurance Code, are
20-19 amended to read as follows:
20-20 (9) An insurance policy or other document evidencing proof
20-21 of purchase of a passenger vehicle liability [personal automobile]
20-22 insurance policy written for a term of less than 30 days may not be
20-23 used to obtain an original or renewal driver's license[, an
20-24 automobile registration or license plates, or a motor vehicle
20-25 inspection certificate] and must contain a statement as follows:
20-26 "TEXAS LAW PROHIBITS USE OF THIS DOCUMENT TO OBTAIN [A MOTOR
21-1 VEHICLE INSPECTION CERTIFICATE,] AN ORIGINAL OR RENEWAL DRIVER'S
21-2 LICENSE[, OR AN AUTOMOBILE REGISTRATION OR LICENSE PLATES]."
21-3 (10) Before accepting any premium or fee for a passenger
21-4 vehicle liability [personal automobile] insurance policy or binder
21-5 for a term of less than 30 days, an agent or insurer must make the
21-6 following written disclosure to the applicant or insured:
21-7 "TEXAS LAW PROHIBITS USE OF THIS POLICY OR BINDER TO OBTAIN
21-8 [A MOTOR VEHICLE INSPECTION CERTIFICATE,] AN ORIGINAL OR RENEWAL
21-9 DRIVER'S LICENSE[, OR AN AUTOMOBILE REGISTRATION OR LICENSE
21-10 PLATES]."
21-11 SECTION 12. Articles 5.06-1(1), (2), and (3), Insurance
21-12 Code, are amended to read as follows:
21-13 (1) No automobile liability insurance [(including insurance
21-14 issued pursuant to an Assigned Risk Plan established under
21-15 authority of Section 35 of the Texas Motor Vehicle
21-16 Safety-Responsibility Act),] covering liability arising out of the
21-17 insured's ownership, maintenance, or use of any motor vehicle shall
21-18 be delivered or issued for delivery in this state unless coverage
21-19 is provided therein or supplemental thereto, in at least the limits
21-20 described in Chapter 28 of this code or Chapter 601, Transportation
21-21 Code, as applicable [the Texas Motor Vehicle Safety-Responsibility
21-22 Act], under provisions prescribed by the Board, for the protection
21-23 of persons insured thereunder who are legally entitled to recover
21-24 damages from uninsured or underinsured owners or operators of
21-25 [uninsured or underinsured] motor vehicles because of bodily
21-26 injury, sickness, or disease, including death, or property damage
22-1 resulting therefrom. The coverages required under this Article
22-2 shall not be applicable where any insured named in the policy shall
22-3 reject the coverage in writing; provided that unless the named
22-4 insured thereafter requests such coverage in writing, such coverage
22-5 need not be provided in or supplemental to a renewal policy where
22-6 the named insured has rejected the coverage in connection with a
22-7 policy previously issued to the insured [him] by the same insurer
22-8 or by an affiliated insurer.
22-9 (2) For the purpose of these coverages: (a) the term
22-10 "uninsured motorist [motor vehicle]" shall, subject to the terms
22-11 and conditions of such coverage, be deemed to include an individual
22-12 who is insured under a policy issued by a [motor vehicle where the]
22-13 liability insurer that [thereof] is unable to make payment with
22-14 respect to the legal liability of its insured within the limits
22-15 specified therein because of insolvency.
22-16 (b) The term "underinsured motorist [motor vehicle]"
22-17 means an insured operator with respect to [motor vehicle on] which
22-18 there is valid and collectible liability insurance coverage with
22-19 limits of liability for the owner or operator which were originally
22-20 lower than, or have been reduced by payment of claims arising from
22-21 the same accident to, an amount less than the limit of liability
22-22 stated in the underinsured coverage of the insured's policy.
22-23 (c) The Board may, in the policy forms adopted under
22-24 Article 5.06 of this code, define "uninsured motorist [motor
22-25 vehicle]" to exclude certain [motor vehicles whose] operators who
22-26 are in fact uninsured.
23-1 (d) The portion of a policy form adopted under Article
23-2 5.06 of this code to provide coverage under this article shall
23-3 include provisions that, regardless of the number of persons
23-4 insured, policies or bonds applicable, vehicles involved, or claims
23-5 made, the total aggregate limit of liability to any one person who
23-6 sustains bodily injury or property damage as the result of any one
23-7 occurrence shall not exceed the limit of liability for these
23-8 coverages as stated in the policy and the total aggregate limit of
23-9 liability to all claimants, if more than one, shall not exceed the
23-10 total limit of liability per occurrence as stated in the policy;
23-11 and shall provide for the exclusion of the recovery of damages for
23-12 bodily injury or property damage or both resulting from the
23-13 intentional acts of the insured. The portion of a policy form
23-14 adopted under Article 5.06 of this code to provide coverage under
23-15 this article shall require that in order for the insured to recover
23-16 under the uninsured motorist coverages where the owner or operator
23-17 of any motor vehicle which causes bodily injury or property damage
23-18 to the insured is unknown, actual physical contact must have
23-19 occurred between the motor vehicle owned or operated by such
23-20 unknown person and the person or property of the insured.
23-21 (3) The limits of liability for bodily injury, sickness, or
23-22 disease, including death, shall be offered to the insured in
23-23 amounts not less than those prescribed in Chapter 28 of this code
23-24 or Chapter 601, Transportation Code, as applicable, [the Texas
23-25 Motor Vehicle Safety-Responsibility Act] and such higher available
23-26 limits as may be desired by the insured, but not greater than the
24-1 limits of liability specified in the bodily injury liability
24-2 provisions of the insured's policy.
24-3 SECTION 13. Article 5.06-1(4)(a), Insurance Code, is amended
24-4 to read as follows:
24-5 (a) Coverage for property damage shall be offered to
24-6 the insured in amounts not less than those prescribed in Chapter 28
24-7 of this code or Chapter 601, Transportation Code, as applicable,
24-8 [the Texas Motor Vehicle Safety-Responsibility Act] and such higher
24-9 available limits as may be desired by the insured, but not greater
24-10 than limits of liability specified in the property damage liability
24-11 provisions of the insured's policy, subject to a deductible amount
24-12 of $250.
24-13 SECTION 14. Articles 5.06-1(7) and (8), Insurance Code, are
24-14 amended to read as follows:
24-15 (7) If a dispute exists as to whether a motorist [motor
24-16 vehicle] is uninsured, the burden of proof as to that issue shall
24-17 be upon the insurer.
24-18 (8) Notwithstanding Section 15.032, Civil Practice and
24-19 Remedies Code, an action against an insurer in relation to the
24-20 coverage provided under this article, including an action to
24-21 enforce that coverage, may be brought only:
24-22 (a) in the county in which the policyholder or
24-23 beneficiary instituting the suit resided at the time of the
24-24 accident; or
24-25 (b) in the county in which the accident involving the
24-26 uninsured or underinsured motorist [motor vehicle] occurred.
25-1 SECTION 15. Articles 5.06-3(a), (b), and (c), Insurance
25-2 Code, are amended to read as follows:
25-3 (a) No automobile liability insurance policy[, including
25-4 insurance issued pursuant to an assigned risk plan established
25-5 under authority of Section 35 of the Texas Motor Vehicle
25-6 Safety-Responsibility Act,] covering liability arising out of the
25-7 ownership, maintenance, or use of any motor vehicle shall be
25-8 delivered or issued for delivery in this state unless personal
25-9 injury protection coverage is provided therein or supplemental
25-10 thereto. The coverage required by this article shall not be
25-11 applicable if any insured named in the policy shall reject the
25-12 coverage in writing; provided, unless the named insured thereafter
25-13 requests such coverage in writing, such coverage need not be
25-14 provided in or supplemental to a renewal policy if the named
25-15 insured has rejected the coverage in connection with a policy
25-16 previously issued to the named insured [him] by the same insurer or
25-17 by an affiliated insurer.
25-18 (b) "Personal injury protection" consists of provisions of a
25-19 motor vehicle liability policy which provide for payment to the
25-20 named insured in the motor vehicle liability policy and [members of
25-21 the insured's household,] any authorized [operator or] passenger of
25-22 a [the named insured's] motor vehicle operated by the named insured
25-23 including a guest occupant, up to an amount of $2,500 for each such
25-24 person for payment of all reasonable expenses arising from the
25-25 accident and incurred within three years from the date thereof for
25-26 necessary medical, surgical, X-ray and dental services, including
26-1 prosthetic devices, and necessary ambulance, hospital, professional
26-2 nursing and funeral services, and in the case of an income
26-3 producer, payment of benefits for loss of income as the result of
26-4 the accident; and where the person injured in the accident was not
26-5 an income or wage producer at the time of the accident, payments of
26-6 benefits must be made in reimbursement of necessary and reasonable
26-7 expenses incurred for essential services ordinarily performed by
26-8 the injured person for care and maintenance of the family or family
26-9 household. The insurer providing loss of income benefits may
26-10 require, as a condition of receiving such benefits, that the
26-11 insured person furnish the insurer reasonable medical proof of the
26-12 [his] injury causing loss of income. The personal injury
26-13 protection in this paragraph specified shall not exceed $2,500 for
26-14 all benefits, in the aggregate, for each person.
26-15 (c) The benefits required by this Act shall be payable
26-16 without regard to the fault or non-fault of the named insured or
26-17 the recipient in causing or contributing to the accident.
26-18 Medical[, and without regard to any collateral source of medical],
26-19 hospital, [or] wage continuation benefits, or similar benefits
26-20 available to the injured person provide primary coverage for the
26-21 injury. Except as provided by this subsection, an [An] insurer
26-22 paying benefits pursuant to this Act shall have no right of
26-23 subrogation and no claim against any other person or insurer to
26-24 recover any such benefits by reason of the alleged fault of such
26-25 other person in causing or contributing to the accident.
26-26 SECTION 16. Article 5.09(c), Insurance Code, is amended to
27-1 read as follows:
27-2 (c) Notwithstanding Subsection (a) of this article, [on and
27-3 after March 1, 1992,] rates for motor vehicle insurance, other than
27-4 passenger vehicle liability insurance, [vehicles] are determined as
27-5 provided by Subchapter M of this chapter.
27-6 SECTION 17. Article 5.11(c), Insurance Code, is amended to
27-7 read as follows:
27-8 (c) Notwithstanding Subsections (a) and (b) of this article,
27-9 [on and after March 1, 1992,] rates for motor vehicle insurance,
27-10 other than passenger vehicle insurance [vehicles] are determined as
27-11 provided by Subchapter M of this chapter.
27-12 SECTION 18. Article 5.96(a-1), Insurance Code, is amended to
27-13 read as follows:
27-14 (a-1) Except as provided by Section 5(d), Article 5.101, of
27-15 this code, this article does not apply to the setting of rates for
27-16 passenger vehicles or benchmark rates for other motor vehicle
27-17 insurance or for [and] fire or [and] allied lines insurance under
27-18 Subchapter M of this chapter.
27-19 SECTION 19. Section 1, Article 5.101, Insurance Code, is
27-20 amended to read as follows:
27-21 Sec. 1. PURPOSE. The program on flexible rating is designed
27-22 to help stabilize the rates charged for insurance in lines of
27-23 property and casualty insurance covered by Subchapters A and C of
27-24 this chapter. This article does not apply to:
27-25 (1) ocean marine insurance;
27-26 (2) inland marine insurance;
28-1 (3) fidelity, surety and guaranty bond insurance;
28-2 (4) errors and omissions insurance;
28-3 (5) directors' and officers' liability insurance;
28-4 (6) general liability insurance;
28-5 (7) commercial property insurance;
28-6 (8) workers' compensation insurance;
28-7 (9) professional liability insurance for physicians
28-8 and health care providers as defined in Article 5.15-1 of this
28-9 code; [or]
28-10 (10) attorney's professional liability insurance; or
28-11 (11) passenger vehicle liability insurance.
28-12 SECTION 20. The following laws are repealed:
28-13 (1) Section 502.153, Transportation Code;
28-14 (2) Section 548.105, Transportation Code; and
28-15 (3) Article 21.81, Insurance Code.
28-16 SECTION 21. (a) Except as provided by Subsection (b) of
28-17 this section, this Act takes effect September 1, 1999.
28-18 (b) Section 20 of this Act takes effect January 1, 2000.
28-19 (c) This Act applies only to the operation of a passenger
28-20 vehicle on or after January 1, 2000. Operation of a passenger
28-21 vehicle before January 1, 2000, is governed by the law in effect
28-22 immediately before the effective date of this Act, and that law is
28-23 continued in effect for that purpose.
28-24 (d) This Act applies only to an insurance policy that is
28-25 delivered, issued for delivery, or renewed on or after January 1,
28-26 2000. A policy that is delivered, issued for delivery, or renewed
29-1 before January 1, 2000, is governed by the law as it existed
29-2 immediately before the effective date of this Act, and that law is
29-3 continued in effect for that purpose.
29-4 SECTION 22. The importance of this legislation and the
29-5 crowded condition of the calendars in both houses create an
29-6 emergency and an imperative public necessity that the
29-7 constitutional rule requiring bills to be read on three several
29-8 days in each house be suspended, and this rule is hereby suspended.