By Grusendorf H.B. No. 999
77R1225 PB-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the establishment of an assigned risk insurance plan
1-3 for certain transporters of motor vehicles.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. The heading to Subchapter F, Chapter 21, Insurance
1-6 Code, is amended to read as follows:
1-7 SUBCHAPTER F. CERTAIN INSURANCE PROGRAMS RELATING TO MOTOR
1-8 VEHICLES [JUDICIAL REVIEW]
1-9 SECTION 2. Subchapter F, Chapter 21, Insurance Code, is
1-10 amended by adding Article 21.82 to read as follows:
1-11 Art. 21.82. TEXAS ASSIGNED RISK PLAN FOR DRIVE-A-WAY
1-12 OPERATORS
1-13 Sec. 1. DEFINITIONS. In this article:
1-14 (1) "Assigned risk plan" means the Texas Assigned Risk
1-15 Plan for Drive-a-way Operators established under this article.
1-16 (2) "Authorized insurer" means any insurer, other than
1-17 a county mutual insurance company, that is authorized by the
1-18 department to write motor vehicle liability insurance coverage
1-19 under Chapter 5 of this code.
1-20 (3) "Dealer" has the meaning assigned by Section
1-21 503.001, Transportation Code.
1-22 (4) "Drive-a-way operator" has the meaning assigned by
1-23 Section 503.001, Transportation Code. The term includes a person
1-24 who transports a motor vehicle from one dealer to another.
2-1 (5) "Insurance" means an insurance policy that meets
2-2 the requirements of Chapter 601, Transportation Code.
2-3 (6) "Plan of operation" means the plan for operating
2-4 the assigned risk plan to provide a means by which insurance may be
2-5 assigned to an eligible drive-a-way operator.
2-6 Sec. 2. CREATION OF ASSIGNED RISK PLAN. (a) The Texas
2-7 Assigned Risk Plan for Drive-a-way Operators is established. The
2-8 assigned risk plan is a nonprofit corporate body composed of all
2-9 authorized insurers. Each authorized insurer shall be a member of
2-10 the assigned risk plan and shall remain a member of the assigned
2-11 risk plan as long as that plan is in existence as a condition of
2-12 the insurer's authority to write motor vehicle liability insurance
2-13 in this state.
2-14 (b) The assigned risk plan shall be administered by a
2-15 governing committee composed of 15 members selected as follows:
2-16 (1) eight members who represent the interests of
2-17 insurers, selected by the members of the assigned risk plan
2-18 according to a method determined by those members;
2-19 (2) five members who represent the interests of
2-20 dealers, selected according to a method determined by dealers; and
2-21 (3) two members who are licensed drive-a-way
2-22 operators, selected by the commissioner.
2-23 (c) To be eligible to serve on the governing committee as a
2-24 representative of insurers, a person must be a full-time employee
2-25 of an authorized insurer.
2-26 Sec. 3. AUTHORITY OF RISK PLAN; PLAN OF OPERATION. (a) The
2-27 assigned risk plan has the powers granted to a nonprofit
3-1 corporation under the Texas Non-Profit Corporation Act (Article
3-2 1396-1.01 et seq., Vernon's Texas Civil Statutes).
3-3 (b) The governing committee is responsible for the
3-4 administration of the assigned risk plan through the plan of
3-5 operation.
3-6 (c) The plan of operation of the assigned risk plan must
3-7 provide for the efficient, economical, fair, and nondiscriminatory
3-8 administration of the assigned risk plan.
3-9 (d) Subject to the approval of the commissioner, the
3-10 governing committee may make and amend the plan of operation.
3-11 (e) If the commissioner at any time believes that the plan
3-12 of operation does not comply with Chapter 601, Transportation Code,
3-13 the commissioner shall notify the governing committee in writing to
3-14 request corrective action by the governing committee.
3-15 (f) The plan of operation must contain incentive programs to
3-16 encourage members of the assigned risk plan to write motor vehicle
3-17 liability insurance for drive-a-way operators on a voluntary basis
3-18 and to minimize the use of the assigned risk plan as a means to
3-19 obtain that insurance. An incentive program is effective on
3-20 approval of the commissioner.
3-21 Sec. 4. ASSESSMENTS. (a) The assigned risk plan may collect
3-22 funds from the member insurers to provide for the operation of the
3-23 assigned risk plan. Assessments must be made on each member in the
3-24 proportion that the number of motor vehicle liability insurance
3-25 policies written by that insurer in this state bears to the total
3-26 number of motor vehicle liability insurance policies written by all
3-27 authorized insurers in this state.
4-1 (b) If an assessment made on a member insurer is not paid on
4-2 or before the 30th day after the date of the assessment, the
4-3 governing committee may bring an action to collect the outstanding
4-4 assessment and shall report the failure to pay to the commissioner,
4-5 who may institute a disciplinary action under Chapter 82 of this
4-6 code.
4-7 Sec. 5. DUTIES AND FUNCTIONS OF ASSIGNED RISK PLAN. (a) The
4-8 assigned risk plan shall provide a means by which insurance may be
4-9 assigned to an authorized insurer for a drive-a-way operator, as
4-10 required by the Texas Department of Transportation or any other
4-11 governmental entity, to show proof of motor vehicle liability
4-12 insurance coverage to engage in business as a drive-a-way operator.
4-13 (b) An applicant is not eligible for insurance through the
4-14 assigned risk plan unless the applicant and the servicing insurance
4-15 agent certify as part of the application to the assigned risk plan
4-16 that the applicant has been rejected for motor vehicle liability
4-17 insurance by at least two insurers licensed to do business in this
4-18 state and actually writing motor vehicle insurance in this state.
4-19 Sec. 6. INSURANCE RATES. (a) At least annually, the
4-20 commissioner shall conduct a hearing to determine appropriate rates
4-21 to be charged for insurance provided through the assigned risk
4-22 plan. The assigned risk plan may appear as a matter of right,
4-23 shall be admitted as a party to present testimony at the hearing,
4-24 and may file information for consideration by the commissioner.
4-25 (b) The commissioner shall determine and prescribe rates
4-26 that are just, reasonable, adequate, not excessive, not
4-27 confiscatory, and not unfairly discriminatory for the risks to
5-1 which they apply. Rates shall be set in an amount sufficient to
5-2 carry all claims to maturity and to meet the expenses incurred in
5-3 the writing and servicing of the business. In making a
5-4 determination, the commissioner shall consider the reports of
5-5 aggregated premiums earned and losses and expenses incurred in the
5-6 writing of motor vehicle liability insurance through the assigned
5-7 risk plan collected under the statistical plans adopted under
5-8 Subsection (c).
5-9 (c) The commissioner shall adopt rules and statistical plans
5-10 to be used by each insurer in the recording and reporting of:
5-11 (1) the insurer's premium, loss, and expense
5-12 experience, reported separately for business assigned to the
5-13 insurer; and
5-14 (2) other information required by the commissioner.
5-15 Sec. 7. IMMUNITY FROM LIABILITY. The assigned risk plan, a
5-16 member of the governing committee, and any employee of the assigned
5-17 risk plan are not personally liable for any act performed in good
5-18 faith within the scope of the person's authority as determined
5-19 under this article or the plan of operation or for damages
5-20 occasioned by the person's official act or omission, other than an
5-21 act or omission that is corrupt or malicious.
5-22 SECTION 3. The Texas Assigned Risk Plan for Drive-a-way
5-23 Operators is not required to issue a policy under Article 21.82,
5-24 Insurance Code, as added by this Act, until January 1, 2002.
5-25 SECTION 4. This Act takes effect September 1, 2001.