By Bivins S.B. No. 1329
77R8895 AJA-D
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; providing penalties.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 ARTICLE 1. FINANCIAL RESPONSIBILITY REQUIREMENTS
1-6 SECTION 1.01. Chapter 601, Transportation Code, is amended
1-7 by adding Subchapter N to read as follows:
1-8 SUBCHAPTER N. VERIFICATION OF COMPLIANCE WITH AND ENFORCEMENT
1-9 OF FINANCIAL RESPONSIBILITY REQUIREMENTS
1-10 Sec. 601.501. DEFINITIONS. In this subchapter:
1-11 (1) "Department" means the Texas Department of
1-12 Transportation.
1-13 (2) "Verification date" means the date on which the
1-14 department mails a written request to an owner of a motor vehicle
1-15 requiring the owner to state whether the owner has established
1-16 financial responsibility in accordance with Section 601.051(a).
1-17 Sec. 601.502. VERIFICATION OF ESTABLISHMENT OF FINANCIAL
1-18 RESPONSIBILITY THROUGH RANDOM SAMPLING. (a) The department or an
1-19 agent of the department shall randomly select samples of
1-20 registrations of motor vehicles subject to this chapter, or samples
1-21 of owners of motor vehicles subject to this chapter, to verify
1-22 whether the owner has established financial responsibility in
1-23 accordance with Section 601.051(a). A sample selected under this
1-24 section may not be classified on the basis of the owner's race,
2-1 color, religion, sex, national origin, age, marital status,
2-2 physical or mental disability, economic status, or geographic
2-3 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 who own a registered motor vehicle to verify that the
2-7 person has established financial 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, as it existed before repeal, or
2-12 601.509, including a violation that occurred while the person was
2-13 operating a motor vehicle owned by another person; or
2-14 (B) has received deferred disposition under
2-15 Article 45.051, Code of Criminal Procedure, for a violation of
2-16 Section 601.051, 601.191, 601.195, 601.196, as it existed before
2-17 repeal, or 601.509;
2-18 (2) a person whose motor vehicle registration has been
2-19 the subject of a deferred suspension under Section 601.505(a)
2-20 during the preceding four years; or
2-21 (3) a person whose driver's license or motor vehicle
2-22 registration has been suspended during the preceding four years.
2-23 (c) The department shall send to the owner of a randomly
2-24 selected motor vehicle, or to a randomly selected motor vehicle
2-25 owner, a request for information about the motor vehicle and the
2-26 owner's method of establishing financial responsibility. The
2-27 request must require the owner to state whether the owner has, as
3-1 of the verification date, established financial responsibility in
3-2 accordance with Section 601.051(a).
3-3 (d) The department by rule shall:
3-4 (1) establish the frequency of sample selection; and
3-5 (2) prescribe:
3-6 (A) the methods employed for the random
3-7 selection of samples and the procedures necessary for
3-8 implementation of the verification process, including the method of
3-9 sending the verification request, which may include certified mail,
3-10 return receipt requested;
3-11 (B) the form for verification of financial
3-12 responsibility; and
3-13 (C) the information to be requested in the
3-14 prescribed form.
3-15 (e) The department may require the information provided by
3-16 the owner to include a statement by the owner that the owner had,
3-17 as of the verification date, established financial responsibility:
3-18 (1) through liability insurance under Subchapter D,
3-19 including:
3-20 (A) the name and address of the insurer;
3-21 (B) the number of the insurance policy; and
3-22 (C) the expiration date of the insurance
3-23 coverage;
3-24 (2) by filing a surety bond with the Department of
3-25 Public Safety under Section 601.121, including:
3-26 (A) the name and address of the company issuing
3-27 the bond;
4-1 (B) the identification number of the bond; and
4-2 (C) the expiration date of the bond;
4-3 (3) by depositing cash or securities with the
4-4 comptroller under Section 601.122, including a copy of the
4-5 certificate issued by the comptroller showing compliance;
4-6 (4) by depositing cash or a cashier's check with the
4-7 county judge of the county in which the motor vehicle is registered
4-8 under Section 601.123, including a copy of the certificate issued
4-9 by the county judge showing compliance; or
4-10 (5) through self-insurance under Section 601.124,
4-11 including a copy of the certificate of self-insurance issued by the
4-12 Department of Public Safety.
4-13 (f) Not later than the 30th day after the verification date,
4-14 the owner to whom the notice is sent shall furnish the requested
4-15 information to the department in the form prescribed by the
4-16 department, accompanied by the owner's signed affirmation that the
4-17 information is true and correct.
4-18 (g) An owner whose response indicates that the owner had not
4-19 established financial responsibility in accordance with Section
4-20 601.051(a), or who fails to respond to the request, is subject to
4-21 suspension of the owner's motor vehicle registration in the manner
4-22 provided by Section 601.505.
4-23 (h) If the owner responds to the request for information by
4-24 asserting that the owner had, as of the verification date,
4-25 established financial responsibility in accordance with a method
4-26 authorized by Section 601.051(a), the department may conduct a
4-27 verification investigation as provided by Section 601.503.
5-1 Sec. 601.503. VERIFICATION INVESTIGATION. (a) To verify a
5-2 response received from an owner under Section 601.502, the
5-3 department or an agent of the department may furnish necessary
5-4 information to the insurer, surety, or officer named in the
5-5 response. Not later than the 30th day after the date of receipt of
5-6 the information, the insurer, surety, or officer shall inform the
5-7 department whether, as of the verification date, financial
5-8 responsibility had been established for the affected motor vehicle
5-9 in accordance with Section 601.051(a).
5-10 (b) If the response received from an owner under Section
5-11 601.502 states that financial responsibility has been established
5-12 through self-insurance, the department shall examine the
5-13 department's records to verify that a certificate of self-insurance
5-14 has been issued in accordance with Section 601.124.
5-15 Sec. 601.504. WARNING NOTICE. If an owner responds under
5-16 Section 601.502 that the owner has not established financial
5-17 responsibility or the owner fails to respond in a timely manner, or
5-18 if the department otherwise determines that an owner has registered
5-19 or maintained the registration of a motor vehicle without
5-20 establishing financial responsibility in accordance with Section
5-21 601.051(a), the department shall issue a warning notice to the
5-22 owner that informs the owner that the owner is not in compliance
5-23 with Section 601.051(a) and that the owner's motor vehicle
5-24 registration will be suspended on the 45th day after the date on
5-25 which the warning notice is mailed unless the owner, not later than
5-26 the 30th day after the date of the mailing of the warning notice,
5-27 establishes financial responsibility in the manner prescribed by
6-1 Section 601.505(b).
6-2 Sec. 601.505. SUSPENSION; REINSTATEMENT; EXCEPTION. (a) The
6-3 department shall suspend the registration of an owner to whom a
6-4 warning notice is issued under Section 601.504 on the 45th day
6-5 after the date of the mailing of the notice. For a first
6-6 violation, the department shall terminate the suspension on payment
6-7 by the owner of a $100 reinstatement fee and submission of proof of
6-8 financial responsibility as prescribed by the department. For a
6-9 second or subsequent violation within the four years that follow
6-10 the first violation or for a violation of Section 601.507, the
6-11 department shall terminate the suspension on the 120th day after
6-12 the effective date of the suspension on payment by the owner of a
6-13 $100 reinstatement fee and submission of proof of financial
6-14 responsibility in a manner prescribed by the department.
6-15 (b) For a first violation, the department shall defer the
6-16 suspension if the owner submits to the department, not later than
6-17 the 30th day after the date of the mailing of the warning notice
6-18 under Section 601.504, proof of financial responsibility evidenced
6-19 by a motor vehicle insurance policy that complies with Subchapter
6-20 D, the premiums for which have been prepaid for a term of at least
6-21 six months. On the earlier of the 180th day after the date of the
6-22 mailing of the warning notice or the expiration date of the
6-23 insurance policy described by this subsection, the owner shall
6-24 submit to the department evidence of renewal of the motor vehicle
6-25 insurance policy, the premiums for which have been prepaid for a
6-26 term of at least six months. If the owner fails to submit the
6-27 required evidence of renewal, the department shall impose the
7-1 suspension and reinstatement fee.
7-2 (c) Notwithstanding any other provision of this subchapter,
7-3 the department may register in accordance with Chapter 502 the
7-4 motor vehicle of an applicant for registration who:
7-5 (1) received a request for information under Section
7-6 601.502; and
7-7 (2) presents proof of financial responsibility that:
7-8 (A) complies with Section 601.051(a); and
7-9 (B) was in effect on the verification date of
7-10 the request for information.
7-11 Sec. 601.506. SUBMISSION OF FALSE PROOF. If the department
7-12 determines that the proof of financial responsibility submitted by
7-13 a motor vehicle owner under Section 601.502 is false, the
7-14 department shall suspend the owner's motor vehicle registration.
7-15 The department shall terminate the suspension on or after the 180th
7-16 day after the effective date of the suspension on payment by the
7-17 owner of a $200 reinstatement fee and submission of proof of
7-18 financial responsibility as prescribed by the department.
7-19 Sec. 601.507. OPERATION OF MOTOR VEHICLE WHILE REGISTRATION
7-20 SUSPENDED FOR FAILURE TO ESTABLISH FINANCIAL RESPONSIBILITY. (a) A
7-21 person who operates a motor vehicle while the registration of the
7-22 motor vehicle is suspended under this subchapter commits an
7-23 offense.
7-24 (b) An offense under this section is punishable by a fine of
7-25 not less than $1,000 or more than $2,000.
7-26 (c) It is a defense to prosecution under this section that
7-27 the person charged with an offense produces in court satisfactory
8-1 evidence that, at the time of the alleged offense, the owner or
8-2 operator had established financial responsibility in accordance
8-3 with Section 601.051(a).
8-4 Sec. 601.508. MAINTENANCE OF EVIDENCE OF FINANCIAL
8-5 RESPONSIBILITY. (a) Each operator of a motor vehicle subject to
8-6 Section 601.051 shall carry within the vehicle a written document
8-7 providing evidence of financial responsibility. The document must
8-8 be legible and provide information sufficient to demonstrate that
8-9 the owner or operator of the motor vehicle has established
8-10 financial responsibility as required under Section 601.051(a) and
8-11 may include:
8-12 (1) a motor vehicle liability insurance policy
8-13 covering the vehicle that satisfies Subchapter D or a photocopy of
8-14 the policy;
8-15 (2) a standard proof of motor vehicle liability
8-16 insurance form prescribed by the Texas Department of Insurance;
8-17 (3) a liability insurance binder as specified by
8-18 Section 601.080 or a certificate of liability insurance as
8-19 specified by Section 601.083;
8-20 (4) the combination of proof of purchase of the motor
8-21 vehicle within the previous 30 days and current proof of insurance;
8-22 (5) a surety bond certificate issued by the Department
8-23 of Public Safety in accordance with Section 601.121;
8-24 (6) a certificate issued by the comptroller stating
8-25 that a deposit has been made with the comptroller that complies
8-26 with Section 601.122;
8-27 (7) a certificate issued by a county judge stating
9-1 that a deposit has been made with the county judge that complies
9-2 with Section 601.123;
9-3 (8) a certificate of self-insurance issued by the
9-4 Department of Public Safety in accordance with Section 601.124; or
9-5 (9) a certificate, decal, or other document issued by
9-6 a governmental agency for a motor vehicle that indicates that the
9-7 vehicle is owned by the United States, this state, or a political
9-8 subdivision of this state.
9-9 (b) The operator of a motor vehicle shall surrender the
9-10 evidence of financial responsibility into the possession of a peace
9-11 officer, as defined by Article 2.12, Code of Criminal Procedure,
9-12 court, or court officer who requests inspection of the evidence of
9-13 financial responsibility. A person who fails or refuses to comply
9-14 with such a request is presumed to violate Section 601.051(a).
9-15 Sec. 601.509. DISPLAY OF FALSE PROOF OF FINANCIAL
9-16 RESPONSIBILITY; CRIMINAL PENALTY. (a) A person commits an offense
9-17 if the person provides evidence of financial responsibility to a
9-18 peace officer, as defined by Article 2.12, Code of Criminal
9-19 Procedure, court, or officer of the court knowing that financial
9-20 responsibility has not been established as required under Section
9-21 601.051(a) or that the evidence of financial responsibility is
9-22 illegally altered, counterfeit, or otherwise invalid.
9-23 (b) If a peace officer issues a citation to a motor vehicle
9-24 operator for displaying invalid evidence of financial
9-25 responsibility, the officer shall confiscate the invalid evidence
9-26 of financial responsibility for presentation in court.
9-27 (c) An offense under this section is a Class B misdemeanor.
10-1 Sec. 601.510. DISPOSITION OF FEES. From the reinstatement
10-2 fees collected under this subchapter, the department shall recover
10-3 its costs in implementing and administering the verification
10-4 program under this subchapter. The department shall deposit any
10-5 amounts collected that exceed the administrative costs of the
10-6 department under this subchapter in the general revenue fund.
10-7 Sec. 601.511. USE OF AGENTS BY DEPARTMENT. The department
10-8 may submit requests for proposals for contracts with private
10-9 vendors to perform the random sampling and the verification
10-10 investigations required under this subchapter as an agent of the
10-11 department. The department may enter into contracts as necessary
10-12 to implement this section.
10-13 SECTION 1.02. Section 601.051, Transportation Code, is
10-14 amended to read as follows:
10-15 Sec. 601.051. REQUIREMENT OF FINANCIAL RESPONSIBILITY. (a)
10-16 A person may not operate, register, or maintain registration of a
10-17 motor vehicle in this state unless financial responsibility is
10-18 established for that vehicle through:
10-19 (1) a motor vehicle liability insurance policy that
10-20 complies with Subchapter D;
10-21 (2) a surety bond filed under Section 601.121;
10-22 (3) a deposit under Section 601.122;
10-23 (4) a deposit under Section 601.123; or
10-24 (5) self-insurance under Section 601.124.
10-25 (b) An owner of a motor vehicle may not permit another
10-26 person to operate the motor vehicle in this state unless financial
10-27 responsibility is established for that vehicle and evidenced
11-1 through a method described by Subsection (a).
11-2 SECTION 1.03. Section 601.191, Transportation Code, is
11-3 amended to read as follows:
11-4 Sec. 601.191. OPERATION OF MOTOR VEHICLE IN VIOLATION OF
11-5 FINANCIAL RESPONSIBILITY REQUIREMENTS [MOTOR VEHICLE LIABILITY
11-6 INSURANCE REQUIREMENT; OFFENSE]. (a) A person commits an offense
11-7 if the person operates a motor vehicle or permits another person to
11-8 operate a motor vehicle in violation of Section 601.051.
11-9 (b) Except as provided by Subsection [Subsections (c) and]
11-10 (d), an offense under this section is [a misdemeanor] punishable by
11-11 a fine of not less than $500 [$175] or more than $1,000 [$350].
11-12 (c) It is a defense to prosecution under this section that
11-13 the person charged with an offense produces in court satisfactory
11-14 evidence that, at the time of the alleged offense, the owner or
11-15 operator had established financial responsibility in accordance
11-16 with Section 601.051(a). [If a person has been previously
11-17 convicted of an offense under this section, an offense under this
11-18 section is a misdemeanor punishable by a fine of not less than $350
11-19 or more than $1,000.]
11-20 (d) If the court determines that a person who has not been
11-21 previously convicted of an offense under this section is
11-22 economically unable to pay the fine, the court may reduce the fine
11-23 to less than $500 [$175].
11-24 SECTION 1.04. Section 601.195, Transportation Code, is
11-25 amended by adding Subsection (c) to read as follows:
11-26 (c) It is a defense to prosecution under this section that
11-27 the person charged with an offense produces in court satisfactory
12-1 evidence that, at the time of the alleged offense, the owner or
12-2 operator had established financial responsibility in accordance
12-3 with Section 601.051(a).
12-4 SECTION 1.05. In performing sample selection under Section
12-5 601.502, Transportation Code, as added by this Act, the Texas
12-6 Department of Transportation shall ensure that at least 500,000
12-7 samples are selected on or before September 1, 2003.
12-8 SECTION 1.06. (a) In cooperation with the Texas Department
12-9 of Insurance and the Department of Public Safety of the State of
12-10 Texas, the Texas Department of Transportation shall conduct an
12-11 evaluation of the implementation and operation of the verification
12-12 program adopted under Subchapter N, Chapter 601, Transportation
12-13 Code, as added by this Act, and of the effectiveness of the
12-14 verification program in increasing compliance with the financial
12-15 responsibility requirements established under Subchapter C, Chapter
12-16 601, Transportation Code. The evaluation must include:
12-17 (1) a computation, by year, of the number of persons
12-18 determined by the Texas Department of Transportation through the
12-19 application of the verification program to be driving without
12-20 compliance with the financial responsibility requirements
12-21 established under Subchapter C, Chapter 601, Transportation Code;
12-22 and
12-23 (2) the annual effect of the program, as determined by
12-24 the Texas Department of Insurance, on the rate for uninsured
12-25 motorist insurance coverage under Article 5.06-1, Insurance Code.
12-26 (b) The Texas Department of Transportation shall enter into
12-27 contracts, memoranda of understanding, or interagency agreements as
13-1 necessary to implement this section.
13-2 (c) The Texas Department of Transportation shall report the
13-3 results of the evaluation conducted under this section to the 81st
13-4 Legislature not later than February 1, 2009. The department shall
13-5 provide written copies of the report to the governor, the
13-6 lieutenant governor, and the speaker of the house of
13-7 representatives.
13-8 ARTICLE 2. SHORT-TERM MOTOR VEHICLE
13-9 LIABILITY INSURANCE FOR CERTAIN MOTORISTS
13-10 SECTION 2.01. Subchapter A, Chapter 5, Insurance Code, is
13-11 amended by adding Article 5.01C to read as follows:
13-12 Art. 5.01C. SHORT-TERM LIABILITY INSURANCE FOR MOTORISTS
13-13 ENTERING THIS STATE FROM MEXICO
13-14 Sec. 1. DEFINITIONS. In this article:
13-15 (1) "Insurer" means an insurance company,
13-16 interinsurance exchange, mutual, capital stock company, county
13-17 mutual, reciprocal association, Lloyd's plan insurer, or other
13-18 entity authorized to write motor vehicle insurance in this state.
13-19 (2) "Motor vehicle" means any private passenger
13-20 vehicle or utility type vehicle that has a gross weight of 25,000
13-21 pounds or less.
13-22 (3) "Short-term liability insurance policy" means an
13-23 insurance policy that:
13-24 (A) provides coverage for at least 24 hours but
13-25 not for more than one week;
13-26 (B) meets the requirements of Chapter 601,
13-27 Transportation Code; and
14-1 (C) covers liability for bodily injury, death,
14-2 and property damage arising from the use or operation of a motor
14-3 vehicle.
14-4 Sec. 2. RULES. (a) The commissioner by rule may establish a
14-5 program to provide for the sale of short-term liability insurance
14-6 policies to motorists entering this state at Texas-Mexico border
14-7 crossings and to increase the availability of those policies.
14-8 (b) The commissioner may negotiate an agreement with any
14-9 insurer under which the insurer will sell policies described by
14-10 Subsection (a) of this section.
14-11 Sec. 3. LICENSE REQUIRED. A person representing an insurer
14-12 in selling short-term liability insurance policies under this
14-13 article must be licensed under Subchapter A, Chapter 21, of this
14-14 code.
14-15 Sec. 4. FORMS. An insurer selling short-term liability
14-16 insurance policies under this article must use the policy forms
14-17 adopted by the commissioner under Article 5.06 of this code unless
14-18 the insurer is exempt from using those forms.
14-19 ARTICLE 3. UNINSURED AND UNDERINSURED MOTORIST COVERAGE
14-20 SECTION 3.01. Article 5.06-1, Insurance Code, is amended to
14-21 read as follows:
14-22 Art. 5.06-1. UNINSURED OR UNDERINSURED MOTORIST COVERAGE.
14-23 (a) [(1)] No automobile liability insurance, [(]including
14-24 insurance issued through the Texas Automobile Insurance Plan
14-25 Association [pursuant to an Assigned Risk Plan established under
14-26 authority of Section 35 of the Texas Motor Vehicle
14-27 Safety-Responsibility Act)], covering liability arising out of the
15-1 ownership, maintenance, or use of any motor vehicle shall be
15-2 delivered or issued for delivery in this state unless coverage is
15-3 provided therein or supplemental thereto, [in at least the limits
15-4 described in the Texas Motor Vehicle Safety-Responsibility Act,]
15-5 under provisions prescribed by the commissioner [Board], for the
15-6 protection of persons insured thereunder who are legally entitled
15-7 to recover damages from owners or operators of uninsured or
15-8 underinsured motor vehicles because of bodily injury, sickness, or
15-9 disease, including death, or property damage resulting therefrom.
15-10 The coverages required under this Article shall not be applicable
15-11 where any insured named in the policy shall reject the coverage in
15-12 writing; provided that unless the named insured thereafter
15-13 requests such coverage in writing, such coverage need not be
15-14 provided in or supplemental to a renewal policy where the named
15-15 insured has rejected the coverage in connection with a policy
15-16 previously issued to the named insured [him] by the same insurer or
15-17 by an affiliated insurer.
15-18 (b) [(2)] For the purpose of these coverages:
15-19 (1) "Exemplary damages" has the meaning assigned by
15-20 Section 41.001, Civil Practice and Remedies Code.
15-21 (2) "Noneconomic damages" means damages other than
15-22 compensatory damages for pecuniary loss. The term includes damages
15-23 for physical pain and mental anguish, loss of consortium,
15-24 disfigurement, physical impairment, or loss of companionship and
15-25 society. The term does not include exemplary damages.
15-26 (3) "Uninsured [(a) the term "uninsured] motor
15-27 vehicle" shall, subject to the terms and conditions of such
16-1 coverage, be deemed to include an insured motor vehicle where the
16-2 liability insurer thereof is unable to make payment with respect to
16-3 the legal liability of its insured within the limits specified
16-4 therein because of insolvency.
16-5 (4) "Underinsured [(b) The term "underinsured] motor
16-6 vehicle" means an insured motor vehicle on which there is valid and
16-7 collectible liability insurance coverage with limits of liability
16-8 for the owner or operator which were originally lower than, or have
16-9 been reduced by payment of claims arising from the same accident
16-10 to, an amount less than the limit of liability stated in the
16-11 underinsured coverage of the insured's policy.
16-12 (c) The commissioner [Board] may, in the policy forms
16-13 adopted under Article 5.06 of this code, define "uninsured motor
16-14 vehicle" to exclude certain motor vehicles whose operators are in
16-15 fact uninsured.
16-16 (d) The portion of a policy form adopted under Article 5.06
16-17 of this code to provide coverage under this article shall include
16-18 provisions that, regardless of the number of persons insured,
16-19 policies or bonds applicable, vehicles involved, or claims made,
16-20 the total aggregate limit of liability to any one person who
16-21 sustains bodily injury or property damage as the result of any one
16-22 occurrence shall not exceed the limit of liability for these
16-23 coverages as stated in the policy and the total aggregate limit of
16-24 liability to all claimants, if more than one, shall not exceed the
16-25 total limit of liability per occurrence as stated in the policy;
16-26 and shall provide for the exclusion of the recovery of damages for
16-27 bodily injury or property damage or both resulting from the
17-1 intentional acts of the insured. The portion of a policy form
17-2 adopted under Article 5.06 of this code to provide coverage under
17-3 this article shall require that in order for the insured to recover
17-4 under the uninsured motorist coverages where the owner or operator
17-5 of any motor vehicle which causes bodily injury or property damage
17-6 to the insured is unknown, actual physical contact must have
17-7 occurred between the motor vehicle owned or operated by such
17-8 unknown person and the person or property of the insured.
17-9 (e) Except as provided by Subsection (f) of this article,
17-10 the [(3) The] limits of liability for bodily injury, sickness, or
17-11 disease, including death, shall be offered to the insured in
17-12 amounts not less than those prescribed in Chapter 601,
17-13 Transportation Code, [the Texas Motor Vehicle Safety-Responsibility
17-14 Act] and such higher available limits as may be desired by the
17-15 insured, but not greater than the limits of liability specified in
17-16 the bodily injury liability provisions of the insured's policy.
17-17 (f) The named insured may elect to waive coverage under this
17-18 article for recovery of noneconomic and exemplary damages resulting
17-19 from bodily injury, sickness, or disease, including death. If an
17-20 insured elects to waive coverage under this subsection, Subsection
17-21 (e) of this article does not apply to the limits of liability that
17-22 are applicable to the coverage provided under the policy issued to
17-23 the named insured for damages resulting from bodily injury,
17-24 sickness, or disease, including death. The commissioner by rule
17-25 may adopt minimum limits of liability applicable to those damages.
17-26 Waiver of coverage under this subsection does not affect the
17-27 insured's right to bring an action for noneconomic and exemplary
18-1 damages against a responsible party.
18-2 (g) [(4)(a)] Coverage for property damage shall be offered
18-3 to the insured in amounts not less than those prescribed in Chapter
18-4 601, Transportation Code, [the Texas Motor Vehicle
18-5 Safety-Responsibility Act] and such higher available limits as may
18-6 be desired by the insured, but not greater than limits of liability
18-7 specified in the property damage liability provisions of the
18-8 insured's policy, subject to a deductible amount of $250.
18-9 (h) [(b)] If the insured has collision coverage and
18-10 uninsured or underinsured property damage liability coverage, the
18-11 insured may recover under the policy coverage chosen by the
18-12 insured. In the event neither coverage is sufficient alone to
18-13 cover all damage resulting from a single occurrence, the insured
18-14 may recover under both coverages. When recovering under both
18-15 coverages, the insured shall designate one coverage as the primary
18-16 coverage and pay the deductible applicable to that coverage. The
18-17 primary coverage must be exhausted before any recovery is made
18-18 under the secondary coverage. If both coverages are utilized in
18-19 the payment of damages from a single occurrence, the insured shall
18-20 not be required to pay the deductible applicable to the secondary
18-21 coverage when the amount of the deductible otherwise applicable to
18-22 the secondary coverage is the same as or less than the amount of
18-23 the deductible applicable to the primary coverage. If both
18-24 coverages are utilized in the payment of damages from a single
18-25 occurrence and the amount of the deductible otherwise applicable to
18-26 the secondary coverage is greater than the amount of the deductible
18-27 applicable to the primary coverage, the insured shall be required
19-1 to pay in respect of the secondary coverage only the difference
19-2 between the amount of the two deductibles. In no event shall the
19-3 insured recover under both coverages more than the actual damages
19-4 suffered.
19-5 (i) [(5)] The underinsured motorist coverage shall provide
19-6 for payment to the insured of all sums which the insured [he] shall
19-7 be legally entitled to recover as damages from owners or operators
19-8 of underinsured motor vehicles because of bodily injury or property
19-9 damage in an amount up to the limit specified in the policy,
19-10 reduced by the amount recovered or recoverable from the insurer of
19-11 the underinsured motor vehicle. If the named insured has waived
19-12 coverage under Subsection (f) of this article for recovery of
19-13 noneconomic and exemplary damages, the amount paid to the insured
19-14 may not include any amount attributable to noneconomic and
19-15 exemplary damages.
19-16 (j) [(6)] In the event of payment to any person under any
19-17 coverage required by this article [Section] and subject to the
19-18 terms and conditions of such coverage, the insurer making such
19-19 payment shall, to the extent thereof, be entitled to the proceeds
19-20 of any settlement or judgment resulting from the exercise of any
19-21 rights of recovery of such person against any person or
19-22 organization legally responsible for the bodily injury, sickness or
19-23 disease, or death for which such payment is made, including the
19-24 proceeds recoverable from the assets of the insolvent insurer;
19-25 provided, however, whenever an insurer shall make payment under a
19-26 policy of insurance issued pursuant to this article [Act], which
19-27 payment is occasioned by the insolvency of an insurer, the insured
20-1 of said insolvent insurer shall be given credit in any judgment
20-2 obtained against the insured [him], with respect to the insured's
20-3 [his] legal liability for such damages, to the extent of such
20-4 payment, but, subject to Section 12 of Article 21.28-C of this
20-5 code, such paying insurer shall have the right to proceed directly
20-6 against the insolvent insurer or its receiver, and in pursuance of
20-7 such right such paying insurer shall possess any rights which the
20-8 insured of the insolvent company might otherwise have had if the
20-9 insured of the insolvent insurer had made the payment.
20-10 (k) [(7)] If a dispute exists as to whether a motor vehicle
20-11 is uninsured, the burden of proof as to that issue shall be upon
20-12 the insurer.
20-13 (l) [(8)] Notwithstanding Section 15.032, Civil Practice and
20-14 Remedies Code, an action against an insurer in relation to the
20-15 coverage provided under this article, including an action to
20-16 enforce that coverage, may be brought only:
20-17 (1) [(a)] in the county in which the policyholder or
20-18 beneficiary instituting the suit resided at the time of the
20-19 accident; or
20-20 (2) [(b)] in the county in which the accident
20-21 involving the uninsured or underinsured motor vehicle occurred.
20-22 ARTICLE 4. PROOF OF INSURANCE CARDS
20-23 SECTION 4.01. Subchapter A, Chapter 5, Insurance Code, is
20-24 amended by adding Article 5.06-7 to read as follows:
20-25 Art. 5.06-7. FORM AND APPEARANCE OF PROOF OF MOTOR VEHICLE
20-26 LIABILITY INSURANCE. (a) The commissioner shall prescribe by rule
20-27 a standard appearance and form for a card issued by an insurer as
21-1 proof of motor vehicle liability insurance prescribed by Section
21-2 601.081, Transportation Code.
21-3 (b) In prescribing the appearance of a proof of motor
21-4 vehicle liability insurance card under Subsection (a) of this
21-5 article, the commissioner shall require an appearance that is:
21-6 (1) difficult to alter, duplicate, or counterfeit; and
21-7 (2) not cost-prohibitive for consumers.
21-8 (c) A card issued as proof of motor vehicle liability
21-9 insurance issued in this state by an insurer must conform to the
21-10 form and appearance prescribed under Subsection (a) of this
21-11 article.
21-12 SECTION 4.02. (a) The commissioner of insurance shall
21-13 prescribe the standard appearance and form of proof of motor
21-14 vehicle liability insurance cards as required by Article 5.06-7,
21-15 Insurance Code, as added by this Act, not later than December 1,
21-16 2001.
21-17 (b) A card issued by an insurer as proof of motor vehicle
21-18 liability insurance that is issued on or after January 1, 2002,
21-19 must conform with rules established by the commissioner of
21-20 insurance under Article 5.06-7, Insurance Code, as added by this
21-21 Act. Proof of motor vehicle liability insurance that is issued
21-22 before January 1, 2002, is governed by the law as it existed
21-23 immediately before the effective date of this Act, and that law is
21-24 continued in effect for that purpose.
21-25 ARTICLE 5. CONDUCT THAT CONSTITUTES THE BUSINESS OF INSURANCE
21-26 SECTION 5.01. Section 101.051(b), Insurance Code, is amended
21-27 to read as follows:
22-1 (b) The following acts in this state constitute the business
22-2 of insurance in this state:
22-3 (1) making or proposing to make, as an insurer, an
22-4 insurance contract;
22-5 (2) making or proposing to make, as guarantor or
22-6 surety, a guaranty or suretyship contract as a vocation and not
22-7 merely incidental to another legitimate business or activity of the
22-8 guarantor or surety;
22-9 (3) taking or receiving an insurance application;
22-10 (4) receiving or collecting any consideration for
22-11 insurance, including:
22-12 (A) a premium;
22-13 (B) a commission;
22-14 (C) a membership fee;
22-15 (D) an assessment; or
22-16 (E) dues;
22-17 (5) issuing or delivering an insurance contract to:
22-18 (A) a resident of this state; or
22-19 (B) a person authorized to do business in this
22-20 state;
22-21 (6) directly or indirectly acting as an agent for or
22-22 otherwise representing or assisting an insurer or other person in:
22-23 (A) soliciting, negotiating, procuring, or
22-24 effectuating insurance or a renewal of insurance;
22-25 (B) disseminating information relating to
22-26 coverage or rates;
22-27 (C) forwarding an insurance application;
23-1 (D) delivering an insurance policy or contract;
23-2 (E) inspecting a risk;
23-3 (F) setting a rate;
23-4 (G) investigating or adjusting a claim or loss;
23-5 (H) transacting a matter after the effectuation
23-6 of the contract that arises out of the contract; or
23-7 (I) representing or assisting an insurer or
23-8 other person in any other manner in the transaction of insurance
23-9 with respect to a subject of insurance that is resident, located,
23-10 or to be performed in this state;
23-11 (7) contracting to provide [in this state]
23-12 indemnification or expense reimbursement for a medical expense by
23-13 direct payment, reimbursement, or otherwise [to a person domiciled
23-14 in this state or for a risk located in this state], whether as an
23-15 insurer, agent, administrator, trust, or funding mechanism or by
23-16 another method;
23-17 (8) doing any kind of insurance business specifically
23-18 recognized as constituting insurance business within the meaning of
23-19 statutes relating to insurance;
23-20 (9) doing or proposing to do any insurance business
23-21 that is in substance equivalent to conduct described by
23-22 Subdivisions (1)-(8) in a manner designed to evade statutes
23-23 relating to insurance; or
23-24 (10) any other transaction of business in this state
23-25 by an insurer.
23-26 ARTICLE 6. REPEALER
23-27 SECTION 6.01. The following laws are repealed:
24-1 (1) Section 601.053, Transportation Code;
24-2 (2) Section 601.193, Transportation Code;
24-3 (3) Subchapter H, Chapter 601, Transportation Code;
24-4 and
24-5 (4) Subchapter I, Chapter 601, Transportation Code.
24-6 ARTICLE 7. TRANSITION; EFFECTIVE DATE
24-7 SECTION 7.01. The change in law made by this Act to Chapter
24-8 601, Transportation Code, applies only to punishment for an offense
24-9 committed on or after the effective date of this Act. For purposes
24-10 of this section, an offense is committed before the effective date
24-11 of this Act if any element of the offense occurs before that date.
24-12 SECTION 7.02. Article 5.06-1, Insurance Code, as amended by
24-13 this Act, applies only to a motor vehicle liability insurance
24-14 policy that is delivered, issued for delivery, or renewed on or
24-15 after January 1, 2002. A policy that is delivered, issued for
24-16 delivery, or renewed before January 1, 2002, is governed by the law
24-17 as it existed immediately before the effective date of this Act,
24-18 and that law is continued in effect for that purpose.
24-19 SECTION 7.03. (a) Except as provided by Subsection (b) of
24-20 this section, this Act takes effect September 1, 2001.
24-21 (b) Article 1 of this Act takes effect January 1, 2003.