83R2367 PMO-D

By: Lucio S.B. No. 491

A BILL TO BE ENTITLED

AN ACT

relating to establishing a personal automobile insurance program for certain low-income individuals; authorizing a fee.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subtitle G, Title 10, Insurance Code, is amended by adding Chapter 2155 to read as follows:

CHAPTER 2155. PERSONAL AUTOMOBILE INSURANCE FOR LOW-INCOME

INDIVIDUALS

Sec. 2155.001. DEFINITION. In this chapter, "motor vehicle" means a self-propelled private passenger vehicle for use on a highway.

Sec. 2155.002. ESTABLISHMENT OF PROGRAM. (a) The commissioner by rule shall establish a program under this chapter to provide to low-income individuals financial responsibility coverage required by Subchapter D, Chapter 601, Transportation Code.

(b) An insurer writing automobile insurance in this state, including an insurance company, reciprocal or interinsurance exchange, mutual insurance company, capital stock company, county mutual insurance company, Lloyd's plan insurer, or other entity, shall provide coverage under the program as required by rules adopted by the commissioner.

Sec. 2155.003. COVERAGE PROVIDED. The program established under this chapter may only provide personal automobile insurance in the minimum coverage amounts required by Subchapter D, Chapter 601, Transportation Code.

Sec. 2155.004. COVERED INDIVIDUALS. (a) Subject to Subsection (b), coverage under this chapter may be made available only to an individual who:

(1) is a licensed driver with not less than three years of driving experience; and

(2) qualifies as a good driver as defined by rules adopted by the commissioner based on factors the commissioner considers appropriate.

(b) Coverage may be made available only to an individual described by Subsection (a) who:

(1) has a household income that is less than or equal to 250 percent of the federal poverty guidelines as determined by the United States Department of Health and Human Services; or

(2) after diligent efforts, obtained from an insurer writing automobile insurance in this state not fewer than two offers of coverage for a premium amount that is more than 10 percent of the applicant's gross income.

(c) Notwithstanding Subsection (b), an applicant is not eligible for coverage if the applicant is claimed during the coverage period as a dependent for federal income tax purposes unless:

(1) the person who claims the applicant as a dependent has a household income that is less than or equal to 250 percent of the federal poverty guidelines as determined by the United States Department of Health and Human Services; or

(2) the applicant, after diligent efforts, obtained from an insurer writing automobile insurance in this state not fewer than two offers of coverage for the applicant for a premium amount that is more than 10 percent of the gross income of the person who claims the applicant as a dependent.

Sec. 2155.005. COVERED MOTOR VEHICLES. (a) Except as provided by Subsection (b), coverage shall be available only for an insurable motor vehicle registered in this state and valued at not more than $20,000.

(b) Coverage may be made available for an insurable motor vehicle not registered in this state and valued at not more than $20,000 if the motor vehicle is registered in this state not later than the 30th day after the date coverage is issued. The coverage terminates on the 31st day after the date coverage is issued if the motor vehicle is not registered in this state before that date.

Sec. 2155.006. RATE STANDARDS. (a) Rates for insurance provided under this chapter must be just, reasonable, not excessive, not confiscatory, and not unfairly discriminatory for the risks to which the rates apply.

(b) The program shall offer premiums:

(1) on a sliding scale, based on financial need determined by the applicant's household income and living expenses; or

(2) based on past and prospective experience and other factors the commissioner considers relevant, including the varying conditions and hazards and the cost of living, in the county in which the motor vehicle is registered.

(c) The program may not offer coverage without requiring payment of premium.

Sec. 2155.007. APPEALS PROCESS. The commissioner shall establish by rule a process by which an applicant may appeal the denial of an application for coverage under this chapter.

Sec. 2155.008. TRAINING AND PUBLIC EDUCATION. (a) The commissioner shall establish a voluntary training program about the program established under this chapter for insurers writing automobile insurance in this state. The commissioner may charge each insurer participating in the training program a fee for expenses incurred by the department in implementing the training program.

(b) An insurer writing automobile insurance in this state shall inform a prospective policyholder who seeks coverage under Subchapter D, Chapter 601, Transportation Code, of the program established under this chapter.

Sec. 2155.009. RULES. The commissioner shall adopt rules necessary to implement and enforce this chapter.

SECTION 2. The commissioner of insurance shall ensure that the program established under Chapter 2155, Insurance Code, as added by this Act, is fully operational in a manner that requires insurers writing automobile insurance in this state to provide coverage under the program not later than January 1, 2014.

SECTION 3. This Act takes effect September 1, 2013.