86R7402 SCL-D
By: Vo H.B. No. 4278
A BILL TO BE ENTITLED
AN ACT
relating to regulation of persons holding a certificate of
self-insurance for establishment of financial responsibility for
operating a motor vehicle.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 601.124, Transportation Code, is amended
to read as follows:
Sec. 601.124. SELF-INSURANCE. (a) A person in whose name
more than 25 motor vehicles are registered may qualify as a
self-insurer by obtaining a certificate of self-insurance issued by
the Texas Department of Insurance [department] as provided by this
section.
(b) The Texas Department of Insurance [department] may
issue a certificate of self-insurance to a person if:
(1) the person applies for the certificate; [and]
(2) the person files with the Texas Department of
Insurance a bond:
(A) in the amount of $10,000;
(B) conditioned for payment:
(i) in the amounts and under the same
circumstances as required under a motor vehicle liability insurance
policy; and
(ii) in accordance with the claims review
procedure under Subsection (c-1) or a court order;
(C) that is not cancelable before the sixth day
after the date the Texas Department of Insurance receives written
notice of the cancellation; and
(D) approved by the Texas Department of
Insurance; and
(3) the commissioner of insurance [department] is
satisfied that the person has and will continue to have the ability
to pay judgments obtained against the person.
(c) The self-insurer must supplement the certificate with
an agreement that, for accidents occurring while the certificate is
in force, the self-insurer will pay the same judgments within the
time and in the same amounts as an insurer would be obligated to pay
under an owner's motor vehicle liability insurance policy issued to
the self-insurer if such policy were issued. The agreement may
include any other requirements that the commissioner of insurance
determines are appropriate for ensuring that the self-insurer pays
a legitimate claim timely.
(c-1) The commissioner of insurance by rule shall establish
a claims review procedure under which a claimant may file a motor
vehicle collision claim against the self-insurer with the Texas
Department of Insurance. If the claimant prevails, the claimant
may recover the awarded amount from the bond filed by the
self-insurer and the self-insurer shall replenish the bond as
necessary for the bond to be in the amount described by Subsection
(b)(2)(A). A claim under the procedure is a contested case under
Chapter 2001, Government Code.
(c-2) Notwithstanding any other law, a person may file suit
against the self-insurer by using the self-insurer's assumed name
stated on a certificate filed under Chapter 71, Business & Commerce
Code, for a cause of action:
(1) provided by other law; and
(2) arising from a motor vehicle collision:
(A) occurring while the certificate is in effect;
and
(B) in which a motor vehicle registered by the
self-insurer is involved.
(d) The Texas Department of Insurance [department] for
cause, including failure to pay a legitimate claim timely or
failure to comply with a requirement imposed by the commissioner of
insurance, may cancel a certificate of self-insurance after a
hearing. Cause includes failure to pay a judgment before the 31st
day after the date the judgment becomes final.
(e) A self-insurer must receive at least five days' notice
of a hearing held under Subsection (d). The Texas Department of
Insurance [department] shall send notice of the hearing to the
self-insurer by:
(1) first class mail; or
(2) e-mail if the self-insurer has provided an e-mail
address to the Texas Department of Insurance [department] and has
elected to receive notice electronically.
(f) The Texas Department of Insurance shall suspend a
certificate under Subsection (d) for six months if the self-insurer
fails to pay a legitimate claim timely. If the self-insurer
subsequently fails to pay a legitimate claim timely, the Texas
Department of Insurance shall cancel the certificate.
(g) The commissioner of insurance may adopt rules necessary
to implement this section.
SECTION 2. Section 601.124, Transportation Code, as amended
by this Act, applies only to a certificate of self-insurance issued
on or after January 1, 2020. A certificate of self-insurance issued
before January 1, 2020, is governed by the law applicable to the
certificate immediately before the effective date of this Act, and
that law is continued in effect for that purpose.
SECTION 3. This Act takes effect September 1, 2019.