HBA-MAJ H.B. 805 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 805 By: Jones, Jesse Insurance 3/31/1999 Introduced BACKGROUND AND PURPOSE The U.S. Census Bureau estimates that close to two million people 65 years or older live in Texas. Many of these individuals live on fixed, low incomes and may not be able to meet all their financial obligations. Nevertheless, many of these citizens remain independent and rely on the use of their automobiles. Rising automobile insurance premiums are a burden on these citizens, and may be unfair considering that senior citizens have better-than-average risk profiles compared with those in younger age groups. H.B. 805 prohibits a motor vehicle insurer from increasing the amount charged for premiums for liability, medical payments, personal injury protection, and collision coverage for an insured who is licensed to drive in Texas, is 65 years of age or older, and, during the preceding three years, has held a driver's license, has not been convicted of a violation of a traffic safety regulation that involves a moving vehicle, and has not been found at fault in a motor vehicle accident. Under this bill, an insured is ineligible for the limitation on motor vehicle insurance premiums if the insured has been convicted of driving under the influence or criminal homicide. In addition, the limitation on increases in premiums does not affect the ability of an insurer to increase the amount of premiums charged an eligible person for a motor vehicle if the value of the motor vehicle designated to be driven by the eligible person increases. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the commissioner of insurance in SECTION 1 (Article 5.03-6, Insurance Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter A, Chapter 5, Insurance Code, by adding Article 5.03-6, as follows: Art. 5.03-6. LIMITATION ON PREMIUM INCREASES FOR CERTAIN COVERED INDIVIDUALS 65 YEARS OF AGE OR OLDER. Sec. 1. DEFINITIONS. Defines "applicant," "driving record," "insurer," "motor vehicle," and "traffic safety regulation." Sec. 2. LIMITATION ON PREMIUM INCREASES; CONDITIONS FOR ELIGIBILITY. (a) Prohibits an insurer who delivers or issues for delivery in this state a motor vehicle insurance policy from increasing the amount charged for premiums for liability, medical payments, personal injury protection, and collision coverage to an amount that exceeds the amount charged for that coverage on the date that the insurer receives written verification from the insured that the insured or a family member covered by the policy is eligible under Subsection (b) of this section. (b) Provides that for an applicant to be eligible for the limitation on premium increases required under Subsection (a), the applicant must be licensed to drive in this state, be 65 years of age or older, and during the three years preceding the date the application is filed have held a driver's license, have not been convicted of a violation of a traffic safety regulation that involves a moving vehicle, and have not been found at fault in a motor vehicle accident. (c) Provides that an applicant is ineligible for the limitation on motor vehicle insurance premium increases under this article if the applicant has been convicted of an offense relating to the operation of a motor vehicle under Chapter 49, Penal Code (Intoxication and Alcoholic Beverage Offenses), Article 6701l-1, V.T.C.S. (Intoxicated Driver; Penalty), as that statute existed before repeal by Chapter 900, Acts of the 73rd Legislature, Regular Session, 1993, or Section 19.05, Penal Code (Criminal Homicide), as that statute existed before amendment by Chapter 900, Acts of the 73rd Legislature, Regular Session, 1993, or another state's statute similar to a statute described by this subsection. (d) Provides that an applicant, for purposes of Subsections (b) and (c), is considered to have been convicted in a case if a sentence is imposed or if the applicant receives community supervision or analogous treatment under the law of another state. (e) Authorizes the commissioner of insurance (commissioner), by rule, to establish additional requirements for limitations on premium increases under this article. Authorizes the commissioner to adopt other rules necessary for the implementation of this article. Sec. 3. INELIGIBILITY; REVOCATION OF PREMIUM LIMITATION; EXCEPTION. (a) Provides that an individual is ineligible for a limitation on increases in motor vehicle insurance premiums under this article after the first date on which the individual fails to satisfy the requirements of Section 2 of this article unless the individual reestablishes eligibility under this article. (b) Provides that the limitation on increases in motor vehicle insurance premiums required under this article does not apply to person who knowingly provides false information in or with the application for the limitation. (c) Provides that the limitation in increases in motor vehicle insurance premiums required under this article does not affect the ability of an insurer to increase the amount of premiums charged an eligible person for a motor vehicle if the value of the motor vehicle designated to be driven by the eligible person increases. Provides that a premium increase made under this subsection reflect only the increased risk resulting from the increase in the value in the motor vehicle. SECTION 2. Makes application of this Act prospective as to insurance policies delivered, issued for delivery, or renewed on or after January 1, 2000. SECTION 3. Effective date: September 1, 1999. SECTION 4. Emergency clause.