Relating to the establishment of the Texas automobile insurance public option.

The text as introduced · 580 words

90R3624 RDS-F

By: Gutierrez
S.B. No. 326

A BILL TO BE ENTITLED

AN ACT

relating to the establishment of the Texas automobile insurance

public option.

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

SECTION 1. Subtitle G, Title 10, Insurance Code, is amended

by adding Chapter 2151A to read as follows:

CHAPTER 2151A. TEXAS AUTOMOBILE INSURANCE PUBLIC OPTION

Sec. 2151A.001. DEFINITIONS. In this chapter:

(1) "Public option" means the Texas automobile

insurance public option established under Section 2151A.002.

(2) "Reserve fund" means the Texas automobile

insurance public option reserve fund established under Section

2151A.005.

Sec. 2151A.002. ESTABLISHMENT OF PUBLIC OPTION. The

department, in consultation with the comptroller and the Texas

Transportation Commission, shall establish and administer an

automobile insurance public option to provide automobile insurance

policies, including policies offering the minimum coverage

specified by Subchapter D, Chapter 601, Transportation Code, and

policies offering optional additional coverage, to individuals

eligible under Section 2151A.003.

Sec. 2151A.003. ENROLLMENT ELIGIBILITY. An individual is

eligible to enroll in the public option if the individual:

(1) is required to establish and maintain financial

responsibility for a vehicle under Chapter 601, Transportation

Code; and

(2) satisfies residency and vehicle registration

requirements established by commissioner rule.

Sec. 2151A.004. OFFER OF COVERAGE; PREMIUMS. (a) The

department shall issue under the public option:

(1) automobile insurance policies that provide at

least the minimum coverage specified by Subchapter D, Chapter 601,

Transportation Code; and

(2) automobile insurance policies that provide, in

addition to the coverage described by Subdivision (1), additional

coverage options, including:

(A) uninsured or underinsured motorist coverage;

and

(B) personal injury coverage.

(b) The department shall set premiums for policies issued

under the public option using actuarial principles to ensure fiscal

solvency, affordability, and market competitiveness. The premiums

must:

(1) except as provided by Subdivision (2), be based on

rates determined in accordance with the standards provided by

Section 2151.201; and

(2) with respect to low-income policyholders, use a

sliding scale to account for a policyholder's ability to pay the

premium.

(c) The commissioner shall adopt rules providing for

risk-based adjustments to premiums set by the department and

determining eligibility for a premium described by Subsection

(b)(2).

Sec. 2151A.005. FUNDING OF PUBLIC OPTION; FUND. (a) The

Texas automobile insurance public option reserve fund is created as

a fund outside the state treasury with the comptroller.

(b) The reserve fund consists of:

(1) premiums paid to the department from automobile

insurance policies issued under the public option;

(2) money transferred or deposited to the credit of

the reserve fund by law; and

(3) revenue that the legislature by general law

dedicates for deposit to the credit of the reserve fund.

(c) The department shall administer the reserve fund and pay

insured losses and operating expenses incurred under the public

option from the fund.

Sec. 2151A.006. CONSUMER PROTECTIONS; FRAUD PREVENTION.

The commissioner shall establish for the public option:

(1) transparent claims handling processes;

(2) an independent appeals system for disputed claims;

and

(3) a fraud detection and prevention program that

includes data analytics and interagency coordination.

Sec. 2151A.007. STUDY ON IMPACT OF PUBLIC OPTION ON

INSURANCE MARKETS. The department shall conduct a biennial study

on the effects of the public option on the automobile insurance

market in this state, including the effects of the public option on

premiums, consumer satisfaction, and the amount of uninsured

motorists.

Sec. 2151A.008. RULES. The commissioner shall adopt rules

necessary to implement this chapter.

SECTION 2. This Act takes effect September 1, 2027.