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You are here: Home . rules . 2008 . 0324-059

SUBCHAPTER A. Automobile Insurance

Division 3. Miscellaneous Interpretations

§5.207. Financial Responsibility Consumer Outreach Program

1. INTRODUCTION.

The Texas Department of Insurance proposes new §5.207, concerning a new Financial Responsibility Consumer Outreach Program (Program). The new section is necessary to implement the provisions of §601.072 of the Transportation Code, enacted by SB 502, 80th Legislature, Regular Session, effective September 1, 2007.

Section 601.072(c) requires the Department to establish an outreach program to inform persons of the requirements of the Texas Motor Vehicle Safety Responsibility Act (Act) (Transportation Code Chapter 601) and the ability to comply with the financial responsibility requirements of the Act through motor vehicle liability insurance coverage. Section 601.072(c) also requires the Commissioner of Insurance to establish the requirements for the outreach program by rule. Section 601.072(c) specifies that the outreach program must be designed to encourage compliance with the financial responsibility requirements of the Act and must be made available in English and Spanish.

Proposed new §5.207(a) states the purpose of the section which is to establish the requirements for the Financial Responsibility Consumer Outreach Program. Proposed new §5.207(b) - (e) establish the requirements for the Program. Proposed new §5.207(c) requires the Department to develop and periodically update Program materials that are designed to encourage compliance with the financial responsibility requirements. Under proposed §5.207(d), the materials must include information on minimum coverage amounts required to establish financial responsibility under the Act; how to comply with the Act through motor vehicle liability insurance coverage; and how to obtain motor vehicle liability insurance coverage. Proposed §5.207(e) provides that the materials may be in the form of publications, brochures, and fliers and requires that the materials be made available in English and Spanish. Proposed §5.207(e) also requires that the materials be made available on the Department's website and that they may also be distributed by other means. Under proposed §5.207(f), the Department may also provide press releases and educational sessions. Under proposed §5.207(g), the materials may be incorporated into existing Department consumer outreach programs and program materials.

2. FISCAL NOTE. Marilyn Hamilton, Associate Commissioner for the Property and Casualty Division, has determined that for each year of the first five years the proposed section is in effect, there will be no fiscal impact to state and local governments as a result of the enforcement or administration of the proposal. There will be no effect on local employment or the local economy as a result of the proposal.

3. PUBLIC BENEFIT/COST NOTE. Ms. Hamilton also has determined that for each year of the first five years the proposed section is in effect, the public benefits anticipated as a result of the proposal are increased consumer education and awareness of the requirements of the Texas Motor Vehicle Safety Responsibility Act and the ability to comply with the requirements of the Act through motor vehicle liability insurance coverage resulting in increased compliance with the Act.

No individuals or entities are required to comply with the proposed requirements except the Department. The costs to the Department to comply with the proposal are negligible because the required materials may be incorporated into existing Department consumer outreach programs, publications, and other related materials. Any costs incurred are a result of the enactment of SB 502 by the 80 th Texas Legislature and not the proposed rule.

4. ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS FOR SMALL AND MICRO BUSINESSES. As required by the Government Code §2006.002(c), the Department has determined that the proposal will not have an adverse economic effect on small or micro businesses because the proposed rule does not apply to any such businesses. The proposed section applies only to the Department. In accordance with the Government Code §2006.002(c), the Department has therefore determined that a regulatory flexibility analysis is not required because the proposal will not have an adverse impact on small or micro businesses.

5. TAKINGS IMPACT ASSESSMENT. The Department has determined that no private real property interests are affected by this proposal and that this proposal does not restrict or limit an owner's right to property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking or require a takings impact assessment under the Government Code §2007.043.

6. REQUEST FOR PUBLIC COMMENT. To be considered, written comments on the proposal must be submitted no later than 5:00 p.m. on May 5, 2008, to Gene C. Jarmon, General Counsel and Chief Clerk, Mail Code 113-2A, Texas Department of Insurance, P. O. Box 149104, Austin, Texas 78714-9104. An additional copy of the comment must be simultaneously submitted to Marilyn Hamilton, Associate Commissioner, Property & Casualty Program, Mail Code 104-PC, Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714-9104. Any request for a public hearing should be submitted separately to the Office of the Chief Clerk before the close of the public comment period. If a hearing is held, written and oral comments presented at the hearing will be considered.

7. STATUTORY AUTHORITY. The new section is proposed pursuant to the Transportation Code §601.072(c) and the Insurance Code §36.001. The Transportation Code §601.072(c) requires the Commissioner of Insurance to establish the requirements for an outreach program by rule to inform persons of the requirements of Chapter 601 of the Transportation Code (Texas Motor Vehicle Safety Responsibility Act) and the ability to comply with the financial responsibility requirements of Chapter 601 through motor vehicle liability insurance coverage. The Insurance Code §36.001 provides that the Commissioner of Insurance may adopt any rules necessary and appropriate to implement the powers and duties of the Department under the Insurance Code and other laws of this state.

8. CROSS REFERENCE TO STATUTE. The following statute is affected by this proposal:

Rule Statute

§5.207 Transportation Code §601.072(c)

9. TEXT.

§5.207. Financial Responsibility Consumer Outreach Program.

(a) The purpose of this section is to establish the requirements for the Financial Responsibility Consumer Outreach Program (Program), which the department is required to establish under Transportation Code §601.072(c).

(b) As required under Transportation Code §601.072(c), the Program shall inform consumers of the requirements of the Texas Motor Vehicle Safety Responsibility Act (Act) (Transportation Code, Chapter 601) and the ability to comply with the financial responsibility requirements of the Act through motor vehicle liability insurance coverage.

(c) The department shall develop and periodically update Program materials that are designed to encourage compliance with the financial responsibility requirements of the Act.

(d) The Program materials shall include information on:

(1) minimum coverage amounts required to establish financial responsibility under the Act;

(2) how to comply with the Act through motor vehicle liability insurance coverage; and

(3) how to obtain motor vehicle liability insurance coverage.

(e) The Program materials may be in the form of publications, brochures, and fliers. Pursuant to Transportation Code §601.072(c), the Program materials must be made available in English and Spanish. The Program materials must be made available on the department's website and may also be distributed by other means.

(f) The department may also provide press releases and educational sessions.

(g) The Program materials may be incorporated into existing department consumer outreach programs and materials.



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