MISSISSIPPI LEGISLATURE

1998 Regular Session

To: Insurance

By: Representative Brown

AN ACT TO PROVIDE THAT THERE SHALL BE NO RECOVERY FOR THE FIRST TEN THOUSAND DOLLARS OF BODILY INJURY OR PROPERTY DAMAGE FOR ANY OWNER OR OPERATOR OF A MOTOR VEHICLE INVOLVED IN AN ACCIDENT WHO FAILS TO OWN OR MAINTAIN MOTOR VEHICLE COVERAGE; TO PRESCRIBE CIRCUMSTANCES UNDER WHICH THIS ACT SHALL NOT APPLY; TO PROVIDE THAT THE PROVISIONS OF THIS SECTION MAY BE ASSERTED AS AN AFFIRMATIVE DEFENSE; TO REQUIRE EVERY MOTOR VEHICLE INSURER TO MAKE AN AUTOMOBILE POLICY RATE FILING WITH THE DEPARTMENT OF INSURANCE TO REDUCE ITS COMBINED RATES FOR BODILY INJURY LIABILITY AND PROPERTY DAMAGE; TO DEFINE "RATE REDUCTION DAY"; TO AMEND SECTION 63-15-21, MISSISSIPPI CODE OF 1972, IN CONFORMITY THERETO; AND FOR RELATED PURPOSES. 

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

SECTION 1. (1) (a) There shall be no recovery for the first Ten Thousand Dollars ($10,000.00) of bodily injury and no recovery for the first Ten Thousand Dollars ($10,000.00) of property damage based on any cause or right of action arising out of a motor vehicle accident, for such injury or damages occasioned by an owner or operator of a motor vehicle involved in such accident who fails to own or maintain motor vehicle liability security.

(b) For the purposes of this section, the meaning of "bodily injury" and "property damage" is governed by the applicable motor vehicle liability insurance policy or, in the event of security other than an insurance policy, the meaning of such terms is that which is commonly ascribed thereto.

(c) The limitation of recovery provisions of this subsection do not apply if the driver of the other vehicle:

(i) Is cited for a violation as a result of the accident and is subsequently convicted of or pleads nolo contendere to such offense.

(ii) Intentionally causes the accident.

(iii) Flees from the scene of the accident.

(iv) At the time of the accident, is in furtherance of the commission of a felony offense under the law.

(2) Each person who is involved in an accident in which the other motor vehicle was not covered by motor vehicle liability security and who is found to be liable for damages to the owner or operator of the other motor vehicle may assert as an affirmative defense the limitation of recovery provisions of subsection (1) of this section.

(3) If the owner of a motor vehicle, who fails to own or maintain motor vehicle liability security, institutes an action to recover damages in any amount, regardless of whether the owner or operator is at fault, and is awarded an amount equal to or less than the minimum amount of motor vehicle liability security, then the owner or operator shall be assessed and held liable for all court costs incurred by all parties to the action.

(4) Each person who applies for a driver's license, registers a motor vehicle, or operates or owns a motor vehicle in this state is deemed to have given his consent to be subject to and governed by the provisions of this section. All persons who apply for the issuance or renewal of a driver's license, motor vehicle title, or motor vehicle registration shall sign a declaration on a form developed by the Department of Public Safety pursuant to rule and regulation that the person acknowledges and gives consent to the requirements and provisions of this section and that the person will comply with all provisions of this section and the Motor Vehicle Safety Responsibility Law. Proof of whether the person obtained or signed such declaration is irrelevant to the application of this section.

(5) Nothing in this section shall preclude a passenger in a vehicle from asserting a claim to recover damages for injury, death, or loss which he occasioned, in whole or in part, by the negligence of another person arising out of the operation or use of a motor vehicle. This subsection shall not apply to a passenger who is also the owner of the uninsured motor vehicle involved in the accident.

(6) (a) Notwithstanding any provision of law to the contrary, no insurer shall lose any rights of subrogation for claims paid under the applicable insurance policy for the recovery of any sum in excess of the first Ten Thousand Dollars ($10,000.00) of bodily injury and the first Ten Thousand Dollars ($10,000.00) of property damages.

(b) In claims where no suit if files, the claimant's insurer shall have all rights to recover any amount paid by the claimant's insurer on behalf of the insured for the recovery of any sum in excess of the first Ten Thousand Dollars ($10,000.00) of bodily injury and the first Ten Thousand Dollars ($10,000.00) of property damages.

SECTION 2. (1) Every motor vehicle insurer authorized to transact business in the State of Mississippi shall make an automobile policy rate filing with the Department of Insurance to reduce its combined rates for bodily injury liability and property damage liability by a minimum of ten percent (10%) in each of its respective territorial service areas, based upon the average rate in such area on the day before "rate reduction day," unless the motor vehicle insurer can demonstrate at a rate hearing that such a decrease will result in inadequate rates, or would result in the continuation of inadequate existing rates, for the motor vehicle insurer or the provisions of subsection (2) of Section 4 of this act become applicable.

(2) Every motor vehicle insurer authorized to transact business in the State of Mississippi shall make an automobile policy rate filing with the Department of Insurance to reduce its rates for uninsured motorist coverage, for insureds which select a policy which provides economic-only uninsured motorist coverage, by a minimum of twenty percent (20%) in each of its respective territorial service areas, based upon the average rate of its uninsured or underinsured motorist coverage in the area on the day before "rate reduction day," unless the motor vehicle insurer can demonstrate at a rate hearing that such a decrease will result in inadequate rates, or would result in the continuation of inadequate existing rates, for the motor vehicle insurer or the provisions of subsection (2) of Section 4 of this act become applicable.

(3) All motor vehicle insurers who write policies shall file rates for bodily injury liability, property damage liability, and uninsured motorist coverage with the Department of Insurance no later than thirty (30) days after "rate reduction day." The Department of Insurance shall conclusively act on all rate filings within ninety (90) days of "rate reduction date."

(4) (a) For the purposes of this section, the savings provided hereby shall be applicable to an insured only upon policy renewal or policy issuance.

(b) For the purposes of this act, "rate reduction day" is the date on which a final and definitive judgment is rendered in the declaratory judgment proceeding authorized in Section 3 of this act, or, if no suit for declaratory judgment is filed before August 1, 1998, "rate reduction day" is August 1, 1998. The Department of Insurance shall certify and make available the official "rate reduction day." If due to unforeseen events or time delays which preclude the filing of rates or the acting thereon by the Department of Insurance, the Commissioner of Insurance may apply to the appropriate state court for a stay order suspending the running of all time limits or provisions which are tied to the "rate reduction day" and the court, for good cause shown, shall grant such stay order.

SECTION 3. Because the Legislature finds and declares that questions of law may be raised by some persons with respect to the constitutionality of some of the provisions of this act, the public welfare requires that such questions of law be resolved with expedition before its provisions take effect in order to avoid disruption of the orderly implementation of its provisions. Therefore, the Legislature finds that the remedy of declaratory judgment to determine the constitutionality of the provisions of this act should be immediately made available in order to avoid confusion by the public. Therefore, any domiciliary of this state may institute an action in the appropriate state courts seeking a declaratory judgment to determine the constitutionality of the provisions of this act. The Attorney General and the Commissioner of Insurance shall be served with a copy of the proceeding and be entitled to be heard. In the interest of further expediting this procedure, the appropriate state courts are urged to minimize all unnecessary delays and may suspend all applicable rules of court in contravention hereof and for this limited purpose.

SECTION 4. (1) Unless otherwise specifically excepted, if any provision or item of this act or the application thereof is held to be invalid or unconstitutional by a final and definitive judgment, such invalidity shall not affect other provisions, items, or applications of this act which are not specifically declared to be invalid or unconstitutional and which can be given effect without the invalid provisions, items, or applications, and to this end the provisions of this act are hereby declared severable.

(2) (a) If any provision or item of this act or the application thereof is held to be invalid or unconstitutional by a final and definitive judgment, the mandatory percentage rate reduction provisions of Section 2 of this act are also decreed to be invalid; however, each insurer shall still make a rate filing with the Department of Insurance within thirty (30) days of "rate reduction day" adjusting its rates to reflect the actuarial value, as determined by the Department of Insurance, with respect to the remaining valid and constitutional provisions of this act.

(b) If the mandatory rate reduction provisions or the actuarial provisions of this act, or both, are held to be invalid or unconstitutional by a final and definitive judgment, all other provisions of this act are decreed to be invalid.

SECTION 5. (1) (a) Section 1 of this act shall become effective one hundred twenty (120) days after "rate reduction day" and shall apply to all causes of action which occur on or after the effective date thereof.

(b) If, however, during the time prescribed in subsection (3) of Section 2 of this act, the Department of Insurance approves rates of insurers selling more than twenty-five percent (25%) of the automobile insurance in this state, as measured by earned premium volume for the calendar year of 1997, which rates are not in compliance with the mandatory percentage rate reduction provisions of subsection (1) or (2) of Section 2 of this act, or, if applicable, the actuarial provision of subsection (2) of Section 4 of this act, all as determined and certified by the Commissioner of the Department of Insurance within ten (10) days of the rate approval, then Section 1 of this act shall never take effect.

SECTION 6. Section 63-15-21, Mississippi Code of 1972, is amended as follows:

63-15-21. Except as provided in Section 1 of this act, security deposited in compliance with the requirements of this chapter shall be placed by the department in the custody of the State Treasurer and shall be applicable only to the payment of a judgment or judgments rendered against the person or persons on whose behalf the deposit was made, for damages arising out of the accident in question in an action at law, begun not later than one year after the date of such accident, or within one (1) year after the date of deposit of any security under provision (3) of Section 63-15-15, or to the payment in settlement, agreed to by the depositor, of a claim or claims arising out of such accident. Such deposit or any balance thereof shall be returned to the depositor or his personal representative when evidence satisfactory to the department has been filed with it that there has been a final adjudication of nonliability, or a duly acknowledged agreement in accordance with provision (2) of Section 63-15-13, or whenever, after the expiration of one (1) year from the date of the accident, or two (2) years from the date of deposit of any security under provision (3) of Section 63-15-15, the department shall be given reasonable evidence that there is no such action pending and no judgment rendered in such action left unpaid.

SECTION 7. This act shall take effect and be in force from and after July 1, 1998.