By: Gutierrez S.B. No. 1246               A BILL TO BE ENTITLED   AN ACT   relating to auto insurance regulation, including the creation of   the Texas Automobile Insurance Public Option.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Chapter 1952, Insurance Code, is amended by   adding Subchapter I to read as follows:   SUBCHAPTER I.  Texas Automobile Insurance Public Option          Sec. 1952.401.  SHORT TITLE. This Act may be cited as the   "Texas Automobile Insurance Public Option Act."          Sec. 1952.402.  PURPOSE. The purpose of this Act is to   establish a publicly administered auto insurance option in Texas to   ensure affordability, accessibility, and competition in the auto   insurance market while maintaining financial stability and   consumer protections.          Sec.1952.403. ESTABLISHMENT OF PUBLIC AUTO INSURANCE OPTION.   (a) The Texas Department of Insurance, in consultation with the   Texas Comptroller and the Texas Transportation Commission, shall   establish and administer a public auto insurance option   (hereinafter referred to as "Texas Public Auto Option") to provide   mandatory liability coverage and optional comprehensive and   collision coverage to eligible drivers.          (b)  The Texas Public Auto Option shall be administered   through the Texas Department of Insurance, subject to state   guidelines and funding support.          Sec. 1952.404.  ELIGIBILITY AND ENROLLMENT. (a) All   individuals required by Texas law to carry auto insurance shall be   eligible to enroll in the Texas Public Auto Option, provided they   meet residency and vehicle registration requirements.          (b)  The Commissioner shall establish an annual enrollment   period, with special enrollment periods for qualifying life events   such as vehicle purchase, change of residence, or loss of private   coverage.          Sec. 1952.405.  COVERAGE AND PREMIUMS.(a) The Texas Public   Auto Option shall provide coverage at levels meeting or exceeding   Texas minimum liability requirements and offer additional coverage   options, including uninsured/underinsured motorist coverage and   personal injury protection.          (b)  Premiums shall be set using actuarial principles to   ensure fiscal solvency, affordability, and market competitiveness.   The Texas Department of Insurance shall implement a sliding scale   for low-income policyholders and explore risk-based adjustments.          Sec. 1952.406.  FUNDING AND FINANCIAL MANAGEMENT.(a) The   Texas Public Auto Option shall be funded through policyholder   premiums, supplemented by state funding to ensure affordability and   solvency.          (b)  State grants shall be available to assist in launching   and administering the Texas Public Auto Option.          (c)  A reserve fund shall be established to ensure long-term   financial sustainability and claims-paying capacity.          Sec. 1952.407.  CONSUMER PROTECTIONS AND FRAUD PREVENTION.   (a)  The Texas Public Auto Option shall establish transparent   claims handling processes and an independent appeals system for   disputed claims.          (b)  The Texas Department of Insurance shall implement fraud   detection and prevention programs, including data analytics and   interagency coordination.          Sec. 1952.408.  COMPETITION AND MARKET EFFECTS. (a) The   Texas Public Auto Option shall operate alongside private insurers   to foster competition, stabilize rates, and provide consumer   choice.          (b)  A biennial study shall assess the impact of the Texas   Public Auto Option on the auto insurance market, premium rates,   consumer satisfaction, and uninsured motorist rates.          Sec. 1952.409.  RULEMAKING AUTHORITY. The Texas Department   of Insurance, in coordination with relevant state agencies, shall   issue regulations necessary to implement this Act.          SECTION 2.  The change in law made by this Act applies only   to an insurance policy that is delivered, issued for delivery, or   renewed on or after January 1, 2026.          SECTION 3.  This Act takes effect September 1, 2025.