I

107TH CONGRESS

1ST SESSION H. R. 1704

To enable drivers to choose a more affordable form of auto insurance that

also provides for more adequate and timely compensation for accident

victims, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MAY 3, 2001

Mr. ARMEY (for himself, Mr. MORAN of Virginia, and Mr. COX) introduced

the following bill; which was referred to the Committee on Financial Services

A BILL

To enable drivers to choose a more affordable form of auto

insurance that also provides for more adequate and timely compensation for accident victims, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Auto Choice Reform Act of 2001’’.

6 (b) TABLE OF CONTENTS.—The table of contents for

7 this Act is as follows:

Sec. 1. Short title and table of contents.

Sec. 2. Findings and purposes.

Sec. 3. Definitions.
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Sec. 4. Auto choice insurance system.

Sec. 5. Personal injury protection system.

Sec. 6. Tort maintenance system.

Sec. 7. Protection against insurance fraud.

Sec. 8. Source of compensation in cases of accidental injury.

Sec. 9. Preservation of State and private rights.

Sec. 10. Applicability to States.

1 SEC. 2. FINDINGS AND PURPOSES

2 (a) FINDINGS.—The Congress finds the following:

3 (1) Auto insurance premiums are too high,

4 largely because the current auto liability insurance

5 system (referred to in this subsection as the

6 ‘‘present system’’)—

7 (A) encourages costly fraudulent claims

8 and unnecessarily contentious behavior by both

9 claimants and defendants; and

10 (B) often requires expensive lawyers on

11 both sides of a dispute to settle claims.

12 (2) The adversarial tort system that is in effect

13 in 35 States poorly compensates the most needy in14 dividuals, in that the system—

15 (A) pays no liability benefits to more than

16 30 percent of all accident victims;

17 (B) takes too long to pay victims when it

18 does pay them;

19 (C)(i) pays victims with minor injuries an

20 average of two to three times the cost of their

21 medical bills and lost wages; but
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1 (ii) pays victims with serious injuries an

2 average of less than 50 percent of those bills

3 and lost wages; and

4 (D) pays twice as much for plaintiff and

5 defense lawyers combined as it pays for victims’

6 medical bills and lost wages.

7 (3) The chance of winning the lawsuit lottery in

8 the present system—

9 (A) results in the filing of billions of dol10 lars of fraudulent or otherwise unnecessary

11 auto insurance claims annually;

12 (B) generates billions of dollars in unnec13 essary health care costs for private, Federal,

14 and State health care programs;

15 (C) raises auto insurance premiums for all

16 drivers, including drivers operating business ve17 hicles; and

18 (D) makes auto insurance premiums

19 unaffordable for many low-income individuals.

20 (4) The present system harms cities by—

21 (A) encouraging the filing of frivolous and

22 inflated claims that cities pay at the expense of

23 all taxpayers; and

24 (B) contributing to the abandonment of

25 cities by taxpayers who can achieve substantial
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1 reductions in their auto insurance premiums by

2 moving to the suburbs.

3 (5) The present system provides individuals lit4 tle incentive to purchase safer automobiles.

5 (6) All of the no-fault insurance reform laws

6 that exist in 13 States provide more timely and equi7 table compensation for medical bills and lost wages

8 to more accident victims.

9 (7) Some of those no-fault insurance reform

10 laws, however, have not been successful in control11 ling insurance premiums, in large part because oppo12 nents of such reform have weakened the laws by cre13 ating loopholes for unnecessary and costly lawsuits.

14 (8) The alternative form of insurance, personal

15 injury protection, that may be offered to drivers by

16 reason of this Act, gives drivers the ability to—

17 (A)(i) insure themselves in all accidents for

18 their own medical bills and lost wages; and

19 (ii) sue other drivers on the basis of fault

20 for any economic losses that are not covered by

21 their insurance; and

22 (B) forgo lawsuits against other drivers for

23 noneconomic damages on the basis of fault in

24 return for being free from suit for noneconomic

25 damages by other drivers.
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1 (9) Personal injury protection, by reducing the

2 need for auto liability lawsuits and the incentives for

3 fraudulent and otherwise questionable claims,

4 could—

5 (A) save drivers billions of dollars annu6 ally; and

7 (B) enable them to receive more adequate

8 and timely compensation when they are seri9 ously injured.

10 (10) Personal injury protection would benefit

11 society by—

12 (A) increasing respect for the law by elimi13 nating the incentives of the adversarial present

14 system for fraudulent claims and unnecessarily

15 contentious behavior by both claimants and de16 fendants;

17 (B) saving precious health care resources;

18 (C) making it more affordable for low-in19 come individuals to operate an automobile to

20 get to better paying jobs;

21 (D) reducing the incentives for individuals

22 to abandon cities, by providing greater savings

23 for drivers who reside in cities;

24 (E) freeing city taxpayers’ dollars for re25 ductions in taxes or expanded city programs by
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1 reducing the amount of frivolous and unneces2 sary lawsuits against cities;

3 (F) encouraging drivers to own safer auto4 mobiles by giving insurers the opportunity to

5 reduce premiums for the owners of safe auto6 mobiles; and

7 (G) helping to free up court dockets that

8 are currently overburdened with personal injury

9 lawsuits fueled by the incentives for lawsuits

10 under the present system.

11 (11) A new auto insurance system that allows

12 drivers to select the form of auto insurance that best

13 meets their needs, by choosing between—

14 (A) a modified version of the present sys15 tem, or

16 (B) the personal injury protection system

17 described in paragraph (9),

18 would enable drivers to reduce the cost of auto in19 surance, increase the amount of average compensa20 tion in the event of a serious accident, and enhance

21 individual freedom.

22 (12) The Federal Government should encourage

23 consumer choice, but not exercise regulatory author24 ity over the business of auto insurance, including
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1 rates and insurer solvency, as that authority is ap2 propriately exercised by the States.

3 (13) During the period beginning January 1,

4 1957, and ending December 31, 1996—

5 (A) the Federal Government spent more

6 than $400 billion to facilitate highway construc7 tion in the United States; and

8 (B) hundreds of thousands of individuals

9 have been killed in motor vehicle accidents on

10 highways constructed with those funds.

11 (14) The auto insurers who operate in inter12 state commerce pay greater than 70 percent of the

13 compensation paid to accident victims.

14 (15) Through programs such as medicare, med15 icaid, and social security, the Federal Government

16 pays a significant amount of the costs for compen17 sating motor vehicle accident victims.

18 (16) It is necessary and proper for the Con19 gress, in the exercise of its authority to establish

20 post roads and regulate commerce under section 8 of

21 article I of the Constitution, to provide drivers

22 throughout the United States with an alternative to

23 address the problems of the adversarial present sys24 tem and the inadequate no-fault insurance reforms.
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1 (b) PURPOSES.—The purposes of this Act are as fol2 lows:

3 (1) To enable consumers of auto insurance to

4 choose between two insurance systems, which are—

5 (A) a tort maintenance system based on

6 applicable State law that provides for substan7 tially similar insurance premiums and com8 pensation for injuries as compared to the auto

9 insurance system in existence in that State on

10 the date of enactment of this Act; and

11 (B) a personal injury protection system

12 that compensates accident victims directly for

13 their medical bills and lost wages with substan14 tially less need to pursue lawsuits and provides

15 the opportunity for—

16 (i) substantial reductions in auto in17 surance premiums;

18 (ii) more comprehensive recovery of

19 medical bills and lost wages in a shorter

20 period of time; and

21 (iii) the right to sue negligent drivers

22 for any uncompensated medical bills or lost

23 wages.

24 (2) To preserve the rights of States to regulate

25 the business of auto insurance.
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1 SEC. 3. DEFINITIONS.

2 In this Act:

3 (1) ACCIDENT.—The term ‘‘accident’’ means an

4 unforeseen or unplanned event that—

5 (A) causes injury; and

6 (B) arises from the operation, mainte7 nance, or use of a motor vehicle.

8 (2) ADD-ON LAW.—The term ‘‘add-on law’’

9 means a State law that provides that persons in10 jured in motor vehicle accidents—

11 (A) are compensated without regard to

12 fault for economic loss; and

13 (B) have the right to claim without any

14 limitation for noneconomic loss based on fault.

15 (3) COLLATERAL SOURCE.—The term ‘‘collat16 eral source’’ means a person, other than a tortfeasor

17 or a motor vehicle insurer, that has a legal obliga18 tion to pay compensation for economic loss to a per19 son who is injured in an accident.

20 (4) COMMON CARRIER.—The term ‘‘common

21 carrier’’ means a motorized vehicle of any kind, li22 censed for highway use, that is—

23 (A) required to be registered under the

24 provisions of applicable State law relating to

25 motor vehicles; and
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1 (B) used in the business of transporting

2 persons.

3 (5) ECONOMIC LOSS.—The term ‘‘economic

4 loss’’ means objectively verifiable pecuniary loss

5 caused by an accident for—

6 (A) reasonable and necessary medical and

7 rehabilitation expenses;

8 (B) loss of earnings;

9 (C) funeral costs; and

10 (D) replacement services loss.

11 (6) ELECTRONIC SIGNATURE.—The term ‘‘elec12 tronic signature’’ means any letters, characters, or

13 symbols executed or adopted by a party with an in14 tent to authenticate a writing that are—

15 (A) manifested by—

16 (i) electronic means; or

17 (ii) any other similar means; and

18 (B) logically associated with that writing.

19 (7) FINANCIAL RESPONSIBILITY LAW.—The

20 term ‘‘financial responsibility law’’ means a law (in21 cluding a law requiring compulsory coverage) penal22 izing motorists for failing to carry defined limits of

23 tort liability insurance covering motor vehicle acci24 dents.
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1 (8) FIRST PARTY BENEFITS.—The term ‘‘first

2 party benefits’’ means benefits paid or payable by an

3 insurer to an insured of that insurer under a per4 sonal injury protection policy or a tort maintenance

5 coverage policy applicable to that insured.

6 (9) INJURY.—The term ‘‘injury’’ means bodily

7 injury, sickness, disease, or death.

8 (10) INSURER.—The term ‘‘insurer’’ means any

9 person who is engaged in the business of issuing or

10 delivering motor vehicle insurance policies (including

11 an insurance agent, if appropriate) under applicable

12 State law.

13 (11) MOTOR CARRIER.—The term ‘‘motor car14 rier’’ means—

15 (A) a person who—

16 (i) transports by motor vehicle goods

17 for another person or entity for compensa18 tion; and

19 (ii) is liable for the operation of the

20 vehicle under part 387 of title 49, Code of

21 Federal Regulations; or

22 (B) a person who transports such person’s

23 goods by a motor vehicle that such person owns

24 or leases.
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1 (12) MOTOR VEHICLE.—The term ‘‘motor vehi2 cle’’ means a vehicle with 4 or more wheels licensed

3 for highway use that is required to be registered

4 under the provisions of the applicable State financial

5 responsibility law relating to motor vehicles.

6 (13) NAMED INSURED.—The term ‘‘named in7 sured’’ means a person designated by name in a per8 sonal injury protection policy or tort maintenance

9 coverage policy as the insured.

10 (14) NO-FAULT MOTOR VEHICLE LAW.—The

11 term ‘‘no-fault motor vehicle law’’ means a State law

12 that provides that—

13 (A) persons injured in motor vehicle acci14 dents are paid compensation without regard to

15 fault for their economic loss that results from

16 injury; and

17 (B) in return for the payment referred to

18 in subparagraph (A), claims based on fault, in19 cluding claims for noneconomic loss, are limited

20 to a defined extent.

21 (15) NONECONOMIC LOSS.—The term ‘‘non22 economic loss’’ means subjective, nonmonetary losses

23 recognized under applicable State tort law.

24 (16) OCCUPY.—The term ‘‘occupy’’ means, with

25 respect to the operation, maintenance, or use of a
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1 motor vehicle, to be in or on a motor vehicle or to

2 be engaged in the immediate act of entering into or

3 alighting from a motor vehicle.

4 (17) OPERATION, MAINTENANCE, OR USE OF A

5 MOTOR VEHICLE.—(A) The term ‘‘operation, main6 tenance, or use of a motor vehicle’’ means any activ7 ity involving or related to the transportation by a

8 motor vehicle.

9 (B) Such term includes occupying or being en10 gaged in the immediate act of entering into or

11 alighting from a motor vehicle before or after its use

12 for transportation.

13 (C) Such term does not include—

14 (i) conduct within the course of a business

15 of manufacturing, sale, repairing, servicing, or

16 otherwise maintaining motor vehicles, unless

17 the conduct occurs outside the scope of the

18 business activity; or

19 (ii) conduct within the course of loading or

20 unloading a motor vehicle, unless the conduct

21 occurs while occupying or being engaged in the

22 immediate act of entering into or alighting from

23 a motor vehicle before or after its use for trans24 portation.
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1 (18) PERSON.—The term ‘‘person’’ means any

2 individual, corporation, company, association, firm,

3 partnership, society, joint stock company, or any

4 other entity, including any governmental entity.

5 (19) PERSONAL INJURY PROTECTION.—The

6 term ‘‘personal injury protection’’ means insurance

7 that provides for—

8 (A) benefits to a personal injury protection

9 insured for economic loss without regard to

10 fault for injury resulting from a motor vehicle

11 accident in accordance with this Act;

12 (B) a waiver of tort claims against other

13 drivers, other than—

14 (i) claims for uncompensated eco15 nomic loss based on fault; and

16 (ii) other tort claims exempted from

17 such a waiver under this Act;

18 (C) coverage against claims for uncompen19 sated economic losses based on fault by another

20 party that is entitled to recover those losses

21 under this Act; and

22 (D) coverage against claims for economic

23 or noneconomic losses of a third party with re24 spect to which the recovery of those losses is

25 not covered under this Act.
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1 (20) PERSONAL INJURY PROTECTION IN2 SURED.—The term ‘‘personal injury protection in3 sured’’ means a person covered by the form of insur4 ance described in section 5.

5 (21) PERSONAL INJURY PROTECTION IN6 SURER.—The term ‘‘personal injury protection in7 surer’’ means an insurer who is engaged in the busi8 ness of providing personal injury protection.

9 (22) PERSONAL INJURY PROTECTION SYS10 TEM.—The term ‘‘personal injury protection sys11 tem’’ means the insurance system described in sec12 tion 5.

13 (23) REPLACEMENT SERVICES LOSS.—The

14 term ‘‘replacement services loss’’ means expenses

15 reasonably incurred in obtaining ordinary and nec16 essary services from other persons who are not mem17 bers of the injured person’s household, in lieu of the

18 services the injured person would have performed for

19 the benefit of the household.

20 (24) RESIDENT RELATIVE OR DEPENDENT.—

21 (A) The term ‘‘resident relative or dependent’’

22 means a person—

23 (i) who is related to the named insured by

24 blood, marriage, adoption, or otherwise (includ-
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1 ing a dependent receiving financial services or

2 support from such insured); and

3 (ii) who—

4 (I) resides in the same household as

5 the named insured at the time of the acci6 dent; or

7 (II) usually makes a home in the

8 same family unit as the named insured,

9 even though that person may temporarily

10 live elsewhere.

11 (B) Such term does not include any person who

12 maintains or is required to maintain insurance for a

13 motor vehicle that such person owns.

14 (25) STATE.—The term ‘‘State’’ includes the

15 District of Columbia, the Commonwealth of Puerto

16 Rico, Guam, the United States Virgin Islands,

17 American Samoa, the Commonwealth of the North18 ern Mariana Islands, the Trust Territories of the

19 Pacific Islands, and any other territory or possession

20 of the United States.

21 (26) TORT LIABILITY.—The term ‘‘tort liabil22 ity’’ means the legal obligation to pay damages for

23 an injury in an accident adjudged to have been

24 caused by a tortfeasor, under applicable State law.
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1 (27) TORT LIABILITY INSURANCE.—The term

2 ‘‘tort liability insurance’’ means a contract of insur3 ance under which an insurer agrees to pay, on behalf

4 of an insured, damages that the insured is obligated

5 to pay to a third person because of the liability of

6 the insured to that person.

7 (28) TORT MAINTENANCE COVERAGE.—The

8 term ‘‘tort maintenance coverage’’ means insurance

9 coverage under which a tort maintenance insured, if

10 involved in an accident with a personal injury pro11 tection insured, may recover first party benefits for

12 economic and noneconomic losses from the insurer of

13 that insured, based on fault under applicable State

14 law.

15 (29) TORT MAINTENANCE INSURED.—The term

16 ‘‘tort maintenance insured’’ means a person covered

17 by the form of insurance described in section 6.

18 (30) TORT MAINTENANCE SYSTEM.—The term

19 ‘‘tort maintenance system’’ means an insurance sys20 tem described in section 6.

21 (31) UNCOMPENSATED ECONOMIC LOSS.—(A)

22 The term ‘‘uncompensated economic loss’’ means

23 any objectively verifiable pecuniary loss payable

24 based on fault under applicable State tort law, ex25 cept for any such loss that is determined by a court
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1 of competent jurisdiction to be, in whole or in part,

2 a product of fraudulent activity by the person mak3 ing the claim.

4 (B) Such term includes a reasonable attorney’s

5 fee calculated on the basis of the time actually ex6 pended and the value of the attorney’s efforts as re7 flected in payment to the attorney’s client, other

8 than any attorney’s fees when the uncompensated

9 economic loss is attributable only to a deductible for

10 coverage specified in subparagraph (C)(i).

11 (C) Subject to section 8(j)(2), such term does

12 not include amounts paid or payable under—

13 (i) personal injury protection;

14 (ii) tort maintenance coverage;

15 (iii) no-fault or add-on motor vehicle insur16 ance;

17 (iv) Federal, State, or private disability or

18 sickness programs;

19 (v) Federal, State, or private health insur20 ance programs;

21 (vi) employer wage continuation programs;

22 or

23 (vii) workers’ compensation or similar oc24 cupational compensation laws.
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1 (32) UNINSURED MOTORIST.—The term ‘‘unin2 sured motorist’’ means the owner of a motor vehicle,

3 including the resident relatives or dependents of the

4 owner, who is uninsured under either the personal

5 injury protection system described in section 5 or

6 the tort maintenance system described in section

7 6—

8 (A) at the limits prescribed by the applica9 ble State financial responsibility law; or

10 (B) an amount prescribed under section

11 5(a)(1).

12 SEC. 4. AUTO CHOICE INSURANCE SYSTEM.

13 (a) OPERATION OF THE RIGHT TO CHOOSE.—

14 (1) IN GENERAL.—Under this Act, an insurer

15 may offer a choice between—

16 (A) the personal injury protection system

17 described in section 5; and

18 (B) the tort maintenance system described

19 in section 6.

20 (2) ELECTION BY SELF-INSURED PERSONS.—A

21 self-insured person, as determined under an applica22 ble State law, may elect coverage under paragraph

23 (1) by filing a notice with the appropriate State or

24 Federal agency.
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1 (3) EFFECT OF ELECTION BY ELECTRONIC

2 MEANS.—For purposes of making an election of an

3 insurance system under this subsection, unless pro4 hibited by applicable State law, an electronic signa5 ture shall have the same force and effect as a hand6 written signature.

7 (b) EFFECT OF CHOICE ON RESIDENT RELATIVES

8 OR DEPENDENTS.—

9 (1) IN GENERAL.—Except as provided in para10 graph (2), a person who chooses either the personal

11 injury protection system or the tort maintenance

12 system also binds the resident relatives or depend13 ents of that person.

14 (2) EXCEPTION.—An adult resident relative or

15 dependent of a person described in paragraph (1)

16 may select the form of insurance that such person

17 does not select if the adult resident relative or de18 pendent makes that selection expressly in writing to

19 the insurer.

20 (3) TERMS AND CONDITIONS.—Insurers may

21 specify reasonable terms and conditions governing

22 the commencement, duration, and application of the

23 chosen coverage, depending on the number of motor

24 vehicles and owners of such vehicles in a household.

25 (c) UNIFORMITY RULES.—
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1 (1) IN GENERAL.—Notwithstanding subsection

2 (b)(2) and in order to minimize conflict between the

3 insurance options, an insurer may maintain and

4 apply underwriting rules that encourage uniformity

5 in the provision of insurance benefits within a house6 hold.

7 (2) UNIFORMITY IN INSURANCE IN EMPLOY8 MENT.—Except as provided in paragraph (6), an

9 employer that elects an insurance option described in

10 subparagraph (A) or (B) of subsection (a)(1) binds

11 the employees of that employer for purposes of cov12 erage of that employee in the course of employment

13 by that employer.

14 (3) UNIFORMITY IN INSURANCE FOR MOTOR

15 CARRIERS.—Except as provided in paragraph (6), a

16 motor carrier that elects an insurance option de17 scribed in subparagraph (A) or (B) of subsection

18 (a)(1) binds any owner, operator, or occupant of a

19 motor vehicle operated by that motor carrier.

20 (4) UNIFORMITY IN INSURANCE FOR COMMON

21 CARRIERS.—Except as provided in paragraph (6), an

22 owner of a common carrier that elects an insurance

23 option described in subparagraph (A) or (B) of sub24 section (a)(1) binds the owner and any operator or

25 occupant of that common carrier.
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1 (5) UNIFORMITY IN INSURANCE FOR MOTOR

2 VEHICLE RENTALS.—

3 (A) IN GENERAL.—Except as provided in

4 subparagraph (B), a person who is engaged in

5 the business of renting motor vehicles and who

6 elects an insurance option described in subpara7 graph (A) or (B) of subsection (a)(1) binds any

8 operator or occupant of the rented motor vehi9 cle with respect to the operation of that vehicle.

10 (B) EXCEPTION.—Subparagraph (A) shall

11 not apply if a customer who rents a motor

12 vehicle—

13 (i) specifically elects to obtain cov14 erage within the rental agreement other

15 than the coverage elected by the person en16 gaged in the business of renting the motor

17 vehicle; and

18 (ii) pays a separate charge for that

19 optional coverage.

20 (6) RIGHT OF EMPLOYEES, OPERATORS, AND

21 CERTAIN OCCUPANTS TO PURCHASE ADDITIONAL

22 COVERAGE.—

23 (A) EMPLOYEES.—An employee under

24 paragraph (2) may elect to purchase separate

25 personal injury protection or tort maintenance
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1 coverage in excess of the insurance provided by

2 the employer in the scope of the employment of

3 that employee.

4 (B) OPERATORS AND OCCUPANTS OF

5 MOTOR CARRIERS.—An operator or occupant of

6 a motor carrier under paragraph (3) may elect

7 to purchase separate personal injury protection

8 or tort maintenance coverage in excess of the

9 insurance provided to that operator or occupant

10 by the motor carrier as an operator or occupant

11 of that motor carrier.

12 (C) OPERATORS AND OCCUPANTS OF COM13 MON CARRIERS.—An operator or occupant of a

14 common carrier under paragraph (4) may elect

15 to purchase separate personal injury protection

16 or tort maintenance coverage in excess of the

17 insurance provided to that operator or occupant

18 by the owner of the common carrier as an oper19 ator or occupant of the common carrier.

20 (D) EFFECT OF ELECTION.—The election

21 by an employee, operator, or occupant to pur22 chase insurance coverage under this paragraph

23 shall not affect the liability of an employer,

24 motor carrier, or common carrier.

25 (d) FAILURE TO ELECT TYPE OF INSURANCE.—
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1 (1) IN GENERAL.—Except as provided in sub2 section (b)(1), any person who fails to elect a type

3 of insurance under subsection (a)(1) shall be deemed

4 to have elected insurance under the tort mainte5 nance system in effect in the State of that person’s

6 residence.

7 (2) RULE OF CONSTRUCTION.—This subsection

8 shall not be construed to prevent a State from en9 acting a law that deems a person who fails to elect

10 a type of insurance under this section to have elect11 ed insurance under the personal injury protection

12 system.

13 (e) CONSUMER INFORMATION PROGRAM.—

14 (1) STATE PROGRAM.—The State official

15 charged with jurisdiction over insurance rates for

16 motor vehicles may establish and maintain a pro17 gram designed to ensure that consumers are ade18 quately informed concerning—

19 (A) the comparative cost of insurance

20 under the personal injury protection system and

21 the tort maintenance system; and

22 (B) the benefits, rights, and obligations of

23 insurers and insureds under each such system.

24 (2) INSURER PROGRAM.—An insurer that offers

25 a choice of insurance systems under subsection
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1 (a)(1) shall provide to each consumer, before that

2 consumer chooses motor vehicle insurance, written

3 consumer information to ensure that consumers are

4 adequately informed about—

5 (A) the comparative cost of insurance

6 under the personal injury protection system and

7 the tort maintenance system; and

8 (B) the benefits, rights, and obligations of

9 insurers and insureds under each system.

10 (3) ADEQUATE NOTICE.—If an insurer files

11 consumer information forms under paragraph (2)

12 with the State official charged with jurisdiction over

13 insurance rates for motor vehicles and such forms

14 are not disapproved within a reasonable period of

15 time after that filing, such filing and use of the in16 formation in accordance with paragraph (2) shall be

17 presumed to be adequate notice.

18 (f) SUPERSEDING PROVISION.—Subject to section

19 10, this Act supersedes a State law to the extent that the

20 State law is otherwise inconsistent with the requirements

21 of this Act.

22 SEC. 5. PERSONAL INJURY PROTECTION SYSTEM.

23 (a) MINIMUM POLICY REQUIREMENTS.—In order to

24 constitute a personal injury protection policy covered by
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1 this Act, a motor vehicle insurance policy issued by an in2 surer shall, at a minimum—

3 (1) for each accident, provide personal injury

4 protection benefits to each personal injury protection

5 insured in amounts equal to—

6 (A) the minimum per-person limits of li7 ability insurance for personal injury under the

8 relevant State financial responsibility law appli9 cable to private passenger vehicles; or

10 (B) in a State covered by a no-fault motor

11 vehicle law, the minimum level of insurance re12 quired for no-fault benefits;

13 (2) contain provisions for a waiver of tort

14 claims against drivers other than the insured,

15 except—

16 (A) claims for uncompensated economic

17 loss based on fault; or

18 (B) other tort claims exempted from such

19 a waiver under this Act;

20 (3) contain provisions for third party liability

21 coverage in amounts equal to the minimum limits re22 quired under applicable Federal or State financial

23 responsibility law for—

24 (A) property damage; and

25 (B) bodily injury to cover—
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1 (i) uncompensated economic losses for

2 parties who are entitled to recover such

3 losses under this Act; and

4 (ii) economic and noneconomic losses

5 of third parties whose recovery is not af6 fected by this Act.

7 (b) PRIMACY OF PAYMENT.—

8 (1) IN GENERAL.—

9 (A) PERSONAL INJURY PROTECTION BENE10 FITS.—

11 (i) IN GENERAL.—Except as provided

12 in subparagraph (B), in any case in which

13 a personal injury protection insurer and a

14 collateral source are obligated to pay bene15 fits for the same economic loss under this

16 Act, the personal injury protection insurer

17 shall be liable for the primary payment of

18 benefits to cover that economic loss.

19 (ii) LIABILITY OF COLLATERAL

20 SOURCES.—A collateral source shall be lia21 ble for economic loss only to the extent

22 that the loss exceeds benefits paid or pay23 able by an insurer under an applicable per24 sonal injury protection insurance policy.
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1 (B) EXCEPTION.—Personal injury protec2 tion benefits shall be reduced by an amount

3 equal to any benefits provided or required to be

4 provided under—

5 (i) an applicable Federal or State law

6 for workers’ compensation;

7 (ii) any State-required nonoccupa8 tional disability insurance; or

9 (iii) any occupational disability insur10 ance covering professional drivers of motor

11 vehicles who are independent contractors.

12 (2) REIMBURSEMENT OF PAYORS.—

13 (A) IN GENERAL.—A personal injury pro14 tection insurer may take appropriate measures

15 to ensure that any person otherwise eligible for

16 personal injury protection benefits who has

17 been paid or is being paid for losses payable by

18 personal injury protection from a source other

19 than the applicable personal injury protection

20 insurer shall not receive multiple payment for

21 those losses.

22 (B) ACCRUAL OF RIGHTS.—Any right to

23 payment for losses referred to in subparagraph

24 (A) from a personal injury protection insurer

25 accrues only to that payor. Payments by a
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1 payor referred to in subparagraph (A) shall not

2 be counted against personal injury limits for

3 personal injury protection until such time as

4 the payor is reimbursed under this subpara5 graph.

6 (3) PROTECTION AGAINST DUPLICATION.—

7 Upon receipt of reasonable notice, a personal injury

8 protection insurer shall reimburse a collateral source

9 for payments made by that collateral source for eco10 nomic loss for injury resulting from a motor vehicle

11 accident, to the extent that the personal injury pro12 tection insurer is obligated to pay for that economic

13 loss.

14 (c) PROMPT AND PERIODIC PAYMENT.—

15 (1) IN GENERAL.—A personal injury protection

16 insurer may pay personal injury protection benefits

17 periodically as losses accrue.

18 (2) LATE PAYMENT.—Except as provided in

19 section 7, a personal injury protection insurer that

20 does not pay a claim for personal injury protection

21 benefits during the 30-day period beginning on the

22 date on which that insurer receives a submission of

23 reasonable proof of the loss for which those benefits

24 are payable, shall pay—
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1 (A) the loss compounded at a rate of 24

2 percent per annum as liquidated damages; and

3 (B) a reasonable attorney’s fee calculated

4 on the basis of the time actually expended or

5 the value of the attorney’s efforts as reflected

6 in payment to the attorney’s client.

7 (3) ADMINISTRATION OF PERSONAL INJURY

8 PROTECTION BENEFITS.—To the extent consistent

9 with this Act, any applicable provision of a State no10 fault motor vehicle law or add-on law governing the

11 administration of payment of benefits without ref12 erence to fault shall apply to the payment of benefits

13 under personal injury protection under this sub14 section.

15 (d) AUTHORIZATIONS FOR DEDUCTIONS AND EXCLU16 SIONS.—

17 (1) IN GENERAL.—A personal injury protection

18 insurer may write personal injury protection—

19 (A)(i) without any deductible; or

20 (ii) subject to a reasonable deductible; and

21 (B) with an exclusion of coverage for first

22 party benefits to cover the losses of the per23 sonal injury protection insured caused by that

24 insured’s—
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1 (i) driving under the influence of alco2 hol or illegal drugs; or

3 (ii) driving while seeking to inten4 tionally injure another person.

5 (2) APPLICABILITY OF DEDUCTIBLES.—The

6 deductibles and exclusions described in paragraph

7 (1) shall apply only to—

8 (A) the person named in the applicable in9 surance policy; and

10 (B) the resident relatives or dependents of

11 the person described in subparagraph (A).

12 SEC. 6. TORT MAINTENANCE SYSTEM.

13 (a) MINIMUM POLICY REQUIREMENTS.—

14 (1) IN GENERAL.—The coverage for a person

15 who chooses insurance under section 4(a)(1)(B)

16 shall include—

17 (A) the type of motor vehicle insurance

18 that is otherwise required under applicable

19 State law; and

20 (B) tort maintenance coverage at a level

21 that is at least equivalent to the level of insur22 ance required under the applicable State finan23 cial responsibility law for bodily injury liability.

24 (2) RESPONSIBILITY FOR PAYMENT UNDER

25 TORT MAINTENANCE COVERAGE.—The responsibility
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1 for payment for any claim under tort maintenance

2 coverage is assumed by the insurer of the tort main3 tenance insured to the extent of such coverage.

4 (b) ADDITIONAL PAYMENTS FROM UNINSURED MO5 TORIST COVERAGE AND UNDERINSURED MOTORIST COV6 ERAGE.—A tort maintenance insured who also purchases

7 an insurance policy that provides uninsured motorist cov8 erage or underinsured motorist coverage may recover

9 under the terms of that policy for any economic or non10 economic loss arising from an accident involving a per11 sonal injury protection insured, in any case in which the

12 amount of those economic or noneconomic losses exceed

13 the aggregate amount recovered or recoverable from the—

14 (1) tort maintenance coverage of the tort main15 tenance insured; and

16 (2) personal injury protection insured.

17 SEC. 7. PROTECTION AGAINST INSURANCE FRAUD.

18 (a) TIMELY SUBMISSION OF CLAIMS FOR FIRST

19 PARTY BENEFITS.—(1) No insurer shall be obligated to

20 pay first party benefits to a personal injury protection in21 sured for any economic loss that occurred more than 60

22 days prior to the submission of a claim for such loss.

23 (2) The time for submission of a claim shall be tolled

24 during any period during which the insured can show

25 that—
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1 (A) the insured was physically unable—

2 (i) to submit proof of the claim; or

3 (ii) to supply the identity of the insurer to

4 the provider of services; or

5 (B) the insured was unable to identify the in6 surer despite good faith efforts to do so.

7 (b) LOSS OF FIRST PARTY BENEFITS.—No insurer

8 shall be obligated to pay any first party benefits to a per9 sonal injury protection insured for any economic loss that

10 a court of competent jurisdiction determines is, in whole

11 or in part, the product of fraudulent activity by the in12 sured with respect to an accident.

13 (c) LOSS OF ENTITLEMENT TO PURCHASE INSUR14 ANCE.—An insurer may cancel, decline to renew, or refuse

15 to issue a personal injury protection policy to any person

16 who a court of competent jurisdiction has determined has

17 engaged in fraudulent activity with respect to an accident

18 during the previous three years.

19 SEC. 8. SOURCE OF COMPENSATION IN CASES OF ACCI20 DENTAL INJURY.

21 (a) ACCIDENTS INVOLVING PERSONS CHOOSING THE

22 TORT MAINTENANCE SYSTEM.—

23 (1) IN GENERAL.—A tort maintenance insured

24 who is involved in an accident with another person

25 shall be subject to applicable State law for injury,
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1 except that, based on fault, that person may, upon

2 submission of proof of insurance—

3 (A) recover from any personal injury pro4 tection insured for uncompensated economic

5 loss (and not for noneconomic loss); and

6 (B) be liable to a personal injury protec7 tion insured for uncompensated economic loss

8 (and not for noneconomic loss).

9 (2) ALLOCATION OF TORT MAINTENANCE PAY10 MENTS.—In determining the extent of recovery of a

11 tort maintenance insured from a personal injury

12 protection insured under subsection (b), the pay13 ments made to the tort maintenance insured from

14 tort maintenance coverage shall first be allocable to

15 economic loss, and any remainder may be allocable

16 to noneconomic loss.

17 (b) ACCIDENTS INVOLVING PERSONS CHOOSING THE

18 PERSONAL INJURY PROTECTION SYSTEM.—

19 (1) RIGHT TO RECOVER ECONOMIC LOSS.—A

20 personal injury protection insured who is injured in

21 an accident may recover under the policy of that in22 sured only for economic loss, without regard to fault.

23 (2) RIGHT TO SUE FOR UNCOMPENSATED ECO24 NOMIC LOSS BASED ON FAULT.—A personal injury

25 protection insured who is involved in an accident
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1 with a tort maintenance insured, or another personal

2 injury protection insured, may recover based on fault

3 from that other insured for uncompensated economic

4 loss (and not for noneconomic loss).

5 (c) ALLOCATION OF COMPARATIVE FAULT.—In any

6 case in which a claim is made under this Act for uncom7 pensated economic loss on the basis of comparative fault

8 under applicable State law, the recovery of damages shall

9 be based on the percentage of fault with respect to the

10 amount of uncompensated economic loss.

11 (d) ACCIDENTS INVOLVING PERSONS CHOOSING THE

12 PERSONAL INJURY PROTECTION SYSTEM AND PERSONS

13 WHO ARE UNLAWFULLY UNINSURED.—

14 (1) RIGHTS OF PERSONAL INJURY PROTECTION

15 INSUREDS.—A personal injury protection insured

16 who is involved in an accident with an uninsured

17 motorist—

18 (A) shall be compensated under the in19 sured person’s policy for economic loss without

20 regard to fault; and

21 (B) may recover from the uninsured mo22 torist (other than under uninsured or under23 insured motorist coverage) for economic loss

24 and for noneconomic loss based on fault.
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1 (2) LIMITATIONS ON LAWSUITS BY UNINSURED

2 MOTORISTS.—An uninsured motorist may not re3 cover from a personal injury protection insured for

4 noneconomic loss.

5 (e) ACCIDENTS INVOLVING MOTORISTS UNDER THE

6 INFLUENCE OF ALCOHOL OR ILLEGAL DRUGS OR IN7 FLICTING INTENTIONAL INJURY.—Notwithstanding any

8 other provision of this Act, a personal injury protection

9 insured who is in an accident may—

10 (1) recover all damages based on fault under

11 applicable State law from a person who—

12 (A) at the time of the accident, was driving

13 under the influence of alcohol or illegal drugs

14 (as those terms are defined under applicable

15 State law); or

16 (B) caused an injury while seeking to in17 tentionally injure another person; and

18 (2) be liable for all damages based on fault

19 under applicable State law, if such insured—

20 (A) at the time of the accident, was driving

21 under the influence of alcohol or illegal drugs

22 (as those terms are defined under applicable

23 State law); or

24 (B) caused an injury while seeking to in25 tentionally injure another person.
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1 (f) RIGHTS OF LAWFULLY UNINSURED PERSONS.—

2 Nothing in this Act shall be construed to affect the tort

3 rights or obligations of any person lawfully uninsured

4 under the terms of an applicable State law for insurance

5 under either the personal injury protection system or tort

6 maintenance system under section 4(a)(1).

7 (g) RIGHTS OF PERSONS OCCUPYING MOTOR VEHI8 CLES WITH FEWER THAN FOUR LOAD-BEARING

9 WHEELS.—Nothing in this Act shall be construed to af10 fect the tort rights or obligations of a person who occupies

11 a motor vehicle with fewer than 4 load-bearing wheels or

12 an attachment thereto, unless an applicable contract for

13 personal injury protection under which that person is in14 sured specifies otherwise. The preceding sentence applies

15 without regard to whether the person is otherwise legally

16 insured for personal injury protection or tort maintenance

17 coverage.

18 (h) FORFEITURE OF FRAUDULENT CLAIMS.—An

19 owner, operator, or occupant of a motor vehicle involved

20 in an accident forfeits the right to make a claim against

21 an insured motorist for economic or noneconomic loss re22 sulting from injury incurred by that owner, operator, or

23 occupant if that owner, operator, or occupant knowingly

24 participated in a scheme to obtain insurance payments for
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1 any accident that was staged with the intent to commit

2 insurance fraud.

3 (i) PRIORITY OF BENEFITS.—

4 (1) IN GENERAL.—Except as provided in para5 graph (2), a personal injury protection insured or a

6 tort maintenance insured may recover first party

7 benefits only under the coverage of that insured in

8 effect at the time of the accident.

9 (2) EXCEPTIONS.—

10 (A) IN GENERAL.—Except as provided in

11 subparagraph (B), with respect to an accident

12 that occurred while an injured individual was

13 occupying a motor vehicle—

14 (i) furnished by an employer, the pri15 mary coverage shall be the coverage appli16 cable to the motor vehicle; or

17 (ii) that was being used in the busi18 ness of transporting individuals or prop19 erty, the primary coverage shall be the cov20 erage applicable to that motor vehicle.

21 (B) CERTAIN CLAIMANTS.—A claimant

22 may claim first party benefits in an amount

23 greater than the amounts determined under the

24 limits under the primary insurance coverage de25 scribed in clause (i) or (ii) of subparagraph (A),
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1 if that claimant would otherwise be able to re2 ceive those increased benefits by reason of in3 surance coverage of that claimant that would

4 otherwise apply, but for the operation of sub5 paragraph (A).

6 (j) REIMBURSEMENT RIGHTS OF PERSONAL INJURY

7 PROTECTION INSURERS AND COLLATERAL SOURCES.—

8 (1) REIMBURSEMENT RIGHTS OF PERSONAL IN9 JURY PROTECTION INSURERS.—

10 (A) IN GENERAL.—A personal injury pro11 tection insurer may seek reimbursement under

12 subparagraph (B), from—

13 (i) an uninsured motorist who is liable

14 for damages caused by the accident;

15 (ii) a motorist who was under the in16 fluence of alcohol or illegal drugs at the

17 time of the accident and whose conduct

18 was the proximate cause of the accident;

19 (iii) a person who caused an injury

20 while seeking to intentionally injure an21 other person; or

22 (iv) any other person who is not af23 fected by the limitations on tort rights and

24 liabilities under this Act and whose con-
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1 duct was the proximate cause of the acci2 dent.

3 (B) REIMBURSEMENT.—A personal injury

4 protection insurer may seek reimbursement

5 under this subparagraph to the extent of the

6 obligations of that insurer, with respect to pay7 ments for a personal injury protection insured

8 of that insurer with respect to an accident

9 caused in whole or in part, as determined in ac10 cordance with applicable State law, from a per11 son referred to in subparagraph (A), for the

12 losses that insurer—

13 (i) has paid or reimbursed; or

14 (ii) under applicable law, is obligated

15 to pay.

16 (2) REIMBURSEMENT RIGHTS OF COLLATERAL

17 SOURCES.—With respect to an accident, a collateral

18 source may seek reimbursement from an insurer in

19 a civil action based on fault.

20 (3) PROHIBITION ON MULTIPLE RECOVERY.—In

21 any action to recover losses arising out of an acci22 dent, a person may not recover or introduce into evi23 dence in a civil action against another person any

24 amount of a loss that a collateral source or personal

25 injury protection insurer—
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1 (A) has paid or reimbursed; or

2 (B) is obligated to pay.

3 (k) CHOICE OF LAW.—

4 (1) APPLICABLE LAW.—With respect to a claim

5 relating to a motor vehicle accident involving persons

6 from different States, the choice-of-law principles

7 applicable under the law of the State of competent

8 jurisdiction shall apply.

9 (2) APPLICABLE COVERAGE IN AN AUTO

10 CHOICE STATE.—With respect to an accident that

11 involves a person from a State in which this Act

12 does not apply and a person from a State in which

13 this Act applies, in any case in which the accident

14 occurs in a State in which this Act applies, the cov15 erage of the person from the State in which this Act

16 does not apply shall be deemed to be the form of in17 surance (whether personal injury protection or tort

18 maintenance coverage) that most closely reflects the

19 form of insurance that the person maintains in the

20 State of residence of the person.

21 (l) JURISDICTION.—This Act shall not confer juris22 diction on the district courts of the United States under

23 section 1331 or 1337 of title 28, United States Code.

24 (m) STATUTES OF LIMITATIONS.—
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1 (1) IN GENERAL.—Subject to paragraph (2),

2 nothing in this Act shall supersede an applicable

3 State law that imposes a statute of limitations for

4 claims related to an injury caused by an accident,

5 except that such statute shall be tolled during the

6 period during which any personal injury protection

7 or tort maintenance coverage benefits are paid.

8 (2) CLAIMS.—Unless otherwise provided by

9 State law, a claim for personal injury protection

10 benefits under this Act shall be filed not later than

11 two years after the economic loss that is the subject

12 of the claim is incurred.

13 (n) LIMITATIONS ON NONRENEWAL, CANCELLATION,

14 AND PREMIUM INCREASES.—An insurer shall not cancel,

15 decline to renew, or increase the premium of a person in16 sured by the insurer solely because that insured person

17 or any other injured person made a claim for—

18 (1) personal injury protection benefits; or

19 (2) tort maintenance coverage benefits in any

20 case in which there is no basis for ascribing fault to

21 the insured or one for whom the insured is vicari22 ously liable.

23 (o) NEGLIGENT DRIVER RATINGS.—Nothing in this

24 Act shall be construed to limit insurers from canceling,

25 failing to renew, or increasing premiums for an insured
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1 person if there is a basis for ascribing moving traffic viola2 tions or fault for an accident caused by that insured or

3 any resident relative or dependent, or employee of that in4 sured.

5 (p) IMMUNITY.—

6 (1) IN GENERAL.—Except as provided in para7 graph (2), no insurer, insurance agent or broker, in8 surance producer representing a motor vehicle in9 surer, automobile residual market plan, or attorney

10 licensed to practice law within a State, or any em11 ployee of any such person or entity, shall be liable

12 in an action for damages on account of—

13 (A) an election of—

14 (i) the tort maintenance system under

15 section 4(a)(1)(B); or

16 (ii) the personal injury protection sys17 tem under section 4(a)(1)(A); or

18 (B) a failure to make a required election.

19 (2) EXCEPTION.—Paragraph (1) shall not

20 apply in any case in which—

21 (A) a person described in that

22 paragraph—

23 (i) willfully and intentionally mis24 represents the insurance choices available

25 to a customer or client of that person; or
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1 (ii) willfully and with the intent to de2 fraud, induces the election of one motor ve3 hicle insurance system described in para4 graph (1)(A) over the other motor vehicle

5 insurance system described in that para6 graph; and

7 (B) the misrepresentation or inducement

8 under subparagraph (A) was the proximate

9 cause of that customer or client’s electing or

10 failing to make an election of an insurance sys11 tem under subparagraph (A) or (B) of section

12 4(a)(1).

13 SEC. 9. PRESERVATION OF STATE AND PRIVATE RIGHTS.

14 (a) RIGHTS OF STATES.—Nothing in this Act shall

15 be construed—

16 (1) to waive or affect any defense of sovereign

17 immunity asserted by any State under any law or by

18 the United States;

19 (2) to preempt State choice-of-law rules with re20 spect to claims brought by a foreign nation or a cit21 izen of a foreign nation;

22 (3) to affect the right of any court to transfer

23 venue, to apply the law of a foreign nation, or to dis24 miss a claim of a foreign nation or of a citizen of
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1 a foreign nation on the ground of inconvenient

2 forum;

3 (4) to preclude a State from establishing a

4 schedule of payments for medical protocols for treat5 ment of an injury that arises from an accident;

6 (5) to preclude a State from requiring personal

7 injury protection insurers to offer first party insur8 ance that establishes a dollar value for noneconomic

9 loss in objectively verifiable defined classes of cases

10 involving death or serious and permanent bodily in11 jury;

12 (6) to preclude a State from enacting a law ap13 plicable to all motor vehicle accident cases, including

14 cases covered by this Act, to establish a minimum

15 dollar value for economic losses for defined classes

16 of cases involving death or serious bodily injury;

17 (7) to preclude a State from providing that

18 forms of insurance other than those listed in section

19 5(b) shall be subtracted from personal injury protec20 tion insurance benefits otherwise payable for injury;

21 or

22 (8) to preclude a State from enacting a law

23 that—
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1 (A) allows litigation by tort maintenance

2 insureds against personal injury protection in3 sureds for economic and noneconomic loss; and

4 (B) assures through a reallocation device

5 that the advantage of tort claim waivers by per6 sonal injury protection insureds against tort

7 maintenance insureds is reflected in the pre8 miums of personal injury protection insureds.

9 (b) PRESERVATION OF STATE REGULATORY AU10 THORITY.—Nothing in this Act may be construed—

11 (1) to preclude a State or State official charged

12 with regulatory authority over the business of insur13 ance from fully exercising that regulatory authority,

14 including adopting regulations and procedures

15 regarding—

16 (A) rates;

17 (B) policy forms;

18 (C) company solvency;

19 (D) consumer protection;

20 (E) underwriting and marketing practices;

21 and

22 (F) carrying out the requirements of this

23 Act; or

24 (2) to allow or provide for Federal regulation of

25 motor vehicle insurance.
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1 (c) RIGHTS OF PRIVATE PARTIES.—Nothing in this

2 Act may be construed—

3 (1) to require a personal injury protection in4 surer to offer, or a personal injury protection in5 sured to purchase, any coverage for bodily injury in

6 addition to the coverage required under this Act, in7 cluding uninsured motorist coverage, underinsured

8 motorist coverage, or coverage for medical payments;

9 (2) to prevent insurers and insureds from con10 tracting to limit recovery for the loss of earnings

11 under personal injury protection by—

12 (A) limiting such recovery to only 60 per13 cent or more of lost wages or income;

14 (B) limiting the amount of such recovery

15 payable per week; or

16 (C) limiting the period of time after an ac17 cident during which the benefits referred to in

18 this paragraph are payable to a period of not

19 less than one year;

20 (3) to prevent insurers and insureds from

21 contracting—

22 (A) to limit recovery for economic loss for

23 medical and rehabilitation expenses to the aver24 age amount actually paid for a particular

25 course of treatment; or
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1 (B) to provide medical or rehabilitation

2 services through designated health care pro3 viders;

4 (4) to prevent an insurer from contracting with

5 insureds, as permitted by applicable State law, to

6 have submitted to arbitration any dispute with re7 spect to payment of personal injury protection or

8 tort maintenance coverage;

9 (5) to affect the worker classification of a per10 son, either as an employee or an independent con11 tractor, on the basis of the election of an employer

12 or motor carrier of an insurance system under sec13 tion 4(a); or

14 (6) to affect the awarding of punitive damages,

15 or damages for bad faith refusal to pay a claim,

16 under any applicable State law.

17 SEC. 10. APPLICABILITY TO STATES.

18 (a) ELECTION OF NONAPPLICABILITY BY STATES.—

19 Subject to subsections (c) through (e), this Act shall apply

20 with respect to a State, unless—

21 (1) by not later than the earlier of the date that

22 is one year after the date of enactment of this Act

23 or the expiration of the first regular legislative ses24 sion of the State beginning after the date of enact25 ment of this Act, the State enacts a statute that—
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1 (A) cites the authority of this subsection;

2 (B) declares the election of that State that

3 this Act shall not apply with respect to that

4 State; and

5 (C) contains no other provision; or

6 (2)(A) the State official charged with jurisdic7 tion over insurance rates for motor vehicles makes a

8 finding that this Act does not apply by reasons of

9 the applicability of the conditions described in sub10 section (b)(1)(A); and

11 (B) that finding is made and any review de12 scribed in subsection (b)(1)(B) is completed not

13 later than the date specified in subsection (b)(1)(C).

14 (b) NONAPPLICABILITY BASED ON STATE FIND15 ING.—

16 (1) IN GENERAL.—This Act shall not apply

17 with respect to a State, if—

18 (A) the State official charged with jurisdic19 tion over insurance rates for motor vehicles

20 makes a finding that the statewide average

21 motor vehicle premiums for bodily injury insur22 ance in effect immediately before the date of

23 enactment of this Act will not be reduced by an

24 average of at least 30 percent for persons

25 choosing the personal injury protection system,
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1 in the amounts required under section 5 (with2 out including in the calculation for personal in3 jury protection insureds any costs for unin4 sured, underinsured, or medical payments cov5 erages);

6 (B) the finding described under subpara7 graph (A) is supported by evidence adduced in

8 a public hearing and reviewable under the appli9 cable State administrative procedure law; and

10 (C) the finding described under subpara11 graph (A) is made, and any review of such find12 ing under subparagraph (B) is completed, not

13 later than 120 days after the date of enactment

14 of this Act.

15 (2) COMPARISON OF BODILY INJURY PRE16 MIUMS.—For purposes of making a comparison

17 under paragraph (1)(A) of premiums for personal

18 injury protection with preexisting premiums for bod19 ily injury insurance (in effect immediately before the

20 date of enactment of this Act), the preexisting bodily

21 injury insurance premiums shall include premiums

22 for—

23 (A) bodily injury liability, uninsured and

24 underinsured motorists’ liability, and medical

25 payments coverage; and
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1 (B) if applicable, no-fault benefits under a

2 no-fault motor vehicle law or add-on law.

3 (c) IMPLEMENTATION PERIOD.—Except as provided

4 in subsection (d), if a State fails to enact a law by the

5 applicable date specified in paragraph (1) of subsection

6 (a) or if a finding described in paragraph (2) of that sub7 section is not made and reviewed by the date specified in

8 subsection (b)(1)(C), this Act shall apply to that State be9 ginning on the date that is 270 days after the later of

10 those dates.

11 (d) ACCELERATED APPLICABILITY.—

12 (1) IN GENERAL.—Subject to paragraph (2), a

13 State may enact a law that provides for the imple14 mentation of the provisions of this Act in that State

15 before an otherwise applicable date determined

16 under subsection (a).

17 (2) APPLICABILITY.—If a State makes an elec18 tion under paragraph (1), this Act shall apply to

19 that State beginning on the date that is 270 days

20 after the date of such election.

21 (e) ELECTION OF NONAPPLICABILITY BY A STATE

22 AFTER THIS ACT BECOMES APPLICABLE WITH RESPECT

23 TO THE STATE.—After this Act becomes applicable with

24 respect to a State under subsection (c) or (d), this Act

25 shall cease to apply with respect to that State if the State
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1 enacts a statute that meets the requirements of subpara2 graphs (A) through (C) of subsection (a)(1).

Æ