Enrolled Bill Summary

House Bill 2253 amends the Insurance Code to modify provisions relating to the operation of the catastrophe reserve fund and to the disposition of assets of the Texas Windstorm Association. The act clarifies that the assets of the association are to be used for payment of claims, authorized investments, administrative expenses, to purchase reinsurance, or to prepare for or mitigate the effects of catastrophic natural events. The act provides that the association's assets revert to the state after the dissolution of the association.

The commissioner of insurance is required to adopt rules under which association members relinquish their net equity on an annual basis by making payments to the catastrophe reserve fund to finance both the fund's obligations and a mitigation and preparedness plan. The act clarifies that all money in the fund is to be regarded as state funds to be held by the comptroller outside the state treasury on behalf of the Texas Department of Insurance, and it further specifies that during each state fiscal year, beginning with fiscal year 2002, the Texas Department of Insurance may use an amount equal to not less than $1 million and not more than 10 percent of the investment income from the catastrophe reserve fund to develop and implement the mitigation and preparedness plan, $1 million of which may be allocated for the windstorm inspection program.