By: Martin H.B. No. 231
73R1708 PB-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the abolition of the board of directors of the Texas
1-3 Catastrophe Property Insurance Association and the operation of
1-4 that association by the State Board of Insurance.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Sections 3(f), (g), (h), and (i), Article 21.49,
1-7 Insurance Code, are amended to read as follows:
1-8 (f) "Insurable Property" means immovable property at fixed
1-9 locations in a catastrophe area or corporeal movable property
1-10 located therein (as may be designated in the plan of operation)
1-11 which property is determined by the Board <Association>, pursuant
1-12 to the criteria specified in the plan of operation to be in an
1-13 insurable condition against windstorm, hail and/or fire and
1-14 explosion as appropriate, as determined by normal underwriting
1-15 standards; provided, however, that insofar as windstorm and hail
1-16 insurance is concerned, any structure located within a catastrophe
1-17 area, commenced on or after the 30th day following the publication
1-18 of the plan of operation, not built or continuing in compliance
1-19 with building specifications set forth in the plan of operation
1-20 shall not be an insurable risk under this Act except as otherwise
1-21 provided under this Act. A structure, or an addition thereto,
1-22 which is constructed in conformity with plans and specifications
1-23 that comply with the specifications set forth in the plan of
1-24 operation at the time construction commences shall not be declared
2-1 ineligible for windstorm and hail insurance as a result of
2-2 subsequent changes in the building specifications set forth in the
2-3 plan of operation. When repair of damage to a structure involves
2-4 replacement of items covered in the building specifications as set
2-5 forth in the plan of operation, such repairs must be completed in a
2-6 manner to comply with such specifications for the structure to
2-7 continue within the definition of Insurable Property for windstorm
2-8 and hail insurance. Nothing in this Act shall preclude special
2-9 rating of individual risks as may be provided in the plan of
2-10 operation. For purposes of this Act, all structures which are
2-11 located within those areas designated as units under the federal
2-12 Coastal Barrier Resources Act (Public Law 97-348) and for which
2-13 construction has commenced on or after July 1, 1991 shall not be
2-14 considered insurable property.
2-15 (g) "Net Direct Premiums" means gross direct written
2-16 premiums less return premiums upon canceled contracts (irrespective
2-17 of reinsurance assumed or ceded) written on property in this State
2-18 as defined by the Board <of Directors of the Association>.
2-19 (h) "Catastrophe Area" means a city or county in which it
2-20 may be determined by the Board, after notice of not less than 10
2-21 days and a hearing, that windstorm and hail insurance is not
2-22 reasonably available to a substantial number of owners of insurable
2-23 property within such city or county, due to such insurable property
2-24 being located within a city or county subject to unusually frequent
2-25 and severe damage resulting from windstorms and/or hailstorms.
2-26 Such designation shall be revoked by the Board if it determines,
2-27 after notice of not less than 10 days and a hearing, that windstorm
3-1 and hail insurance in such catastrophe area is no longer reasonably
3-2 unavailable to a substantial number of owners of insurable property
3-3 within such designated city or county. <If the Association shall
3-4 determine that windstorm and hail insurance is no longer reasonably
3-5 unavailable to a substantial number of owners of insurable property
3-6 in any designated catastrophe area or areas, then the Association
3-7 may request in writing that the Board revoke the designation of any
3-8 or all of such catastrophe areas and, after notice of not less than
3-9 10 days and a hearing, but within 30 days of such hearing, the
3-10 Board shall either approve or reject the Association's request and
3-11 shall, if such request be approved, revoke such designation or
3-12 designations.>
3-13 (i) "Inadequate Fire Insurance Area" means a city or county
3-14 which is, or is within an area, designated as a catastrophe area,
3-15 as defined in Paragraph (h), above, and in which it may be
3-16 determined by the Board, after notice of not less than 10 days and
3-17 a hearing, that fire and explosion insurance is not reasonably
3-18 available to a substantial number of owners of insurable property
3-19 within such city or county. Such designation shall be revoked by
3-20 the Board if it determines, after 10 days' notice and a hearing,
3-21 that fire and explosion insurance in such inadequate fire insurance
3-22 area is no longer reasonably unavailable to a substantial number of
3-23 owners of insurable property within such designated city or county.
3-24 <If the Association shall determine that fire and explosion
3-25 insurance is no longer reasonably unavailable to a substantial
3-26 number of owners of insurable property in any designated inadequate
3-27 fire insurance area or areas, then the Association may request in
4-1 writing that the Board revoke the designation of any or all such
4-2 inadequate fire insurance areas, and, after notice of not less than
4-3 10 days and a hearing, but within 30 days of such hearing, the
4-4 Board shall either approve or reject the Association's request and
4-5 shall, if such request is approved, revoke such designation or
4-6 designations.>
4-7 SECTION 2. Section 5, Article 21.49, Insurance Code, is
4-8 amended to read as follows:
4-9 Sec. 5. Operation of the Texas Catastrophe Property
4-10 Insurance Association<; Association Board of Directors>. (a) The
4-11 Association shall, pursuant to the provisions of this Act and the
4-12 plan of operation, and with respect to insurance on insurable
4-13 property, have the power on behalf of its members to cause to be
4-14 issued policies of insurance to applicants, to assume reinsurance
4-15 from its members, and to cede reinsurance to its members and to
4-16 purchase reinsurance on behalf of its members.
4-17 (b) All members of the Association shall participate in its
4-18 writings, expenses, profits and losses in the proportion that the
4-19 net direct premiums of such member written in this State during the
4-20 preceding calendar year bears to the aggregate net direct premiums
4-21 written in this State by all members of the Association, as
4-22 furnished to the Association by the Board after review of annual
4-23 statements, other reports and other statistics the Board shall deem
4-24 necessary to provide the information herein required and which the
4-25 Board is hereby authorized and empowered to obtain from any member
4-26 of the Association, provided, however, that a member shall, in
4-27 accordance with the plan of operation, be entitled to receive
5-1 credit for similar insurance voluntarily written in the area
5-2 designated by the Board and its participation in the writings in
5-3 the Association shall be reduced in accordance with the provisions
5-4 of the plan of operation. Each member's participation in the
5-5 Association shall be determined annually in the manner provided in
5-6 the plan of operation. For purposes of determining participation
5-7 in the Association, two or more members having a common ownership
5-8 or operating in this State under common management or control shall
5-9 be treated as if they constituted a single member and also shall
5-10 include the net direct premiums, as defined by this article, of any
5-11 affiliated insurance company that is under such common management
5-12 or control including affiliated insurance companies that are not
5-13 authorized to transact property insurance in this State. Any
5-14 insurer authorized to write and engaged in writing any insurance,
5-15 the writing of which required such insurer to be a member of the
5-16 Association, who becomes authorized to engage in writing such
5-17 insurance shall become a member of the Association on the 1st day
5-18 of January immediately following such authorization and the
5-19 determination of such insurer's participation in the Association
5-20 shall be made as of the date of such membership in the same manner
5-21 as for all other members of the Association.
5-22 (c) The plan of operation of the Association shall provide
5-23 for the efficient, economical, fair, and nondiscriminatory
5-24 administration of the Association. The Board by rule shall adopt
5-25 the plan of operation <with the advice of the board of directors of
5-26 the Association>. A member of the <The> Association may present
5-27 recommended changes in the plan of operation to the Board at
6-1 periodic hearings conducted by the Board for that purpose, or at
6-2 hearings relating to property and casualty insurance rates. The
6-3 member <Association> must present a proposed change to the Board in
6-4 writing in the manner prescribed by the Board. A change proposed
6-5 by a member of the Association does not take effect unless adopted
6-6 by the Board by rule.
6-7 (d) The plan of operation must include:
6-8 (1) a plan for the equitable assessment of the members
6-9 of the Association to defray losses and expenses;
6-10 (2) underwriting standards;
6-11 (3) procedures for the acceptance and cession of
6-12 reinsurance;
6-13 (4) procedures for determining the amount of insurance
6-14 to be provided to specific risks;
6-15 (5) time limits and procedures for processing
6-16 applications for insurance; and
6-17 (6) other provisions as deemed necessary by the Board
6-18 to carry out the purposes of this Act.
6-19 (e) The Board shall develop programs to improve the
6-20 efficient operation of the Association, including a program
6-21 designed to create incentives for insurers to write windstorm and
6-22 hail insurance voluntarily to cover property located in a
6-23 catastrophe area, especially property located on the barrier
6-24 islands. The Board shall implement the incentive program not later
6-25 than April 1, 1992. The program shall be designed in a way that
6-26 reduces the number of policies that are not written in the
6-27 voluntary market in catastrophe areas by not less than 10 percent
7-1 by January 1, 1993, not less than 25 percent by January 1, 1994,
7-2 and not less than 40 percent by January 1, 1995, based on the
7-3 number of risks underwritten by the Association on January 1, 1991.
7-4 The Board shall report its results to the legislature on March 1 of
7-5 each year beginning in 1993.
7-6 (f) Any interested person may petition the Board to modify
7-7 the plan of operation in accordance with the Administrative
7-8 Procedure and Texas Register Act (Article 6252-13a, Vernon's Texas
7-9 Civil Statutes).
7-10 (g) <The board of directors of the Association is
7-11 responsible and accountable to the Board. The board of directors
7-12 is composed of nine members as follows:>
7-13 <(1) five representatives of different insurers who
7-14 are members of the Association who shall be elected by members as
7-15 provided in the plan of operation;>
7-16 <(2) two representatives of the general public,
7-17 nominated by the office of public insurance counsel, who, as of the
7-18 date of the appointment, reside in a catastrophe area and who are
7-19 policyholders, as of the date of the appointment, of the
7-20 Association; and>
7-21 <(3) two local recording agents licensed under this
7-22 Code with demonstrated experience in the Association, and whose
7-23 principal offices, as of the date of the appointment, are located
7-24 in a catastrophe area.>
7-25 <(h) Members of the board of directors of the Association
7-26 serve three-year staggered terms, with the terms of three members
7-27 expiring on the third Tuesday of March of each year. If an insurer
8-1 member has been elected and served two full terms, such insurer
8-2 shall provide for a reasonable rotation of persons designated by it
8-3 to serve on the board.>
8-4 <(i) The persons appointed as provided by Subsections (g)(2)
8-5 and (g)(3) of this section must be from different counties.>
8-6 <(j) The board of directors of the Association shall elect
8-7 an executive committee consisting of a chairman, vice-chairman, and
8-8 secretary-treasurer from its membership. At least one of those
8-9 officers must be a member appointed under Subsection (g)(2) or
8-10 Subsection (g)(3) of this section.>
8-11 <(k)> Except for an emergency meeting of the Association <or
8-12 the board of directors of the Association>, the members of the
8-13 Association shall notify the Board not later than the 11th day
8-14 before the date of <each meeting of the board of directors of the
8-15 Association or> a meeting of the members of the Association.
8-16 Except for closed <or executive> sessions authorized by Section 2,
8-17 Chapter 271, Acts of the 60th Legislature, Regular Session, 1967
8-18 (Article 6252-17, Vernon's Texas Civil Statutes), meetings of the
8-19 <board of directors of the Association and> members of the
8-20 Association shall be open to any member of the Board or the
8-21 member's designated representative and to members of the public.
8-22 Notice of meetings of the Association <or board of directors of the
8-23 Association> shall be given as provided by Chapter 271, Acts of the
8-24 60th Legislature, Regular Session, 1967 (Article 6252-17, Vernon's
8-25 Texas Civil Statutes).
8-26 (h) <(l)> If an occurrence or series of occurrences within
8-27 the defined catastrophe area results in insured losses in excess of
9-1 $100 million in a single calendar year, the <Association shall
9-2 immediately notify the> Board <of that fact. The Board on
9-3 receiving notice> shall immediately notify the Governor and
9-4 appropriate committees of each house of the Legislature of the
9-5 amount of insured losses in excess of $100 million.
9-6 SECTION 3. Sections 6(a) and (b), Article 21.49, Insurance
9-7 Code, are amended to read as follows:
9-8 (a) Any person having an insurable interest in insurable
9-9 property located in an area designated by the Board shall be
9-10 entitled to apply to the Association for insurance provided for
9-11 under the plan of operation and for an inspection of the property
9-12 under such rules and regulations, including an inspection fee, if
9-13 any, as determined by the Board <of Directors of the Association
9-14 and approved by the State Board of Insurance>. The term "insurable
9-15 interest" as used in this subsection shall be deemed to include any
9-16 lawful and substantial economic interest in the safety or
9-17 preservation of property from loss, destruction or pecuniary
9-18 damage. Application shall be made on behalf of the applicant by a
9-19 Local Recording Agent and shall be submitted on forms prescribed by
9-20 the Board <Association>. The application shall contain a statement
9-21 as to whether or not the applicant has or will submit the premium
9-22 in full from personal funds, or if not, to whom a balance is or
9-23 will be due.
9-24 (b) If the Board <Association> determines that the property
9-25 is insurable, the Association, upon payment of the premium, shall
9-26 cause to be issued a policy of insurance as may be provided in the
9-27 plan for a term of one year.
10-1 In the event an agent or some other person, firm, or
10-2 corporation shall finance the payment of all or a portion of the
10-3 premium and there is a balance due for the financing of such
10-4 premium and such balance, or any installment thereof, is not paid
10-5 within 10 days after the due date, the agent or other person, firm,
10-6 or corporation to whom such balance is due may request cancellation
10-7 of the insurance by returning the policy, with proof that the
10-8 insured was notified of such return, or by requesting the Board
10-9 <Association> to cancel such insurance by notice mailed to the
10-10 insured and any others shown in the policy as having an insurable
10-11 interest in the property. Upon completion of cancellation, the
10-12 Board <Association> shall refund the unearned premium, less any
10-13 minimum retained premium set forth in the plan of operation, to the
10-14 person, firm, or corporation to whom the unpaid balance is due. In
10-15 the event an insured requests cancellation of insurance, the Board
10-16 <Association> shall make refund of such unearned premium payable to
10-17 the insured and the holder of an unpaid balance. The Local
10-18 Recording Agent, who submitted the application, shall refund the
10-19 commission on any unearned premium in the same manner.
10-20 SECTION 4. Section 6A(a), Article 21.49, Insurance Code, is
10-21 amended to read as follows:
10-22 (a) Except as otherwise provided by this Subsection, all
10-23 structures that are constructed or repaired or to which additions
10-24 are made on or after January 1, 1988, to be considered insurable
10-25 property for windstorm and hail insurance from the Association,
10-26 must be inspected or approved by the Board for compliance with the
10-27 building specifications in the plan of operation. Roofing
11-1 materials satisfy the building specifications in the plan of
11-2 operation if those materials pass the UL Standard 997 or a
11-3 comparable test certified by the Board and are installed as
11-4 required by the Board to promote the wind resistance of the
11-5 materials. A structure constructed, repaired, or to which
11-6 additions were made before January 1, 1988, that is located in an
11-7 area covered at the time by a building code recognized by the Board
11-8 <Association> shall be considered an insurable property for
11-9 windstorm and hail insurance from the Association without
11-10 compliance with the inspection or approval requirements of this
11-11 Section or the plan of operation. A structure constructed,
11-12 repaired, or to which additions were made before January 1, 1988,
11-13 that is located in an area not covered by a building code
11-14 recognized by the Board <Association> shall be considered an
11-15 insurable property for windstorm and hail insurance from the
11-16 Association without compliance with the inspection or approval
11-17 requirements of this Section or the plan of operation if that
11-18 structure has been previously insured by a licensed insurance
11-19 company authorized to do business in this State and the risk is in
11-20 essentially the same condition as when previously insured, except
11-21 for normal wear and tear, and without any structural change other
11-22 than a change made according to code. Evidence of previous
11-23 insurance includes a copy of a previous policy, copies of cancelled
11-24 checks or agent's records that show payments for previous policies,
11-25 and a copy of the title to the structure or mortgage company
11-26 records that show previous policies. The Board may appoint or
11-27 employ qualified inspectors as defined in this Section to perform
12-1 any inspections required by this Section.
12-2 SECTION 5. Section 8, Article 21.49, Insurance Code, is
12-3 amended to read as follows:
12-4 Sec. 8. Rates, Rating Plans and Rate Rules <Applicable>.
12-5 (a) <The Association shall file with the Board every manual of
12-6 classifications, rules, rates which shall include condition
12-7 charges, every rating plan, and every modification of any of the
12-8 foregoing which it proposes to use. Every such filing shall
12-9 indicate the character and the extent of the coverage contemplated
12-10 and shall be accompanied by the policies and endorsements forms
12-11 proposed to be used, which said forms and endorsements may be
12-12 designed specifically for use by the Association and without regard
12-13 to other forms filed with, approved by, or promulgated by the Board
12-14 for use in this State. The Association may not file changes that
12-15 would result in a reduction of coverages or an increase in an
12-16 applicable deductible.>
12-17 <(c) Any filing made by the Association pursuant hereto
12-18 shall be submitted to the Board and as soon as reasonably possible
12-19 after the filing has been made the Board shall, in writing,
12-20 approve, modify, or disapprove the same; provided that any filing
12-21 shall be determined approved unless modified or disapproved within
12-22 30 days after date of filing.>
12-23 <(d) If at any time the Board finds that a filing so
12-24 approved no longer meets the requirements of this Act, it may,
12-25 after a hearing held on not less than 20 days' notice to the
12-26 Association specifying the matters to be considered at such
12-27 hearing, issue an order withdrawing its approval thereof. Said
13-1 order shall specify in what respects the Board finds that such
13-2 filing no longer meets the requirements of this Act and shall be
13-3 effective not less than 30 days after its issuance.>
13-4 <(e)> All rates shall be made in accordance with the
13-5 following provisions:
13-6 (1) Due consideration shall be given to the past and
13-7 prospective loss experience within and outside the State of hazards
13-8 for which insurance is made available through the plan of
13-9 operation, if any, to expenses of operation including acquisition
13-10 costs, to a reasonable margin for profit and contingencies, and to
13-11 all other relevant factors, within and outside the State.
13-12 (2) Risks may be grouped by classifications for the
13-13 establishment of rates and minimum premiums. Classification rates
13-14 may be modified to produce rates for individual risks in accordance
13-15 with rating plans which establish standards for measuring
13-16 variations in such risks on the basis of any or all of the factors
13-17 mentioned in the preceding paragraph. Such rates may include rules
13-18 for classification of risks insured hereunder and rate
13-19 modifications thereof. All such provisions, however, as respects
13-20 rates, classifications, standards and premiums shall be without
13-21 prejudice to or prohibition of provision by the Association for
13-22 consent rates on individual risks if the rate and risk are
13-23 acceptable to the Board <Association> and as is similarly provided
13-24 for, or as is provided for, in Article 5.26(a), Texas Insurance
13-25 Code, and this provision or exception on consent rates is
13-26 irrespective of whether or not any such risk would otherwise be
13-27 subject to or the subject of a provision of rate classification or
14-1 eligibility.
14-2 (3) Rates shall be reasonable, adequate, not unfairly
14-3 discriminatory, and nonconfiscatory as to any class of insurer.
14-4 (4) Commissions paid to agents shall be reasonable,
14-5 adequate, not unfairly discriminatory and nonconfiscatory.
14-6 (b) <(f)> For the purpose of this Act the applicant under
14-7 Section 6(a) hereof shall be considered to have consented to the
14-8 appropriate rates and classifications authorized by this Act
14-9 irrespective of any and all other rates or classifications.
14-10 (c) <(g)> All premiums written and losses paid under this
14-11 Act as appropriate shall be included in applicable classifications
14-12 for general rate making purposes.
14-13 (d) <(h)> Rates, including extended coverage rates covering
14-14 risks or classes of risks written by the Association before
14-15 December 31, 1995, may not exceed the benchmark rates promulgated
14-16 by the Board under Subchapter M, Chapter 5, Insurance Code, for
14-17 noncommercial lines of insurance. Rates for noncommercial lines of
14-18 insurance written by the Association on or after December 31, 1995,
14-19 may not exceed the manual rate promulgated by the Board under
14-20 Subchapter C, Chapter 5, Insurance Code. Notwithstanding Article
14-21 5.13-2, Insurance Code, the Board shall promulgate a manual rate
14-22 for commercial risks and classes of risks written by the
14-23 Association in accordance with Subchapter C, Chapter 5, Insurance
14-24 Code. Article 5.13-2, Insurance Code, does not apply to the rates
14-25 of insurance written by the Association.
14-26 (e) If valid flood or rising water insurance coverage exists
14-27 and is maintained on any risk being insured in the pool the <State>
15-1 Board <of Insurance> may provide for a rate and reduction in rate
15-2 of premium as may be appropriate.
15-3 (f) The <State> Board <of Insurance> shall make provision by
15-4 rule and regulation requiring catastrophe reserves as part of the
15-5 premium received on risks or classes of risks located in a
15-6 catastrophe area and shall approve a catastrophe reinsurance pool
15-7 or program that is funded through the excess of premiums over
15-8 losses in a calendar year and may approve a catastrophe reinsurance
15-9 pool funded through assessments of members of the Association. The
15-10 amount required to be reserved for catastrophes (as such
15-11 catastrophes are defined by the Board) shall be that portion of the
15-12 pure premium as is actuarially made attributable, as ascertained by
15-13 the Board, to prospective catastrophic loss. The portion of the
15-14 pure premium attributable to prospective catastrophic loss shall
15-15 not be income and shall be unearned until the occurrence of an
15-16 applicable catastrophe as defined and shall be held in trust by the
15-17 pool or trustee of the pool until losses are paid therefrom under
15-18 such reasonable rules and regulations as the <State> Board <of
15-19 Insurance> shall prescribe or approve.
15-20 (g) <(i)> The Board annually shall promulgate extended
15-21 coverage rates based on sound actuarial principles. Rates for
15-22 windstorm and hail insurance shall be 90 percent of the extended
15-23 coverage rates. Extended coverage rates shall be uniform
15-24 throughout the first tier coastal counties. The catastrophe
15-25 element of extended coverage rates shall be uniform throughout the
15-26 seacoast territory and shall be based on all monoline extended
15-27 coverage loss experience of all regulated insurers authorized to do
16-1 business in this state, including the Association, for property
16-2 located in the seacoast territory, using the most recent 30 years'
16-3 experience available. Surcharges collected in the past and used in
16-4 the development of current manual rates may not be excluded from
16-5 future rate development as long as those surcharges were collected
16-6 during the experience period used by the Board.
16-7 SECTION 6. Section 9, Article 21.49, Insurance Code, is
16-8 amended to read as follows:
16-9 Sec. 9. APPEALS. Any person insured pursuant to this Act,
16-10 or his duly authorized representative, or any affected insurer who
16-11 may be aggrieved by an act, ruling or decision of the Association,
16-12 may, within 30 days after such act, ruling or decision, appeal to
16-13 the commissioner. In the event a member of the Association is
16-14 aggrieved by the action of the commissioner with respect to any
16-15 ruling, order, or determination of the commissioner, the member
16-16 <it> may, within 30 days after such action, make a written request
16-17 to the commissioner, for a hearing thereon. The commissioner shall
16-18 hear the member of the Association, or the appeal from an act,
16-19 ruling or decision of the Association, within 30 days after receipt
16-20 of such request or appeal and shall give not less than 10 days'
16-21 written notice of the time and place of hearing to the member of
16-22 the Association making such request or the person, or his duly
16-23 authorized representative, appealing from the act, ruling or
16-24 decision of the Association. A hearing on an act, ruling or
16-25 decision of the Association relating to the payment of, the amount
16-26 of, or the denial of a particular claim shall be held, at the
16-27 request of the claimant, in either the county in which the covered
17-1 property is located or Travis County. Within 30 days after the
17-2 hearing, the commissioner shall affirm, reverse or modify its
17-3 previous action or the act, ruling or decision appealed to the
17-4 commissioner. Pending such hearing and decision thereon, the
17-5 commissioner may suspend or postpone the effective date of its
17-6 previous rule or of the act, ruling or decision appealed to the
17-7 commissioner. The member of the Association, or the person
17-8 aggrieved by any order or decision of the commissioner, may
17-9 thereafter appeal to either a District Court of Travis County,
17-10 Texas, or a District Court in the county in which the covered
17-11 property is located. An action brought under this section is
17-12 subject to the procedures established under Article 1.04(f) of this
17-13 code.
17-14 SECTION 7. Section 11, Article 21.49, Insurance Code, is
17-15 amended to read as follows:
17-16 Sec. 11. Indemnification. Each <person serving as a
17-17 director of the Association, each> member of the Association<,> and
17-18 each officer and employee of the Association shall be indemnified
17-19 by the Association against all costs and expenses actually and
17-20 necessarily incurred by him or it in connection with the defense of
17-21 any action, suit, or proceeding in which he or it is made a party
17-22 by reason of his or its being or having been a <director or> member
17-23 of the Association<,> or an officer or employee of the Association
17-24 except in relation to matters as to which he or it has been judged
17-25 in such action, suit or proceeding to be liable by reason of
17-26 misconduct in the performance of his or its duties as a <director
17-27 of the Association or a> member or officer or employee of the
18-1 Association, provided, however, that this indemnification shall in
18-2 no way indemnify a member of the Association from participating in
18-3 the writings, expenses, profits, and losses of the Association in
18-4 the manner set out in this Act. Indemnification hereunder shall
18-5 not be exclusive of other rights to which such member or officer
18-6 may be entitled as a matter of law.
18-7 SECTION 8. Section 12, Article 21.49, Insurance Code, is
18-8 amended to read as follows:
18-9 Sec. 12. Annual Report. The <Association shall file in the
18-10 office of the> Board annually shall compile a statement which shall
18-11 summarize the transactions, conditions, operations and affairs of
18-12 the Association during the preceding year <at such times and
18-13 covering such periods as may be designated by the Board>. <Such
18-14 statement shall contain such matters and information as are
18-15 prescribed by the Board and shall be in such form as is required by
18-16 it.>
18-17 SECTION 9. (a) This Act takes effect September 1, 1993.
18-18 (b) The board of directors of the Texas Catastrophe Property
18-19 Insurance Association is abolished on the effective date of this
18-20 Act. All records in the custody of that board of directors
18-21 relating to the operation of the Texas Catastrophe Property
18-22 Insurance Association shall be transferred to the State Board of
18-23 Insurance not later than January 1, 1994.
18-24 SECTION 10. The importance of this legislation and the
18-25 crowded condition of the calendars in both houses create an
18-26 emergency and an imperative public necessity that the
18-27 constitutional rule requiring bills to be read on three several
19-1 days in each house be suspended, and this rule is hereby suspended.