By Eiland, Berlanga, Hunter of Nueces, H.B. No. 2593
Luna, Munoz, et al.
Substitute the following for H.B. No. 2593:
By Counts C.S.H.B. No. 2593
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to rates for commercial windstorm and hail insurance
1-3 coverage through the Texas Catastrophe Property Insurance
1-4 Association.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 8(h), Texas Catastrophe Property
1-7 Insurance Pool Act (Article 21.49, Insurance Code), is amended to
1-8 read as follows:
1-9 (h)(1) Each extended coverage benchmark rate, flexibility
1-10 band, and promulgated rate established by the commissioner <Board>
1-11 in accordance with Chapter 5, Insurance Code, must be uniform
1-12 throughout the first tier of coastal counties.
1-13 (2) The rates for noncommercial windstorm and hail
1-14 insurance written by the association <before December 31, 1995,>
1-15 shall be 90 percent of the modified extended coverage rates. For
1-16 purposes of this section, the modified extended coverage rate is
1-17 the greater of the upper flexibility band for extended coverage
1-18 established by the commissioner <board> under Article 5.101 of this
1-19 code or 25 percent above the extended coverage benchmark rate
1-20 established by the commissioner <board> under that article.
1-21 (3) Not later than August 1 of each year, the
1-22 Association <The rates for noncommercial windstorm and hail
1-23 insurance written by the association after December 31, 1995, shall
2-1 be 90 percent of the manual rate for monoline extended coverage
2-2 promulgated by the Board for noncommercial risks under Subchapter
2-3 C, Chapter 5, Insurance Code. Notwithstanding Article 5.13-2,
2-4 Insurance Code, the Board> shall file with the department for
2-5 approval by the commissioner <promulgate> a manual rate for
2-6 commercial risks and classes of risks written by the Association
2-7 developed in accordance with Subchapter C, Chapter 5, Insurance
2-8 Code, which is applicable only to the extent consistent with this
2-9 article. The Association may not make such a filing more than one
2-10 time in any 12-month period. The rate for commercial windstorm and
2-11 hail insurance written by the Association shall be 90 percent of
2-12 the rate for extended coverage for commercial risks as developed in
2-13 accordance with Subchapter C, Chapter 5, Insurance Code, to the
2-14 extent consistent with this article. Article 5.13-2, Insurance
2-15 Code, does not apply to the rates of insurance written by the
2-16 Association. Article 1.33B of this code does not apply to a filing
2-17 made under this subdivision and Subdivisions (4)-(10) of this
2-18 subsection, or a department action with respect to the filing.
2-19 <The rates for commercial windstorm and hail insurance written by
2-20 the Association shall be 90 percent of the manual rates for
2-21 extended coverage promulgated by the Board for commercial risks
2-22 under Subchapter C, Chapter 5, Insurance Code.>
2-23 (4) Before approving or disapproving a filing, or
2-24 modifying a filing, the commissioner shall provide all interested
2-25 persons a reasonable opportunity to review the filing, obtain
3-1 copies of the filing on payment of any legally required copying
3-2 cost, and submit to the commissioner written comments or
3-3 information related to the filing.
3-4 (5) The commissioner shall schedule an open meeting
3-5 not later than the 45th day after the date on which the department
3-6 receives the filing at which interested persons may present written
3-7 or oral comments relating to the filing. An open meeting under
3-8 this subdivision is subject to Chapter 551, Government Code, but is
3-9 not a contested case hearing under Chapter 2001, Government Code.
3-10 (6) The department shall file with the Texas Register
3-11 notice that a filing has been made under Subdivision (3) of this
3-12 subsection not later than the seventh day after the date the filing
3-13 is received by the department. The notice must include information
3-14 relating to:
3-15 (A) the availability of the filing for public
3-16 inspection at the department during regular business hours and the
3-17 procedures for obtaining copies of the filing;
3-18 (B) procedures for making written comments
3-19 related to the filing; and
3-20 (C) the time, place and date of the open meeting
3-21 scheduled under Subdivision (5) of this subsection at which an
3-22 interested person may submit either written or oral comments
3-23 relating to the filing.
3-24 (7) After the conclusion of the open meeting, the
3-25 commissioner shall approve or disapprove or modify the filing in
4-1 writing on or before November 1 of the year in which the filing is
4-2 made or the filing is deemed approved. If the commissioner
4-3 disapproves a filing, the commissioner shall state in writing the
4-4 reasons for the disapproval and the criteria to be met by the
4-5 Association to obtain approval. The Association may file with the
4-6 Commissioner, not later than ten (10) days after the date on which
4-7 the Association receives the Commissioner's written disapproval, an
4-8 amended filing bringing the filing into conformity with all
4-9 criteria stated in the Commissioner's written disapproval.
4-10 (8) Before approving or disapproving an amended
4-11 filing, the commissioner shall provide all interested persons a
4-12 reasonable opportunity to review the amended filing, obtain copies
4-13 of the amended filing on payment of any legally required copying
4-14 cost, and submit to the commissioner written comments or
4-15 information related to the amended filing in the manner provided by
4-16 Subdivision (4) of this subsection, and may hold a hearing not
4-17 later than the 20th day after the date on which the department
4-18 receives the amended filing in the manner provided by Subdivision
4-19 (5) of this subsection. Not later than the 10th day after the date
4-20 on which the hearing on the amended filing is concluded, the
4-21 commissioner shall approve or disapprove the amended filing.
4-22 Within 30 days after the amended filing is received, the
4-23 commissioner shall approve or disapprove an amended filing or it is
4-24 deemed approved. The requirements imposed under Subdivisions (6)
4-25 and (7) of this subsection apply to a hearing conducted under this
5-1 subdivision.
5-2 (9) In conjunction with the review of a filing or
5-3 amended filing, the commissioner may request the Association to
5-4 provide additional supporting information relating to the filing or
5-5 amended filing, and any interested person may file a written
5-6 request with the commissioner for additional supporting information
5-7 relating to the filing or amended filing. A request under this
5-8 subdivision must be reasonable and must be directly related to the
5-9 filing or amended filing. The commissioner shall submit to the
5-10 Association all requests for additional supporting information made
5-11 under this subdivision for the commissioner's use and the use of
5-12 any interested person. The Association shall provide the
5-13 information to the commissioner not later than the fifth day after
5-14 the date on which the written request for additional supporting
5-15 information is delivered to the Association. The department shall
5-16 notify an interested person who has requested additional
5-17 information of the availability of the information not later than
5-18 one business day after the date on which the commissioner receives
5-19 the information from the Association.
5-20 (10) A filing made under this subsection may not
5-21 reflect an annual premium rate change that is more than 15 percent
5-22 (higher or lower) of the rate for commercial windstorm and hail
5-23 insurance in each rate classification in effect on September 1,
5-24 1995. This subdivision expires January 1, 2001, provided however,
5-25 that the commissioner may, after notice and hearing, suspend this
6-1 subdivision upon a finding that a catastrophe loss or series of
6-2 occurrences resulting in losses in the catastrophe area justify a
6-3 need to assure rate adequacy in the catastrophe area and also
6-4 justify a need to assure availability of insurance outside the
6-5 catastrophe area.
6-6 (11) If valid flood or rising water insurance coverage
6-7 exits and is maintained on any risk being insured in the pool, the
6-8 commissioner <State Board of Insurance> may provide for a rate and
6-9 reduction in rate of premium as may be appropriate.
6-10 (12) The catastrophe element of extended coverage
6-11 rates promulgated or filed by the commissioner <Board> under this
6-12 Act applicable to commercial risks written by the Association shall
6-13 be uniform throughout the seacoast territory and shall be based on
6-14 all monoline extended coverage loss experience of all regulated
6-15 insurers authorized to do business in this state, including the
6-16 Association, for property located in the seacoast territory, using
6-17 the most recent 30 years' experience available. Surcharges
6-18 collected in the past and used in the development of current manual
6-19 rates may not be excluded from future rate development as long as
6-20 those surcharges were collected during the experience period used
6-21 by the commissioner <Board>.
6-22 (13) The Association shall either establish a
6-23 reinsurance program or enter into a contract as provided in
6-24 Subsection (i) of this section. The Texas Department of Insurance
6-25 may approve any reinsurance program.
7-1 SECTION 2. This Act takes effect on September 1, 1995, and
7-2 applies only to an insurance policy that is delivered, issued for
7-3 delivery, or renewed on or after January 1, 1996. A policy that is
7-4 delivered, issued for delivery, or renewed before January 1, 1996,
7-5 is governed by the law as it existed immediately before the
7-6 effective date of this Act, and that law is continued in effect for
7-7 that purpose.
7-8 SECTION 3. The importance of this legislation and the
7-9 crowded condition of the calendars in both houses create an
7-10 emergency and an imperative public necessity that the
7-11 constitutional rule requiring bills to be read on three several
7-12 days in each house be suspended, and this rule is hereby suspended.