By Eiland H.B. No. 2593
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to noncommercial windstorm and hail insurance.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 8(h), Article 21.49, Insurance Code, is
1-5 amended to read as follows:
1-6 (h) Each extended coverage benchmark rate, flexibility band,
1-7 and promulgated rate established by the Board in accordance with
1-8 Chapter 5, Insurance Code, must be uniform throughout the first
1-9 tier of coastal counties.
1-10 The rates for noncommercial windstorm and hail insurance
1-11 written by the association <before December 31, 1995,> shall be 90
1-12 percent of the modified extended coverage rates. For purposes of
1-13 this section, the modified extended coverage rate is the greater of
1-14 the upper flexibility band for extended coverage established by the
1-15 board under Article 5.101 of this code or 25 percent above the
1-16 extended coverage benchmark rate established by the board under
1-17 that article.
1-18 <The rates for noncommercial windstorm and hail insurance
1-19 written by the association after December 31, 1995, shall be 90
1-20 percent of the manual rate for monoline extended coverage
1-21 promulgated by the Board for noncommercial risks under Subchapter
1-22 C, Chapter 5, Insurance Code.> Notwithstanding Article 5.13-2,
1-23 Insurance Code, the Board shall promulgate a manual rate for
2-1 commercial risks and classes of risks written by the Association in
2-2 accordance with Subchapter C, Chapter 5, Insurance Code. Article
2-3 5.13-2, Insurance Code, does not apply to the rates of insurance
2-4 written by the Association. The rates for commercial windstorm and
2-5 hail insurance written by the Association shall be 90 percent of
2-6 the manual rates for extended coverage promulgated by the Board for
2-7 commercial risks under Subchapter C, Chapter 5, Insurance Code.
2-8 If valid flood or rising water insurance coverage exists and
2-9 is maintained on any risk being insured in the pool the State Board
2-10 of Insurance may provide for a rate and reduction in rate of
2-11 premium as may be appropriate.
2-12 The catastrophe element of extended coverage rates
2-13 promulgated by the Board under this Act applicable to commercial
2-14 risks written by the Association shall be uniform throughout the
2-15 seacoast territory and shall be based on all monoline extended
2-16 coverage loss experience of all regulated insurers authorized to do
2-17 business in this state, including the Association, for property
2-18 located in the seacoast territory, using the most recent 30 years'
2-19 experience available. Surcharges collected in the past and used in
2-20 the development of current manual rates may not be excluded from
2-21 future rate development as long as those surcharges were collected
2-22 during the experience period used by the Board.
2-23 The association shall either establish a reinsurance program
2-24 or enter into a contract as provided in Subsection (i) of this
2-25 section. The Texas Department of Insurance may approve any
3-1 reinsurance program.
3-2 SECTION 2. This Act takes effect September 1, 1995.
3-3 SECTION 3. The importance of this legislation nd the crowded
3-4 condition of the calendars in both houses create an emergency and
3-5 an imperative public necessity that the constitutional rule
3-6 requiring bills to be read on three several days in each house be
3-7 suspended, and this rule is hereby suspended.