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.