By Hunter of Nueces H.B. No. 2676
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the operation of the Texas Catastrophe Property
1-3 Insurance Association and adjustment of liability limits for
1-4 insurance coverage.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 8D, Article 21.49, Insurance Code, is
1-7 amended to read as follows:
1-8 Sec. 8D. (a) The maximum limits of liability under a <A>
1-9 policy of windstorm and hail insurance issued by the Association
1-10 under this Act shall be determined by the board of directors of the
1-11 Association and included in the plan of operation. In no event
1-12 shall the board of directors provide for maximum limits less than
1-13 <coverage for any one insurable property in amounts equal to>:
1-14 (1) $250,000 for a dwelling and the corporeal movable
1-15 property located in the dwelling, as the term "dwelling" is defined
1-16 in the special dwelling, homeowners, or farm and ranch property
1-17 owners schedules of the Texas Personal Lines Manual <General Basis
1-18 Schedule>;
1-19 (2) $2 million for a building and the corporeal
1-20 movable property located in the building that is owned by, and at
1-21 least 75 percent of which is occupied by, a governmental entity, or
1-22 that is not owned by, but is wholly and exclusively occupied by, a
1-23 governmental entity;
2-1 (3) $750,000 per building for an apartment,
2-2 condominium, or townhouse defined as a risk under the apartment
2-3 house rating schedule, residential condominium rating schedule, or
2-4 townhouse unit rating schedule of the Texas Commercial Lines Manual
2-5 <General Basis Schedule> and the corporeal movable property of the
2-6 owner of the structure in which the apartment, condominium, or
2-7 townhouse is located;
2-8 (4) $100,000 for individually owned corporeal movable
2-9 property located in an apartment, condominium, or townhouse unit
2-10 that is occupied by the owner of that property; and
2-11 (5) $1 million for a structure other than a dwelling
2-12 or a public building and the corporeal movable property located in
2-13 that structure.
2-14 (b) Liability limits for insurable property that is not
2-15 covered under Subsection (a) of this section shall be established
2-16 by the plan of operation.
2-17 (c)(1) The board of directors of the Association, not later
2-18 than September 1 of each year, <Board, as part of the annual rate
2-19 hearings conducted by the Board,> shall adjust to the nearest
2-20 $1,000 in round numbers the liability limits for inflation,
2-21 including the limits set by Subsection (a) of this section, at a
2-22 rate that reflects any change in the BOECKH Index. If the BOECKH
2-23 Index ceases to exist, the board of directors shall adjust the
2-24 liability limits for inflation based on any <or> other index that
2-25 <may accurately reflect> reflects changes in the cost of
3-1 construction or residential values in the catastrophe area. An
3-2 adjustment in liability limits applies to all policies of windstorm
3-3 and hail insurance with an effective date on or after January 1 of
3-4 the year following the board of director's adjustment to the
3-5 liability limits. The indexing of the limits of liability shall
3-6 apply as determined <by the Board> on and after January 1, 1992.
3-7 (2) The board of directors of the Association may make
3-8 additional increases in the limits of liability as it deems
3-9 necessary for the purposes of this Act. Adjustments of liability
3-10 limits under this subsection shall be included in the plan of
3-11 operation.
3-12 (d) Within 10 days following the adjustment of liability
3-13 limits under Subsection (c) of this section, the Association shall
3-14 make a written filing with the Texas Department of Insurance which
3-15 shall include a statement of the adjusted liability limits, a
3-16 statement of liability limits in effect immediately preceding such
3-17 adjustment, a brief summary of the changes to the BOECKH Index on
3-18 which the adjustments are based, and a brief summary of the
3-19 calculations used for making the adjustments. The Texas Department
3-20 of Insurance shall make this filing available for public
3-21 inspection.
3-22 (e) <(d)> Notwithstanding Subsections (b) and (c) of this
3-23 section, the board of directors <Board> may not adjust liability
3-24 limits to amounts lower than the amounts adopted under Subsection
3-25 (a) of this section.
4-1 (f) <(e)> A policyholder who is insured on September 1,
4-2 1991, for an amount higher than the liability limits prescribed by
4-3 Subsection (a) of this section may not be required to reduce the
4-4 insurance coverage to an amount lower than the amount in effect on
4-5 September 1, 1991.
4-6 SECTION 2. This Act takes effect on September 1, 1995.
4-7 SECTION 3. The importance of this legislation and the
4-8 crowded condition of the calendars in both houses create an
4-9 emergency and an imperative public necessity that the
4-10 constitutional rule requiring bills to be read on three several
4-11 days in each house be suspended, and this rule is hereby suspended
4-12 and that this Act take effect and be in force according to its
4-13 terms, and it is so enacted.