By: Truan S.B. No. 702 A BILL TO BE ENTITLED AN ACT 1-1 relating to residential fire protection sprinkler systems and to an 1-2 insurance premium discount for the use of such a system. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 SECTION 1. Subsection (a), Section 3, Article 5.43-3, 1-5 Insurance Code, is amended to read as follows: 1-6 (a) The board shall administer this article and may issue 1-7 rules necessary to its administration through the State Fire 1-8 Marshal. Under rules adopted under this subsection, the board may 1-9 create a specialized licensing or registration program for fire 1-10 protection sprinkler system contractors. 1-11 SECTION 2. Subchapter C, Chapter 5, Insurance Code, is 1-12 amended by adding Article 5.33B to read as follows: 1-13 Art. 5.33B. REDUCTION IN HOMEOWNERS INSURANCE PREMIUMS FOR 1-14 APPROVED SPRINKLER SYSTEMS 1-15 Sec. 1. DEFINITIONS. In this article: 1-16 (1) "Commission" means the Texas Commission on Fire 1-17 Protection. 1-18 (2) "Commissioner" means the commissioner of 1-19 insurance. 1-20 (3) "Fire protection sprinkler system" has the meaning 1-21 assigned by Section 1(9), Article 5.43-3, of this code. 1-22 (4) "Homeowners insurance" means insurance coverage 1-23 written by a company authorized to engage in the business of fire 1-24 and residential allied lines insurance in this state, including a 2-1 business entity regulated under Chapter 6, 16, 17, 18, or 19 of 2-2 this code. 2-3 (5) "Inspector" means a person certified by the 2-4 commission to be a fire protection sprinkler system contractor 2-5 under Article 5.43-3 of this code. 2-6 Sec. 2. ELIGIBILITY FOR PREMIUM REDUCTION. A policyholder 2-7 of a one-family or two-family dwelling is entitled to a premium 2-8 reduction for homeowners insurance coverage if the policyholder has 2-9 installed on the covered property a fire protection sprinkler 2-10 system that is approved under this article by an inspector. 2-11 Sec. 3. APPROVAL PROCEDURE. (a) A person who has a fire 2-12 protection sprinkler system in the person's residence may contract 2-13 with an inspector for a premium reduction certification inspection. 2-14 (b) The inspector shall inspect the property and shall file 2-15 a written report in the form prescribed by the department with the 2-16 department stating the inspector's findings and whether or not the 2-17 fire protection sprinkler system meets applicable standards and 2-18 qualifies the applicant's property for a premium reduction. 2-19 (c) For purposes of this section, "applicable standards" 2-20 means the standards for a fire protection sprinkler system that are 2-21 adopted by rule by the commission, which may include standards 2-22 proposed by the National Fire Protection Association. 2-23 Sec. 4. PREMIUM REDUCTION CERTIFICATE. (a) If the 2-24 inspector's report states that the applicant's property qualifies 2-25 for a premium reduction, the department shall issue to the 2-26 applicant a premium reduction certificate entitling the applicant 2-27 to a premium reduction on the homeowners insurance. 3-1 (b) The policyholder is entitled to the premium reduction on 3-2 presentation of the certificate to the insurer issuing the policy 3-3 or the insurer's agent. 3-4 Sec. 5. AMOUNT OF PREMIUM REDUCTION. The commissioner shall 3-5 establish by rule the amount of a premium reduction applicable 3-6 under this article to a homeowners insurance policy. 3-7 SECTION 3. (a) This Act takes effect September 1, 1995. 3-8 (b) Article 5.33B, Insurance Code, as added by Section 2 of 3-9 this Act, applies only to an insurance policy that is delivered, 3-10 issued for delivery, or renewed on or after January 1, 1996. A 3-11 policy that is delivered, issued for delivery, or renewed before 3-12 January 1, 1996, is governed by the law as it existed immediately 3-13 before the effective date of this Act, and that law is continued in 3-14 effect for that purpose. 3-15 SECTION 4. The importance of this legislation and the 3-16 crowded condition of the calendars in both houses create an 3-17 emergency and an imperative public necessity that the 3-18 constitutional rule requiring bills to be read on three several 3-19 days in each house be suspended, and this rule is hereby suspended.