By Truan S.B. No. 702 74R4752 PB-D A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to residential fire protection sprinkler systems and to an 1-3 insurance premium discount for the use of such a system. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Section 3(a), Article 5.43-3, Insurance Code, is 1-6 amended to read as follows: 1-7 (a) The board shall administer this article and may issue 1-8 rules necessary to its administration through the State Fire 1-9 Marshal. Under rules adopted under this subsection, the board may 1-10 create a specialized licensing or registration program for fire 1-11 protection sprinkler system contractors. 1-12 SECTION 2. Subchapter C, Chapter 5, Insurance Code, is 1-13 amended by adding Article 5.33B to read as follows: 1-14 Art. 5.33B. REDUCTION IN HOMEOWNERS INSURANCE PREMIUMS FOR 1-15 APPROVED SPRINKLER SYSTEMS 1-16 Sec. 1. DEFINITIONS. In this article: 1-17 (1) "Commission" means the Texas Commission on Fire 1-18 Protection. 1-19 (2) "Commissioner" means the commissioner of 1-20 insurance. 1-21 (3) "Fire protection sprinkler system" has the meaning 1-22 assigned by Section 1(9), Article 5.43-3, of this code. 1-23 (4) "Homeowners insurance" means insurance coverage 1-24 written by a company authorized to engage in the business of fire 2-1 and residential allied lines insurance in this state, including a 2-2 business entity regulated under Chapter 6, 16, 17, 18, or 19 of 2-3 this code. 2-4 (5) "Inspector" means a person certified by the 2-5 commission to be a fire protection sprinkler system contractor 2-6 under Article 5.43-3 of this code. 2-7 Sec. 2. ELIGIBILITY FOR PREMIUM REDUCTION. A policyholder 2-8 is entitled to a premium reduction for homeowners insurance 2-9 coverage if the policyholder has installed on the covered property 2-10 a fire protection sprinkler system that is approved under this 2-11 article by an inspector. 2-12 Sec. 3. APPROVAL PROCEDURE. (a) A person who has a fire 2-13 protection sprinkler system in the person's residence may contract 2-14 with an inspector for a premium reduction certification inspection. 2-15 An inspector who conducts an inspection under this section may 2-16 charge the fee for the inspection that is set by the commission. 2-17 (b) The inspector shall inspect the property and shall file 2-18 a written report in the form prescribed by the department with the 2-19 department stating the inspector's findings and whether or not the 2-20 fire protection sprinkler system meets applicable standards and 2-21 qualifies the applicant's property for a premium reduction. 2-22 (c) For purposes of this section, "applicable standards" 2-23 means the standards for a fire protection sprinkler system that are 2-24 adopted by rule by the commission, which may include standards 2-25 proposed by the National Fire Protection Association. 2-26 Sec. 4. PREMIUM REDUCTION CERTIFICATE. (a) If the 2-27 inspector's report states that the applicant's property qualifies 3-1 for a premium reduction, the department shall issue to the 3-2 applicant a premium reduction certificate entitling the applicant 3-3 to a premium reduction on the homeowners insurance. 3-4 (b) The policyholder is entitled to the premium reduction on 3-5 presentation of the certificate to the insurer issuing the policy 3-6 or the insurer's agent. 3-7 Sec. 5. AMOUNT OF PREMIUM REDUCTION. The commissioner shall 3-8 establish by rule the amount of a premium reduction applicable 3-9 under this article to a homeowners insurance policy. 3-10 SECTION 3. (a) This Act takes effect September 1, 1995. 3-11 (b) Article 5.33B, Insurance Code, as added by Section 2 of 3-12 this Act, applies only to an insurance policy that is delivered, 3-13 issued for delivery, or renewed on or after January 1, 1996. A 3-14 policy that is delivered, issued for delivery, or renewed before 3-15 January 1, 1996, is governed by the law as it existed immediately 3-16 before the effective date of this Act, and that law is continued in 3-17 effect for that purpose. 3-18 SECTION 4. The importance of this legislation and the 3-19 crowded condition of the calendars in both houses create an 3-20 emergency and an imperative public necessity that the 3-21 constitutional rule requiring bills to be read on three several 3-22 days in each house be suspended, and this rule is hereby suspended.