1-1 By: Truan S.B. No. 702
1-2 (In the Senate - Filed February 22, 1995; February 23, 1995,
1-3 read first time and referred to Committee on Economic Development;
1-4 March 21, 1995, reported favorably, as amended, by the following
1-5 vote: Yeas 10, Nays 0; March 21, 1995, sent to printer.)
1-6 COMMITTEE AMENDMENT NO. 1 By: Ellis
1-7 Amend S.B. No. 702, SECTION 2, by striking the second sentence of
1-8 Section 3 on page 2, lines 15 through 16 (committee printing
1-9 page 1, lines 49-50).
1-10 A BILL TO BE ENTITLED
1-11 AN ACT
1-12 relating to residential fire protection sprinkler systems and to an
1-13 insurance premium discount for the use of such a system.
1-14 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-15 SECTION 1. Subsection (a), Section 3, Article 5.43-3,
1-16 Insurance Code, is amended to read as follows:
1-17 (a) The board shall administer this article and may issue
1-18 rules necessary to its administration through the State Fire
1-19 Marshal. Under rules adopted under this subsection, the board may
1-20 create a specialized licensing or registration program for fire
1-21 protection sprinkler system contractors.
1-22 SECTION 2. Subchapter C, Chapter 5, Insurance Code, is
1-23 amended by adding Article 5.33B to read as follows:
1-24 Art. 5.33B. REDUCTION IN HOMEOWNERS INSURANCE PREMIUMS FOR
1-25 APPROVED SPRINKLER SYSTEMS
1-26 Sec. 1. DEFINITIONS. In this article:
1-27 (1) "Commission" means the Texas Commission on Fire
1-28 Protection.
1-29 (2) "Commissioner" means the commissioner of
1-30 insurance.
1-31 (3) "Fire protection sprinkler system" has the meaning
1-32 assigned by Section 1(9), Article 5.43-3, of this code.
1-33 (4) "Homeowners insurance" means insurance coverage
1-34 written by a company authorized to engage in the business of fire
1-35 and residential allied lines insurance in this state, including a
1-36 business entity regulated under Chapter 6, 16, 17, 18, or 19 of
1-37 this code.
1-38 (5) "Inspector" means a person certified by the
1-39 commission to be a fire protection sprinkler system contractor
1-40 under Article 5.43-3 of this code.
1-41 Sec. 2. ELIGIBILITY FOR PREMIUM REDUCTION. A policyholder
1-42 is entitled to a premium reduction for homeowners insurance
1-43 coverage if the policyholder has installed on the covered property
1-44 a fire protection sprinkler system that is approved under this
1-45 article by an inspector.
1-46 Sec. 3. APPROVAL PROCEDURE. (a) A person who has a fire
1-47 protection sprinkler system in the person's residence may contract
1-48 with an inspector for a premium reduction certification inspection.
1-49 An inspector who conducts an inspection under this section may
1-50 charge the fee for the inspection that is set by the commission.
1-51 (b) The inspector shall inspect the property and shall file
1-52 a written report in the form prescribed by the department with the
1-53 department stating the inspector's findings and whether or not the
1-54 fire protection sprinkler system meets applicable standards and
1-55 qualifies the applicant's property for a premium reduction.
1-56 (c) For purposes of this section, "applicable standards"
1-57 means the standards for a fire protection sprinkler system that are
1-58 adopted by rule by the commission, which may include standards
1-59 proposed by the National Fire Protection Association.
1-60 Sec. 4. PREMIUM REDUCTION CERTIFICATE. (a) If the
1-61 inspector's report states that the applicant's property qualifies
1-62 for a premium reduction, the department shall issue to the
1-63 applicant a premium reduction certificate entitling the applicant
1-64 to a premium reduction on the homeowners insurance.
1-65 (b) The policyholder is entitled to the premium reduction on
1-66 presentation of the certificate to the insurer issuing the policy
1-67 or the insurer's agent.
1-68 Sec. 5. AMOUNT OF PREMIUM REDUCTION. The commissioner shall
2-1 establish by rule the amount of a premium reduction applicable
2-2 under this article to a homeowners insurance policy.
2-3 SECTION 3. (a) This Act takes effect September 1, 1995.
2-4 (b) Article 5.33B, Insurance Code, as added by Section 2 of
2-5 this Act, applies only to an insurance policy that is delivered,
2-6 issued for delivery, or renewed on or after January 1, 1996. A
2-7 policy that is delivered, issued for delivery, or renewed before
2-8 January 1, 1996, is governed by the law as it existed immediately
2-9 before the effective date of this Act, and that law is continued in
2-10 effect for that purpose.
2-11 SECTION 4. The importance of this legislation and the
2-12 crowded condition of the calendars in both houses create an
2-13 emergency and an imperative public necessity that the
2-14 constitutional rule requiring bills to be read on three several
2-15 days in each house be suspended, and this rule is hereby suspended.
2-16 * * * * *