By Henderson S.B. No. 1583
74R7249 PB-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to adjustment of certain liability limits for insurance
1-3 coverage through the Texas Catastrophe Property Insurance
1-4 Association.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 8D, Texas Catastrophe Property Insurance
1-7 Pool Act (Article 21.49, Insurance Code), is amended to read as
1-8 follows:
1-9 Sec. 8D. LIABILITY LIMITS. (a) A policy of windstorm and
1-10 hail insurance issued by the Association under this Act shall
1-11 provide coverage for any one insurable property in amounts equal
1-12 to:
1-13 (1) $250,000 for a dwelling and the corporeal movable
1-14 property located in the dwelling, as the term "dwelling" is defined
1-15 in the special dwelling, homeowners, or farm and ranch property
1-16 owners schedules of the General Basis Schedule;
1-17 (2) $2 million for a building and the corporeal
1-18 movable property located in the building that is owned by, and at
1-19 least 75 percent of which is occupied by, a governmental entity, or
1-20 that is not owned by, but is wholly and exclusively occupied by, a
1-21 governmental entity;
1-22 (3) $750,000 per building for an apartment,
1-23 condominium, or townhouse defined as a risk under the apartment
1-24 house rating schedule, residential condominium rating schedule, or
2-1 townhouse unit rating schedule of the General Basis Schedule and
2-2 the corporeal movable property of the owner of the structure in
2-3 which the apartment, condominium, or townhouse is located;
2-4 (4) $100,000 for individually owned corporeal movable
2-5 property located in an apartment, condominium, or townhouse unit
2-6 that is occupied by the owner of that property; and
2-7 (5) $1 million for a structure other than a dwelling
2-8 or a public building and the corporeal movable property located in
2-9 that structure.
2-10 (b) Liability limits for insurable property that is not
2-11 covered under Subsection (a) of this section shall be established
2-12 by the plan of operation.
2-13 (c) The board of directors of the Association, not later
2-14 than September 1 of each year <Board, as part of the annual rate
2-15 hearings conducted by the Board>, shall adjust to the nearest
2-16 $1,000 the liability limits for inflation, including the limits set
2-17 by Subsection (a) of this section, at a rate that reflects any
2-18 change in the BOECK Index. If that index ceases to exist, the
2-19 board of directors shall adjust the liability limits for inflation
2-20 using any <or> other index that the board of directors determines
2-21 <may> accurately reflects <reflect> changes in the cost of
2-22 construction or residential values in the catastrophe area. An
2-23 adjustment in liability limits under this subsection applies to
2-24 each policy of windstorm and hail insurance that is delivered,
2-25 issued for delivery, or renewed on or after January 1 of the year
2-26 after the year in which the board of directors makes an adjustment
2-27 to the liability <The indexing of the> limits <of liability shall
3-1 apply as determined by the Board on and after January 1, 1992>.
3-2 (d) Not later than the 10th day after the date on which the
3-3 board of directors adjusts liability limits under Subsection (c) of
3-4 this section, the Association shall file in writing with the
3-5 department a statement that includes:
3-6 (1) the adjusted liability limits;
3-7 (2) the limits in effect immediately before the
3-8 adjustment;
3-9 (3) a brief summary of the changes to the BOECK Index
3-10 or other applicable index on which the adjustments are based; and
3-11 (4) a brief summary of the computations used for
3-12 making the adjustment.
3-13 (e) The department shall make the statement filed under
3-14 Subsection (d) of this section available for public inspection.
3-15 (f) Notwithstanding Subsections (b) and (c) of this section,
3-16 the board of directors <Board> may not adjust liability limits to
3-17 amounts lower than the amounts adopted under Subsection (a) of this
3-18 section.
3-19 (g) <(e)> A policyholder who is insured on September 1,
3-20 1991, for an amount higher than the liability limits prescribed by
3-21 Subsection (a) of this section may not be required to reduce the
3-22 insurance coverage to an amount lower than the amount in effect on
3-23 September 1, 1991.
3-24 SECTION 2. This Act takes effect September 1, 1995, and
3-25 applies only to an insurance policy that is delivered, issued for
3-26 delivery, or renewed on or after January 1, 1996. A policy that is
3-27 delivered, issued for delivery, or renewed before January 1, 1996,
4-1 is governed by the law as it existed immediately before the
4-2 effective date of this Act, and that law is continued in effect for
4-3 that purpose.
4-4 SECTION 3. The importance of this legislation and the
4-5 crowded condition of the calendars in both houses create an
4-6 emergency and an imperative public necessity that the
4-7 constitutional rule requiring bills to be read on three several
4-8 days in each house be suspended, and this rule is hereby suspended.