By Henderson S.B. No. 1584
74R7250 PB-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to rates for commercial windstorm and hail 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 8(h), Texas Catastrophe Property
1-7 Insurance Pool Act (Article 21.49, Insurance Code), is amended to
1-8 read as follows:
1-9 (h)(1) Each extended coverage benchmark rate, flexibility
1-10 band, and promulgated rate established by the commissioner <Board>
1-11 in accordance with Chapter 5, Insurance Code, must be uniform
1-12 throughout the first tier of coastal counties.
1-13 (2) The rates for noncommercial windstorm and hail
1-14 insurance written by the association <before December 31, 1995,>
1-15 shall be 90 percent of the modified extended coverage rates. For
1-16 purposes of this section, the modified extended coverage rate is
1-17 the greater of the upper flexibility band for extended coverage
1-18 established by the board under Article 5.101 of this code or 25
1-19 percent above the extended coverage benchmark rate established by
1-20 the commissioner <board> under that article.
1-21 (3) <The rates for noncommercial windstorm and hail
1-22 insurance written by the association after December 31, 1995, shall
1-23 be 90 percent of the manual rate for monoline extended coverage
1-24 promulgated by the Board for noncommercial risks under Subchapter
2-1 C, Chapter 5, Insurance Code.> Notwithstanding Article 5.13-2,
2-2 Insurance Code, the Association <Board> shall file with the
2-3 department for approval by the commissioner <promulgate> a manual
2-4 rate for commercial risks and classes of risks written by the
2-5 Association <in accordance with Subchapter C, Chapter 5, Insurance
2-6 Code>. The Association may not make such a filing more than once
2-7 in any 12-month period. Article 5.13-2, Insurance Code, does not
2-8 apply to the rates of insurance written by the Association.
2-9 (4) The department shall file with the Texas Register
2-10 notice that a filing has been made under Subdivision (3) of this
2-11 subsection not later than the seventh day after the date the
2-12 filing is received by the department.
2-13 (5) An insured under a commercial policy written by
2-14 the association who is aggrieved by a filing affecting commercial
2-15 insurance, or the office of public insurance counsel, may apply to
2-16 the commissioner in writing, not later than the 60th day after the
2-17 date the notice is published in the Texas Register, for a hearing
2-18 on the filing. The application must:
2-19 (A) specify the grounds on which the insured or
2-20 office of public insurance counsel bases the request for the
2-21 hearing; and
2-22 (B) be accompanied by written, specific facts
2-23 and information that supports the grounds for the objection to the
2-24 filing.
2-25 (6) The commissioner shall issue notice of a hearing
2-26 to be conducted not later than the 30th day after the date of
2-27 receipt of the application if, after review of the application and
3-1 the supporting facts and information, the commissioner determines
3-2 that:
3-3 (A) the application is made in good faith;
3-4 (B) the insured, or the public as represented by
3-5 the office of public insurance counsel, would be adversely impacted
3-6 as described by the application and supporting materials; and
3-7 (C) the grounds presented otherwise justify
3-8 holding the hearing.
3-9 (7) The commissioner shall give at least 10 days'
3-10 written notice of the hearing to the person who files the
3-11 application and to the association. The notice must specify which
3-12 of the grounds stated in the request for the hearing will be
3-13 considered, and whether the hearing is limited to all or part of
3-14 those grounds.
3-15 (8) If, after the hearing, the commissioner determines
3-16 that all or part of the association's filing does not meet the
3-17 requirements of this section, the commissioner shall issue an order
3-18 that specifies each aspect in which the filing fails to meet the
3-19 requirements of this section.
3-20 (9) Each commercial filing and any information
3-21 supporting the filing that is made under this section is open to
3-22 public inspection as of the date of the filing. A commercial
3-23 filing made by the association is considered approved by the
3-24 commissioner on the 75th day after the date it is filed with the
3-25 department unless the commissioner disapproves the filing before
3-26 that time or issues a notice of hearing in accordance with this
3-27 section. If the commissioner issues a notice of hearing, the
4-1 commissioner may extend the date of approval or disapproval until
4-2 the 60th day after the date the hearing ends. <The rates for
4-3 commercial windstorm and hail insurance written by the Association
4-4 shall be 90 percent of the manual rates for extended coverage
4-5 promulgated by the Board for commercial risks under Subchapter C,
4-6 Chapter 5, Insurance Code.>
4-7 (10) If valid flood or rising water insurance coverage
4-8 exists and is maintained on any risk being insured in the pool, the
4-9 commissioner <State Board of Insurance> may provide for a rate and
4-10 reduction in rate of premium as may be appropriate.
4-11 (11) The catastrophe element of extended coverage
4-12 rates promulgated or filed by the commissioner <Board> under this
4-13 Act applicable to commercial risks written by the Association shall
4-14 be uniform throughout the seacoast territory and shall be based on
4-15 all monoline extended coverage loss experience of all regulated
4-16 insurers authorized to do business in this state, including the
4-17 Association, for property located in the seacoast territory, using
4-18 the most recent 30 years' experience available. Surcharges
4-19 collected in the past and used in the development of current manual
4-20 rates may not be excluded from future rate development as long as
4-21 those surcharges were collected during the experience period used
4-22 by the commissioner <Board>.
4-23 (12) The association shall either establish a
4-24 reinsurance program or enter into a contract as provided in
4-25 Subsection (i) of this section. The Texas Department of Insurance
4-26 may approve any reinsurance program.
4-27 (13) Subdivision (2) of this subsection expires on the
5-1 date that Article 5.101 of this code expires. If that article is
5-2 continued in effect after December 31, 1995, this subdivision
5-3 expires January 1, 1996.
5-4 SECTION 2. This Act takes effect September 1, 1995.
5-5 SECTION 3. The importance of this legislation and the
5-6 crowded condition of the calendars in both houses create an
5-7 emergency and an imperative public necessity that the
5-8 constitutional rule requiring bills to be read on three several
5-9 days in each house be suspended, and this rule is hereby suspended.