SRC-SLL H.B. 3383 75(R)   BILL ANALYSIS


Senate Research Center   H.B. 3383
By: Eiland (Patterson)
Economic Development
5-7-97
Engrossed


DIGEST 

The current building code standards for properties insured by the Texas
Catastrophe Property Insurance Association (association) were adopted in
1972.  These standards are outdated and stricter standards, based on
updated engineering methods, could help reduce losses due to windstorm and
hail along the Texas coast.  This bill provides that a new building code
adopted by the commissioner of insurance (commissioner) must be met for
new residential construction to be insurable by the association.
Additionally, this bill requires the commissioner to establish rate
reductions for new residential construction built to the standards of a
new building code. 

PURPOSE

As proposed, H.B. 3383 provides regulations for the operation of the Texas
catastrophe property insurance pool.  

RULEMAKING AUTHORITY

Rulemaking authority is granted to the commissioner of insurance in
SECTION 3 (Section 8E(c), Article 21.49, Insurance Code) of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1. Sets forth legislative findings regarding the negative impact
of new building code standards on consumers and elimination of that impact
through insurance rate reductions. 

SECTION 2. Amends Section 3, Article 21.49, Insurance Code, by adding
Subsection (o), to define "new building code." 

SECTION 3. Amends Article 21.49, Insurance Code, by adding Section 8E, as
follows: 

Sec.  8E.  RATE ROLLBACK.  Provides that this section applies only to
policies or coverages that are issued by the Texas Catastrophe Property
Insurance Association (association) to cover new residential construction,
excluding additions or repairs to existing structures, built to the
standards of a new building code.  Requires the commissioner of insurance
(commissioner) to hold a rulemaking hearing under Chapter 2001, Government
Code, to determine the percentage of equitable across-the-board reductions
in insurance rates required for Texas windstorm and hail insurance
coverage written by the association. Requires the commissioner to issue an
order mandating the appropriate rate reductions within a certain time
period.  Requires the commissioner to require a six-percent
across-the-board reduction under certain circumstances.  Requires a
hearing under this section be held before the commissioner or the
commissioner's designee, notwithstanding Article 1.33B of this code. 

SECTION 4. Provides that this section applies to certain counties.
Provides that, notwithstanding any law to the contrary, a building code
adopted on or after January 1, 1997, does not apply to a county subject to
this section.  Defines "building code."  Provides that this section
expires June 1, 1999. 


 SECTION 5. Emergency clause.
  Effective date: upon passage.