SRC-JFA C.S.S.B. 865 75(R)BILL ANALYSIS


Senate Research CenterC.S.S.B. 865
By: Patterson
Economic Development
4-10-97
Committee Report (Substituted)


DIGEST 

Currently, Article 21.49, Insurance Code, the Texas Catastrophe Property
Insurance Pool Act, provides for windstorm, hail, and fire insurance
policies issued by the Texas Catastrophe Property Insurance Association.
The Act does not require an insurance policy that offers financial
assistance to remove the debris left behind when a home is destroyed or
partially destroyed by a storm, or when high tides damage beach front
property.  This bill would require a policy of windstorm and hail
insurance to include coverage for the demolition of dwellings and other
associated structures and the removal of the associated debris under
certain circumstances.   

PURPOSE

As proposed, C.S.S.B. 865 requires a policy of windstorm and hail
insurance issued by the Texas Catastrophe Property Insurance Association
to include coverage for the demolition of a dwelling and other associated
structures and the removal of associated debris under certain conditions. 

RULEMAKING AUTHORITY

Rulemaking authority is granted to the commissioner of insurance in
SECTION 1 (Section 8C(b), Article 21.49, Insurance Code) of this bill.  

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Article 21.49, Insurance Code (Texas Catastrophe
Property Insurance Pool Act), by adding Section 8C, as follows: 

Sec. 8C.  COVERAGE FOR DEMOLITION AND DEBRIS REMOVAL. (a)  Authorizes the
Texas Catastrophe Property Insurance Association (association) to include
an endorsement on a policy of windstorm and hail insurance issued by the
association to provide coverage for the cost of demolition of undamaged
portions of real property insured under a windstorm and hail policy and
the removal of associated debris if at least 50 percent of the insured
real property is destroyed at the time of loss through wind damage, hail
damage, or wind-driven rain damage. 

(b)  Prohibits liability limits for demolition and debris removal
authorized by this section from exceeding $1,000 and from increasing the
association's liability under a windstorm and hail policy issued under
this Act beyond limits established under Section 8D of this Act.  Requires
the commissioner of insurance (commissioner) to provide, by rule, how, and
to whom, the loss of payment for coverage authorized in this section is to
be paid; the form and content of the endorsement; the rate the association
may charge for coverage under the endorsement; the geographic location in
each designated catastrophe area in which real properties are eligible for
coverage under the endorsement; and any other item determined by the
commission to be necessary to implement this section. 

(c)  Requires a hearing, notwithstanding Article 1.33B of this code, to be
held before the commissioner or the commissioner's designee.   

SECTION 2. Makes application of this Act prospective to January 1, 1998. 

 SECTION 3. Emergency clause.
  Effective date:  upon passage. 

SUMMARY OF COMMITTEE CHANGES

SECTION 1. 

Amends Section 8C, Article 21.49, Insurance Code, to revise Subsections
(a) and (c) and to add Subsection (c).   

 SECTION 3.

Revises the effective date from 90 days after adjournment to upon passage
of the Act.