By:  Patterson                                        S.B. No. 1387

                                A BILL TO BE ENTITLED

                                       AN ACT

 1-1     relating to benefits for certain roof damage on property insured

 1-2     through the Texas Catastrophe Property Insurance Association.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Section 8A, Article 21.49, Insurance Code, is

 1-5     amended by amending Subsection (b) and by adding Subsections (d)

 1-6     and (e) to read as follows:

 1-7           (b)  If, at the time of loss, the total amount of insurance

 1-8     applicable to the dwelling is equal to 80 percent or more of the

 1-9     full replacement cost of the dwelling or equal to the maximum

1-10     amount of insurance otherwise available through the Association,

1-11     coverage applicable to the dwelling under the policy is extended to

1-12     include the full cost of repair or replacement, without a deduction

1-13     for depreciation.  If, at the time of loss, the total amount of

1-14     insurance applicable to the dwelling is equal to less than 80

1-15     percent of the full replacement cost of the dwelling and less than

1-16     the maximum amount of insurance available through the Association,

1-17     liability for loss under the policy may not exceed the replacement

1-18     cost of that part of the dwelling damaged or destroyed, less

1-19     depreciation.  Notwithstanding any other provision of this Act or

1-20     other law, the commissioner, after notice and hearing, may adopt

1-21     rules to:

1-22                 (1)  authorize the Association to provide actual cash

1-23     value coverage instead of replacement cost coverage on the roof

 2-1     covering of a building insured by the Association; and

 2-2                 (2)  determine:

 2-3                       (A)  the conditions under which the Association

 2-4     may provide that actual cash value coverage;

 2-5                       (B)  the appropriate premium reductions when

 2-6     coverage for the roof covering is provided on an actual cash value

 2-7     basis; and

 2-8                       (C)  the disclosure that must be provided to the

 2-9     policyholder, prominently displayed on the face of the windstorm

2-10     and hail insurance policy.

2-11           (d)  Notwithstanding Article 1.33B of this code, a hearing

2-12     under Subsection (b) of this section shall be held before the

2-13     commissioner or the commissioner's designee.

2-14           (e)  For purposes of this section, "roof covering" means:

2-15                 (1)  the roofing material exposed to the weather;

2-16                 (2)  the underlayments applied for moisture protection;

2-17     and

2-18                 (3)  all flashings required in the replacement of a

2-19     roof covering.

2-20           SECTION 2.  Section 8A, Article 21.49, Insurance Code, as

2-21     amended by this Act, applies only to an insurance policy that is

2-22     delivered, issued for delivery, or renewed on or after January 1,

2-23     1998.  A policy that is delivered, issued for delivery, or renewed

2-24     before January 1, 1998, is governed by the law as it existed

2-25     immediately before the effective date of this Act, and that law is

 3-1     continued in effect for this purpose.

 3-2           SECTION 3.  This Act takes effect September 1, 1997.

 3-3           SECTION 4.  The importance of this legislation and the

 3-4     crowded condition of the calendars in both houses create an

 3-5     emergency and an imperative public necessity that the

 3-6     constitutional rule requiring bills to be read on three several

 3-7     days in each house be suspended, and this rule is hereby suspended.