1-1 By: Patterson S.B. No. 1387 1-2 (In the Senate - Filed March 13, 1997; March 19, 1997, read 1-3 first time and referred to Committee on Economic Development; 1-4 April 22, 1997, reported adversely, with favorable Committee 1-5 Substitute by the following vote: Yeas 9, Nays 0; April 22, 1997, 1-6 sent to printer.) 1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 1387 By: Patterson 1-8 A BILL TO BE ENTITLED 1-9 AN ACT 1-10 relating to benefits for certain roof damage on property insured 1-11 through the Texas Catastrophe Property Insurance Association. 1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-13 SECTION 1. Section 8A, Article 21.49, Insurance Code, is 1-14 amended by amending Subsection (b) and by adding Subsections (d) 1-15 and (e) to read as follows: 1-16 (b) If, at the time of loss, the total amount of insurance 1-17 applicable to the dwelling is equal to 80 percent or more of the 1-18 full replacement cost of the dwelling or equal to the maximum 1-19 amount of insurance otherwise available through the Association, 1-20 coverage applicable to the dwelling under the policy is extended to 1-21 include the full cost of repair or replacement, without a deduction 1-22 for depreciation. If, at the time of loss, the total amount of 1-23 insurance applicable to the dwelling is equal to less than 80 1-24 percent of the full replacement cost of the dwelling and less than 1-25 the maximum amount of insurance available through the Association, 1-26 liability for loss under the policy may not exceed the replacement 1-27 cost of that part of the dwelling damaged or destroyed, less 1-28 depreciation. Notwithstanding any other provision of this Act or 1-29 other law, the commissioner, after notice and hearing, may adopt 1-30 rules to: 1-31 (1) authorize the Association to provide actual cash 1-32 value coverage instead of replacement cost coverage on the roof 1-33 covering of a building insured by the Association; and 1-34 (2) determine: 1-35 (A) the conditions under which the Association 1-36 may provide that actual cash value coverage; 1-37 (B) the appropriate premium reductions when 1-38 coverage for the roof covering is provided on an actual cash value 1-39 basis; and 1-40 (C) the disclosure that must be provided to the 1-41 policyholder, prominently displayed on the face of the windstorm 1-42 and hail insurance policy. 1-43 (d) Notwithstanding Article 1.33B of this code, a hearing 1-44 under Subsection (b) of this section shall be held before the 1-45 commissioner or the commissioner's designee. 1-46 (e) For purposes of this section, "roof covering" means: 1-47 (1) the roofing material exposed to the weather; 1-48 (2) the underlayments applied for moisture protection; 1-49 and 1-50 (3) all flashings required in the replacement of a 1-51 roof covering. 1-52 SECTION 2. Section 8A, Article 21.49, Insurance Code, as 1-53 amended by this Act, applies only to an insurance policy that is 1-54 delivered, issued for delivery, or renewed on or after January 1, 1-55 1998. A policy that is delivered, issued for delivery, or renewed 1-56 before January 1, 1998, is governed by the law as it existed 1-57 immediately before the effective date of this Act, and that law is 1-58 continued in effect for this purpose. 1-59 SECTION 3. This Act takes effect September 1, 1997. 1-60 SECTION 4. The importance of this legislation and the 1-61 crowded condition of the calendars in both houses create an 1-62 emergency and an imperative public necessity that the 1-63 constitutional rule requiring bills to be read on three several 1-64 days in each house be suspended, and this rule is hereby suspended. 2-1 * * * * *