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                                  * * * * *