By Moreno of Harris                                   H.B. No. 1461
         77R3036 AJA-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to homeowners insurance policies covering the percentage
 1-3     of the replacement or market value of a home designated by the
 1-4     insured.
 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-6           SECTION 1.  Subchapter C, Chapter 5, Insurance Code, is
 1-7     amended by adding Article 5.35-2 to read as follows:
 1-8           Art. 5.35-2.  COVERAGE FOR PERCENTAGE OF REPLACEMENT OR
 1-9     MARKET VALUE.  (a)  In this article, "homeowners insurance" means
1-10     insurance coverage written by an insurance company or other entity
1-11     authorized to engage in the business of fire and residential allied
1-12     lines insurance in this state, including coverage written by:
1-13                 (1)  a farm mutual insurance company;
1-14                 (2)  a county mutual insurance company;
1-15                 (3)  a Lloyd's plan insurer; or
1-16                 (4)  a reciprocal or interinsurance exchange.
1-17           (b)  An insurer writing homeowners insurance in this state
1-18     must offer a policy that provides coverage for the percentage, not
1-19     to exceed 100 percent, of a home's market or replacement value that
1-20     the homeowner designates at the time the policy is purchased.
1-21           (c)  The commissioner shall adopt rules as necessary to
1-22     implement this article.
1-23           (d)  This article does not affect any right of a person who
1-24     holds a lien on a home under Section 50, Article XVI, Texas
 2-1     Constitution, or another law, to require a homeowner to obtain
 2-2     homeowners insurance coverage in an amount specified by the lien
 2-3     holder.
 2-4           SECTION 2.  (a)  This Act takes effect September 1, 2001.
 2-5           (b)  An insurer is not required to comply with Article
 2-6     5.35-2, Insurance Code, as added by this Act, until September 1,
 2-7     2002.
 2-8           (c)  The commissioner shall adopt all rules necessary to
 2-9     implement Article 5.35-2, Insurance Code, as added by this Act, not
2-10     later than January 1, 2002.