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78R3554 PB-D
By: Ritter H.B. No. 986
A BILL TO BE ENTITLED
AN ACT
relating to insurance coverage provided through the Texas Windstorm
Insurance Association.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2(f), Article 21.49, Insurance Code, is
amended to read as follows:
(f) "Insurable Property" means immovable property at fixed
locations in a catastrophe area or corporeal movable property
located therein (as may be designated in the plan of operation)
which property is determined by the Association, pursuant to the
criteria specified in the plan of operation to be in an insurable
condition against windstorm, hail and/or fire and explosion as
appropriate, as determined by normal underwriting standards;
provided, however, that insofar as windstorm and hail insurance is
concerned, any structure located within a catastrophe area,
commenced on or after the 30th day following the publication of the
plan of operation, not built or continuing in compliance with any
requirements [building specifications] set forth in the plan of
operation shall not be an insurable risk under this Act except as
otherwise provided under this Act. A structure, or an addition
thereto, which is constructed in conformity with plans [and
specifications] that comply with the requirements [specifications]
set forth in the plan of operation at the time construction
commences shall not be declared ineligible for windstorm and hail
insurance as a result of subsequent changes [in the building
specifications] set forth in the plan of operation. When repair of
damage to a structure involves replacement of items covered in
requirements [the building specifications as] set forth in the plan
of operation, such repairs must be completed in a manner to comply
with those requirements [such specifications] for the structure to
continue within the definition of Insurable Property for windstorm
and hail insurance. Nothing in this Act shall preclude special
rating of individual risks as may be provided in the plan of
operation. For purposes of this Act, all structures which are
located within those areas designated as units under the federal
Coastal Barrier Resources Act (Public Law 97-348) and for which
construction has commenced on or after July 1, 1991 shall not be
considered insurable property.
SECTION 2. Sections 6A(a), (d), (h), (j), and (k), Article
21.49, Insurance Code, are amended to read as follows:
(a) Except as otherwise provided by this Subsection, all
structures that are constructed or repaired or to which additions
are made on or after January 1, 1988, to be considered insurable
property for windstorm and hail insurance from the Association,
must be inspected or approved by the Board for compliance with [the
building specifications in] the plan of operation. After January
1, 2004 [2002], for [in] geographic areas specified by the
commissioner, the commissioner by rule shall adopt [may supplement
the building specifications in the plan of operation with the
structural provisions of] the 2003 International Residential Code
for one- and two-family dwellings published by the International
Code Council. For those geographic areas, the commissioner by rule
may adopt a subsequent edition of that code and may adopt any
supplements published by the International Code Council and
amendments to the code. Roofing materials satisfy the requirements
of [building specifications in] the plan of operation if those
materials pass the UL Standard 997 or a comparable test certified by
the Board and are installed as required by the Board to promote the
wind resistance of the materials. A structure constructed,
repaired, or to which additions were made before January 1, 1988,
that is located in an area covered at the time by a building code
recognized by the Association shall be considered an insurable
property for windstorm and hail insurance from the Association
without compliance with the inspection or approval requirements of
this Section or the plan of operation. A structure constructed,
repaired, or to which additions were made before January 1, 1988,
that is located in an area not covered by a building code recognized
by the Association shall be considered an insurable property for
windstorm and hail insurance from the Association without
compliance with the inspection or approval requirements of this
Section or the plan of operation if that structure has been
previously insured by a licensed insurance company authorized to do
business in this State and the risk is in essentially the same
condition as when previously insured, except for normal wear and
tear, and without any structural change other than a change made
according to code. Evidence of previous insurance includes a copy
of a previous policy, copies of canceled checks or agent's records
that show payments for previous policies, and a copy of the title to
the structure or mortgage company records that show previous
policies. After January 1, 2004 [2002], a person must submit a
notice of a [an application for] windstorm inspection to the unit
responsible for certification of windstorm inspections
[inspection] at the department before beginning to construct,
alter, remodel, enlarge, or repair a structure. [Failure to submit
a timely application may result in a certificate of compliance not
being issued unless plans and calculations, testing information,
manufacturer's installation instructions, or any other
documentation required by the commissioner is submitted to the unit
responsible for windstorm inspection at the department as may be
requested in order to fulfill the requirements of this section. The
Board may appoint or employ qualified inspectors as defined in this
Section to perform any inspections required by this Section.]
(d) A windstorm inspection may only be performed by a
qualified inspector. For purposes of this article, a "qualified
inspector" includes:
(1) [a person determined by the Board to be qualified
to perform building inspections because of training or experience;
[(2)] a licensed professional engineer meeting the
requirements of the rules adopted by the commissioner for
registration [appointment] to conduct windstorm inspections; and
(2) [(3)] an inspector who is certified by the
International Code Council, the Building Officials and Code
Administrators International, Inc., the International Conference
of Building Officials, or the Southern Building Code Congress
International, Inc., who has certifications as a buildings
inspector and coastal construction inspector, and who also complies
with other requirements specified by rule by the commissioner. A
qualified inspector must be registered with the department
[approved and appointed or employed by the Board to perform
building inspections]. [The Board may charge a reasonable fee not
to exceed $200 for the filing of applications and determining the
qualifications of persons for appointment as qualified
inspectors.]
(h) The department [Board] may charge a reasonable fee to
cover the cost of making building requirements [specifications] and
inspection standards available to the public.
(j) After notice and hearing, the department [Board] may
cancel or revoke a registration [an appointment or authorization
made, issued, or existing] under [this] Section 6D of this article
if the registered person [holder or possessor of the appointment or
authorization] is found to be in violation of, or to have failed to
comply with, specific provisions of this Section or any rule or
regulation of the commissioner [Board] made under this Section. In
lieu of cancellation or revocation, the commissioner [Board] may
order one or more of the following sanctions, if the commissioner
[it] determines from the facts that it would be fair, reasonable, or
equitable:
(1) suspending the registration [authorization or
appointment] for a specific period, not to exceed one year;
(2) an order directing the registered person [holder
or possessor of the authorization or appointment] to cease and
desist from the specified activity determined to be in violation of
specific provisions of this Section or rules and regulations of the
commissioner [Board] made pursuant to this Section or from failing
to comply with those provisions of this Section or the rules and
regulations promulgated under this Section; or
(3) if the registered person [authorized or appointed]
is found by the Board to have knowingly, wilfully, fraudulently, or
with gross negligence signed or caused to be prepared an inspection
report that contains a false, fictitious, or fraudulent statement
or entry, directing the registered person [holder or possessor of
the authorization or appointment] to remit within a specified time,
not to exceed 60 days, a specified monetary forfeiture not to exceed
$5,000 for the violation or failure to comply.
(k) A monetary forfeiture paid as a result of an order
issued under Subsection (j)(3) of this Section shall be deposited
to the credit of the general revenue fund. If it is found after
hearing that any registered person [holder or possessor] has failed
to comply with an order issued under Subsection (j) of this Section,
the department [Board] shall, unless the [its] order is lawfully
stayed, cancel the registration [authorization or appointment] of
the person [holder or possessor]. The department [Board] may
informally dispose of any matter under Subsection (j) of this
Section by consent order or default.
SECTION 3. Sections 6C(b), (f), (g), (h), (k), (l), and (m),
Article 21.49, Insurance Code, are amended to read as follows:
(b) The Windstorm Building Code Advisory Committee on
Specifications and Maintenance is established as an advisory
committee to the commissioner to advise and make recommendations to
the commissioner on building requirements [specifications] and
maintenance in the plan of operation.
(f) The advisory committee shall analyze and make
recommendations for changes regarding procedures described under
Section 5(d) of this article that are [building specifications]
adopted by the commissioner in the plan of operation. In making
recommendations, the advisory committee shall [consider
technological developments in building products and windstorm
research and shall] seek to balance the concerns of all affected
parties, including consumers, builders, and the Association.
(g) Each proposal for a change in an applicable procedure
[building specification] must be submitted to the commissioner.
Each proposal must be submitted separately in writing and must
contain:
(1) the name, mailing address, and telephone number of
the proponent, or, if the proponent is a group or organization, the
name of the group or organization and the mailing address and
telephone number of the group or organization;
(2) a citation of any applicable statute or rule [the
building code section regarding that specification, as published in
the latest edition of that code];
(3) the text of the proposed change, with deletions
from current [code] language struck through with a single line and
new language underlined; and
(4) a statement of the purpose of the proposed change,
with supporting written or printed information.
(h) The commissioner by rule shall adopt a form to be used by
a person in presenting a proposal for a change in an applicable
procedure [building specification] to the commissioner.
(k) At an advisory committee meeting, any interested person
may present the person's views on a proposal for a change in an
applicable procedure [building specification] that is included on
the advisory committee's published agenda. The advisory committee
shall consider each comment presented in its action on the
disposition of each proposal.
(l) After consideration of a proposal for a change in an
applicable procedure [building specification], the advisory
committee by vote shall:
(1) recommend adoption of the proposal as initially
submitted;
(2) recommend adoption of the proposal with
modifications;
(3) recommend rejection of the proposal; or
(4) suspend consideration of the proposal and request
additional evaluation and study of the proposal.
(m) The advisory committee shall submit its recommendation
on each proposal to the commissioner. The commissioner shall
notify the advisory committee of the acceptance or rejection of
each recommendation not later than the 30th day after the date of
receipt by the commissioner. Acceptance of a recommendation by the
commissioner means that the commissioner will consider adoption of
that recommendation at a rulemaking hearing. Before adopting a
recommendation, the commissioner must determine that the proposal,
if adopted, will not weaken the integrity or diminish the
effectiveness of a procedure [building specification]. [The
commissioner by rule may adopt a recommendation of the advisory
committee by amending the plan of operation and, in amending the
plan, may adopt a specification by reference.]
SECTION 4. Article 21.49, Insurance Code, is amended by
adding Section 6D to read as follows:
Sec. 6D. REGISTRATION OF PERSONS WHO CONTRACT TO PERFORM
INSPECTIONS. (a) The commissioner by rule shall implement a
program to register persons who contract to perform inspections
under this article. The department may charge a reasonable fee not
to exceed $200 for registration of a qualified inspector.
(b) The commissioner, on the request of an engineer licensed
by the Texas Board of Professional Engineers, shall register the
engineer in the program.
(c) An engineer registered in the program may contract to
perform inspections under this article unless the Texas Board of
Professional Engineers determines the engineer is not qualified to
perform an inspection.
(d) An engineer registered under this section is subject
only to the examination requirements, continuing education
requirements, fees, and disciplinary procedures adopted by the
Texas Board of Professional Engineers.
(e) The commissioner may not adopt minimum qualifications
for an engineer licensed by the Texas Board of Professional
Engineers to contract with an applicant for insurance coverage to
perform an inspection under this article.
SECTION 5. Sections 6A(c) and (e), Article 21.49, Insurance
Code, are repealed.
SECTION 6. Article 21.49, Insurance Code, as amended by
this Act, applies only to a policy of windstorm or hail insurance
that is delivered, issued for delivery, or renewed after January 1,
2004. A policy that is delivered, issued for delivery, or renewed
on or before January 1, 2004, is governed by the law as it existed
immediately before the effective date of this Act, and that law is
continued in effect for that purpose.
SECTION 7. This Act takes effect September 1, 2003.