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H.R. No. 1868
R E S O L U T I O N
BE IT RESOLVED by the House of Representatives of the State of
Texas, 78th Legislature, Regular Session, 2003, That House Rule 13,
Section 9(a), be suspended in part as provided by House Rule 13,
Section 9(f), to enable the conference committee appointed to
resolve the differences on Senate Bill 463, relating to structures
that constitute insurable property under the Texas Windstorm
Insurance Association, to consider and take action on the following
matter:
(1) House Rule 13, Section 9(a)(1), is suspended to permit
the committee to change Section 1 of the bill to read as follows:
SECTION 1. Subsection (f), Section 3, 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
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 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.
Except as otherwise provided by this subsection, if [When] repair
of damage to a structure involves replacement of items covered in
the building specifications as set forth in the plan of operation,
such repairs must be completed in a manner to comply with such
specifications for the structure to continue within the definition
of Insurable Property for windstorm and hail insurance. If repair
of damage to a structure is based on a direct loss and claim the
amount of which is equal to less than five percent of the amount of
total property coverage on the structure, the repairs may be
completed in a manner that returns the structure to its condition
immediately before the loss without affecting the eligibility of
the structure to qualify as insurable property. 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.
Explanation: The change in SECTION 1 is necessary to remove
language designating certain structures as insurable property by
the Texas Windstorm Insurance Association if a building permit or
plat was filed with the municipality, county, or United States Army
Corps of Engineers before the effective date of the bill and to
provide that if a direct loss occurs, and the amount of repair
constitutes five percent or less of the value of the property, the
insurability of the property is not affected if the repairs are
properly made.
(2) House Rule 13, Section 9(a)(4), is suspended to permit
the committee to add a new section to the bill to read as follows:
SECTION 2. Subdivision (9), Subsection (h), Section 8,
Article 21.49, Insurance Code, is amended to read as follows:
(9) A rate established and authorized by the
commissioner under this subsection may not reflect an average rate
change that is more than 10 percent higher or lower than the rate
for commercial or 10 percent higher or lower than the rate for
noncommercial windstorm and hail insurance in effect on the date
the filing is made. The rate may not reflect a rate change for an
individual rating class that is 15 percent higher or lower than the
rate for that individual class in effect on the date the filing is
made. The commissioner may, after notice and hearing, suspend this
subdivision upon a finding that a catastrophe loss or series of
occurrences resulting in losses in the catastrophe area justify a
need to assure rate adequacy in the catastrophe area and also
justify a need to assure availability of insurance outside the
catastrophe area. [This subdivision expires December 31, 2005.]
Explanation: The change in SECTION 2 is necessary to remove
the expiration of Subsection (h) of Section 8, which establishes
certain limitations on the amount of the rate the commissioner sets
and requires the commissioner to justify the rate if the rate is not
set within those limitations.
Eiland
______________________________
Speaker of the House
I certify that H.R. No. 1868 was adopted by the House on June
1, 2003, by a non-record vote.
______________________________
Chief Clerk of the House