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