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S.B. No. 463
AN ACT
relating to rates and insurable property under the Texas Windstorm
Insurance Association.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
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.
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.]
SECTION 3. Article 21.49, Insurance Code, as amended by
this Act, applies only to an insurance policy delivered or issued
for delivery by the Texas Windstorm Insurance Association on or
after the effective date of this Act. A policy delivered or issued
for delivery before the effective date of this Act 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 4. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2003.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 463 passed the Senate on
April 25, 2003, by the following vote: Yeas 29, Nays 0;
May 29, 2003, Senate refused to concur in House amendment and
requested appointment of Conference Committee; May 30, 2003, House
granted request of the Senate; June 1, 2003, Senate adopted
Conference Committee Report by a viva-voce vote.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 463 passed the House, with
amendment, on May 28, 2003, by the following vote: Yeas 144,
Nays 0, two present not voting; May 30, 2003, House granted request
of the Senate for appointment of Conference Committee;
June 1, 2003, House adopted Conference Committee Report by the
following vote: Yeas 144, Nays 0, two present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor