By:  Ellis                                                        S.B. No. 1606


A BILL TO BE ENTITLED

AN ACT

relating to the FAIR Plan (Fair Access to Insurance Requirements) 
Act.      
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 1, Article 21.49A, Chapter 21, Insurance 
Code, is amended to read as follows:
	Sec. 1.  Authority; Purpose.  (a)  If the commissioner 
determines, after a public hearing, that in all or any part of the 
state residential property insurance is not reasonably available in 
the voluntary market to a substantial number of insurable risks 
[and that at least 50 percent of the applicants to the residential 
property market assistance program who are qualified under the plan 
of operation, after the commissioner has made insurer participation 
mandatory under the plan of operation, have not been placed with an 
insurer in the previous 12-month period,] the commissioner may 
establish a FAIR (Fair Access to Insurance Requirements) Plan to 
deliver residential property insurance to citizens of this state in 
underserved areas, which shall be determined and designated by the 
commissioner by rule.  Each insurer, as defined herein, as a 
condition of its authority to transact residential property 
insurance in this state, shall participate in the FAIR Plan 
Association in accordance with this Act.
	(b)  The FAIR Plan may not provide windstorm and hail 
insurance coverage for a risk eligible for that coverage under 
Article 21.49 of this code.
	SECTION 2.  Section 6, Article 21.49A, Chapter 21, Insurance 
Code, is amended to read as follows:
	Sec. 6.  Property Inspection; FAIR Plan Procedure.  (a)  Any 
person having an insurable interest in real or tangible personal 
property at a fixed location in an underserved area who, after 
diligent effort has been unable to obtain residential property 
insurance, as evidenced by two current declinations from insurers 
licensed to write property insurance and actually writing 
residential property insurance in the state, is entitled upon 
application to the association to an inspection and evaluation of 
the property by representatives of the inspection bureau.
	(b)  Applications may be made on behalf of the applicant by a 
licensed general lines property and casualty [local recording] 
agent and shall be submitted on forms prescribed by the 
association.
	(c)  Promptly after the request for inspection is received, 
an inspection must be made and an inspection report filed with the 
association and made available to the applicant upon request.
	(d)  If the inspection bureau finds that the residential 
property meets the reasonable underwriting standards established 
in the plan of operation, the applicant shall be so informed in 
writing and a policy or binder shall be issued by the association.  
If the residential property does not meet the criteria, the 
applicant shall be informed, in writing, of the reasons for the 
failure of the residential property to meet the criteria.
	(e)  If, at any time, the applicant makes improvements in the 
residential property or its condition which the applicant believes 
are sufficient to make the residential property meet the criteria, 
a representative of the inspection bureau shall reinspect the 
residential property upon request.  In any case, the applicant for 
residential property insurance shall be eligible for one 
reinspection any time within 60 days after the initial FAIR Plan 
inspection.  If upon reinspection the residential property meets 
the reasonable underwriting standards established in the plan of 
operation, the applicant shall be so informed in writing and a 
policy or binder shall be issued by the association.
	SECTION 3.  Section 8, Article 21.49A, Chapter 21, Insurance 
Code, is amended to read as follows:
	Sec. 8.  Appeals; Judicial Review.  (a)  Any applicant or 
affected insurer has the right of appeal to the association.  A 
decision of the association may be appealed to the commissioner 
within 30 days after such decision.
	(b)  All orders or decisions of the commissioner made 
pursuant to this Act are subject to judicial review in accordance 
with Sections 36.201-36.205 [Article 1.04] of this code.
	SECTION 4.  Section 12, Article 21.49A, Chapter 21, 
Insurance Code, is amended to read as follows:
	Sec. 12.  Sanctions.  If the association, inspection bureau, 
or participating insurer is found to be in violation of or in 
failure to comply with this Act, each entity shall be subject to the 
sanctions authorized by Sections 82.001-82.003 and 82.051-82.056 
[in Article 1.10] of this code, including administrative penalties 
authorized under Sections 84.001-84.003 and 84.021-84.022 [Article 
1.10E] of this code.  The commissioner may also utilize any other 
disciplinary procedures authorized by this code, including the 
cease and desist procedures authorized Sections 83.001-83.004 and 
83.051-83.055 [by Article 1.10A] of this code.
	SECTION 5.  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.