Suspending limitations on conference committee
jurisdiction, S.B. No. 463
By: Janek S.R. No. 1044
SENATE RESOLUTION
BE IT RESOLVED by the Senate of the State of Texas, 78th
Legislature, Regular Session, 2003, That Senate Rule 12.03 be
suspended in part as provided by Senate Rule 12.08 to enable the
conference committee appointed to resolve the differences on
Senate Bill No. 463, relating to structures that constitute
insurable property under the Texas Windstorm Insurance
Association, to consider and take action on the following matter:
(1) Senate Rule 12.03(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) Senate Rule 12.03(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.
_______________________________
President of the Senate
I hereby certify that the
above Resolution was adopted by
the Senate on June 1, 2003, by the
following vote: Yeas 31, Nays 0.
_______________________________
Secretary of the Senate