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A BILL TO BE ENTITLED
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AN ACT
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relating to the cessation of operations of the Texas Windstorm |
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Insurance Association and the provision of windstorm and hail |
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insurance in the seacoast territory of this state. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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ARTICLE 1. CESSATION OF OPERATIONS OF TEXAS WINDSTORM INSURANCE |
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ASSOCIATION |
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SECTION 1.01. Chapter 2210, Insurance Code, is amended by |
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adding Subchapter O to read as follows: |
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SUBCHAPTER O. CESSATION OF OPERATIONS OF ASSOCIATION |
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Sec. 2210.701. CESSATION OF OPERATIONS. |
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(a) Notwithstanding any other law, the commissioner, as soon as |
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practicable after the effective date of this section, shall by rule |
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adopt and implement a transition plan for the cessation of all |
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operations of the association. |
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(b) The plan adopted under Subsection (a) must: |
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(1) provide for the repayment of the association's |
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public security obligations, public security administrative |
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expenses, and other lawful obligations in the manner provided by |
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Section 2210.609; |
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(2) permit the continued operation of the association, |
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including the continued issuance of policies and collection of |
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premiums and premium surcharges, for an amount of time and to the |
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extent reasonably necessary to satisfy the requirement of |
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Subdivision (1); |
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(3) be consistent with Section 2210.616; and |
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(4) on repayment of all obligations of the |
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association, provide for the transfer of any remaining assets of |
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the catastrophe reserve trust fund, as defined by Section 2210.003, |
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to the department for use in the development and implementation of a |
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mitigation and preparedness plan, in order to: |
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(A) improve preparedness for windstorm and hail |
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catastrophes in the seacoast territory; |
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(B) reduce potential losses in the event of such |
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a catastrophe; and |
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(C) provide research into the means to: |
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(i) reduce those losses; |
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(ii) educate or inform the public in |
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determining the appropriateness of particular upgrades to |
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structures; and |
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(iii) protect infrastructure from |
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potential damage from those catastrophes. |
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ARTICLE 2. WINDSTORM AND HAIL INSURANCE IN SEACOAST TERRITORY |
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SECTION 2.01. Subtitle G, Title 10, Insurance Code, is |
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amended by adding Chapter 2214 to read as follows: |
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CHAPTER 2214. WINDSTORM AND HAIL INSURANCE IN SEACOAST TERRITORY |
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Sec. 2214.001. DEFINITIONS. In this chapter: |
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(1) "First tier coastal county" means: |
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(A) Aransas County; |
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(B) Brazoria County; |
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(C) Calhoun County; |
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(D) Cameron County; |
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(E) Chambers County; |
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(F) Galveston County; |
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(G) Jefferson County; |
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(H) Kenedy County; |
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(I) Kleberg County; |
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(J) Matagorda County; |
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(K) Nueces County; |
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(L) Refugio County; |
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(M) San Patricio County; or |
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(N) Willacy County. |
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(2) "Seacoast territory" means the territory of this |
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state composed of the first tier coastal counties and the second |
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tier coastal counties. |
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(3) "Second tier coastal county" means: |
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(A) Bee County; |
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(B) Brooks County; |
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(C) Fort Bend County; |
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(D) Goliad County; |
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(E) Hardin County; |
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(F) Harris County; |
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(G) Hidalgo County; |
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(H) Jackson County; |
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(I) Jim Wells County; |
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(J) Liberty County; |
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(K) Live Oak County; |
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(L) Orange County; |
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(M) Victoria County; or |
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(N) Wharton County. |
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(4) "Windstorm and hail insurance" means deductible |
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insurance against: |
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(A) direct loss to insurable property incurred as |
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a result of windstorm or hail, as those terms are defined and |
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limited in policies and forms approved by the department; and |
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(B) indirect losses resulting from the direct |
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loss. |
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Sec. 2214.002. APPLICABILITY. (a) Except as provided by |
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Subsection (b), this chapter applies to each insurer authorized to |
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engage in the business of property insurance in this state, |
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including a county mutual insurance company, a Lloyd's plan, and a |
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reciprocal or interinsurance exchange. |
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(b) This chapter does not apply to: |
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(1) a farm mutual insurance company operating under |
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Chapter 911; |
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(2) a nonaffiliated county mutual fire insurance |
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company described by Section 912.310 that is writing exclusively |
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industrial fire insurance policies as described by Section |
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912.310(a)(2); or |
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(3) a mutual insurance company or a statewide mutual |
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assessment company engaged in business under Chapter 12 or 13, |
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Title 78, Revised Statutes, respectively, before those chapters' |
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repeal by Section 18, Chapter 40 (S.B. 37), Acts of the 41st |
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Legislature, 1st Called Session, 1929, as amended by Section 1, |
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Chapter 60 (S.B. 106), General Laws, Acts of the 41st Legislature, |
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2nd Called Session, 1929, that retains the rights and privileges |
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under the repealed law to the extent provided by those sections. |
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Sec. 2214.003. REQUIREMENT TO ISSUE WINDSTORM AND HAIL |
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INSURANCE IN SEACOAST TERRITORY; PHASE-IN PERIOD AUTHORIZED. |
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(a) As a condition of the insurer's authority to engage in the |
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business of insurance in this state, each insurer to which this |
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chapter applies shall issue windstorm and hail insurance policies |
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to applicants in the seacoast territory of this state, in an amount |
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such that the insurer's share of the market for windstorm and hail |
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insurance in the aggregated first tier coastal counties and |
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aggregated second tier coastal counties, respectively, is in |
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proportion to the insurer's statewide market share, exclusive of |
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the seacoast territory. |
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(b) For purposes of satisfying the requirement of |
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Subsection (a), each insurer's market share is determined in a |
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manner provided by Section 2210.052 for determining an insurer's |
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participation in the Texas Windstorm Insurance Association. |
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(c) An insurer's duty to comply with this section begins on |
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the date specified in the transition plan adopted by the |
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commissioner under Section 2210.701. To the extent consistent with |
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Sections 2210.701(b)(2) and (3), the transition plan may provide |
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for a reasonable schedule during which the duty to comply with this |
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section becomes effective in increments. |
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Sec. 2214.004. ORDERS AND RULES. (a) The commissioner may |
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issue any orders that the commissioner considers necessary to |
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implement this chapter. |
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(b) The commissioner may adopt rules in the manner |
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prescribed by Subchapter A, Chapter 36, as reasonable and necessary |
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to implement this chapter. |
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Sec. 2214.005. RATES. Rates for windstorm and hail |
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insurance issued as required by this chapter are determined in the |
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manner provided by Chapter 2251. |
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ARTICLE 3. EFFECTIVE DATE |
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SECTION 3.01. This Act takes effect on the 91st day after |
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the last day of the legislative session. |