|
|
|
A BILL TO BE ENTITLED
|
|
AN ACT
|
|
relating to the operation of the Texas Windstorm Insurance |
|
Association and to the resolution of certain disputes concerning |
|
claims made to that association; providing penalties. |
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
SECTION 1. Section 83.002, Insurance Code, is amended by |
|
adding Subsection (c) to read as follows: |
|
(c) This chapter also applies to: |
|
(1) a person appointed as a qualified inspector under |
|
Section 2210.254 or 2210.255; and |
|
(2) a person acting as a qualified inspector under |
|
Section 2210.254 or 2210.255 without being appointed as a qualified |
|
inspector under either of those sections. |
|
SECTION 2. Section 541.152, Insurance Code, is amended by |
|
amending Subsection (b) and adding Subsection (c) to read as |
|
follows: |
|
(b) Except as provided by Subsection (c), on [On] a finding |
|
by the trier of fact that the defendant knowingly committed the act |
|
complained of, the trier of fact may award an amount not to exceed |
|
three times the amount of actual damages. |
|
(c) Subsection (b) does not apply to an action under this |
|
subchapter brought against the Texas Windstorm Insurance |
|
Association by a person who is insured under Chapter 2210. |
|
SECTION 3. Section 2210.002(b), Insurance Code, is amended |
|
to read as follows: |
|
(b) The association is subject to review under Chapter 325, |
|
Government Code (Texas Sunset Act), but is not abolished under that |
|
chapter. The association shall be reviewed during the period in |
|
which state agencies abolished in 2013 [2015] are reviewed. The |
|
association shall pay the costs incurred by the Sunset Advisory |
|
Commission in performing the review of the association under this |
|
subsection. The Sunset Advisory Commission shall determine the |
|
costs of the review performed under this subsection, and the |
|
association shall pay the amount of those costs promptly on receipt |
|
of a statement from the Sunset Advisory Commission regarding those |
|
costs. This subsection expires September 1, 2013 [2015]. |
|
SECTION 4. Subchapter A, Chapter 2210, Insurance Code, is |
|
amended by adding Sections 2210.010, 2210.011, 2210.012, and |
|
2210.013 to read as follows: |
|
Sec. 2210.010. APPLICABILITY OF CERTAIN OTHER LAW. (a) |
|
Except as otherwise provided by this chapter or Chapter 541 or 542, |
|
Chapters 541 and 542 apply to the association and to the processing |
|
and settlement of claims by the association. To the extent of any |
|
conflict between this chapter and Chapter 541 or 542, this chapter |
|
prevails. |
|
(b) A person insured under this chapter may not bring a |
|
private action against the association under Chapter 541. |
|
(c) Section 33.004(e), Civil Practice and Remedies Code, |
|
does not apply to an action against the association. |
|
Sec. 2210.011. CERTAIN CONDUCT IN DISPUTE RESOLUTION |
|
PROHIBITED. A person insured under this chapter may not preside |
|
over a matter or action to which the association is a party, |
|
including by sitting as a judge or serving as an arbitrator. |
|
Sec. 2210.012. STANDARDS OF CONDUCT: BOARD OF DIRECTORS |
|
AND EMPLOYEES. (a) A member of the board of directors or an |
|
employee of the association may not: |
|
(1) accept or solicit any gift, favor, or service that |
|
might reasonably tend to influence the member or employee in the |
|
discharge of duties related to the operation or business of the |
|
association or that the member or employee knows or should know is |
|
being offered with the intent to influence the member's or |
|
employee's conduct related to the operation or business of the |
|
association; |
|
(2) accept other employment or engage in a business or |
|
professional activity that the member or employee might reasonably |
|
expect would require or induce the member or employee to disclose |
|
confidential information acquired by reason of the member's or |
|
employee's position with the association; |
|
(3) accept other employment or compensation that could |
|
reasonably be expected to impair the member's or employee's |
|
independence of judgment in the performance of the member's or |
|
employee's duties related to the operation or business of the |
|
association; |
|
(4) make personal investments that could reasonably be |
|
expected to create a substantial conflict between the member's or |
|
employee's private interest and the interest of the association; or |
|
(5) intentionally or knowingly solicit, accept, or |
|
agree to accept any benefit for having exercised the member's or |
|
employee's powers related to the operation or business of the |
|
association or having performed, in favor of another, the member's |
|
or employee's duties related to the operation or business of the |
|
association. |
|
(b) An association employee who violates Subsection (a) or a |
|
code of conduct established under Section 2210.107(a)(4) is subject |
|
to an employment-related sanction, including termination of the |
|
employee's employment with the association. |
|
(c) A member of the board of directors or an association |
|
employee who violates Subsection (a) is subject to any applicable |
|
civil or criminal penalty if the violation also constitutes a |
|
violation of another statute or rule. |
|
Sec. 2210.013. CERTAIN EMPLOYMENT AND CONTRACTS |
|
PROHIBITED. A member of the board of directors or an employee of |
|
the association may not appoint or employ, or contract with, the |
|
following individuals for the provision of goods or services in |
|
connection with the operation or business of the association, if |
|
the individual to be appointed or employed, or with whom a contract |
|
is to be entered into, is to be directly or indirectly compensated |
|
from funds of the association: |
|
(1) an individual related to the member or employee |
|
within a degree of relationship described by Section 573.002, |
|
Government Code; or |
|
(2) an individual related to any member of the board of |
|
directors or employee of the association within a degree of |
|
relationship described by Section 573.002, Government Code. |
|
SECTION 5. Section 2210.072(b), Insurance Code, is amended |
|
to read as follows: |
|
(b) Public securities described by Subsection (a) shall be |
|
issued as necessary in a principal amount not to exceed $1 billion |
|
per occurrence or series of occurrences in a calendar year that |
|
results in insured losses. |
|
SECTION 6. Section 2210.073(b), Insurance Code, is amended |
|
to read as follows: |
|
(b) Public securities described by Subsection (a) may be |
|
issued as necessary in a principal amount not to exceed $1 billion |
|
per occurrence or series of occurrences in a calendar year that |
|
results in insured losses. If the losses are paid with public |
|
securities described by this section, the public securities shall |
|
be repaid in the manner prescribed by Subchapter M. |
|
SECTION 7. Section 2210.074(b), Insurance Code, is amended |
|
to read as follows: |
|
(b) Public securities described by Subsection (a) may be |
|
issued as necessary in a principal amount not to exceed $500 million |
|
per occurrence or series of occurrences in a calendar year that |
|
results in insured losses. If the losses are paid with public |
|
securities described by this section, the public securities shall |
|
be repaid in the manner prescribed by Subchapter M through member |
|
assessments as provided by this section. The association shall |
|
notify each member of the association of the amount of the member's |
|
assessment under this section. The proportion of the losses |
|
allocable to each insurer under this section shall be determined in |
|
the manner used to determine each insurer's participation in the |
|
association for the year under Section 2210.052. A member of the |
|
association may not recoup an assessment paid under this subsection |
|
through a premium surcharge or tax credit. |
|
SECTION 8. Section 2210.104, Insurance Code, is amended to |
|
read as follows: |
|
Sec. 2210.104. OFFICERS AND MANAGERIAL EMPLOYEES; SALARIES |
|
AND BONUSES. (a) The board of directors shall elect from the |
|
board's membership an executive committee consisting of a presiding |
|
officer, assistant presiding officer, and secretary-treasurer. |
|
(b) The association shall post on the association's |
|
Internet website the salary of each association employee who serves |
|
in a managerial capacity and any bonuses paid to those association |
|
employees. |
|
SECTION 9. Section 2210.105, Insurance Code, is amended by |
|
amending Subsections (a) and (b) and adding Subsections (b-1), (e), |
|
and (f) to read as follows: |
|
(a) Except for an emergency meeting, the association shall: |
|
(1) notify the department not later than the 11th day |
|
before the date of a meeting of the board of directors or of the |
|
members of the association; and |
|
(2) not later than the seventh day before the date of a |
|
meeting of the board of directors, post notice of the meeting on the |
|
association's Internet website and the department's Internet |
|
website. |
|
(b) Except for a closed meeting authorized by Subchapter D, |
|
Chapter 551, Government Code, a meeting of the board of directors or |
|
of the members of the association is open to[:
|
|
[(1)
the commissioner or the commissioner's designated
|
|
representative; and
|
|
[(2)] the public. |
|
(b-1) A meeting of the board of directors or the members of |
|
the association, including a closed meeting authorized by |
|
Subchapter D, Chapter 551, Government Code, is open to the |
|
commissioner or the commissioner's designated representative. |
|
(e) The association shall: |
|
(1) broadcast live on the association's Internet |
|
website all meetings of the board of directors, other than closed |
|
meetings; and |
|
(2) maintain on the association's Internet website an |
|
archive of meetings of the board of directors. |
|
(f) A recording of a meeting must be maintained in the |
|
archive required under Subsection (e) through and including the |
|
second anniversary of the meeting. |
|
SECTION 10. Section 2210.107, Insurance Code, is amended to |
|
read as follows: |
|
Sec. 2210.107. PRIMARY BOARD OBJECTIVES; REPORT. (a) The |
|
primary objectives of the board of directors are to ensure that the |
|
board and the association: |
|
(1) operate [operates] in accordance with this |
|
chapter, the plan of operation, and commissioner rules; |
|
(2) comply [complies] with sound insurance |
|
principles; [and] |
|
(3) meet [meets] all standards imposed under this |
|
chapter; |
|
(4) establish a code of conduct and performance |
|
standards for association employees and persons with which the |
|
association contracts; and |
|
(5) establish, and adhere to terms of, an annual |
|
evaluation of association management necessary to achieve the |
|
statutory purpose, board objectives, and any performance or |
|
enterprise risk management objectives established by the board. |
|
(b) Not later than June 1 of each year, the association |
|
shall submit to the commissioner, the legislative oversight board |
|
established under Subchapter N, the governor, the lieutenant |
|
governor, and the speaker of the house of representatives a report |
|
evaluating the extent to which the board met the objectives |
|
described by Subsection (a) in the 12-month period immediately |
|
preceding the date of the report. |
|
SECTION 11. Subchapter C, Chapter 2210, Insurance Code, is |
|
amended by adding Section 2210.108 to read as follows: |
|
Sec. 2210.108. OPEN MEETINGS AND OPEN RECORDS. (a) Except |
|
as specifically provided by this chapter or another law, the |
|
association is subject to Chapters 551 and 552, Government Code. |
|
(b) A settlement agreement to which the association is a |
|
party: |
|
(1) is public information and is not exempted from |
|
required disclosure under Chapter 552, Government Code; and |
|
(2) if applicable, must contain the name of any |
|
attorney or adjuster involved with the claim that is the basis of |
|
the settlement. |
|
SECTION 12. Section 2210.152, Insurance Code, is amended by |
|
adding Subsection (c) to read as follows: |
|
(c) The plan of operation shall require the association to |
|
use the claim settlement guidelines published by the commissioner |
|
under Section 2210.577(f) in evaluating the extent to which a loss |
|
to insurable property is incurred as a result of wind, waves, tidal |
|
surges, rising waters not caused by waves or surges, or wind-driven |
|
rain associated with a storm. |
|
SECTION 13. Section 2210.202, Insurance Code, is amended by |
|
adding Subsection (c) to read as follows: |
|
(c) The commissioner shall adopt rules to simplify and |
|
streamline the process through which: |
|
(1) a person who has an insurable interest in |
|
insurable property may apply with the association for insurance |
|
coverage; and |
|
(2) a person insured under this chapter may apply with |
|
the association for renewal of the person's insurance coverage. |
|
SECTION 14. Section 2210.204(e), Insurance Code, is amended |
|
to read as follows: |
|
(e) For cancellation of insurance coverage under this |
|
section, the minimum retained premium in the plan of operation must |
|
be for a period of not less than 90 [180] days, except for events |
|
specified in the plan of operation that reflect a significant |
|
change in the exposure or the policyholder concerning the insured |
|
property, including: |
|
(1) the purchase of similar coverage in the voluntary |
|
market; |
|
(2) sale of the property to an unrelated party; |
|
(3) death of the policyholder; or |
|
(4) total loss of the property. |
|
SECTION 15. Subchapter E, Chapter 2210, Insurance Code, is |
|
amended by adding Sections 2210.205 and 2210.210 to read as |
|
follows: |
|
Sec. 2210.205. REQUIRED POLICY PROVISIONS: DEADLINE FOR |
|
FILING CLAIM; NOTICE CONCERNING ARBITRATION. (a) A windstorm and |
|
hail insurance policy issued by the association must: |
|
(1) require an insured to file a claim under the policy |
|
not later than the first anniversary of the date on which the damage |
|
to property that is the basis of the claim occurs; and |
|
(2) contain, in boldface type, a conspicuous notice |
|
concerning the resolution of disputes under the policy, including: |
|
(A) the processes and deadlines for appraisal |
|
under Section 2210.575 and independent coverage review under |
|
Section 2210.576; and |
|
(B) the necessity of complying with the |
|
requirements of Subchapter L-1 to seek administrative or judicial |
|
relief. |
|
(b) The commissioner, on a showing of good cause by a person |
|
insured under this chapter, may extend the one-year period |
|
described by Subsection (a)(1) for a period not to exceed 180 days. |
|
Sec. 2210.210. COVERAGE OF CERTAIN STRUCTURES PROHIBITED. |
|
The association may not issue coverage for the following |
|
structures, regardless of whether the structure is otherwise |
|
insurable property under this chapter: |
|
(1) a wind turbine; |
|
(2) a structure used primarily as a casino or other |
|
gambling establishment; or |
|
(3) a structure used as a sexually oriented business, |
|
as defined by Section 243.002, Local Government Code. |
|
SECTION 16. Section 2210.254, Insurance Code, is amended by |
|
adding Subsection (e) to read as follows: |
|
(e) The department may establish an annual renewal period |
|
for persons appointed as qualified inspectors. |
|
SECTION 17. Subchapter F, Chapter 2210, Insurance Code, is |
|
amended by adding Section 2210.2551 to read as follows: |
|
Sec. 2210.2551. EXCLUSIVE ENFORCEMENT AUTHORITY; RULES. |
|
(a) The department has exclusive authority over all matters |
|
relating to the appointment and oversight of qualified inspectors |
|
for purposes of this chapter. |
|
(b) The commissioner by rule shall establish criteria to |
|
ensure that a person seeking appointment as a qualified inspector |
|
under this subchapter, including an engineer seeking appointment |
|
under Section 2210.255, possesses the knowledge, understanding, |
|
and professional competence to perform windstorm inspections under |
|
this chapter and to comply with other requirements of this chapter. |
|
SECTION 18. The heading to Section 2210.256, Insurance |
|
Code, is amended to read as follows: |
|
Sec. 2210.256. DISCIPLINARY PROCEEDINGS REGARDING |
|
APPOINTED INSPECTORS AND CERTAIN OTHER PERSONS. |
|
SECTION 19. Section 2210.256, Insurance Code, is amended by |
|
adding Subsection (a-1) to read as follows: |
|
(a-1) In addition to any other action authorized under this |
|
section, the commissioner ex parte may enter an emergency cease and |
|
desist order under Chapter 83 against a qualified inspector, or a |
|
person acting as a qualified inspector, if: |
|
(1) the commissioner believes that: |
|
(A) the qualified inspector has: |
|
(i) through submitting or failing to submit |
|
to the department sealed plans, designs, calculations, or other |
|
substantiating information, failed to demonstrate that a structure |
|
or a portion of a structure subject to inspection meets the |
|
requirements of this chapter and department rules; or |
|
(ii) refused to comply with requirements |
|
imposed under this chapter or department rules; or |
|
(B) the person acting as a qualified inspector is |
|
acting without appointment as a qualified inspector under Section |
|
2210.254 or 2210.255; and |
|
(2) the commissioner determines that the conduct |
|
described by Subdivision (1) is fraudulent or hazardous or creates |
|
an immediate danger to the public. |
|
SECTION 20. Section 2210.259, Insurance Code, is amended by |
|
amending Subsection (a) and adding Subsection (c) to read as |
|
follows: |
|
(a) A noncompliant residential structure insured by the |
|
association as of September 1, 2009, under Section 2210.251(f) that |
|
had been approved for insurability under the approval process |
|
regulations in effect on September 1, 2009, is subject to an annual |
|
premium surcharge in an amount determined under Subsection (c) |
|
[equal to 15 percent of the premium for insurance coverage obtained
|
|
through the association]. The surcharge under this subsection |
|
applies to each policy issued or renewed by the association on or |
|
after the effective date of Sections 5 through 49, H.B. No. 4409, |
|
Acts of the 81st Legislature, Regular Session, 2009, and is due on |
|
the issuance or renewal of the policy. |
|
(c) The commissioner, after receiving a recommendation from |
|
the board concerning the amount of the annual premium surcharge |
|
required under Subsection (a), by rule shall establish the amount |
|
of the annual premium surcharge. The amount of the surcharge must |
|
be actuarially justifiable and may not be less than 15 percent of |
|
the premium for insurance coverage obtained through the |
|
association. Before the commissioner by rule establishes the |
|
amount of the annual premium surcharge, the commissioner shall |
|
report to the legislative oversight board established under |
|
Subchapter N concerning the methodology the commissioner used to |
|
determine the amount of the annual premium surcharge. |
|
SECTION 21. Section 2210.355, Insurance Code, is amended by |
|
amending Subsection (i) and adding Subsections (j), (k), and (l) to |
|
read as follows: |
|
(i) The association shall [may] establish rating |
|
territories and shall [may] vary rates among the territories in |
|
accordance with Subsections (j) and (k) [as provided by this
|
|
subsection.
A rating territory that subdivides a county may be used
|
|
only if the rate for any subdivision in the county is not more than:
|
|
[(A)
five percent higher than the rate used by
|
|
the association in 2009 in any other subdivision in the county;
|
|
[(B)
six percent higher than the rate used by the
|
|
association in 2010 in any other subdivision in the county;
|
|
[(C)
seven percent higher than the rate used by
|
|
the association in 2011 in any other subdivision in the county; and
|
|
[(D)
eight percent higher than the rate used by
|
|
the association in 2012 in any other subdivision in the county]. |
|
(j) Notwithstanding Section 2210.351, the association may |
|
use rate relativities for rating territories that subdivide a |
|
county without prior commissioner approval if the resulting rate |
|
for any subdivision in the county: |
|
(1) is not more than 15 percent greater than the |
|
resulting rate used in any other subdivision in that county for |
|
identical coverage for insureds having risk characteristics that |
|
are identical except for rating territory; and |
|
(2) is not unfairly discriminatory. |
|
(k) The association may use rate relativities for rating |
|
territories that subdivide a county only with prior commissioner |
|
approval if the resulting rate for any subdivision in the county is |
|
not described by Subsection (j)(1). |
|
(l) A rate relativity described by Subsection (k) must be |
|
based on sound actuarial principles supported by data filed with |
|
the department, including reasonable output from recognized |
|
catastrophe models, and must produce rates that comply with the |
|
statutory and regulatory requirements of this chapter. |
|
SECTION 22. Section 2210.453, Insurance Code, is amended by |
|
adding Subsection (c) to read as follows: |
|
(c) If the association does not purchase reinsurance as |
|
authorized by this section, the board, not later than June 1 of each |
|
year, shall submit to the commissioner, the legislative oversight |
|
board established under Subchapter N, the governor, the lieutenant |
|
governor, and the speaker of the house of representatives a report |
|
containing an actuarial plan for paying losses in the event of a |
|
catastrophe with estimated damages of $2.5 billion or more. |
|
SECTION 23. Subchapter J, Chapter 2210, Insurance Code, is |
|
amended by adding Section 2210.455 to read as follows: |
|
Sec. 2210.455. CATASTROPHE PLAN. (a) Not later than June 1 |
|
of each year, the board shall submit to the commissioner, the |
|
legislative oversight board established under Subchapter N, the |
|
governor, the lieutenant governor, and the speaker of the house of |
|
representatives a catastrophe plan covering the period beginning on |
|
the date the plan is submitted and ending on the following May 31. |
|
(b) The catastrophe plan must describe the manner in which |
|
the association will, during the period covered by the plan, |
|
evaluate losses and process claims after the following windstorms |
|
affecting an area of maximum exposure to the association: |
|
(1) a windstorm with a four percent chance of |
|
occurring during the period covered by the plan; |
|
(2) a windstorm with a two percent chance of occurring |
|
during the period covered by the plan; and |
|
(3) a windstorm with a one percent chance of occurring |
|
during the period covered by the plan. |
|
(c) The catastrophe plan must include a description of how |
|
losses under association policies will be paid, and how claims |
|
under association policies will be administered and adjusted, |
|
during the period covered by the plan. |
|
SECTION 24. Sections 2210.551(a) and (b), Insurance Code, |
|
are amended to read as follows: |
|
(a) This section: |
|
(1) does not apply to a person insured under this |
|
chapter who is required to resolve a dispute concerning a |
|
causation, coverage, or damage dispute under Subchapter L-1; and |
|
(2) applies only to: |
|
(A) [(1)] a person not described by Subdivision |
|
(1) who is insured under this chapter or an authorized |
|
representative of the person; or |
|
(B) [(2)] an affected insurer. |
|
(b) A person or entity described by Subsection (a)(2) [(a)] |
|
who is aggrieved by an act, ruling, or decision of the association |
|
may appeal to the commissioner not later than the 30th day after the |
|
date of that act, ruling, or decision. |
|
SECTION 25. The heading to Section 2210.552, Insurance |
|
Code, is amended to read as follows: |
|
Sec. 2210.552. [CLAIM] DISPUTES OTHER THAN CAUSATION, |
|
COVERAGE, AND DAMAGE DISPUTES; VENUE. |
|
SECTION 26. Section 2210.552, Insurance Code, is amended by |
|
amending Subsection (a) and adding Subsection (e) to read as |
|
follows: |
|
(a) Except as provided by Sections 2210.007 and 2210.106 and |
|
Subchapter L-1, a person insured under this chapter who is |
|
aggrieved by an act, ruling, or decision of the association |
|
[relating to the payment of, the amount of, or the denial of a
|
|
claim] may: |
|
(1) bring an action against the association[,
|
|
including an action under Chapter 541]; or |
|
(2) appeal the act, ruling, or decision under Section |
|
2210.551. |
|
(e) A person who brings an action against the association |
|
under this section: |
|
(1) may recover only the amount of actual damages, |
|
plus court costs and reasonable and necessary attorney's fees; and |
|
(2) may not recover consequential, punitive, or |
|
exemplary damages, including damages under Section 541.152(b) of |
|
this code or Section 17.50, Business & Commerce Code. |
|
SECTION 27. Subchapter L, Chapter 2210, Insurance Code, is |
|
amended by adding Section 2210.553 to read as follows: |
|
Sec. 2210.553. LIMITATIONS PERIOD. (a) Notwithstanding |
|
any other law, including Section 541.162, a person insured under |
|
this chapter who brings an action against the association in the |
|
manner described by Section 2210.552(a)(1) must bring the action |
|
not later than the second anniversary of the date of the act, |
|
ruling, or decision of the association by which the insured is |
|
aggrieved. |
|
(b) This section is a statute of repose and controls over |
|
any other applicable limitations period. |
|
SECTION 28. Chapter 2210, Insurance Code, is amended by |
|
adding Subchapter L-1 to read as follows: |
|
SUBCHAPTER L-1. CLAIMS: SETTLEMENT AND DISPUTE RESOLUTION |
|
Sec. 2210.571. DEFINITIONS. In this subchapter: |
|
(1) "Association policy" means a windstorm and hail |
|
insurance policy issued by the association. |
|
(2) "Causation dispute" means a dispute involving the |
|
extent to which damage to property insured under an association |
|
policy was caused by an event or peril covered under the policy. |
|
(3) "Claim" means a request for payment under an |
|
association policy following damage to property insured, or alleged |
|
to be insured, under the policy. |
|
(4) "Claimant" means a person who makes a claim. |
|
(5) "Coverage dispute" means a dispute that involves |
|
whether, or the extent to which, an association policy covers |
|
damages to property alleged to be insured under the policy. The |
|
term does not include a causation dispute. |
|
(6) "Damage dispute" means a dispute that involves the |
|
extent of damage to property, or the cost of repairing or replacing |
|
property, insured under an association policy. The term does not |
|
include a causation dispute or coverage dispute. |
|
Sec. 2210.572. EXCLUSIVE REMEDIES AND LIMITATION ON AWARD. |
|
(a) This subchapter provides the exclusive remedies for a |
|
causation, coverage, or damage dispute with the association. |
|
(b) Except as provided by Section 2210.578, a claimant may |
|
not be paid or recover any amount under this subchapter in excess of |
|
the policy limits of the association policy under which the claim |
|
that is the basis of a causation, coverage, or damage dispute is |
|
made. |
|
Sec. 2210.573. FILING OF CLAIM; CLAIM PROCESSING. (a) |
|
Subject to Section 2210.205(b), an insured must file a claim under |
|
an association policy not later than the first anniversary of the |
|
date on which the damage to property that is the basis of the claim |
|
occurs. |
|
(b) Except as provided by Subsection (d), not later than the |
|
90th day after the date the association receives a claim, the |
|
association shall: |
|
(1) notify the claimant in writing of the amount of |
|
money, if any, the association will pay the claimant for the claim; |
|
and |
|
(2) provide the claimant with: |
|
(A) a detailed description of the assumptions or |
|
estimates used by the association in determining the amount of the |
|
claim to be paid, including the estimated labor and materials |
|
required and the estimated prices for the labor and materials; or |
|
(B) if the association determines that, in whole |
|
or in part, the property damaged is not insured under the |
|
association policy, or that the property insured under the |
|
association policy was damaged by an event or peril not covered by |
|
the association policy, a detailed description of the factual and |
|
legal basis on which the association determined that a coverage or |
|
causation dispute exists concerning all or part of the claim. |
|
(c) If the association does not notify the claimant in |
|
accordance with Subsection (b), the claim is presumed to be covered |
|
by the association policy. |
|
(d) The association may extend the 90-day period described |
|
by Subsection (b) for a period not to exceed 90 days, if, before the |
|
end of the 90-day period described by Subsection (b), the |
|
association determines that special circumstances require an |
|
extension of the 90-day period described by Subsection (b) and |
|
notifies the claimant in writing of that determination and those |
|
circumstances. |
|
(e) If a claimant fails to submit information necessary for |
|
the association to determine whether to pay a claim or any portion |
|
of a claim or to deny payment of a claim or any portion of a claim, |
|
the association may request in writing the necessary information |
|
from the claimant. If the association makes a written request for |
|
information, the applicable period described by Subsection (b) or |
|
(d) is tolled from the date the association requests the |
|
information until the date the association receives from the |
|
claimant information responsive to the request. |
|
(f) In addition to the notice and information otherwise |
|
required under this section, the association shall notify a |
|
claimant of the time limits under Section 2210.574 to request |
|
review of the association's determination under Subsection (e). |
|
Sec. 2210.574. REQUEST FOR REVIEW OF ASSOCIATION |
|
DETERMINATION. (a) A claimant aggrieved by a determination of the |
|
association under Section 2210.573 may, not later than the 30th day |
|
after the date the claimant receives the association's |
|
determination, request in writing a review of the determination. A |
|
claimant may submit written comments, documents, records, and other |
|
information to the association with or following the request for |
|
review. |
|
(b) The association shall, on request and free of charge, |
|
provide a claimant requesting review of an association |
|
determination under Subsection (a) reasonable access to all |
|
information relevant to the determination of the association that |
|
is being reviewed. The claimant may copy the information at the |
|
claimant's own cost or may request the association to provide a copy |
|
of all or part of the information to the claimant. The association |
|
may charge a claimant the actual cost incurred by the association in |
|
providing a copy of information under this section, excluding any |
|
amount for labor involved in making any information or copy of |
|
information available to a claimant. |
|
(c) Not later than the 60th day after the date the |
|
association receives a request for review under Subsection (a), the |
|
association shall notify the claimant in writing of the outcome of |
|
the association's review. The association and the claimant may |
|
agree to extend the 60-day period described by this subsection. |
|
(d) The association's notice to the claimant of the outcome |
|
of the association's review must be in writing, contain the reasons |
|
for the outcome, and notify the claimant of the time limits to |
|
request, as applicable, appraisal under Section 2210.575 or review |
|
by an independent review panel under Section 2210.576. |
|
Sec. 2210.575. APPRAISAL IN DAMAGE DISPUTES. (a) If, after |
|
review of an association determination under Section 2210.574, a |
|
damage dispute exists with reference to a claim filed under an |
|
association policy, but a coverage or causation dispute does not |
|
exist with reference to that claim, the claimant may request |
|
appraisal of the extent of damage to the property, or the cost of |
|
repairing or replacing the property, insured under the policy. |
|
(b) A claimant must make a written request for appraisal not |
|
later than the 30th day after the date the claimant receives actual |
|
or constructive notice of the outcome of the association's review |
|
of a determination under Section 2210.574 that is the basis of the |
|
damage dispute. If a claimant, on a showing of good cause and not |
|
later than the 60th day after the expiration of the 30-day period |
|
described by this subsection, requests in writing that the 30-day |
|
period to request appraisal be extended, the commissioner may grant |
|
an additional 30-day period in which the claimant may request |
|
appraisal. |
|
(c) If a claimant requests appraisal under Subsection (b), |
|
the claimant and the association shall resolve the damage dispute |
|
through appraisal, in accordance with the terms of the association |
|
policy. The results of the appraisal: |
|
(1) are binding on the claimant and the association |
|
and are subject to appeal and judicial review only in the manner |
|
provided by Section 2210.578; and |
|
(2) become final and appealable on the 15th day after |
|
the date the appealing party receives actual or constructive notice |
|
of the results. |
|
(d) A request for appraisal, and participation in the |
|
appraisal process, under this section is a condition precedent to |
|
contesting a determination made by the association concerning the |
|
extent of damage to property, or the cost of repairing or replacing |
|
property, insured under an association policy. A claimant who does |
|
not request appraisal within the applicable period described by |
|
Subsection (b) waives the claimant's right to contest a |
|
determination of the association concerning the extent of damage to |
|
property, or the cost of repairing or replacing property, insured |
|
under an association policy. |
|
(e) The commissioner by rule shall establish policies and |
|
procedures for an appraisal requested and conducted under this |
|
section. |
|
Sec. 2210.576. REVIEW BY INDEPENDENT REVIEW PANEL. (a) If, |
|
after review of an association determination under Section |
|
2210.574, a coverage or causation dispute exists with reference to |
|
a claim filed under an association policy, the claimant may seek |
|
resolution of all disputes concerning the claim, including a damage |
|
dispute, through review by an independent review panel. |
|
(b) A claimant must make a written request, mailed or served |
|
on the association or the commissioner, for review by an |
|
independent review panel not later than the 30th day after the date |
|
the claimant receives actual or constructive notice of the outcome |
|
of the association's review of a determination under Section |
|
2210.574 that is the basis of the causation, coverage, or damage |
|
dispute. If a claimant mails or serves a request for review by an |
|
independent review panel, the association shall immediately |
|
forward the request for review to the commissioner. |
|
(c) If a claimant, on a showing of good cause and not later |
|
than the 60th day after the expiration of the 30-day period |
|
described by Subsection (b), requests in writing that the 30-day |
|
period to request review by an independent review panel be |
|
extended, the commissioner may grant an additional 30-day period in |
|
which the claimant may request independent review under this |
|
section. |
|
(d) The commissioner shall appoint an independent review |
|
panel to resolve a dispute in the manner described by this section. |
|
A panel appointed under this section must consist of three members, |
|
selected by the commissioner from a roster of qualified panel |
|
members maintained and published by the commissioner. If a |
|
selected panel member cannot serve or declines to serve for any |
|
reason, the commissioner shall select a new panel member not later |
|
than the 10th day after the date the panel member notifies the |
|
commissioner of the member's inability or unwillingness to serve. |
|
The commissioner shall appoint one member of the panel to serve as |
|
the presiding officer of the panel. |
|
(e) An independent review panel appointed under Subsection |
|
(b) shall make a determination concerning, as applicable, the |
|
causation, coverage, or damage dispute submitted to the panel for |
|
review and notify the claimant and the association in writing of the |
|
panel's determination as soon as practicable, but not later than |
|
the 120th day after the date the independent review panel is |
|
appointed. If the independent review panel does not make a |
|
determination concerning a dispute before the 120th day, the |
|
commissioner may grant a reasonable extension for the panel to make |
|
a determination or dissolve the panel and appoint a new panel to |
|
conduct the review. |
|
(f) An independent review panel shall determine whether the |
|
review of a dispute involves a technical issue requiring guidance |
|
or information from the technical panel appointed under Section |
|
2210.577. If the review of a dispute involves a technical issue, the |
|
independent review panel shall request from the technical panel |
|
guidance and any information relevant to the dispute. |
|
(g) The 120-day period described by Subsection (e) is tolled |
|
from the date the independent review panel requests guidance or |
|
information from the technical panel through the date on which the |
|
independent review panel receives the requested guidance or |
|
information. |
|
(h) The determination of an independent review panel: |
|
(1) is binding on the claimant and the association and |
|
is subject to appeal and judicial review only in the manner provided |
|
by Section 2210.578; and |
|
(2) becomes final and appealable on the 15th day after |
|
the date the appealing party receives actual or constructive notice |
|
of the determination. |
|
(i) The commissioner by rule shall establish: |
|
(1) the qualifications for members of the independent |
|
review panel; |
|
(2) procedures and deadlines to be used in independent |
|
review; |
|
(3) procedures and requirements relating to the |
|
exchange of documents during the independent review process, |
|
including the content of those documents; and |
|
(4) procedures or requirements necessary for any other |
|
matter regarding the handling of requests for review. |
|
(j) The rules adopted by the commissioner under Subsection |
|
(i) must ensure that the independent review process is fair to the |
|
claimant and enables the claimant to participate in the independent |
|
review process without engaging legal counsel. |
|
Sec. 2210.577. TECHNICAL PANEL. (a) The commissioner |
|
shall appoint a technical panel of experts to advise the |
|
association concerning the extent to which damage to property |
|
insured under an association policy was incurred as a result of |
|
wind, waves, tidal surges, rising waters not caused by waves or |
|
surges, and wind-driven rain associated with a storm. The panel |
|
shall consist of a number of experts to be decided by the |
|
commissioner. The commissioner shall appoint one member of the |
|
panel to serve as the presiding officer of the panel. |
|
(b) Members of the panel must have professional expertise |
|
in, and be knowledgeable concerning, the geography and meteorology |
|
of the Texas seacoast territory, as well as the scientific basis for |
|
determining the extent to which damage to property is caused by |
|
wind, waves, tidal surges, rising waters not caused by waves or |
|
surges, and wind-driven rain associated with a storm. |
|
(c) The panel shall meet at the request of the commissioner |
|
or the call of the presiding officer of the panel. |
|
(d) The panel shall investigate, collect, and evaluate the |
|
information necessary to provide recommendations under Subsection |
|
(e) and to provide guidance or other information requested by an |
|
independent review panel under Section 2210.576. |
|
(e) At the request of the commissioner, the technical panel |
|
shall recommend to the commissioner methods for determining the |
|
extent to which damage to property insured under an association |
|
policy resulted from wind, waves, tidal surges, rising waters not |
|
caused by waves or surges, and wind-driven rain associated with a |
|
storm for geographic areas or regions designated by the |
|
commissioner. |
|
(f) After consideration of the recommendations made by the |
|
panel under Subsection (e), the commissioner shall publish |
|
guidelines that the association will use to settle claims. |
|
Sec. 2210.578. JUDICIAL REVIEW. (a) A claimant who has |
|
exhausted all administrative remedies under this subchapter and who |
|
is aggrieved by an appraisal under Section 2210.575 or the |
|
determination of an independent review panel under Section 2210.576 |
|
is entitled to judicial review. A claimant may not seek judicial |
|
review before exhausting all administrative remedies under this |
|
subchapter. |
|
(b) A claimant may seek judicial review of an appraisal |
|
under Section 2210.575 or the determination of an independent |
|
review panel under Section 2210.576 in the manner provided for the |
|
appeal of contested cases under Subchapter G, Chapter 2001, |
|
Government Code. The standard for judicial review under this |
|
section is the substantial evidence rule. |
|
(c) In a proceeding for judicial review under this section, |
|
the court may award only the amount described by Section |
|
2210.572(b), plus court costs and reasonable and necessary |
|
attorney's fees. |
|
Sec. 2210.579. CONSTRUCTION WITH OTHER LAW. To the extent |
|
of any conflict between a provision of this subchapter and any other |
|
law, the provision of this subchapter prevails. |
|
SECTION 29. Section 2210.551(e), Insurance Code, is |
|
repealed. |
|
SECTION 30. This Act applies only to a Texas windstorm and |
|
hail insurance policy, and a dispute arising under a Texas |
|
windstorm and hail insurance policy, delivered, issued for |
|
delivery, or renewed by the Texas Windstorm Insurance Association |
|
on or after the 30th day after the effective date of this Act. A |
|
Texas windstorm and hail insurance policy, and a dispute arising |
|
under a Texas windstorm and hail insurance policy, delivered, |
|
issued for delivery, or renewed by the Texas Windstorm Insurance |
|
Association before the 30th day after the effective date of this |
|
Act, are governed by the law in effect on the date the policy was |
|
delivered, issued for delivery, or renewed, and the former law is |
|
continued in effect for that purpose. |
|
SECTION 31. The Texas Windstorm Insurance Association shall |
|
amend the association's plan of operation to conform to the changes |
|
in law made by this Act not later than January 1, 2012. |
|
SECTION 32. Sections 541.152 and 2210.552, Insurance Code, |
|
as amended by this Act, apply only to a cause of action that accrues |
|
on or after the effective date of this Act. A cause of action that |
|
accrues before the effective date of this Act is governed by the law |
|
in effect immediately before the effective date of this Act, and |
|
that law is continued in effect for that purpose. |
|
SECTION 33. 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, 2011. |