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A BILL TO BE ENTITLED
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AN ACT
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relating to the institution of a formal delinquency proceeding |
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against the Texas Windstorm Insurance Association. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. In this Act: |
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(1) "Association" means the Texas Windstorm Insurance |
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Association established under Chapter 2210, Insurance Code. |
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(2) "Commissioner" means the commissioner of |
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insurance. |
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(3) "Formal delinquency proceeding" and |
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"receivership" have the meanings assigned by Section 443.004, |
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Insurance Code. |
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(4) "First tier coastal county" and "second tier |
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coastal county" have the meanings assigned by Section 2210.003, |
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Insurance Code. |
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SECTION 2. The commissioner of insurance shall, as soon as |
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practicable after the effective date of this Act and in accordance |
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with Chapter 443, Insurance Code, petition a court for an order to |
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liquidate the business of the Texas Windstorm Insurance |
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Association. |
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SECTION 3. Notwithstanding any contrary provision of |
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Chapter 2210, Insurance Code, on the date that the commissioner |
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files the petition for an order to liquidate the business of the |
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Texas Windstorm Insurance Association, the board of the association |
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is dissolved. Persons described by Section 443.010, Insurance |
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Code, shall cooperate with the commissioner in the manner required |
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by that section during the pendency of the formal delinquency |
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proceeding against the association. |
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SECTION 4. In accordance with Section 443.015(i), Insurance |
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Code, the Texas Windstorm Insurance Association shall pay all |
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expenses of the receivership initiated against the association. |
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SECTION 5. The commissioner shall appoint an advisory |
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committee as authorized by Section 443.154, Insurance Code. |
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Notwithstanding any contrary provision of Chapter 443, Insurance |
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Code, the committee shall be composed of: |
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(1) five members, appointed from a list of names |
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submitted to the commissioner by the governor, all of whom must have |
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experience in the business of insurance, loss adjustment, business |
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management, or finance and no more than two of whom are residents of |
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a first tier coastal county; |
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(2) two members, appointed from a list of names |
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submitted to the commissioner by the speaker of the house of |
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representatives, both of whom must be members of the house of |
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representatives and only one of whom may be a resident of a first or |
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second tier coastal county; and |
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(3) two members, appointed from a list of names |
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submitted to the commissioner by the lieutenant governor, both of |
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whom must be members of the senate and only one of whom may be a |
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resident of a first or second tier coastal county. |
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SECTION 6. (a) The advisory committee appointed by the |
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commissioner under Section 5 of this Act shall, as soon as |
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practicable after the effective date of this Act, develop and |
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recommend to the commissioner a plan of liquidation to govern the |
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liquidation of the association. After consideration of the |
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recommendations of the advisory committee, the commissioner shall |
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adopt a plan of liquidation. |
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(b) The plan of liquidation adopted under Subsection (a) of |
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this section must include provisions concerning: |
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(1) the transfer of the association's policy |
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obligations to a solvent assuming insurer authorized to write |
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windstorm and hail insurance in this state; and |
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(2) the establishment of a program that will replace |
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the association and provide a residual market for windstorm and |
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hail insurance in first tier coastal counties. |
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(c) The program described by Subsection (b) of this section: |
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(1) must, if possible, operate in the private |
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windstorm and hail insurance market in this state; |
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(2) must be actuarially sound and have proper internal |
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controls and safeguards to ensure accurate, efficient, and timely |
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adjustment of claims; and |
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(3) may, if necessary, include a source of funding to |
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support the program. |
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SECTION 7. (a) The commissioner shall take all steps |
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necessary to ensure that the liquidation of the association is |
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finalized not later than September 1, 2014, or if possible, by |
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September 1, 2013. |
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(b) On the date that the liquidation is final, the program |
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to replace the association must be fully operational and capable of |
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issuing, or causing the issuance of, windstorm and hail insurance |
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policies in first tier coastal counties. |
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SECTION 8. If necessary to accomplish the purposes of this |
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Act or to effect a specific action required by this Act, the |
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commissioner may, before commencing the formal delinquency |
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proceeding against the association or at the time the formal |
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delinquency proceeding is commenced, petition a court for a seizure |
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order under Section 443.051, Insurance Code, to allow the |
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commissioner to take possession and control of the Texas Windstorm |
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Insurance Association in the same manner that the commissioner |
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could take possession and control of an insurer under that section. |
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SECTION 9. The commissioner may adopt rules necessary to |
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implement this Act. |
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SECTION 10. This Act takes effect immediately if it |
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receives a vote of two-thirds of all the members elected to each |
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house, as provided by Section 39, Article III, Texas Constitution. |
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If this Act does not receive the vote necessary for immediate |
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effect, this Act takes effect September 1, 2011. |