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A BILL TO BE ENTITLED
|
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AN ACT
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|
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relating to the operation of the Texas Windstorm Insurance |
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Association and the FAIR Plan Association and the renaming of the |
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Texas Windstorm Insurance Association as the Texas Residual |
|
Insurance Plan. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 2210.001, Insurance Code, is amended to |
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read as follows: |
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Sec. 2210.001. PURPOSE. The primary purpose of the Texas |
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Residual [Windstorm] Insurance Plan [Association] is the provision |
|
of an adequate market for windstorm and hail insurance in the |
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seacoast territory of this state. The legislature finds that the |
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provision of adequate windstorm and hail insurance is necessary to |
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the economic welfare of this state, and without that insurance, the |
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orderly growth and development of this state would be severely |
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impeded. This chapter provides a method by which adequate |
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windstorm and hail insurance may be obtained in certain designated |
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portions of the seacoast territory of this state. The plan |
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[association] is intended to serve as a residual insurer of last |
|
resort for windstorm and hail insurance in the seacoast territory. |
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The plan [association] shall: |
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(1) function in such a manner as to not be a direct |
|
competitor in the private market; and |
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(2) provide windstorm and hail insurance coverage to |
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those who are unable to obtain that coverage in the private market. |
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SECTION 2. Section 2210.002, Insurance Code, is amended by |
|
amending Subsection (a) and adding Subsection (a-1) to read as |
|
follows: |
|
(a) This chapter may be cited as the Texas Residual |
|
[Windstorm] Insurance Plan [Association] Act. |
|
(a-1) A reference in this chapter or other law to the Texas |
|
Windstorm Insurance Association means the Texas Residual Insurance |
|
Plan. |
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SECTION 3. Section 2210.003, Insurance Code, is amended by |
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amending Subdivision (1) and adding Subdivisions (1-a), (3-c), and |
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(14) to read as follows: |
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(1) "Administrator" means the entity contractually |
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retained to: |
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(A) manage the association and administer the |
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plan of operation under Section 2210.062; |
|
(B) establish, administer, and maintain the |
|
electronic portal under Section 2210.211; and |
|
(C) manage the FAIR Plan Association and |
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administer the plan of operation under Section 2211.0522. |
|
(1-a) "Association" means the Texas Residual |
|
[Windstorm] Insurance Plan [Association]. |
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(3-c) "Exposure reduction plan fund" means the |
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dedicated trust fund established by the board of directors and held |
|
by the Texas Treasury Safekeeping Trust Company into which |
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assessments collected under Section 2210.212 are deposited for the |
|
purpose of achieving the association's required exposure reduction |
|
through means including mitigation, rate assistance, or any other |
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means related to that purpose considered necessary by the board. |
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(14) "Total insured exposure" means the total of all |
|
risks insured by the association in any class of business. |
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SECTION 4. Section 2210.014, Insurance Code, is amended by |
|
amending Subsection (b) and adding Subsection (c) to read as |
|
follows: |
|
(b) Chapter 542 does not apply to the processing and |
|
settlement of claims by the association or to an agent or |
|
representative of the association. |
|
(c) An insurer or adjuster, or the administrator contracted |
|
under Section 2210.062, is an agent of the association for purposes |
|
of adjusting association claims under this section. |
|
SECTION 5. Subchapter A, Chapter 2210, Insurance Code, is |
|
amended by adding Section 2210.015 to read as follows: |
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Sec. 2210.015. STUDY OF MARKET INCENTIVES; BIENNIAL |
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REPORTING. (a) Each biennium, the department shall conduct a |
|
study of market incentives to promote participation in the |
|
voluntary windstorm and hail insurance market in the seacoast |
|
territory of this state. The study must address as possible |
|
incentives the mandatory or voluntary issuance of windstorm and |
|
hail insurance in conjunction with the issuance of a homeowners |
|
policy in the seacoast territory. |
|
(b) The department shall include the results of the study |
|
conducted under this section in the report submitted under Section |
|
32.022. |
|
SECTION 6. Subchapter B, Chapter 2210, Insurance Code, is |
|
amended by adding Sections 2210.062, 2210.063, 2210.064, 2210.065, |
|
and 2210.066 to read as follows: |
|
Sec. 2210.062. ADMINISTRATION BY CONTRACTED ADMINISTRATOR. |
|
(a) Notwithstanding any other law, the commissioner shall |
|
contract with an administrator to manage the association and |
|
administer the plan of operation beginning January 1, 2014. The |
|
administrator may not exercise any power under the contract before |
|
January 1, 2014. |
|
(b) The administrator must hold either a managing general |
|
agent license issued under Chapter 4053 or a third-party |
|
administrator certificate of authority issued under Chapter 4151. |
|
(c) The term of the administrator's contract may not exceed |
|
five years. The contract may be renewed for additional terms not to |
|
exceed five years for each term. |
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(d) In establishing the compensation paid to the |
|
administrator under the contract, the commissioner shall consider |
|
the cost of operations of the association and make every reasonable |
|
effort to ensure that the cost of operations of the association |
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under the contract does not exceed average historical costs. |
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Sec. 2210.063. PROPRIETARY INFORMATION. (a) Any |
|
information, analyses, programs, or data acquired or created by the |
|
administrator under a contract under this chapter or Chapter 2211 |
|
are property of the department. |
|
(b) Information, analyses, programs, or data described by |
|
Subsection (a) are confidential and exempt from public disclosure |
|
under Chapter 552, Government Code. |
|
Sec. 2210.064. OFFICE; RECORDS. (a) The administrator |
|
shall maintain an office in Austin, Texas. |
|
(b) The commissioner may arrange to lease office space of |
|
the department to the administrator. |
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Sec. 2210.065. AUDIT. (a) The administrator is subject to |
|
audit by the commissioner and shall pay the costs incurred by the |
|
commissioner in performing an audit under this section in an amount |
|
the commissioner finds reasonable. |
|
(b) Work papers, as defined by Section 401.020(a), from an |
|
audit are confidential and not subject to disclosure under Chapter |
|
552, Government Code. |
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Sec. 2210.066. ANNUAL REPORT OF ADMINISTRATOR. (a) Not |
|
later than March 1 of each year, the administrator shall submit a |
|
report regarding the administrator's duties under this chapter and |
|
Chapter 2211 to: |
|
(1) the governor; |
|
(2) the lieutenant governor; |
|
(3) the speaker of the house of representatives; |
|
(4) the Senate Committee on Business and Commerce or |
|
the successor of that committee with jurisdiction over insurance; |
|
(5) the House Committee on Insurance or the successor |
|
of that committee with jurisdiction over insurance; and |
|
(6) the legislative oversight board established under |
|
Subchapter N. |
|
(b) The report must be made in accordance with the terms of |
|
the administrator's contract with the department. |
|
SECTION 7. Subchapter B-1, Chapter 2210, Insurance Code, is |
|
amended by amending Section 2210.071 and adding Section 2210.0715 |
|
to read as follows: |
|
Sec. 2210.071. PAYMENT OF EXCESS LOSSES[; PAYMENT FROM
|
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RESERVES AND TRUST FUND]. [(a)] If, in a catastrophe year, an |
|
occurrence or series of occurrences in a catastrophe area results |
|
in insured losses and operating expenses of the association in |
|
excess of premium and other revenue of the association, the excess |
|
losses and operating expenses shall be paid as provided by this |
|
subchapter. |
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Sec. 2210.0715. PAYMENT FROM RESERVES AND TRUST FUND. [(b)] |
|
The association shall pay losses in excess of premium and other |
|
revenue of the association from available reserves of the |
|
association and available amounts in the catastrophe reserve trust |
|
fund. |
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[(c)
Losses not paid under Subsection (b) shall be paid from
|
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the proceeds from public securities issued in accordance with this
|
|
subchapter and Subchapter M and, notwithstanding Subsection (a),
|
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may be paid from the proceeds of public securities issued under
|
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Section 2210.072(a) before an occurrence or series of occurrences
|
|
that results in insured losses.] |
|
SECTION 8. Subchapter B-1, Chapter 2210, Insurance Code, is |
|
amended by adding Section 2210.0716 to read as follows: |
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Sec. 2210.0716. PAYMENT FROM CLASS 1 ASSESSMENTS. |
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(a) Losses in a catastrophe year not paid under Section 2210.0715 |
|
shall be paid as provided by this section from member assessments |
|
not to exceed $500 million for that catastrophe year. |
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(b) The administrator, with the approval of the |
|
commissioner, shall notify each member 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. |
|
(c) A member of the association may not recoup an assessment |
|
paid under this section through a premium surcharge or tax credit. |
|
SECTION 9. Subsections (a), (b), (b-1), (c), and (f), |
|
Section 2210.072, Insurance Code, are amended to read as follows: |
|
(a) Losses not paid under Sections 2210.0715 and 2210.0716 |
|
[Section 2210.071(b)] shall be paid as provided by this section |
|
from the proceeds from Class 1 public securities authorized to be |
|
issued in accordance with Subchapter M before, on, or after the date |
|
of any occurrence or series of occurrences that results in insured |
|
losses. Public securities issued under this section must be paid |
|
[repaid] within a period not to exceed 10 [14] years, and may be |
|
paid [repaid] sooner if the board of directors elects to do so and |
|
the commissioner approves. |
|
(b) Public securities described by Subsection (a) that are |
|
issued before an occurrence or series of occurrences that results |
|
in incurred losses: |
|
(1) may be issued on the request of the board of |
|
directors with the approval of the commissioner; and |
|
(2) may not, in the aggregate, exceed $500 million [$1
|
|
billion] at any one time, regardless of the calendar year or years |
|
in which the outstanding public securities were issued. |
|
(b-1) Public securities described by Subsection (a): |
|
(1) shall be issued as necessary in a principal amount |
|
not to exceed $500 million [$1 billion] per catastrophe year, in the |
|
aggregate, for securities issued during that catastrophe year |
|
before the occurrence or series of occurrences that results in |
|
incurred losses in that year and securities issued on or after the |
|
date of that occurrence or series of occurrences, and regardless of |
|
whether for a single occurrence or a series of occurrences; and |
|
(2) subject to the $500 million [$1 billion] maximum |
|
described by Subdivision (1), may be issued, in one or more |
|
issuances or tranches, during the calendar year in which the |
|
occurrence or series of occurrences occurs or, if the public |
|
securities cannot reasonably be issued in that year, during the |
|
following calendar year. |
|
(c) If public securities are issued as described by this |
|
section, the public securities shall be paid [repaid] in the manner |
|
prescribed by Subchapter M [from association premium revenue]. |
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(f) If, under Subsection (e), the proceeds of any |
|
outstanding public securities issued during a previous catastrophe |
|
year must be depleted, those proceeds shall count against the $500 |
|
million [$1 billion] limit on public securities described by this |
|
section in the catastrophe year in which the proceeds must be |
|
depleted. |
|
SECTION 10. Subchapter B-1, Chapter 2210, Insurance Code, |
|
is amended by adding Section 2210.0725 to read as follows: |
|
Sec. 2210.0725. PAYMENT FROM CLASS 2 ASSESSMENTS. |
|
(a) Losses in a catastrophe year not paid under Sections |
|
2210.0715, 2210.0716, and 2210.072 shall be paid as provided by |
|
this section from member assessments not to exceed $500 million for |
|
that catastrophe year. |
|
(b) The administrator, with the approval of the |
|
commissioner, shall notify each member 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. |
|
(c) A member of the association may not recoup an assessment |
|
paid under this section through a premium surcharge or tax credit. |
|
SECTION 11. Section 2210.073, Insurance Code, is amended to |
|
read as follows: |
|
Sec. 2210.073. PAYMENT FROM CLASS 2 PUBLIC SECURITIES. |
|
(a) Losses not paid under Sections 2210.0715, 2210.0716, |
|
[2210.071 and] 2210.072, and 2210.0725 shall be paid as provided by |
|
this section from the proceeds from Class 2 public securities |
|
authorized to be issued in accordance with Subchapter M on or after |
|
the date of any occurrence or series of occurrences that results in |
|
insured losses [under this subsection]. Public securities issued |
|
under this section must be paid [repaid] within a period not to |
|
exceed 10 years, and may be paid [repaid] sooner if the board of |
|
directors elects to do so and the commissioner approves. |
|
(b) Public securities described by Subsection (a): |
|
(1) shall [may] be issued as necessary in a principal |
|
amount not to exceed $500 million [$1 billion] per catastrophe |
|
year, in the aggregate, whether for a single occurrence or a series |
|
of occurrences; and |
|
(2) subject to the $500 million [$1 billion] maximum |
|
described by Subdivision (1), may be issued, in one or more |
|
issuances or tranches, during the calendar year in which the |
|
occurrence or series of occurrences occurs or, if the public |
|
securities cannot reasonably be issued in that year, during the |
|
following calendar year. |
|
(c) If the losses are paid with public securities described |
|
by this section, the public securities shall be paid [repaid] in the |
|
manner prescribed by Subchapter M. |
|
SECTION 12. Section 2210.102, Insurance Code, is amended to |
|
read as follows: |
|
Sec. 2210.102. COMPOSITION. (a) The board of directors is |
|
composed of nine members appointed by the governor [commissioner] |
|
in accordance with this section. |
|
(b) Three [Four] members must be representatives of the |
|
insurance industry who actively write and renew windstorm and hail |
|
insurance in the first tier coastal counties. |
|
(c) Three [Four] members must, as of the date of the |
|
appointment, reside in the first tier coastal counties. Each of |
|
the following regions must be represented by a member residing in |
|
the region and [At least one of the members] appointed under this |
|
subsection: |
|
(1) the region consisting of Cameron, Kenedy, Kleberg, |
|
and Willacy Counties; |
|
(2) the region consisting of Aransas, Calhoun, Nueces, |
|
Refugio, and San Patricio Counties; and |
|
(3) the region consisting of Brazoria, Chambers, |
|
Galveston, Jefferson, and Matagorda Counties and any part of Harris |
|
County designated as a catastrophe area under Section 2210.005. |
|
(c-1) One of the members appointed under Subsection (c) must |
|
be a property and casualty agent who is licensed under this code and |
|
is not a captive agent. |
|
(d) One member must be a representative of an area of this |
|
state that is not located in the seacoast territory [with
|
|
demonstrated expertise in insurance and actuarial principles]. |
|
(d-1) One member must be an engineer who: |
|
(1) is knowledgeable of, and has professional |
|
expertise in, wind-related design and construction practices in |
|
coastal areas that are subject to high winds and hurricanes; and |
|
(2) resides in a second tier coastal county. |
|
(d-2) One member must be a representative of the financial |
|
industry who resides in a second tier coastal county. |
|
(e) All members must have demonstrated experience in |
|
insurance, general business, or actuarial principles and the |
|
member's area of expertise, if any, sufficient to make the success |
|
of the association probable. |
|
(f) Insurers who are members of the association shall |
|
nominate, from among those members, persons to fill any vacancy in |
|
the three [four] board of director seats reserved for |
|
representatives of the insurance industry. The board of directors |
|
shall solicit nominations from the members and submit the |
|
nominations to the governor [commissioner]. The nominee slate |
|
submitted to the governor [commissioner] under this subsection must |
|
include at least three more names than the number of vacancies. The |
|
governor may [commissioner shall] appoint replacement insurance |
|
industry representatives from the nominee slate. |
|
(g) In addition to the nine members appointed under |
|
Subsection (a), the governor [The commissioner] shall appoint three |
|
individuals [one person] to serve as [a] nonvoting ex officio |
|
members [member] of the board to advise the board [regarding issues
|
|
relating to the inspection process.
The commissioner may give
|
|
preference in an appointment under this subsection to a person who
|
|
is a qualified inspector under Section 2210.254]. Each [The] |
|
nonvoting member appointed under this section must: |
|
(1) hold an elective office of this state or a |
|
political subdivision of this state; and |
|
(2) reside in and represent one of the following |
|
areas: |
|
(A) the northern portion of the seacoast |
|
territory [be an engineer licensed by, and in good standing with,
|
|
the Texas Board of Professional Engineers]; |
|
(B) the southern portion of the seacoast |
|
territory [(2) reside in a first tier coastal county]; or [and] |
|
(C) an area of this state that is not located in |
|
the seacoast territory [(3)
be knowledgeable of, and have
|
|
professional expertise in, wind-related design and construction
|
|
practices in coastal areas that are subject to high winds and
|
|
hurricanes]. |
|
(h) The persons appointed under Subsection (c) must reside |
|
in [be from] different counties. The persons appointed under |
|
Subsection (g) must reside in different counties. |
|
SECTION 13. Subsection (c), Section 2210.103, Insurance |
|
Code, is amended to read as follows: |
|
(c) A member of the board of directors may be removed by the |
|
governor [commissioner] with cause stated in writing and posted on |
|
the association's website. The governor [commissioner] shall |
|
appoint a replacement in the manner provided by Section 2210.102 |
|
for a member who leaves or is removed from the board of directors. |
|
SECTION 14. Subchapter E, Chapter 2210, Insurance Code, is |
|
amended by adding Sections 2210.2022, 2210.211, 2210.212, and |
|
2210.213 to read as follows: |
|
Sec. 2210.2022. INFORMATION REQUIRED FOR CERTAIN |
|
APPLICATIONS. An application for association coverage, including |
|
an application for new or renewal coverage on or after January 1, |
|
2014, must include information on the applicant's policy that |
|
covers perils other than windstorm and hail, if any, including: |
|
(1) the total premium for that policy, including a |
|
policy number for coverage issued by the FAIR Plan Association |
|
under Chapter 2211, if applicable, and: |
|
(A) the amount of insurance on the dwelling and |
|
contents; or |
|
(B) if the policy is a tenants policy or |
|
condominium owners policy, the insured amount for the contents |
|
coverage; and |
|
(2) the deductibles applicable for each policy. |
|
Sec. 2210.211. VOLUNTARY ELECTRONIC PORTAL. (a) As soon |
|
as practicable after January 1, 2014, the administrator shall make |
|
available to all insurers an electronic portal to provide insurers |
|
access to information described by Subsection (b). |
|
(b) The portal must provide insurers access to information |
|
on each insured's association policy and other policy, if any, that |
|
covers other perils, if known, including: |
|
(1) the insured's total premium amount on the |
|
association policy; and |
|
(2) for coverage for perils other than windstorm and |
|
hail: |
|
(A) the total premium for that policy, including |
|
a policy issued by the FAIR Plan Association under Chapter 2211, if |
|
applicable, and: |
|
(i) the amount of insurance on the dwelling |
|
and its contents; or |
|
(ii) if the policy is a tenants policy or |
|
condominium owners policy, the insured amount for the contents |
|
coverage; and |
|
(B) the deductibles applicable for each policy. |
|
Sec. 2210.212. EXPOSURE REDUCTION PLAN. (a) The |
|
association shall reduce the association's total insured exposure |
|
determined as of January 1, 2013, according to the following |
|
schedule: |
|
(1) not later than January 1, 2016, the amount of the |
|
association's total insured exposure must reflect a 20 percent |
|
reduction from the association's total insured exposure as of |
|
January 1, 2013; |
|
(2) not later than January 1, 2018, the amount of the |
|
association's total insured exposure must reflect a 35 percent |
|
reduction from the total insured exposure as of January 1, 2013; |
|
(3) not later than January 1, 2020, the amount of the |
|
association's total insured exposure must reflect a 45 percent |
|
reduction from the association's total insured exposure as of |
|
January 1, 2013; |
|
(4) not later than January 1, 2022, the amount of the |
|
association's total insured exposure must reflect a 55 percent |
|
reduction from the association's total insured exposure as of |
|
January 1, 2013; and |
|
(5) not later than January 1, 2024, the amount of the |
|
association's total insured exposure must reflect a 60 percent |
|
reduction from the association's total insured exposure as of |
|
January 1, 2013. |
|
(b) As soon as practicable after January 1, 2016, January 1, |
|
2018, January 1, 2020, and January 1, 2024, respectively, the board |
|
of directors shall determine whether the reductions in the |
|
association's total insured exposure required under Subsection (a) |
|
have been achieved. |
|
(c) If on January 1, 2016, the association did not achieve |
|
the reduction in the total insured exposure required by Subsection |
|
(a)(1), the board of directors shall establish a plan to reduce the |
|
association's total insured exposure, which must include imposing |
|
an assessment as described by Subsection (f). |
|
(d) If on January 1, 2018, January 1, 2020, and January 1, |
|
2024, respectively, the association did not achieve the reduction |
|
in the total insured exposure required for that date, the board of |
|
directors shall establish a plan to reduce the association's total |
|
insured exposure, which must include imposing an assessment as |
|
described by Subsection (f). |
|
(e) An exposure reduction plan under Subsection (c) or (d) |
|
must be implemented not later than March 31 in the year in which the |
|
board of directors determines that the required reduction was not |
|
achieved and must result in the achievement of the required |
|
reduction by not later than December 31 of that year. |
|
(f) An assessment imposed under this section must be paid |
|
into the exposure reduction plan fund and is assessed against each |
|
member of the association that, as determined by the board of |
|
directors, has not met the member's proportionate responsibility |
|
for reduction of the association's total insured exposure. The |
|
total aggregate amount of an assessment under this section, if |
|
assessed against all members of the association, is $200 million. |
|
(g) The amount of a member's assessment paid under |
|
Subsection (f) must be equal to the portion of $200 million that is |
|
consistent with the member's proportionate participation in the |
|
association as determined under Section 2210.052. |
|
(h) A member of the association may not recoup an assessment |
|
paid under this section through a premium surcharge or tax credit or |
|
through a rate increase. |
|
(i) At the request of the commissioner, but not less |
|
frequently than twice each year, the administrator shall submit a |
|
report to the commissioner detailing the amount of the |
|
association's total insured exposure and any statistical |
|
information or experience data requested by the commissioner |
|
concerning the characteristics of that exposure. |
|
(j) Not later than May 15 and November 15 of each year, the |
|
commissioner shall submit a report to the windstorm insurance |
|
legislative oversight board established under Subchapter N |
|
summarizing the contents of the report submitted to the |
|
commissioner under Subsection (i). |
|
(k) In determining whether the association has met the goal |
|
established under Subsection (a), the commissioner shall make |
|
adjustments to book value of the total insured exposure as of |
|
January 1, 2013, to reflect any change in the BOECKH Index. If the |
|
BOECKH Index ceases to exist, the commissioner shall make |
|
adjustments in the same manner based on another index that the board |
|
of directors determines accurately reflects changes in the cost of |
|
construction or residential values in the catastrophe area. |
|
(l) Not later than January 1 of each year, beginning January |
|
1, 2014, the department shall notify each member of the member's |
|
proportionate share of the association's total insured exposure |
|
required to be reduced under this section and of the member's |
|
potential liability for an assessment under this section. |
|
(m) The commissioner shall adopt rules necessary to |
|
implement and enforce this section. |
|
Sec. 2210.213. CONFIDENTIAL INFORMATION. (a) Except as |
|
provided by Subsection (b), all information, data, and databases |
|
collected and used under Sections 2210.2022, 2210.211, and 2210.212 |
|
are confidential information not subject to disclosure under |
|
Chapter 552, Government Code. |
|
(b) Information described by Subsection (a) may be used for |
|
the purposes and in the manner described by this chapter and Chapter |
|
2211. |
|
SECTION 15. Section 2210.451, Insurance Code, is amended to |
|
read as follows: |
|
Sec. 2210.451. DEFINITION. Except to the extent that |
|
context clearly requires otherwise, in [In] this subchapter, "trust |
|
fund" means the catastrophe reserve trust fund. |
|
SECTION 16. Section 2210.452, Insurance Code, is amended by |
|
amending Subsections (a), (c), and (d) and adding Subsection (f) to |
|
read as follows: |
|
(a) The commissioner shall adopt rules under which the |
|
association makes payments to the catastrophe reserve trust fund. |
|
Except as otherwise specifically provided by this section, the |
|
[The] trust fund may be used only for purposes directly related to |
|
funding the payment of insured losses, including: |
|
(1) funding [to fund] the obligations of the trust |
|
fund under Subchapter B-1; and |
|
(2) purchasing reinsurance or using alternative risk |
|
financing mechanisms under Sections 2210.453 and 2210.4531. |
|
(c) At the end of each calendar year or policy year, the |
|
association shall use the net gain from operations of the |
|
association, including all premium and other revenue of the |
|
association in excess of incurred losses, operating expenses, |
|
deposits to the fund under Section 2210.4521, public security |
|
obligations, and public security administrative expenses, to make |
|
payments to the trust fund, to procure reinsurance, or to make |
|
payments to the trust fund and to procure reinsurance. |
|
(d) The commissioner by rule shall establish the procedure |
|
relating to the disbursement of money from the trust fund to |
|
policyholders and for association administrative expenses directly |
|
related to funding the payment of insured losses in the event of an |
|
occurrence or series of occurrences within a catastrophe area that |
|
results in a disbursement under Subchapter B-1. |
|
(f) The commissioner by rule shall establish the procedure |
|
relating to the disbursement of money from the trust fund to pay for |
|
operating expenses, including reinsurance or alternate risk |
|
financing mechanisms under Sections 2210.453 and 2210.4531, if the |
|
association does not have sufficient premium and other revenue. |
|
SECTION 17. Subchapter J, Chapter 2210, Insurance Code, is |
|
amended by adding Section 2210.4521 to read as follows: |
|
Sec. 2210.4521. CATASTROPHE RESERVE TRUST FUND DEDICATION. |
|
(a) Notwithstanding any other provision in this chapter, as |
|
provided for in the plan of operation, the association shall |
|
deposit monthly in a fund, separate from the catastrophe reserve |
|
trust fund established under Section 2210.452, an amount sufficient |
|
to accumulate on an annual calendar year basis an amount equal to 30 |
|
percent of the association's earned premium for the preceding |
|
calendar year. |
|
(b) The fund described by Subsection (a) is a trust fund |
|
with the Texas Treasury Safekeeping Trust Company to be held |
|
outside the state treasury. |
|
(c) Not later than February 1 of each year the association |
|
shall direct the Texas Treasury Safekeeping Trust Company to |
|
deposit all amounts deposited in the fund described by Subsection |
|
(a) during the preceding calendar year, and interest earned on |
|
those amounts, into the catastrophe reserve trust fund. |
|
(d) Money deposited in the fund described by Subsection (a) |
|
is irrevocably pledged to be distributed to the catastrophe reserve |
|
trust fund as provided in this section and is exempt from any other |
|
claim or attachment under law. |
|
(e) Money deposited under this section may be invested by |
|
the Texas Treasury Safekeeping Trust Company as permitted by |
|
general law. |
|
SECTION 18. Section 2210.453, Insurance Code, is amended to |
|
read as follows: |
|
Sec. 2210.453. REINSURANCE AND ALTERNATIVE RISK FINANCING |
|
MECHANISMS. (a) The association shall [may:
|
|
[(1) make payments into the trust fund; and
|
|
[(2)] purchase reinsurance or use alternative risk |
|
financing mechanisms in an amount equal to $1 billion. |
|
(b) The [association may purchase] reinsurance or |
|
alternative risk financing mechanisms purchased or used under this |
|
section operate [that operates] in addition to [or in concert with
|
|
the trust fund,] public securities, other approved financial |
|
instruments, and assessments authorized by this chapter. |
|
(c) The attachment point for reinsurance purchased under |
|
this section may not be less than the aggregate amount of all |
|
funding available to the association under Subchapter B-1. [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.
The report required by
|
|
this subsection must:
|
|
[(1)
document and denominate the association's
|
|
resources available to pay claims, including cash or other highly
|
|
liquid assets, assessments that the association is projected to
|
|
impose, pre-event and post-event bonding capacity, and
|
|
private-sector recognized risk-transfer mechanisms, including
|
|
catastrophe bonds and reinsurance;
|
|
[(2)
include an independent, third-party appraisal of
|
|
the likelihood of an assessment, the maximum potential size of the
|
|
assessment, and an estimate of the probability that the assessment
|
|
would not be adequate to meet the association's needs; and
|
|
[(3)
include an analysis of financing alternatives to
|
|
assessments that includes the costs of borrowing and the
|
|
consequences that additional purchase of reinsurance, catastrophe
|
|
bonds, or other private-sector recognized risk-transfer
|
|
instruments would have in reducing the size or potential of
|
|
assessments.
|
|
[(d)
A person who prepares a report required by Subsection
|
|
(c) may not contract to provide any other service to the
|
|
association, except for the preparation of similar reports, before
|
|
the third anniversary of the date the last report prepared by the
|
|
person under that subsection is submitted.
|
|
[(e)
The report submitted under this section is for
|
|
informational purposes only and does not bind the association to a
|
|
particular course of action.] |
|
SECTION 19. Subchapter J, Chapter 2210, Insurance Code, is |
|
amended by adding Section 2210.4531 to read as follows: |
|
Sec. 2210.4531. ADDITIONAL REINSURANCE. (a) The |
|
association shall purchase, in addition to any reinsurance |
|
purchased under Section 2210.453, reinsurance in an amount not |
|
greater than the lesser of: |
|
(1) $800 million; or |
|
(2) an amount such that the association's total loss |
|
funding is sufficient to fund its probable maximum loss for a |
|
catastrophe year with a probability of 1 in 100. |
|
(b) The attachment point for reinsurance purchased under |
|
this section may not be less than the aggregate amount of all |
|
funding available to the association under Subchapter B-1 and |
|
Section 2210.453. |
|
(c) The association shall assess member insurers the cost of |
|
reinsurance purchased under this section. The proportion of the |
|
reinsurance cost 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. |
|
SECTION 20. Subchapter L-1, Chapter 2210, Insurance Code, |
|
is amended by adding Section 2210.5725 to read as follows: |
|
Sec. 2210.5725. ASSOCIATION CLAIMS PROCESSING. (a) An |
|
insurer that has primary coverage on property for loss by fire must |
|
adjust all claims made on an association policy covering the same |
|
property. |
|
(b) An insurer acting under this section is an agent of the |
|
association for purposes of Sections 2210.014 and 2210.572 and |
|
shall process claims as prescribed by this chapter and the plan of |
|
operation. |
|
(c) An insurer acting under this section is not liable for |
|
any amount payable under the terms of the association policy. |
|
SECTION 21. Section 2210.602, Insurance Code, is amended by |
|
adding Subdivisions (2-a) and (3-a) to read as follows: |
|
(2-a) "Class 1 public security trust fund" means the |
|
dedicated trust fund established by the board and held by the Texas |
|
Treasury Safekeeping Trust Company into which premium surcharges |
|
collected under Section 2210.612 for the purpose of repaying Class |
|
1 public securities are deposited. |
|
(3-a) "Class 2 public security trust fund" means the |
|
dedicated trust fund established by the board and held by the Texas |
|
Treasury Safekeeping Trust Company into which premium surcharges |
|
collected under Section 2210.613 for the purpose of repaying Class |
|
2 public securities are deposited. |
|
SECTION 22. Subsection (a), Section 2210.604, Insurance |
|
Code, is amended to read as follows: |
|
(a) At the request of the association and with the approval |
|
of the commissioner, the Texas Public Finance Authority shall issue |
|
Class 1 or [,] Class 2[, or Class 3] public securities. The |
|
association shall submit to the commissioner a cost-benefit |
|
analysis of various financing methods and funding structures when |
|
requesting the issuance of public securities under this subsection. |
|
SECTION 23. Section 2210.609, Insurance Code, is amended to |
|
read as follows: |
|
Sec. 2210.609. REPAYMENT OF ASSOCIATION'S PUBLIC SECURITY |
|
OBLIGATIONS. (a) The board and the association shall enter into |
|
an agreement under which the association shall provide for the |
|
payment of all public security obligations from available funds |
|
collected by the association and deposited as required by this |
|
subchapter [into the public security obligation revenue fund]. If |
|
the association determines that it is unable to pay the public |
|
security obligations and public security administrative expenses, |
|
if any, with available funds, the association shall pay those |
|
obligations and expenses in accordance with Sections 2210.612 and |
|
[,] 2210.613, [2210.6135, and 2210.6136] as applicable. Class 1 or |
|
[,] Class 2[, or Class 3] public securities may be issued on a |
|
parity or subordinate lien basis with other Class 1 or [,] Class 2[,
|
|
or Class 3] public securities, respectively. |
|
(b) If any public securities issued under this chapter are |
|
outstanding, the authority shall notify the association of the |
|
amount of the public security obligations and the estimated amount |
|
of public security administrative expenses, if any, each calendar |
|
year in a period sufficient, as determined by the association, to |
|
permit the association to determine the availability of funds[,
|
|
assess members of the association under Sections 2210.613 and
|
|
2210.6135,] and assess a premium surcharge if necessary. |
|
(c) The association shall deposit all revenue collected |
|
under Section 2210.612 in the Class 1 public security trust fund |
|
[public security obligation revenue fund,] and all revenue |
|
collected under Section 2210.613 [2210.613(b)] in the Class 2 |
|
public security trust fund [premium surcharge trust fund, and all
|
|
revenue collected under Sections 2210.613(a) and 2210.6135 in the
|
|
member assessment trust fund]. Money deposited in a fund may be |
|
invested as permitted by general law. Money in a fund required to |
|
be used to pay public security obligations and public security |
|
administrative expenses, if any, shall be transferred to the |
|
appropriate funds in the manner and at the time specified in the |
|
proceedings authorizing the public securities to ensure timely |
|
payment of obligations and expenses. This may include the board |
|
establishing funds and accounts with the comptroller that the board |
|
determines are necessary to administer and repay the public |
|
security obligations. If the association has not transferred |
|
amounts sufficient to pay the public security obligations to the |
|
board's designated interest and sinking fund in a timely manner, |
|
the board may direct the Texas Treasury Safekeeping Trust Company |
|
to transfer from the Class 1 public security trust fund [public
|
|
security obligation revenue fund, the premium surcharge trust
|
|
fund,] or the Class 2 public security trust fund [member assessment
|
|
trust fund] to the appropriate account the amount necessary to pay |
|
the public security obligation. |
|
(d) The association shall provide for the payment of the |
|
public security obligations and the public security administrative |
|
expenses by irrevocably pledging revenues received from premiums, |
|
[member assessments,] premium surcharges, and amounts on deposit in |
|
the Class 1 public security trust fund [public security obligation
|
|
revenue fund, the premium surcharge trust fund,] and the Class 2 |
|
public security trust fund [member assessment trust fund], together |
|
with any public security reserve fund, as provided in the |
|
proceedings authorizing the public securities and related credit |
|
agreements. |
|
(e) An amount owed by the board under a credit agreement |
|
shall be payable from and secured by a pledge of revenues received |
|
by the association [or amounts from the public security obligation
|
|
trust fund], the Class 1 public security trust fund [premium
|
|
surcharge trust fund], and the Class 2 public security trust fund |
|
[member assessment trust fund] to the extent provided in the |
|
proceedings authorizing the credit agreement. |
|
SECTION 24. Subsection (a), Section 2210.610, Insurance |
|
Code, is amended to read as follows: |
|
(a) Revenues received from the premium surcharges under |
|
Sections 2210.612 and [Section] 2210.613 [and member assessments
|
|
under Sections 2210.613 and 2210.6135] may be applied only as |
|
provided by this subchapter. |
|
SECTION 25. Section 2210.611, Insurance Code, is amended to |
|
read as follows: |
|
Sec. 2210.611. EXCESS REVENUE COLLECTIONS AND INVESTMENT |
|
EARNINGS. Revenue collected in any calendar year from a premium |
|
surcharge under Sections 2210.612 and [Section] 2210.613 [and
|
|
member assessments under Sections 2210.613 and 2210.6135] that |
|
exceeds the amount of the public security obligations and public |
|
security administrative expenses payable in that calendar year and |
|
interest earned on the funds [public security obligation fund] may, |
|
in the discretion of the association, be: |
|
(1) used to pay public security obligations payable in |
|
the subsequent calendar year, offsetting the amount of the premium |
|
surcharge [and member assessments, as applicable,] that would |
|
otherwise be required to be levied for the year under this |
|
subchapter; |
|
(2) used to redeem or purchase outstanding public |
|
securities; or |
|
(3) deposited in the catastrophe reserve trust fund. |
|
SECTION 26. Section 2210.612, Insurance Code, is amended to |
|
read as follows: |
|
Sec. 2210.612. PAYMENT OF CLASS 1 PUBLIC SECURITIES. |
|
(a) The association shall pay Class 1 public securities issued |
|
under Section 2210.072 from: |
|
(1) [its] net premium and other revenue; and |
|
(2) if net premium and other revenue are not |
|
sufficient to pay the securities, a catastrophe area premium |
|
surcharge collected in accordance with this section. |
|
(b) On approval by the commissioner, the association and |
|
each insurer that provides insurance in a catastrophe area shall |
|
assess, as provided by this section, a premium surcharge to each |
|
policyholder of a policy described by Subsection (c). The premium |
|
surcharge must be set in an amount sufficient to pay, for the |
|
duration of the issued public securities, all debt service not |
|
already covered by available funds and all related expenses on the |
|
public securities. |
|
(c) The premium surcharge under this section shall be |
|
assessed on all policyholders of policies that cover insured |
|
property that is located in a catastrophe area, including an |
|
automobile principally garaged in a catastrophe area. The premium |
|
surcharge shall be assessed on each Texas windstorm and hail |
|
insurance policy and each property and casualty insurance policy, |
|
including an automobile insurance policy, issued for an automobile |
|
or other property located in the catastrophe area. The premium |
|
surcharge applies to: |
|
(1) all policies written under the following lines of |
|
insurance: |
|
(A) fire and allied lines; |
|
(B) farm and ranch owners; |
|
(C) residential property insurance; |
|
(D) private passenger automobile liability and |
|
physical damage insurance; and |
|
(E) commercial automobile liability and physical |
|
damage insurance; and |
|
(2) the property insurance portion of a commercial |
|
multiple peril insurance policy. |
|
(d) A premium surcharge under this section is a separate |
|
charge in addition to the premiums collected and is not subject to |
|
premium tax or commissions. Failure by a policyholder to pay the |
|
surcharge constitutes failure to pay premium for purposes of policy |
|
cancellation. |
|
(e) [(b)] The association may enter financing arrangements |
|
as described by Section 2210.072(d) as necessary to obtain public |
|
securities issued under Section 2210.072. Nothing in this |
|
subsection shall prevent the authorization and creation of one or |
|
more programs for the issuance of commercial paper before the date |
|
of an occurrence or series of occurrences that results in insured |
|
losses under Section 2210.072(a). |
|
SECTION 27. Section 2210.613, Insurance Code, is amended to |
|
read as follows: |
|
Sec. 2210.613. PAYMENT OF CLASS 2 PUBLIC SECURITIES. |
|
(a) The association shall pay Class 2 public securities issued |
|
under Section 2210.073 from: |
|
(1) net premium and other revenue; and |
|
(2) if net premium and other revenue are not |
|
sufficient to pay the securities, a catastrophe area premium |
|
surcharge collected in accordance with this section. |
|
(b) On approval by the commissioner, the association and |
|
each insurer that provides insurance in a catastrophe area shall |
|
assess, as provided by this section, a premium surcharge to each |
|
policyholder of a policy described by Subsection (c). The premium |
|
surcharge must be set in an amount sufficient to pay, for the |
|
duration of the issued public securities, all debt service not |
|
already covered by available funds and all related expenses on the |
|
public securities. [as provided by this section.
Thirty percent of
|
|
the cost of the public securities shall be paid 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.
|
|
[(b)
Seventy percent of the cost of the public securities
|
|
shall be paid by a premium surcharge collected under this section in
|
|
an amount set by the commissioner.
On approval by the
|
|
commissioner, each insurer, the association, and the Texas FAIR
|
|
Plan Association shall assess, as provided by this section, a
|
|
premium surcharge to each policyholder of a policy that is in effect
|
|
on or after the 180th day after the date the commissioner issues
|
|
notice of the approval of the public securities.
The premium
|
|
surcharge must be set in an amount sufficient to pay, for the
|
|
duration of the issued public securities, all debt service not
|
|
already covered by available funds or member assessments and all
|
|
related expenses on the public securities.] |
|
(c) The premium surcharge under this section [Subsection
|
|
(b)] shall be assessed on all policyholders of policies that cover |
|
insured property that is located in a catastrophe area, including |
|
automobiles principally garaged in a catastrophe area. The |
|
premium surcharge shall be assessed on each Texas windstorm and |
|
hail insurance policy and each property and casualty insurance |
|
policy, including an automobile insurance policy, issued for |
|
automobiles and other property located in the catastrophe area. |
|
The [A] premium surcharge under this section [Subsection (b)] |
|
applies to: |
|
(1) all policies written under the following lines of |
|
insurance: |
|
(A) fire and allied lines; |
|
(B) farm and ranch owners; |
|
(C) residential property insurance; |
|
(D) private passenger automobile liability and |
|
physical damage insurance; and |
|
(E) commercial automobile liability and physical |
|
damage insurance; and |
|
(2) the property insurance portion of a commercial |
|
multiple peril insurance policy. |
|
(d) A premium surcharge under this section [Subsection (b)] |
|
is a separate charge in addition to the premiums collected and is |
|
not subject to premium tax or commissions. Failure by a |
|
policyholder to pay the surcharge constitutes failure to pay |
|
premium for purposes of policy cancellation. |
|
SECTION 28. Section 2210.614, Insurance Code, is amended to |
|
read as follows: |
|
Sec. 2210.614. REFINANCING PUBLIC SECURITIES. The |
|
association may request the board to refinance any public |
|
securities issued in accordance with Subchapter B-1, whether Class |
|
1 or [,] Class 2[, or Class 3] public securities, with public |
|
securities payable from the same sources as the original public |
|
securities. |
|
SECTION 29. Subsection (a), Section 2210.616, Insurance |
|
Code, is amended to read as follows: |
|
(a) The state pledges for the benefit and protection of |
|
financing parties, the board, and the association that the state |
|
will not take or permit any action that would: |
|
(1) impair the collection of [member assessments and] |
|
premium surcharges or the deposit of those funds into the Class 1 |
|
public security [member assessment] trust fund or Class 2 public |
|
security [premium surcharge] trust fund; |
|
(2) reduce, alter, or impair the [member assessments
|
|
or] premium surcharges to be imposed, collected, and remitted to |
|
financing parties until the principal, interest, and premium, and |
|
any other charges incurred and contracts to be performed in |
|
connection with the related public securities, have been paid and |
|
performed in full; or |
|
(3) in any way impair the rights and remedies of the |
|
public security owners until the public securities are fully |
|
discharged. |
|
SECTION 30. Section 2210.6165, Insurance Code, is amended |
|
to read as follows: |
|
Sec. 2210.6165. PROPERTY RIGHTS. If public securities |
|
issued under this subchapter are outstanding, the rights and |
|
interests of the association, a successor to the association, any |
|
member of the association, or any member of the Texas FAIR Plan |
|
Association, including the right to impose, collect, and receive a |
|
premium surcharge [or a member assessment] authorized under this |
|
subchapter, are only contract rights until those revenues are first |
|
pledged for the repayment of the association's public security |
|
obligations as provided by Section 2210.609. |
|
SECTION 31. Subsection (a), Section 2210.653, Insurance |
|
Code, is amended to read as follows: |
|
(a) The board shall: |
|
(1) receive information about rules proposed by the |
|
department relating to windstorm insurance and may submit comments |
|
to the commissioner on the proposed rules; |
|
(2) review the reports required by Section |
|
2210.212(j); |
|
(3) monitor windstorm insurance in this state, |
|
including: |
|
(A) the adequacy of rates; |
|
(B) the operation of the association; and |
|
(C) the availability of coverage; [and] |
|
(4) monitor the activities of the administrator under |
|
Section 2210.212, including: |
|
(A) the performance of the administrator |
|
contracted to administer the association; |
|
(B) the progress toward meeting the requirements |
|
of Section 2210.212; and |
|
(C) the extent of voluntary market participation |
|
in coastal and historically underserved areas in this state; |
|
(5) review and provide input with regard to efforts to |
|
meet the requirements of Section 2210.212; and |
|
(6) [(3)] review recommendations for legislation |
|
proposed by the department or the association. |
|
SECTION 32. Section 2211.001, Insurance Code, is amended by |
|
amending Subdivision (1) and adding Subdivision (1-a) to read as |
|
follows: |
|
(1) "Administrator" means the entity contractually |
|
retained to manage: |
|
(A) the Texas Residual Insurance Plan under |
|
Section 2210.062; and |
|
(B) the association under Section 2211.0522. |
|
(1-a) "Association" means the FAIR Plan Association |
|
established under this chapter. |
|
SECTION 33. Subchapter B, Chapter 2211, Insurance Code, is |
|
amended by adding Sections 2211.0522 and 2211.0555 to read as |
|
follows: |
|
Sec. 2211.0522. ADMINISTRATION BY ADMINISTRATOR. |
|
Notwithstanding Section 2211.052 or any other law, the |
|
administrator shall manage the association and administer the plan |
|
of operation beginning January 1, 2014. The administrator may not |
|
exercise any power under the contract before January 1, 2014. |
|
Sec. 2211.0555. ASSOCIATION CLAIMS PROCESSING. (a) The |
|
administrator shall adjust claims made on or after January 1, 2014, |
|
on an association policy. |
|
(b) The administrator is not liable for any amount payable |
|
under the terms of an association policy. |
|
SECTION 34. Subchapter D, Chapter 2211, Insurance Code, is |
|
amended by adding Sections 2211.1514 and 2211.1515 to read as |
|
follows: |
|
Sec. 2211.1514. VOLUNTARY ELECTRONIC PORTAL. (a) As soon |
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as practicable after January 1, 2014, the administrator shall make |
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available to all insurers an electronic portal to provide insurers |
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access to information described by Subsection (b). |
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(b) The portal must provide insurers access to information |
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on each insured's association policy and other policy, if any, that |
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covers other perils, if known, including: |
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(1) the insured's total premium amount on the |
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association policy; |
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(2) the total premium for a policy that covers losses |
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due to windstorm and hail, if any, including a policy issued by the |
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Texas Residual Insurance Plan under Chapter 2210, if applicable, |
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and: |
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(A) the amount of insurance on the dwelling and |
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its contents; or |
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(B) if the policy is a tenants policy or |
|
condominium owners policy, the insured amount for the contents |
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coverage; and |
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(3) the deductibles applicable for each policy. |
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Sec. 2211.1515. CONFIDENTIAL INFORMATION. (a) Except as |
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provided by Subsection (b), all information and data collected and |
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used under Section 2211.1514 constitute confidential information |
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not subject to disclosure under Chapter 552, Government Code. |
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(b) Information described by Subsection (a) may be used for |
|
the purposes and in the manner described by this chapter and Chapter |
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2210. |
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SECTION 35. The Texas Department of Insurance shall conduct |
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a study to consider possible exposure reduction plans for the FAIR |
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Plan Association established under Chapter 2211, Insurance Code. |
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Not later than January 1, 2014, the department shall submit a report |
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containing the findings of the study to: |
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(1) the governor; |
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(2) the lieutenant governor; |
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(3) the speaker of the house of representatives; |
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(4) the Senate Committee on Business and Commerce or |
|
the successor of that committee with jurisdiction over insurance; |
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(5) the House Committee on Insurance or the successor |
|
of that committee with jurisdiction over insurance; and |
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(6) the legislative oversight board established under |
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Subchapter N, Chapter 2210, Insurance Code. |
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SECTION 36. The following provisions of Chapter 2210, |
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Insurance Code, are repealed: |
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(1) Sections 2210.074 and 2210.075; |
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(2) Subdivisions (4), (5-a), (6-b), (6-c), and (10), |
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Section 2210.602; |
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(3) Subsection (c), Section 2210.605; and |
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(4) Sections 2210.6135 and 2210.6136. |
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SECTION 37. (a) The board of directors of the Texas |
|
Windstorm Insurance Association established under Section |
|
2210.102, Insurance Code, as that section existed before amendment |
|
by this Act, is abolished effective November 1, 2013. |
|
(b) The governor shall appoint the members of the board of |
|
directors of the Texas Residual Insurance Plan under Section |
|
2210.102, Insurance Code, as amended by this Act, effective |
|
November 1, 2013. The initial directors shall draw lots to achieve |
|
staggered terms, with three of the directors serving one-year |
|
terms, three of the directors serving two-year terms, and three of |
|
the directors serving three-year terms. |
|
(c) The term of a person who is serving as a member of the |
|
board of directors of the Texas Windstorm Insurance Association |
|
immediately before the abolition of that board under Subsection (a) |
|
of this section expires on November 1, 2013. Such a person is |
|
eligible for appointment by the governor to the new board of |
|
directors of the Texas Residual Insurance Plan under Section |
|
2210.102, Insurance Code, as amended by this Act. |
|
(d) Notwithstanding Section 2210.4521, Insurance Code, as |
|
added by this Act, beginning on the effective date of this Act and |
|
continuing until December 31, 2013, the Texas Residual Insurance |
|
Plan shall deposit 30 percent of its earned premium into the trust |
|
fund described by that section. Not later than February 1, 2014, |
|
the plan shall direct the Texas Treasury Safekeeping Trust Company |
|
to deposit all amounts deposited in the trust fund during the 2013 |
|
calendar year, and interest earned on those funds, into the |
|
catastrophe reserve trust fund as described by that section. |
|
(e) Section 2210.4521, Insurance Code, as added by this Act, |
|
applies to all Texas Residual Insurance Plan premiums earned on and |
|
after January 1, 2014. |
|
(f) Notwithstanding Subsection (d) of this section and |
|
Section 2210.0715, Insurance Code, as added by this Act, amounts |
|
collected under Section 2210.4521, Insurance Code, as added by this |
|
Act, may not be used to pay for a covered insured association loss |
|
incurred before June 1, 2013. |
|
(g) Section 2210.5725, Insurance Code, as added by this Act, |
|
applies only to adjustment of a claim made on or after the effective |
|
date of this Act. |
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(h) It is the intent of the legislature that each member of |
|
the legislative oversight board appointed under Section 2210.652, |
|
Insurance Code, and serving on the effective date of this Act |
|
continues to serve after the effective date of this Act until a |
|
successor is appointed under that section. |
|
SECTION 38. 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, 2013. |
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* * * * * |