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SENATE ENGROSSED
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HOUSE COMMITTEE SUBSTITUTE
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SECTION 1. The heading to
Chapter 2210, Insurance Code, is amended to read as follows:
CHAPTER 2210. TEXAS COASTAL
[WINDSTORM] INSURANCE ASSOCIATION
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No
equivalent provision.
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SECTION 2. Section 2210.001,
Insurance Code, is amended to read as follows:
Sec. 2210.001. PURPOSE. The
primary purpose of the Texas Coastal [Windstorm] Insurance
Association is the provision of an adequate market for windstorm and hail
insurance in the seacoast territory of this state. The legislature finds
that the provision of adequate windstorm and hail insurance is necessary to
the economic welfare of this state, and without that insurance, the orderly
growth and development of this state would be severely impeded. This
chapter provides a method by which adequate windstorm and hail insurance
may be obtained in certain designated portions of the seacoast territory of
this state. The association is intended to serve as a residual insurer of
last resort for windstorm and hail insurance in the seacoast territory.
The association shall:
(1) function in such a
manner as to not be a direct competitor in the private market; and
(2) provide windstorm and
hail insurance coverage to those who are unable to obtain that coverage in
the private market.
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No
equivalent provision.
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SECTION 3. 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 Coastal [Windstorm] Insurance Association
Act.
(a-1) A reference in this
chapter or other law to the Texas Windstorm Insurance Association means the
Texas Coastal Insurance Association.
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No
equivalent provision.
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SECTION 4. Section 2210.003,
Insurance Code, is amended.
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SECTION 1. Same as engrossed
version.
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SECTION 5. Section 2210.014,
Insurance Code, is amended.
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SECTION 2. Same as engrossed
version.
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SECTION 6. Subchapter A,
Chapter 2210, Insurance Code, is amended.
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SECTION 3. Same as engrossed
version.
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SECTION 7. Subchapter B,
Chapter 2210, Insurance Code, is amended.
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SECTION 4. Same as engrossed
version.
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SECTION 8. Subchapter B-1,
Chapter 2210, Insurance Code, is amended by amending Section 2210.071 and
adding Sections 2210.0715, 2210.07151, and 2210.0716 to read as follows:
Sec. 2210.071. PAYMENT OF
EXCESS LOSSES[; PAYMENT FROM 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.
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.
Sec. 2210.07151. PAYMENT
FROM CLASS 1-A PUBLIC SECURITIES; FINANCIAL INSTRUMENTS. (a) Losses not
paid under Section 2210.0715 shall be paid as provided by this section from
the proceeds from Class 1-A 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 within a period not to
exceed 10 years and may be paid 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 $250 million 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 $250 million 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
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 in the manner prescribed by Subchapter M.
(d) The association may
borrow from, or enter into other financing arrangements with, any market
source, under which the market source makes interest-bearing loans or other
financial instruments to the association to enable the association to pay
losses under this section or to obtain public securities under this
section. For purposes of this subsection, financial instruments includes
commercial paper.
(e) The proceeds of any
outstanding public securities described by Subsection (a) that are issued
before an occurrence or series of occurrences shall be depleted before the
proceeds of any securities issued after an occurrence or series of
occurrences may be used. This subsection does not prohibit the association
from issuing securities after an occurrence or series of occurrences before
the proceeds of outstanding public securities issued during a previous
catastrophe year have been depleted.
(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 limit on public securities described by this section in the
catastrophe year in which the proceeds must be depleted.
Sec. 2210.0716. PAYMENT
FROM CLASS 1 ASSESSMENTS. (a) Losses in a catastrophe year not paid under
Sections 2210.0715 and 2210.07151
shall be paid as provided by this section from Class 1 member assessments
not to exceed $500 million for that catastrophe year.
(b) The association, 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.
[(c) Losses not paid
under Subsection (b) shall be paid from the proceeds from public securities
issued in accordance with this subchapter and Subchapter M and,
notwithstanding Subsection (a), may be paid from the proceeds of public
securities issued under Section 2210.072(a) before an occurrence or series
of occurrences that results in insured losses.]
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SECTION 5. 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 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.
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.
No
equivalent provision.
(See SECTION 7 below.)
[(c) Losses not paid
under Subsection (b) shall be paid from the proceeds from public securities
issued in accordance with this subchapter and Subchapter M and,
notwithstanding Subsection (a), may be paid from the proceeds of public
securities issued under Section 2210.072(a) before an occurrence or series
of occurrences that results in insured losses.]
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SECTION 9. The heading to
Section 2210.072, Insurance Code, is amended to read as follows:
Sec. 2210.072. PAYMENT FROM CLASS
1-B [1] PUBLIC SECURITIES; FINANCIAL INSTRUMENTS.
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SECTION 6. Section 2210.072,
Insurance Code, is amended to read as follows:
Sec. 2210.072. PAYMENT FROM
CLASS 1 PUBLIC SECURITIES ISSUED BEFORE JUNE 1, 2015[; FINANCIAL
INSTRUMENTS].
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SECTION 10. Sections
2210.072(a), (b), (b-1), (c), and (f), Insurance Code, are amended to read
as follows:
(a) Losses not paid under Sections
2210.0715, 2210.07151, and 2210.0716
[Section 2210.071(b)] shall be paid as provided by this section from
the proceeds from Class 1-B [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 $250 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 $250
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 [$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].
(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 [$1 billion] limit on public securities
described by this section in the catastrophe year in which the proceeds
must be depleted.
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(a) Losses not paid under Section
2210.0715 [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 on
or before June 1, 2015 [before,
on, or after the date of any occurrence or series of occurrences that
results in insured losses]. Public securities described by [issued under] this section must be repaid within a period not to exceed 14 years, and may be 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 $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 $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 $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) Public [If
public] securities [are] issued as described by this section[,
the public securities] shall be repaid
in the manner prescribed by Subchapter M from
association premium revenue.
(d) The association may
borrow from, or enter into other financing arrangements with, any market
source, under which the market source makes interest-bearing loans or other
financial instruments to the association to enable the association to pay
losses under this section or to obtain public securities under this
section. For purposes of this subsection, financial instruments includes
commercial paper.
[(e)
The proceeds of any outstanding public securities described by Subsection
(a) that are issued before an occurrence or series of occurrences shall be
depleted before the proceeds of any securities issued after an occurrence
or series of occurrences may be used. This subsection does not prohibit
the association from issuing securities after an occurrence or series of
occurrences before the proceeds of outstanding public securities issued
during a previous catastrophe year have been depleted.
[(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 $1 billion limit on public securities described by
this section in the catastrophe year in which the proceeds must be
depleted.]
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(See Sec. 2210.0716 in
SECTION 8 above.)
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SECTION 7. Subchapter B-1,
Chapter 2210, Insurance Code, is amended by adding Section 2210.0725 to
read as follows:
Sec. 2210.0725. PAYMENT
FROM CLASS 1 ASSESSMENTS. (a) Losses in a catastrophe year not paid under
Sections 2210.0715 and 2210.072
shall be paid as provided by this section from Class 1 member assessments
not to exceed $500 million for that catastrophe year.
(b) The association, 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.
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SECTION 11. 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, 2210.07151, 2210.0716, and 2210.072 shall be paid as
provided by this section from Class 2 member assessments not to exceed $500
million for that catastrophe year.
(b) The association, 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.
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No
equivalent provision.
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SECTION 12. 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,
2210.07151, 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 [$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.
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SECTION 8. 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,
[2210.071 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 $250 million [$1 billion] per
catastrophe year, in the aggregate, whether for a single occurrence or a
series of occurrences; and
(2) subject to the [$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.
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No
equivalent provision.
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SECTION 9. Section 2210.074,
Insurance Code, is amended to read as follows:
Sec. 2210.074. PAYMENT
THROUGH CLASS 2 ASSESSMENTS [3 PUBLIC SECURITIES]. (a)
Losses in a catastrophe year not paid under Sections 2210.0715,
[2210.071,] 2210.072, 2210.0725, and 2210.073 shall be paid
as provided by this section from Class 2 member assessments not to
exceed $250 million for that catastrophe year.
(b) The association, 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 [proceeds from public securities
authorized to be issued in accordance with Subchapter M on or after the
date of any occurrence that results in insured losses under this subsection
or through reinsurance as described by Section 2210.075. Public securities
issued under this section must be repaid within a period not to exceed 10
years, and may be repaid sooner if the board of directors elects to do so
and the commissioner approves.
[(b) Public securities
described by Subsection (a):
[(1) may be issued as
necessary in a principal amount not to exceed $500 million per catastrophe
year, in the aggregate, whether for a single occurrence or a series of
occurrences; and
[(2) subject to the $500
million 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 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].
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No
equivalent provision.
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SECTION 10. Subchapter B-1,
Chapter 2210, Insurance Code, is amended by adding Sections 2210.0741 and
2210.0742 to read as follows:
Sec. 2210.0741. PAYMENT
THROUGH CLASS 3 PUBLIC SECURITIES. (a) Losses not paid under Sections
2210.0715, 2210.072, 2210.0725, 2210.073, and 2210.074 shall be paid as
provided by this section from proceeds from public securities authorized to
be issued in accordance with Subchapter M on or after the date of any
occurrence that results in insured losses under this subsection or through
reinsurance as described by Section 2210.075. Public securities issued under
this section must be paid within a period not to exceed 10 years, and may
be paid sooner if the board of directors elects to do so and the
commissioner approves.
(b) Public securities
described by Subsection (a):
(1) may be issued as
necessary in a principal amount not to exceed $250 million per catastrophe
year, in the aggregate, whether for a single occurrence or a series of
occurrences; and
(2) subject to the
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 in the manner prescribed by Subchapter M.
Sec. 2210.0742. PAYMENT
FROM CLASS 3 ASSESSMENTS. (a) Losses in a catastrophe year not paid under
Sections 2210.0715, 2210.072, 2210.0725, 2210.073, 2210.074, and 2210.0741
shall be paid as provided by this section from Class 3 member assessments
not to exceed $250 million for that catastrophe year.
(b) The association, 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.
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SECTION 13. Section
2210.075, Insurance Code, is amended.
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SECTION 11. Same as engrossed
version.
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SECTION 14. 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
commissioner in accordance with this section.
(b) Three [Four]
members must be representatives of the insurance industry who do not reside in the seacoast territory.
(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 reside in a second tier coastal county [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) Two members must represent and reside in an area located
more than 100 miles from the Texas coastline.
(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 commissioner. The nominee slate submitted to the
commissioner under this subsection must include at least three more names
than the number of vacancies. The commissioner may [shall]
appoint replacement insurance industry representatives from the nominee
slate.
(g) In addition to the
nine members appointed under Subsection (a), the [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 (g) [(c)] must each reside in a [be
from] different area described by Subsection (g)(2) and in different
counties.
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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
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) Three members [One member] must represent [be a representative
of] an area of this state that is [not] located more than 200
miles from the Texas coastline [in the seacoast territory with
demonstrated expertise in insurance and actuarial principles].
(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 commissioner. The nominee slate submitted to the
commissioner under this subsection must include at least three more names
than the number of vacancies. The commissioner may [shall]
appoint replacement insurance industry representatives from the nominee
slate.
(g) In addition to the
nine members appointed under Subsection (a), the [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 (g) [(c)] must each reside in a [be
from] different area described by Subsection (g)(2) and in different
counties.
|
|
SECTION 15. Section 2210.103(c),
Insurance Code, is amended.
|
SECTION 13. Same as engrossed
version.
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|
SECTION 16. Section
2210.355(b), Insurance Code, is amended to read as follows:
(b) In adopting rates under
this chapter, the following must be considered:
(1) the past and prospective
loss experience within and outside this state of hazards for which
insurance is made available through the plan of operation, if any;
(2) expenses of operation,
including acquisition costs;
(3) a reasonable margin for
profit and contingencies;
(4) payment of public
security obligations for Class 1-A or Class 1-B [1] public
securities issued under this chapter, including the additional amount of
any debt service coverage determined by the association to be required for
the issuance of marketable public securities; and
(5) all other relevant
factors, within and outside this state.
|
No
equivalent provision.
|
|
SECTION 17. The heading to
Subchapter J, Chapter 2210, Insurance Code, is amended.
|
SECTION 14. Same as engrossed
version.
|
|
SECTION 18. Section
2210.452, Insurance Code, is amended.
|
SECTION 15. Same as engrossed
version.
|
|
SECTION 19. 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 the probable maximum loss for the
association for a catastrophe year with a probability of one in 100.
(b) Any [The
association may purchase] reinsurance purchased or alternative risk
financing mechanism used under this section operates [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 16. 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
not less than the probable maximum
loss for the association for a catastrophe year with a probability of one
in 100.
(b) Any [The
association may purchase] reinsurance purchased or alternative risk
financing mechanism used under this section operates [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.]
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|
No
equivalent provision.
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SECTION 17. Section
2210.501, Insurance Code, is amended by adding Subsection (d) to read as
follows:
(d) Notwithstanding
Section 2210.502, maximum liability limits for coverage described by
Subsection (b)(1) or (3) may not exceed $1,500,000.
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|
SECTION 20. Section
2210.602, Insurance Code, is amended by adding Subdivisions (1-c), (2-a),
(2-b), and (3-a) and amending Subdivision (2) to read as follows:
(1-c) "Class 1-A public securities" means public
securities authorized to be issued by Section 2210.07151, including a
commercial paper program authorized before the occurrence of a catastrophic
event.
(2)
"Class 1-B [1] public securities" means public
securities authorized to be issued by Section 2210.072, including a
commercial paper program authorized before the occurrence of a catastrophic
event.
(2-a) "Class 1-A 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 paying Class 1-A public securities are
deposited.
(2-b) "Class 1-B 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 paying Class 1-B 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 paying Class 2 public securities are deposited.
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SECTION 18. Section 2210.602,
Insurance Code, is amended by amending Subdivision (4) and adding
Subdivisions (3-a) and (4-a) to read as follows:
(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 paying Class 2 public securities are deposited.
(4)
"Class 3 public securities" means public securities authorized to
be issued on or after the occurrence of a catastrophic event by Section 2210.0741
[2210.074].
(4-a) "Class 3 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 2210.6131 for the purpose of paying Class 3 public securities
are deposited.
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|
SECTION 21. Section
2210.604(a), 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-A, Class 1-B, or [1,]
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.
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No
equivalent provision.
|
|
SECTION 22. Section
2210.608(c), Insurance Code, is amended to read as follows:
(c) Notwithstanding
Subsection (a)(2), the proceeds from public securities issued under Section
2210.07151 or 2210.072 before an occurrence or series of occurrences
that results in incurred losses, including investment income, may not be
used to purchase reinsurance for the association.
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No
equivalent provision.
|
|
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-A,
Class 1-B, or [1,] Class 2[,
or Class 3] public securities may be issued on a parity or
subordinate lien basis with other Class 1-A,
Class 1-B, or [1,] 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-A public security trust fund or Class 1-B
public security trust fund, as applicable, and [public security obligation revenue fund,]
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-A public security trust fund, the Class
1-B 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-A public
security trust fund, the Class 1-B 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-A public security trust fund, the Class 1-B 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.
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SECTION 19. 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, 2210.613, and 2210.6131 [2210.6135, and 2210.6136]
as applicable. Class 1, Class 2, or Class 3 public securities may be
issued on a parity or subordinate lien basis with other Class 1, 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 public security obligation revenue fund,
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 Section
2210.6131 [Sections 2210.613(a) and 2210.6135] in the Class 3
public security [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 public security
obligation revenue fund, the Class 2 public security [premium surcharge] trust fund, or the Class 3 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 public security
obligation revenue fund, the Class 2 public security [premium surcharge] trust fund, and the Class 3 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 2 public security [premium
surcharge] trust fund, and the Class
3 public security trust fund [member assessment trust fund]
to the extent provided in the proceedings authorizing the credit agreement.
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|
SECTION 24. Section 2210.610(a),
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.
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SECTION 20. Section
2210.610(a), Insurance Code, is amended to read as follows:
(a) Revenues received from
the premium surcharges under Sections [Section] 2210.613 and
2210.6131 [and member
assessments under Sections 2210.613 and 2210.6135] may be applied only
as provided by this subchapter.
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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.
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SECTION 21. 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 [Section]
2210.613 and 2210.6131 [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.
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|
SECTION 26. Section
2210.612, Insurance Code, is amended to read as follows:
Sec. 2210.612. PAYMENT OF
CLASS 1-A AND CLASS 1-B [1] PUBLIC SECURITIES. (a) The
association shall pay Class 1-A and Class 1-B [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 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 association
policies issued under this chapter.
(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 2210.07151(d)
or 2210.072(d) as necessary to obtain public securities issued under
Section 2210.07151 or 2210.072, as applicable. 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 2210.07151(a) or 2210.072(a).
|
No
equivalent provision.
|
|
SECTION 27. Section
2210.613, Insurance Code, is amended.
|
SECTION 22. Same as engrossed
version.
|
|
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-A,
Class 1-B, or [1,] Class 2[, or Class 3] public
securities, with public securities payable from the same sources as the
original public securities.
|
No
equivalent provision.
|
|
No
equivalent provision.
|
SECTION 23. Subchapter M,
Chapter 2210, Insurance Code, is amended by adding Section 2210.6131 to
read as follows:
Sec. 2210.6131. PAYMENT
OF CLASS 3 PUBLIC SECURITIES. (a) The association shall pay Class 3
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 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 association
policies issued under this chapter.
(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.
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|
SECTION 29. Section
2210.616(a), 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-A public security
trust fund, Class 1-B 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.
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SECTION 24. Section
2210.616(a), 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 applicable [member assessment trust fund or 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.
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|
SECTION 30. Section
2210.6165, Insurance Code, is amended.
|
SECTION 25. Same as engrossed
version.
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|
SECTION 31. The following
provisions of Chapter 2210, Insurance Code, are repealed:
(1) Section 2210.074;
(2) Sections 2210.602(4), (5-a), (6), (6-b), (6-c), and (10);
(3) Section 2210.605(c); and
(4) Sections 2210.6135 and
2210.6136.
|
SECTION 26. The following
provisions of the Insurance Code are repealed:
(1) Sections 2210.602(5-a),
(6), (6-b), and (6-c);
(2) Section 2210.605(c); and
(3) Sections 2210.6135 and
2210.6136.
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|
SECTION 32. (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 October 1, 2015.
(b) The commissioner of
insurance shall appoint the members of the board of directors of the Texas Coastal Insurance Association under
Section 2210.102, Insurance Code, as amended by this Act, effective October
1, 2015. 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 October 1, 2015. Such a person
is eligible for appointment by the commissioner of insurance to the new
board of directors of the Texas Coastal
Insurance Association under Section 2210.102, Insurance Code, as amended by
this Act.
(d)
Subchapter M, Chapter 2210, Insurance Code, as it existed before the
effective date of this Act, is applicable to bond obligations incurred
under Chapter 2210, Insurance Code, before the effective date of this Act,
and that law is continued in effect for that purpose.
(e) 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 27. (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 October 1, 2015.
(b) The commissioner shall
appoint the members of the board of directors of the Texas Windstorm Insurance Association under
Section 2210.102, Insurance Code, as amended by this Act, effective October
1, 2015. 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 October 1, 2015. Such a person
is eligible for appointment by the commissioner to the new board of
directors of the Texas Windstorm
Insurance Association under Section 2210.102, Insurance Code, as amended by
this Act.
(d) 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.
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|
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, 2015.
|
SECTION 28. Same as engrossed
version.
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