| |
| |
|
|
A BILL TO BE ENTITLED
|
|
|
AN ACT
|
|
|
relating to the funding structure of the Texas Windstorm Insurance |
|
|
Association. |
|
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
|
SECTION 1. Section 2210.0741(a), Insurance Code, is amended |
|
|
to read as follows: |
|
|
(a) Losses not paid under Sections 2210.0715, 2210.072, |
|
|
2210.0725, 2210.073, and 2210.074 and, if applicable, 2210.0743 |
|
|
shall be paid as provided by this section from the proceeds from |
|
|
Class 3 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. 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. |
|
|
SECTION 2. Section 2210.0742(a), Insurance Code, is amended |
|
|
to read as follows: |
|
|
(a) Losses in a catastrophe year not paid under Sections |
|
|
2210.0715, 2210.072, 2210.0725, 2210.073, 2210.074, and 2210.0741 |
|
|
and, if applicable, 2210.0743 shall be paid as provided by this |
|
|
section from Class 3 member assessments not to exceed $250 million |
|
|
for that catastrophe year. |
|
|
SECTION 3. Subchapter B-1, Chapter 2210, Insurance Code, is |
|
|
amended by adding Section 2210.0743 to read as follows: |
|
|
Sec. 2210.0743. PAYMENT IN CERTAIN CIRCUMSTANCES. If the |
|
|
balance of the catastrophe reserve trust fund is less than $500 |
|
|
million: |
|
|
(1) Class 3 public securities may not be issued until |
|
|
reinsurance proceeds under Section 2210.453(d) are exhausted; |
|
|
(2) the association may not assess members for Class 3 |
|
|
assessments until reinsurance proceeds under Section 2210.453(d) |
|
|
are exhausted; and |
|
|
(3) losses not paid under Sections 2210.0715, |
|
|
2210.072, 2210.0725, 2210.073, and 2210.074 must be paid by |
|
|
reinsurance or an alternative risk financing mechanism under |
|
|
Section 2210.453(d). |
|
|
SECTION 4. Section 2210.453, Insurance Code, is amended by |
|
|
amending Subsection (c) and adding Subsection (d) to read as |
|
|
follows: |
|
|
(c) Except as provided by Subsection (d), the [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. |
|
|
(d) If the balance of the catastrophe reserve trust fund is |
|
|
less than $500 million, the association shall maintain reinsurance |
|
|
or an alternate risk financing mechanism for the period covered by |
|
|
the plan that: |
|
|
(1) has an attachment point not less than the |
|
|
aggregate amount of all the funding available to the association |
|
|
under Sections 2210.0715, 2210.072, 2210.0725, 2210.073, and |
|
|
2210.074; and |
|
|
(2) maintains total available loss funding not less |
|
|
than the probable maximum loss for the association for a |
|
|
catastrophe year with a probability of one in 100. |
|
|
SECTION 5. The Texas Windstorm Insurance Association shall |
|
|
amend the association's plan of operation to conform to the changes |
|
|
in law made by this Act not later than the 60th day after the |
|
|
effective date of this Act. |
|
|
SECTION 6. This Act takes effect September 1, 2019. |