87S30211 SMT-D
 
  By: Hunter H.B. No. 100
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the setting of premium rates for Texas Windstorm
  Insurance Association policies by the commissioner of insurance.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 560.001, Insurance Code, is amended to
  read as follows:
         Sec. 560.001.  DEFINITION OF INSURER. In this chapter,
  "insurer" means an insurance company, reciprocal or interinsurance
  exchange, mutual insurance company, farm mutual insurance company,
  capital stock insurance company, county mutual insurance company,
  Lloyd's plan, surplus lines insurer, or other legal entity engaged
  in the business of insurance in this state. The term includes:
               (1)  an affiliate described by Section 823.003(a);
               (2)  [the Texas Windstorm Insurance Association
  established under Chapter 2210;
               [(3)]  the FAIR Plan Association established under
  Chapter 2211; and
               (3) [(4)]  the Texas Automobile Insurance Plan
  Association established under Chapter 2151.
         SECTION 2.  Section 2210.259(a-1), Insurance Code, is
  amended to read as follows:
         (a-1)  For a policy insuring a noncompliant residential
  structure eligible for coverage under Section 2210.258(c), the
  association shall charge:
               (1)  a premium set by the commissioner that is based on
  the rate charged in the voluntary market for the portion of the
  canceled or nonrenewed policy that provides windstorm and hail
  insurance coverage for the applicable risk; and
               (2)  an annual premium surcharge in an amount equal to
  10 percent of that premium.
         SECTION 3.  Subchapter H, Chapter 2210, Insurance Code, is
  amended by adding Sections 2210.331, 2210.332, 2210.333, 2210.334,
  2210.335, 2210.336, 2210.337, and 2210.338 to read as follows:
         Sec. 2210.331.  SETTING OF PREMIUM RATES. (a) The
  commissioner shall set and adopt the premium rates to be charged for
  association policies.
         (b)  A premium may not be charged for an association policy
  at a rate different from the rate set and adopted by the
  commissioner.
         Sec. 2210.332.  FACTORS CONSIDERED IN SETTING PREMIUM RATES.
  (a) In setting premium rates, the commissioner shall consider all
  relevant revenue and expenses of the association.
         (b)  The premium rates set by the commissioner must be:
               (1)  reasonable as to the public; and
               (2)  nonconfiscatory as to the association and member
  insurers.
         Sec. 2210.333.  SUBMISSION OF DATA. (a) The association
  shall annually submit to the department a report containing
  information relating to:
               (1)  loss experience;
               (2)  expense of operation; and
               (3)  other matters material to premium rates as
  determined by the department.
         (b)  The information must be submitted in the form and manner
  prescribed by the department.
         Sec. 2210.334.  HEARING REQUIRED FOR SETTING PREMIUM RATE.
  (a) A premium rate previously set by the commissioner may not be
  changed until after the commissioner holds a public hearing.
         (b)  The commissioner shall order a public hearing to
  consider changing a premium rate, including setting a new premium
  rate, in response to a written request by the association. The
  association may not request more than one hearing in a 12-month
  period.
         (c)  A public hearing held under Subsection (a) shall be
  conducted by the commissioner as a rulemaking hearing held under
  Subchapter B, Chapter 2001, Government Code.
         (d)  The commissioner shall render a decision and issue a
  final order not later than the 120th day after the date the
  commissioner receives a written request under Subsection (b).
         (e)  The commissioner shall consider each matter presented
  in a hearing under this section and announce in a public hearing all
  decisions on all matters considered.
         Sec. 2210.335.  COURT PETITION. (a) The association may
  petition a district court in Travis County to enter an order
  requiring the commissioner to comply with the deadline described by
  Section 2210.334(d).
         (b)  If the commissioner fails to comply with the
  requirements of Section 2210.334(d), the association may petition a
  district court in Travis County to adopt a premium rate based on the
  record made in the hearing before the commissioner under Section
  2210.334.
         (c)  If the record made in the hearing before the
  commissioner is not complete before the request for the court to
  adopt a premium rate under Subsection (b), the court shall hold an
  evidentiary hearing to establish a record before adopting the
  premium rate.
         (d)  After a petition has been filed under Subsection (b),
  the commissioner may not issue findings or an order related to the
  subject matter of the petition until after the date the court enters
  a final judgment.
         (e)  A district court may appoint a magistrate to adopt a
  premium rate under this section.
         Sec. 2210.336.  PERIODIC HEARING. The commissioner shall
  hold a public hearing not earlier than July 1 after the fifth
  anniversary of the closing of a hearing held under this subchapter
  and not later than December 31 following that July 1 to consider the
  setting of premium rates for the association under this subchapter.
         Sec. 2210.337.  COMMISSIONER AUTHORITY TO HOLD HEARINGS AS
  NECESSARY. At any time, the commissioner may order a public hearing
  to consider adoption of premium rates for the association under
  this subchapter.
         Sec. 2210.338.  NOTICE OF CERTAIN HEARINGS. Not later than
  the 60th day before the date of a hearing under Section 2210.334,
  2210.336, or 2210.337, notice of the hearing and of each item to be
  considered at the hearing shall be:
               (1)  sent directly to the association; and
               (2)  published in the Texas Register and on the
  department's Internet website.
         SECTION 4.  Section 2210.351(b), Insurance Code, is amended
  to read as follows:
         (b)  The association must file with the department each [A
  filing under this section must indicate the character and the
  extent of the coverage contemplated and must be accompanied by the]
  policy and endorsement form [forms] proposed to be used. The forms
  may be designed specifically for use by the association without
  regard to other forms filed with, approved by, or prescribed by the
  department for use in this state.
         SECTION 5.  Section 2210.363(a), Insurance Code, is amended
  to read as follows:
         (a)  The commissioner may authorize the association to [may]
  offer a person insured under this chapter an actuarially justified
  premium discount on a policy issued by the association, or an
  actuarially justified credit against a surcharge assessed against
  the person, other than a surcharge assessed under Subchapter M, if:
               (1)  the construction, alteration, remodeling,
  enlargement, or repair of, or an addition to, insurable property
  exceeds applicable building code standards set forth in the plan of
  operation; or
               (2)  the person elects to purchase a binding
  arbitration endorsement under Section 2210.554.
         SECTION 6.  Section 2210.453(f), Insurance Code, is amended
  to read as follows:
         (f)  The association may not purchase reinsurance under this
  section from an insurer or broker involved in the execution of a
  catastrophe model on which the association relies in [:
               [(1)] determining the probable maximum loss applicable
  for the period covered by the reinsurance [; or
               [(2)  adopting rates under Section 2210.355].
         SECTION 7.  The following provisions of the Insurance Code
  are repealed:
               (1)  Section 2210.004(f);
               (2)  Sections 2210.351(a), (c), (d), (e), and (f); and
               (3)  Sections 2210.3511, 2210.3512, 2210.352,
  2210.353, 2210.354, 2210.355, 2210.357, 2210.358, and 2210.359.
         SECTION 8.  The rates for Texas Windstorm Insurance
  Association insurance policies on the effective date of this Act
  remain in effect until the commissioner of insurance holds a
  hearing to change the rates under Subchapter H, Chapter 2210,
  Insurance Code, as amended by this Act.
         SECTION 9.  This Act takes effect on the 91st day after the
  last day of the legislative session.