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  H.B. No. 998
 
 
 
 
AN ACT
  relating to the provision of property owners' association insurance
  by the FAIR Plan Association in certain areas.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 2211.001, Insurance Code, is amended by
  adding Subdivision (6-a) to read as follows:
               (6-a)  "Property owners' association insurance" means
  property and liability insurance covering:
                     (A)  common areas and facilities of a homeowners'
  association; or
                     (B)  common elements of a condominium owners'
  association.
         SECTION 2.  Section 2211.051, Insurance Code, is amended to
  read as follows:
         Sec. 2211.051.  ESTABLISHMENT OF FAIR PLAN. (a) The
  commissioner may establish a Fair Access to Insurance Requirements
  Plan to deliver residential property insurance to residents of this
  state in underserved areas if the commissioner determines, after a
  public hearing, that:
               (1)  in all or any part of the state, residential
  property insurance is not reasonably available in the voluntary
  market to a substantial number of insurable risks; or
               (2)  at least 25 percent of the applicants to the
  residential property market assistance program who are qualified
  under that program's plan of operation have not been placed with an
  insurer in the preceding six months.
         (b)  The commissioner may include in the plan established
  under Subsection (a) the delivery of property owners' association
  insurance in underserved areas as provided by Section 2211.1515 if
  the commissioner determines, after notice and a hearing, that in
  all or any part of the area designated under Section 2211.1515(a),
  property owners' association insurance is not reasonably available
  in the voluntary market to a substantial number of insurable risks.
         SECTION 3.  Section 2211.054, Insurance Code, is amended to
  read as follows:
         Sec. 2211.054.  CONTENTS OF PLAN OF OPERATION. The plan of
  operation must:
               (1)  provide for a nonprofit association to issue
  residential property insurance and, if applicable, property
  owners' association insurance under this chapter and distribute the
  losses and expenses in writing that insurance in this state;
               (2)  provide that all insurers that write residential
  property insurance shall participate in the association in
  accordance with Sections 2211.101(b) and (c);
               (3)  provide that a participating insurer is entitled
  to receive credit in accordance with Section 2211.101(d);
               (4)  provide for the immediate binding of eligible
  risks;
               (5)  provide for the use of premium installment payment
  plans, adequate marketing, and service facilities;
               (6)  provide for the establishment of reasonable
  service standards;
               (7)  provide procedures for efficient, economical,
  fair, and nondiscriminatory administration of the association;
               (8)  provide procedures for determining the net level
  of participation required for each insurer in the association;
               (9)  provide for the use of deductibles and other
  underwriting devices;
               (10)  provide for assessment of all members in amounts
  sufficient to operate the association;
               (11)  establish maximum limits of liability to be
  placed through the program;
               (12)  establish commissions to be paid to the insurance
  agents submitting applications;
               (13)  provide that the association issue policies in
  the association's own name;
               (14)  provide reasonable underwriting standards for
  determining insurability of a risk;
               (15)  provide procedures for the association to assume
  and cede reinsurance; and
               (16)  provide any other procedure or operational matter
  the governing committee or the commissioner considers necessary.
         SECTION 4.  Subchapter D, Chapter 2211, Insurance Code, is
  amended by adding Section 2211.1515 to read as follows:
         Sec. 2211.1515.  MANDATORY PROPERTY OWNERS' ASSOCIATION
  POLICIES IN CERTAIN AREAS. (a) This section applies only to the
  area designated by the commissioner by rule.  In determining the
  boundaries of the area, the commissioner shall:
               (1)  to the extent practicable, ensure the area is not
  more than 10 miles beyond the Texas Windstorm Insurance Association
  catastrophe area designated under Section 2210.005; and
               (2)  follow geographical features.
         (b)  If the commissioner makes the determination described
  by Section 2211.051(b), the association shall make property owners'
  association insurance available to each applicant in an underserved
  area of the area designated under Subsection (a) whose property is
  insurable in accordance with reasonable underwriting standards but
  who, after diligent efforts, is unable to obtain property owners'
  association insurance through the voluntary market, as evidenced by
  two declinations from insurers authorized to engage in the business
  of, and writing, property owners' association insurance in this
  state.
         (c)  If the area designated under Subsection (a) changes
  after the association issues a policy under Subsection (b), the
  policy is valid until renewal regardless of whether the insured
  property is located in the area designated under Subsection (a)
  after the change.
         SECTION 5.  Section 2211.153, Insurance Code, is amended to
  read as follows:
         Sec. 2211.153.  INSPECTION BUREAU. The association, with
  the approval of the commissioner, shall designate one or more
  organizations as the inspection bureau. The inspection bureau
  shall:
               (1)  make inspections to determine the condition of a
  property for which residential property insurance or property
  owners' association insurance is sought; and
               (2)  perform other duties authorized by the association
  or the commissioner.
         SECTION 6.  Section 2211.154(a), Insurance Code, is amended
  to read as follows:
         (a)  A person who has an insurable interest in real or
  tangible personal property at a fixed location in an underserved
  area and who, after diligent effort, is unable to obtain
  residential property insurance, or a homeowners' or condominium
  owners' association located in an underserved area as provided by
  Section 2211.1515 that, after diligent effort, is unable to obtain
  property owners' association insurance, as evidenced by two current
  declinations from insurers authorized to engage in the business of
  residential property insurance or property owners' association
  insurance, as applicable, in this state and actually writing
  residential property insurance or property owners' association
  insurance in this state, is entitled on application to the
  association to an inspection and evaluation of the property by
  representatives of the inspection bureau.
         SECTION 7.  Section 2211.155, Insurance Code, is amended to
  read as follows:
         Sec. 2211.155.  INSPECTION RESULTS; REINSPECTION. (a) If,
  after an inspection, the inspection bureau determines that
  [residential] property meets the underwriting standards
  established in the plan of operation, the applicant must be
  informed in writing of that determination and the association shall
  issue a policy or binder. If the [residential] property does not
  meet the underwriting standards, the applicant must be informed in
  writing of the reason for the failure of the [residential] property
  to meet the standards.
         (b)  If, at any time, an applicant whose [residential]
  property did not meet the underwriting standards makes improvements
  to the property or the property's condition that the applicant
  believes are sufficient to make the property meet the standards, an
  inspection bureau representative shall reinspect the property on
  request. In any case, the applicant is eligible for one
  reinspection on or before the 60th day after the date of the initial
  inspection.
         (c)  If, on reinspection, the [residential] property meets
  the underwriting standards, the applicant must be informed in
  writing of that fact and the association shall issue a policy or
  binder.
         SECTION 8.  Section 2211.201, Insurance Code, is amended to
  read as follows:
         Sec. 2211.201.  PURPOSE.  The legislature finds that
  issuing public securities to provide a method to raise funds to
  provide residential property insurance and property owners'
  association insurance in this state through the association is to
  benefit the public and to further a public purpose.
         SECTION 9.  Notwithstanding the changes in law made by this
  Act to Chapter 2211, Insurance Code, the Fair Access to Insurance
  Requirements Plan is not required to provide property owners' 
  association insurance under that chapter until September 1, 2024.
         SECTION 10.  This Act takes effect September 1, 2023.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 998 was passed by the House on April
  14, 2023, by the following vote:  Yeas 139, Nays 4, 2 present, not
  voting.
 
  ______________________________
  Chief Clerk of the House   
 
 
         I certify that H.B. No. 998 was passed by the Senate on May 4,
  2023, by the following vote:  Yeas 29, Nays 2.
 
  ______________________________
  Secretary of the Senate    
  APPROVED:  _____________________
                     Date          
   
            _____________________
                   Governor