Bill Text: TX HB272 | 2011-2012 | 82nd Legislature | Comm Sub
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to the operation of the Texas Windstorm Insurance Association and to the resolution of certain disputes concerning claims made to that association; providing penalties.
Spectrum: Partisan Bill (Republican 31-0)
Status: (Engrossed - Dead) 2011-05-27 - Senate appoints conferees-reported [HB272 Detail]
Download: Texas-2011-HB272-Comm_Sub.html
Bill Title: Relating to the operation of the Texas Windstorm Insurance Association and to the resolution of certain disputes concerning claims made to that association; providing penalties.
Spectrum: Partisan Bill (Republican 31-0)
Status: (Engrossed - Dead) 2011-05-27 - Senate appoints conferees-reported [HB272 Detail]
Download: Texas-2011-HB272-Comm_Sub.html
82R21589 KCR-D | |||
By: Smithee | H.B. No. 272 | ||
Substitute the following for H.B. No. 272: | |||
By: Smithee | C.S.H.B. No. 272 |
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relating to the operation of the Texas Windstorm Insurance | ||
Association and to the resolution of certain disputes concerning | ||
claims made to that association; providing penalties. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 83.002, Insurance Code, is amended by | ||
adding Subsection (c) to read as follows: | ||
(c) This chapter also applies to: | ||
(1) a person appointed as a qualified inspector under | ||
Section 2210.254 or 2210.255; and | ||
(2) a person acting as a qualified inspector under | ||
Section 2210.254 or 2210.255 without being appointed as a qualified | ||
inspector under either of those sections. | ||
SECTION 2. Section 541.152, Insurance Code, is amended by | ||
amending Subsection (b) and adding Subsection (c) to read as | ||
follows: | ||
(b) Except as provided by Subsection (c), on [ |
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by the trier of fact that the defendant knowingly committed the act | ||
complained of, the trier of fact may award an amount not to exceed | ||
three times the amount of actual damages. | ||
(c) Subsection (b) does not apply to an action under this | ||
subchapter brought against the Texas Windstorm Insurance | ||
Association by a person who is insured under Chapter 2210. | ||
SECTION 3. Section 2210.002(b), Insurance Code, is amended | ||
to read as follows: | ||
(b) The association is subject to review under Chapter 325, | ||
Government Code (Texas Sunset Act), but is not abolished under that | ||
chapter. The association shall be reviewed during the period in | ||
which state agencies abolished in 2013 [ |
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association shall pay the costs incurred by the Sunset Advisory | ||
Commission in performing the review of the association under this | ||
subsection. The Sunset Advisory Commission shall determine the | ||
costs of the review performed under this subsection, and the | ||
association shall pay the amount of those costs promptly on receipt | ||
of a statement from the Sunset Advisory Commission regarding those | ||
costs. This subsection expires September 1, 2013 [ |
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SECTION 4. Subchapter A, Chapter 2210, Insurance Code, is | ||
amended by adding Sections 2210.010, 2210.011, 2210.012, and | ||
2210.013 to read as follows: | ||
Sec. 2210.010. APPLICABILITY OF CERTAIN OTHER LAW. (a) | ||
Except as otherwise provided by this chapter or Chapter 541 or 542, | ||
Chapters 541 and 542 apply to the association and to the processing | ||
and settlement of claims by the association. To the extent of any | ||
conflict between this chapter and Chapter 541 or 542, this chapter | ||
prevails. | ||
(b) A person insured under this chapter may not bring a | ||
private action against the association under Chapter 541. | ||
(c) Section 33.004(e), Civil Practice and Remedies Code, | ||
does not apply to an action against the association. | ||
Sec. 2210.011. CERTAIN CONDUCT IN DISPUTE RESOLUTION | ||
PROHIBITED. A person insured under this chapter may not preside | ||
over a matter or action to which the association is a party, | ||
including by sitting as a judge or serving as an arbitrator. | ||
Sec. 2210.012. STANDARDS OF CONDUCT: BOARD OF DIRECTORS | ||
AND EMPLOYEES. (a) A member of the board of directors or an | ||
employee of the association may not: | ||
(1) accept or solicit any gift, favor, or service that | ||
might reasonably tend to influence the member or employee in the | ||
discharge of duties related to the operation or business of the | ||
association or that the member or employee knows or should know is | ||
being offered with the intent to influence the member's or | ||
employee's conduct related to the operation or business of the | ||
association; | ||
(2) accept other employment or engage in a business or | ||
professional activity that the member or employee might reasonably | ||
expect would require or induce the member or employee to disclose | ||
confidential information acquired by reason of the member's or | ||
employee's position with the association; | ||
(3) accept other employment or compensation that could | ||
reasonably be expected to impair the member's or employee's | ||
independence of judgment in the performance of the member's or | ||
employee's duties related to the operation or business of the | ||
association; | ||
(4) make personal investments that could reasonably be | ||
expected to create a substantial conflict between the member's or | ||
employee's private interest and the interest of the association; or | ||
(5) intentionally or knowingly solicit, accept, or | ||
agree to accept any benefit for having exercised the member's or | ||
employee's powers related to the operation or business of the | ||
association or having performed, in favor of another, the member's | ||
or employee's duties related to the operation or business of the | ||
association. | ||
(b) An association employee who violates Subsection (a) or a | ||
code of conduct established under Section 2210.107(a)(4) is subject | ||
to an employment-related sanction, including termination of the | ||
employee's employment with the association. | ||
(c) A member of the board of directors or an association | ||
employee who violates Subsection (a) is subject to any applicable | ||
civil or criminal penalty if the violation also constitutes a | ||
violation of another statute or rule. | ||
Sec. 2210.013. CERTAIN EMPLOYMENT AND CONTRACTS | ||
PROHIBITED. A member of the board of directors or an employee of | ||
the association may not appoint or employ, or contract with, the | ||
following individuals for the provision of goods or services in | ||
connection with the operation or business of the association, if | ||
the individual to be appointed or employed, or with whom a contract | ||
is to be entered into, is to be directly or indirectly compensated | ||
from funds of the association: | ||
(1) an individual related to the member or employee | ||
within a degree of relationship described by Section 573.002, | ||
Government Code; or | ||
(2) an individual related to any member of the board of | ||
directors or employee of the association within a degree of | ||
relationship described by Section 573.002, Government Code. | ||
SECTION 5. Section 2210.072(b), Insurance Code, is amended | ||
to read as follows: | ||
(b) Public securities described by Subsection (a) shall be | ||
issued as necessary in a principal amount not to exceed $1 billion | ||
per occurrence or series of occurrences in a calendar year that | ||
results in insured losses. | ||
SECTION 6. Section 2210.073(b), Insurance Code, is amended | ||
to read as follows: | ||
(b) Public securities described by Subsection (a) may be | ||
issued as necessary in a principal amount not to exceed $1 billion | ||
per occurrence or series of occurrences in a calendar year that | ||
results in insured losses. 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. | ||
SECTION 7. Section 2210.074(b), Insurance Code, is amended | ||
to read as follows: | ||
(b) Public securities described by Subsection (a) may be | ||
issued as necessary in a principal amount not to exceed $500 million | ||
per occurrence or series of occurrences in a calendar year that | ||
results in insured losses. 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. | ||
SECTION 8. Section 2210.104, Insurance Code, is amended to | ||
read as follows: | ||
Sec. 2210.104. OFFICERS AND MANAGERIAL EMPLOYEES; SALARIES | ||
AND BONUSES. (a) The board of directors shall elect from the | ||
board's membership an executive committee consisting of a presiding | ||
officer, assistant presiding officer, and secretary-treasurer. | ||
(b) The association shall post on the association's | ||
Internet website the salary of each association employee who serves | ||
in a managerial capacity and any bonuses paid to those association | ||
employees. | ||
SECTION 9. Section 2210.105, Insurance Code, is amended by | ||
amending Subsections (a) and (b) and adding Subsections (b-1), (e), | ||
and (f) to read as follows: | ||
(a) Except for an emergency meeting, the association shall: | ||
(1) notify the department not later than the 11th day | ||
before the date of a meeting of the board of directors or of the | ||
members of the association; and | ||
(2) not later than the seventh day before the date of a | ||
meeting of the board of directors, post notice of the meeting on the | ||
association's Internet website and the department's Internet | ||
website. | ||
(b) Except for a closed meeting authorized by Subchapter D, | ||
Chapter 551, Government Code, a meeting of the board of directors or | ||
of the members of the association is open to[ |
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(b-1) A meeting of the board of directors or the members of | ||
the association, including a closed meeting authorized by | ||
Subchapter D, Chapter 551, Government Code, is open to the | ||
commissioner or the commissioner's designated representative. | ||
(e) The association shall: | ||
(1) broadcast live on the association's Internet | ||
website all meetings of the board of directors, other than closed | ||
meetings; and | ||
(2) maintain on the association's Internet website an | ||
archive of meetings of the board of directors. | ||
(f) A recording of a meeting must be maintained in the | ||
archive required under Subsection (e) through and including the | ||
second anniversary of the meeting. | ||
SECTION 10. Section 2210.107, Insurance Code, is amended to | ||
read as follows: | ||
Sec. 2210.107. PRIMARY BOARD OBJECTIVES; REPORT. (a) The | ||
primary objectives of the board of directors are to ensure that the | ||
board and the association: | ||
(1) operate [ |
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chapter, the plan of operation, and commissioner rules; | ||
(2) comply [ |
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principles; [ |
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(3) meet [ |
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chapter; | ||
(4) establish a code of conduct and performance | ||
standards for association employees and persons with which the | ||
association contracts; and | ||
(5) establish, and adhere to terms of, an annual | ||
evaluation of association management necessary to achieve the | ||
statutory purpose, board objectives, and any performance or | ||
enterprise risk management objectives established by the board. | ||
(b) Not later than June 1 of each year, the association | ||
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 | ||
evaluating the extent to which the board met the objectives | ||
described by Subsection (a) in the 12-month period immediately | ||
preceding the date of the report. | ||
SECTION 11. Subchapter C, Chapter 2210, Insurance Code, is | ||
amended by adding Section 2210.108 to read as follows: | ||
Sec. 2210.108. OPEN MEETINGS AND OPEN RECORDS. (a) Except | ||
as specifically provided by this chapter or another law, the | ||
association is subject to Chapters 551 and 552, Government Code. | ||
(b) A settlement agreement to which the association is a | ||
party: | ||
(1) is public information and is not exempted from | ||
required disclosure under Chapter 552, Government Code; and | ||
(2) if applicable, must contain the name of any | ||
attorney or adjuster involved with the claim that is the basis of | ||
the settlement. | ||
SECTION 12. Section 2210.152, Insurance Code, is amended by | ||
adding Subsection (c) to read as follows: | ||
(c) The plan of operation shall require the association to | ||
use the claim settlement guidelines published by the commissioner | ||
under Section 2210.577(f) in evaluating the extent to which a loss | ||
to insurable property is incurred as a result of wind, waves, tidal | ||
surges, rising waters not caused by waves or surges, or wind-driven | ||
rain associated with a storm. | ||
SECTION 13. Section 2210.202, Insurance Code, is amended by | ||
adding Subsection (c) to read as follows: | ||
(c) The commissioner shall adopt rules to simplify and | ||
streamline the process through which: | ||
(1) a person who has an insurable interest in | ||
insurable property may apply with the association for insurance | ||
coverage; and | ||
(2) a person insured under this chapter may apply with | ||
the association for renewal of the person's insurance coverage. | ||
SECTION 14. Section 2210.204(e), Insurance Code, is amended | ||
to read as follows: | ||
(e) For cancellation of insurance coverage under this | ||
section, the minimum retained premium in the plan of operation must | ||
be for a period of not less than 90 [ |
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specified in the plan of operation that reflect a significant | ||
change in the exposure or the policyholder concerning the insured | ||
property, including: | ||
(1) the purchase of similar coverage in the voluntary | ||
market; | ||
(2) sale of the property to an unrelated party; | ||
(3) death of the policyholder; or | ||
(4) total loss of the property. | ||
SECTION 15. Subchapter E, Chapter 2210, Insurance Code, is | ||
amended by adding Sections 2210.205 and 2210.210 to read as | ||
follows: | ||
Sec. 2210.205. REQUIRED POLICY PROVISIONS: DEADLINE FOR | ||
FILING CLAIM; NOTICE CONCERNING ARBITRATION. (a) A windstorm and | ||
hail insurance policy issued by the association must: | ||
(1) require an insured to file a claim under the policy | ||
not later than the first anniversary of the date on which the damage | ||
to property that is the basis of the claim occurs; and | ||
(2) contain, in boldface type, a conspicuous notice | ||
concerning the resolution of disputes under the policy, including: | ||
(A) the processes and deadlines for appraisal | ||
under Section 2210.575 and independent coverage review under | ||
Section 2210.576; and | ||
(B) the necessity of complying with the | ||
requirements of Subchapter L-1 to seek administrative or judicial | ||
relief. | ||
(b) The commissioner, on a showing of good cause by a person | ||
insured under this chapter, may extend the one-year period | ||
described by Subsection (a)(1) for a period not to exceed 180 days. | ||
Sec. 2210.210. COVERAGE OF CERTAIN STRUCTURES PROHIBITED. | ||
The association may not issue coverage for the following | ||
structures, regardless of whether the structure is otherwise | ||
insurable property under this chapter: | ||
(1) a wind turbine; | ||
(2) a structure used primarily as a casino or other | ||
gambling establishment; or | ||
(3) a structure used as a sexually oriented business, | ||
as defined by Section 243.002, Local Government Code. | ||
SECTION 16. Section 2210.254, Insurance Code, is amended by | ||
adding Subsection (e) to read as follows: | ||
(e) The department may establish an annual renewal period | ||
for persons appointed as qualified inspectors. | ||
SECTION 17. Subchapter F, Chapter 2210, Insurance Code, is | ||
amended by adding Section 2210.2551 to read as follows: | ||
Sec. 2210.2551. EXCLUSIVE ENFORCEMENT AUTHORITY; RULES. | ||
(a) The department has exclusive authority over all matters | ||
relating to the appointment and oversight of qualified inspectors | ||
for purposes of this chapter. | ||
(b) The commissioner by rule shall establish criteria to | ||
ensure that a person seeking appointment as a qualified inspector | ||
under this subchapter, including an engineer seeking appointment | ||
under Section 2210.255, possesses the knowledge, understanding, | ||
and professional competence to perform windstorm inspections under | ||
this chapter and to comply with other requirements of this chapter. | ||
SECTION 18. The heading to Section 2210.256, Insurance | ||
Code, is amended to read as follows: | ||
Sec. 2210.256. DISCIPLINARY PROCEEDINGS REGARDING | ||
APPOINTED INSPECTORS AND CERTAIN OTHER PERSONS. | ||
SECTION 19. Section 2210.256, Insurance Code, is amended by | ||
adding Subsection (a-1) to read as follows: | ||
(a-1) In addition to any other action authorized under this | ||
section, the commissioner ex parte may enter an emergency cease and | ||
desist order under Chapter 83 against a qualified inspector, or a | ||
person acting as a qualified inspector, if: | ||
(1) the commissioner believes that: | ||
(A) the qualified inspector has: | ||
(i) through submitting or failing to submit | ||
to the department sealed plans, designs, calculations, or other | ||
substantiating information, failed to demonstrate that a structure | ||
or a portion of a structure subject to inspection meets the | ||
requirements of this chapter and department rules; or | ||
(ii) refused to comply with requirements | ||
imposed under this chapter or department rules; or | ||
(B) the person acting as a qualified inspector is | ||
acting without appointment as a qualified inspector under Section | ||
2210.254 or 2210.255; and | ||
(2) the commissioner determines that the conduct | ||
described by Subdivision (1) is fraudulent or hazardous or creates | ||
an immediate danger to the public. | ||
SECTION 20. Section 2210.259, Insurance Code, is amended by | ||
amending Subsection (a) and adding Subsection (c) to read as | ||
follows: | ||
(a) A noncompliant residential structure insured by the | ||
association as of September 1, 2009, under Section 2210.251(f) that | ||
had been approved for insurability under the approval process | ||
regulations in effect on September 1, 2009, is subject to an annual | ||
premium surcharge in an amount determined under Subsection (c) | ||
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applies to each policy issued or renewed by the association on or | ||
after the effective date of Sections 5 through 49, H.B. No. 4409, | ||
Acts of the 81st Legislature, Regular Session, 2009, and is due on | ||
the issuance or renewal of the policy. | ||
(c) The commissioner, after receiving a recommendation from | ||
the board concerning the amount of the annual premium surcharge | ||
required under Subsection (a), by rule shall establish the amount | ||
of the annual premium surcharge. The amount of the surcharge must | ||
be actuarially justifiable and may not be less than 15 percent of | ||
the premium for insurance coverage obtained through the | ||
association. Before the commissioner by rule establishes the | ||
amount of the annual premium surcharge, the commissioner shall | ||
report to the legislative oversight board established under | ||
Subchapter N concerning the methodology the commissioner used to | ||
determine the amount of the annual premium surcharge. | ||
SECTION 21. Section 2210.355, Insurance Code, is amended by | ||
amending Subsection (i) and adding Subsections (j), (k), and (l) to | ||
read as follows: | ||
(i) The association shall [ |
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territories and shall [ |
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accordance with Subsections (j) and (k) [ |
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(j) Notwithstanding Section 2210.351, the association may | ||
use rate relativities for rating territories that subdivide a | ||
county without prior commissioner approval if the resulting rate | ||
for any subdivision in the county: | ||
(1) is not more than 15 percent greater than the | ||
resulting rate used in any other subdivision in that county for | ||
identical coverage for insureds having risk characteristics that | ||
are identical except for rating territory; and | ||
(2) is not unfairly discriminatory. | ||
(k) The association may use rate relativities for rating | ||
territories that subdivide a county only with prior commissioner | ||
approval if the resulting rate for any subdivision in the county is | ||
not described by Subsection (j)(1). | ||
(l) A rate relativity described by Subsection (k) must be | ||
based on sound actuarial principles supported by data filed with | ||
the department, including reasonable output from recognized | ||
catastrophe models, and must produce rates that comply with the | ||
statutory and regulatory requirements of this chapter. | ||
SECTION 22. Section 2210.453, Insurance Code, is amended by | ||
adding Subsection (c) to read as follows: | ||
(c) 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. | ||
SECTION 23. Subchapter J, Chapter 2210, Insurance Code, is | ||
amended by adding Section 2210.455 to read as follows: | ||
Sec. 2210.455. CATASTROPHE PLAN. (a) Not later than June 1 | ||
of each year, the board 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 catastrophe plan covering the period beginning on | ||
the date the plan is submitted and ending on the following May 31. | ||
(b) The catastrophe plan must describe the manner in which | ||
the association will, during the period covered by the plan, | ||
evaluate losses and process claims after the following windstorms | ||
affecting an area of maximum exposure to the association: | ||
(1) a windstorm with a four percent chance of | ||
occurring during the period covered by the plan; | ||
(2) a windstorm with a two percent chance of occurring | ||
during the period covered by the plan; and | ||
(3) a windstorm with a one percent chance of occurring | ||
during the period covered by the plan. | ||
(c) The catastrophe plan must include a description of how | ||
losses under association policies will be paid, and how claims | ||
under association policies will be administered and adjusted, | ||
during the period covered by the plan. | ||
SECTION 24. Sections 2210.551(a) and (b), Insurance Code, | ||
are amended to read as follows: | ||
(a) This section: | ||
(1) does not apply to a person insured under this | ||
chapter who is required to resolve a dispute concerning a | ||
causation, coverage, or damage dispute under Subchapter L-1; and | ||
(2) applies only to: | ||
(A) [ |
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(1) who is insured under this chapter or an authorized | ||
representative of the person; or | ||
(B) [ |
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(b) A person or entity described by Subsection (a)(2) [ |
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who is aggrieved by an act, ruling, or decision of the association | ||
may appeal to the commissioner not later than the 30th day after the | ||
date of that act, ruling, or decision. | ||
SECTION 25. The heading to Section 2210.552, Insurance | ||
Code, is amended to read as follows: | ||
Sec. 2210.552. [ |
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COVERAGE, AND DAMAGE DISPUTES; VENUE. | ||
SECTION 26. Section 2210.552, Insurance Code, is amended by | ||
amending Subsection (a) and adding Subsection (e) to read as | ||
follows: | ||
(a) Except as provided by Sections 2210.007 and 2210.106 and | ||
Subchapter L-1, a person insured under this chapter who is | ||
aggrieved by an act, ruling, or decision of the association | ||
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(1) bring an action against the association[ |
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(2) appeal the act, ruling, or decision under Section | ||
2210.551. | ||
(e) A person who brings an action against the association | ||
under this section: | ||
(1) may recover only the amount of actual damages, | ||
plus court costs and reasonable and necessary attorney's fees; and | ||
(2) may not recover consequential, punitive, or | ||
exemplary damages, including damages under Section 541.152(b) of | ||
this code or Section 17.50, Business & Commerce Code. | ||
SECTION 27. Subchapter L, Chapter 2210, Insurance Code, is | ||
amended by adding Section 2210.553 to read as follows: | ||
Sec. 2210.553. LIMITATIONS PERIOD. (a) Notwithstanding | ||
any other law, including Section 541.162, a person insured under | ||
this chapter who brings an action against the association in the | ||
manner described by Section 2210.552(a)(1) must bring the action | ||
not later than the second anniversary of the date of the act, | ||
ruling, or decision of the association by which the insured is | ||
aggrieved. | ||
(b) This section is a statute of repose and controls over | ||
any other applicable limitations period. | ||
SECTION 28. Chapter 2210, Insurance Code, is amended by | ||
adding Subchapter L-1 to read as follows: | ||
SUBCHAPTER L-1. CLAIMS: SETTLEMENT AND DISPUTE RESOLUTION | ||
Sec. 2210.571. DEFINITIONS. In this subchapter: | ||
(1) "Association policy" means a windstorm and hail | ||
insurance policy issued by the association. | ||
(2) "Causation dispute" means a dispute involving the | ||
extent to which damage to property insured under an association | ||
policy was caused by an event or peril covered under the policy. | ||
(3) "Claim" means a request for payment under an | ||
association policy following damage to property insured, or alleged | ||
to be insured, under the policy. | ||
(4) "Claimant" means a person who makes a claim. | ||
(5) "Coverage dispute" means a dispute that involves | ||
whether, or the extent to which, an association policy covers | ||
damages to property alleged to be insured under the policy. The | ||
term does not include a causation dispute. | ||
(6) "Damage dispute" means a dispute that involves the | ||
extent of damage to property, or the cost of repairing or replacing | ||
property, insured under an association policy. The term does not | ||
include a causation dispute or coverage dispute. | ||
Sec. 2210.572. EXCLUSIVE REMEDIES AND LIMITATION ON AWARD. | ||
(a) This subchapter provides the exclusive remedies for a | ||
causation, coverage, or damage dispute with the association. | ||
(b) Except as provided by Section 2210.578, a claimant may | ||
not be paid or recover any amount under this subchapter in excess of | ||
the policy limits of the association policy under which the claim | ||
that is the basis of a causation, coverage, or damage dispute is | ||
made. | ||
Sec. 2210.573. FILING OF CLAIM; CLAIM PROCESSING. (a) | ||
Subject to Section 2210.205(b), an insured must file a claim under | ||
an association policy not later than the first anniversary of the | ||
date on which the damage to property that is the basis of the claim | ||
occurs. | ||
(b) Except as provided by Subsection (d), not later than the | ||
90th day after the date the association receives a claim, the | ||
association shall: | ||
(1) notify the claimant in writing of the amount of | ||
money, if any, the association will pay the claimant for the claim; | ||
and | ||
(2) provide the claimant with: | ||
(A) a detailed description of the assumptions or | ||
estimates used by the association in determining the amount of the | ||
claim to be paid, including the estimated labor and materials | ||
required and the estimated prices for the labor and materials; or | ||
(B) if the association determines that, in whole | ||
or in part, the property damaged is not insured under the | ||
association policy, or that the property insured under the | ||
association policy was damaged by an event or peril not covered by | ||
the association policy, a detailed description of the factual and | ||
legal basis on which the association determined that a coverage or | ||
causation dispute exists concerning all or part of the claim. | ||
(c) If the association does not notify the claimant in | ||
accordance with Subsection (b), the claim is presumed to be covered | ||
by the association policy. | ||
(d) The association may extend the 90-day period described | ||
by Subsection (b) for a period not to exceed 90 days, if, before the | ||
end of the 90-day period described by Subsection (b), the | ||
association determines that special circumstances require an | ||
extension of the 90-day period described by Subsection (b) and | ||
notifies the claimant in writing of that determination and those | ||
circumstances. | ||
(e) If a claimant fails to submit information necessary for | ||
the association to determine whether to pay a claim or any portion | ||
of a claim or to deny payment of a claim or any portion of a claim, | ||
the association may request in writing the necessary information | ||
from the claimant. If the association makes a written request for | ||
information, the applicable period described by Subsection (b) or | ||
(d) is tolled from the date the association requests the | ||
information until the date the association receives from the | ||
claimant information responsive to the request. | ||
(f) In addition to the notice and information otherwise | ||
required under this section, the association shall notify a | ||
claimant of the time limits under Section 2210.574 to request | ||
review of the association's determination under Subsection (e). | ||
Sec. 2210.574. REQUEST FOR REVIEW OF ASSOCIATION | ||
DETERMINATION. (a) A claimant aggrieved by a determination of the | ||
association under Section 2210.573 may, not later than the 30th day | ||
after the date the claimant receives the association's | ||
determination, request in writing a review of the determination. A | ||
claimant may submit written comments, documents, records, and other | ||
information to the association with or following the request for | ||
review. | ||
(b) The association shall, on request and free of charge, | ||
provide a claimant requesting review of an association | ||
determination under Subsection (a) reasonable access to all | ||
information relevant to the determination of the association that | ||
is being reviewed. The claimant may copy the information at the | ||
claimant's own cost or may request the association to provide a copy | ||
of all or part of the information to the claimant. The association | ||
may charge a claimant the actual cost incurred by the association in | ||
providing a copy of information under this section, excluding any | ||
amount for labor involved in making any information or copy of | ||
information available to a claimant. | ||
(c) Not later than the 60th day after the date the | ||
association receives a request for review under Subsection (a), the | ||
association shall notify the claimant in writing of the outcome of | ||
the association's review. The association and the claimant may | ||
agree to extend the 60-day period described by this subsection. | ||
(d) The association's notice to the claimant of the outcome | ||
of the association's review must be in writing, contain the reasons | ||
for the outcome, and notify the claimant of the time limits to | ||
request, as applicable, appraisal under Section 2210.575 or review | ||
by an independent review panel under Section 2210.576. | ||
Sec. 2210.575. APPRAISAL IN DAMAGE DISPUTES. (a) If, after | ||
review of an association determination under Section 2210.574, a | ||
damage dispute exists with reference to a claim filed under an | ||
association policy, but a coverage or causation dispute does not | ||
exist with reference to that claim, the claimant may request | ||
appraisal of the extent of damage to the property, or the cost of | ||
repairing or replacing the property, insured under the policy. | ||
(b) A claimant must make a written request for appraisal not | ||
later than the 30th day after the date the claimant receives actual | ||
or constructive notice of the outcome of the association's review | ||
of a determination under Section 2210.574 that is the basis of the | ||
damage dispute. If a claimant, on a showing of good cause and not | ||
later than the 60th day after the expiration of the 30-day period | ||
described by this subsection, requests in writing that the 30-day | ||
period to request appraisal be extended, the commissioner may grant | ||
an additional 30-day period in which the claimant may request | ||
appraisal. | ||
(c) If a claimant requests appraisal under Subsection (b), | ||
the claimant and the association shall resolve the damage dispute | ||
through appraisal, in accordance with the terms of the association | ||
policy. The results of the appraisal: | ||
(1) are binding on the claimant and the association | ||
and are subject to appeal and judicial review only in the manner | ||
provided by Section 2210.578; and | ||
(2) become final and appealable on the 15th day after | ||
the date the appealing party receives actual or constructive notice | ||
of the results. | ||
(d) A request for appraisal, and participation in the | ||
appraisal process, under this section is a condition precedent to | ||
contesting a determination made by the association concerning the | ||
extent of damage to property, or the cost of repairing or replacing | ||
property, insured under an association policy. A claimant who does | ||
not request appraisal within the applicable period described by | ||
Subsection (b) waives the claimant's right to contest a | ||
determination of the association concerning the extent of damage to | ||
property, or the cost of repairing or replacing property, insured | ||
under an association policy. | ||
(e) The commissioner by rule shall establish policies and | ||
procedures for an appraisal requested and conducted under this | ||
section. | ||
Sec. 2210.576. REVIEW BY INDEPENDENT REVIEW PANEL. (a) If, | ||
after review of an association determination under Section | ||
2210.574, a coverage or causation dispute exists with reference to | ||
a claim filed under an association policy, the claimant may seek | ||
resolution of all disputes concerning the claim, including a damage | ||
dispute, through review by an independent review panel. | ||
(b) A claimant must make a written request, mailed or served | ||
on the association or the commissioner, for review by an | ||
independent review panel not later than the 30th day after the date | ||
the claimant receives actual or constructive notice of the outcome | ||
of the association's review of a determination under Section | ||
2210.574 that is the basis of the causation, coverage, or damage | ||
dispute. If a claimant mails or serves a request for review by an | ||
independent review panel, the association shall immediately | ||
forward the request for review to the commissioner. | ||
(c) If a claimant, on a showing of good cause and not later | ||
than the 60th day after the expiration of the 30-day period | ||
described by Subsection (b), requests in writing that the 30-day | ||
period to request review by an independent review panel be | ||
extended, the commissioner may grant an additional 30-day period in | ||
which the claimant may request independent review under this | ||
section. | ||
(d) The commissioner shall appoint an independent review | ||
panel to resolve a dispute in the manner described by this section. | ||
A panel appointed under this section must consist of three members, | ||
selected by the commissioner from a roster of qualified panel | ||
members maintained and published by the commissioner. If a | ||
selected panel member cannot serve or declines to serve for any | ||
reason, the commissioner shall select a new panel member not later | ||
than the 10th day after the date the panel member notifies the | ||
commissioner of the member's inability or unwillingness to serve. | ||
The commissioner shall appoint one member of the panel to serve as | ||
the presiding officer of the panel. | ||
(e) An independent review panel appointed under Subsection | ||
(b) shall make a determination concerning, as applicable, the | ||
causation, coverage, or damage dispute submitted to the panel for | ||
review and notify the claimant and the association in writing of the | ||
panel's determination as soon as practicable, but not later than | ||
the 120th day after the date the independent review panel is | ||
appointed. If the independent review panel does not make a | ||
determination concerning a dispute before the 120th day, the | ||
commissioner may grant a reasonable extension for the panel to make | ||
a determination or dissolve the panel and appoint a new panel to | ||
conduct the review. | ||
(f) An independent review panel shall determine whether the | ||
review of a dispute involves a technical issue requiring guidance | ||
or information from the technical panel appointed under Section | ||
2210.577. If the review of a dispute involves a technical issue, the | ||
independent review panel shall request from the technical panel | ||
guidance and any information relevant to the dispute. | ||
(g) The 120-day period described by Subsection (e) is tolled | ||
from the date the independent review panel requests guidance or | ||
information from the technical panel through the date on which the | ||
independent review panel receives the requested guidance or | ||
information. | ||
(h) The determination of an independent review panel: | ||
(1) is binding on the claimant and the association and | ||
is subject to appeal and judicial review only in the manner provided | ||
by Section 2210.578; and | ||
(2) becomes final and appealable on the 15th day after | ||
the date the appealing party receives actual or constructive notice | ||
of the determination. | ||
(i) The commissioner by rule shall establish: | ||
(1) the qualifications for members of the independent | ||
review panel; | ||
(2) procedures and deadlines to be used in independent | ||
review; | ||
(3) procedures and requirements relating to the | ||
exchange of documents during the independent review process, | ||
including the content of those documents; and | ||
(4) procedures or requirements necessary for any other | ||
matter regarding the handling of requests for review. | ||
(j) The rules adopted by the commissioner under Subsection | ||
(i) must ensure that the independent review process is fair to the | ||
claimant and enables the claimant to participate in the independent | ||
review process without engaging legal counsel. | ||
Sec. 2210.577. TECHNICAL PANEL. (a) The commissioner | ||
shall appoint a technical panel of experts to advise the | ||
association concerning the extent to which damage to property | ||
insured under an association policy was incurred as a result of | ||
wind, waves, tidal surges, rising waters not caused by waves or | ||
surges, and wind-driven rain associated with a storm. The panel | ||
shall consist of a number of experts to be decided by the | ||
commissioner. The commissioner shall appoint one member of the | ||
panel to serve as the presiding officer of the panel. | ||
(b) Members of the panel must have professional expertise | ||
in, and be knowledgeable concerning, the geography and meteorology | ||
of the Texas seacoast territory, as well as the scientific basis for | ||
determining the extent to which damage to property is caused by | ||
wind, waves, tidal surges, rising waters not caused by waves or | ||
surges, and wind-driven rain associated with a storm. | ||
(c) The panel shall meet at the request of the commissioner | ||
or the call of the presiding officer of the panel. | ||
(d) The panel shall investigate, collect, and evaluate the | ||
information necessary to provide recommendations under Subsection | ||
(e) and to provide guidance or other information requested by an | ||
independent review panel under Section 2210.576. | ||
(e) At the request of the commissioner, the technical panel | ||
shall recommend to the commissioner methods for determining the | ||
extent to which damage to property insured under an association | ||
policy resulted from wind, waves, tidal surges, rising waters not | ||
caused by waves or surges, and wind-driven rain associated with a | ||
storm for geographic areas or regions designated by the | ||
commissioner. | ||
(f) After consideration of the recommendations made by the | ||
panel under Subsection (e), the commissioner shall publish | ||
guidelines that the association will use to settle claims. | ||
Sec. 2210.578. JUDICIAL REVIEW. (a) A claimant who has | ||
exhausted all administrative remedies under this subchapter and who | ||
is aggrieved by an appraisal under Section 2210.575 or the | ||
determination of an independent review panel under Section 2210.576 | ||
is entitled to judicial review. A claimant may not seek judicial | ||
review before exhausting all administrative remedies under this | ||
subchapter. | ||
(b) A claimant may seek judicial review of an appraisal | ||
under Section 2210.575 or the determination of an independent | ||
review panel under Section 2210.576 in the manner provided for the | ||
appeal of contested cases under Subchapter G, Chapter 2001, | ||
Government Code. The standard for judicial review under this | ||
section is the substantial evidence rule. | ||
(c) In a proceeding for judicial review under this section, | ||
the court may award only the amount described by Section | ||
2210.572(b), plus court costs and reasonable and necessary | ||
attorney's fees. | ||
Sec. 2210.579. CONSTRUCTION WITH OTHER LAW. To the extent | ||
of any conflict between a provision of this subchapter and any other | ||
law, the provision of this subchapter prevails. | ||
SECTION 29. Section 2210.551(e), Insurance Code, is | ||
repealed. | ||
SECTION 30. This Act applies only to a Texas windstorm and | ||
hail insurance policy, and a dispute arising under a Texas | ||
windstorm and hail insurance policy, delivered, issued for | ||
delivery, or renewed by the Texas Windstorm Insurance Association | ||
on or after the 30th day after the effective date of this Act. A | ||
Texas windstorm and hail insurance policy, and a dispute arising | ||
under a Texas windstorm and hail insurance policy, delivered, | ||
issued for delivery, or renewed by the Texas Windstorm Insurance | ||
Association before the 30th day after the effective date of this | ||
Act, are governed by the law in effect on the date the policy was | ||
delivered, issued for delivery, or renewed, and the former law is | ||
continued in effect for that purpose. | ||
SECTION 31. 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 January 1, 2012. | ||
SECTION 32. Sections 541.152 and 2210.552, Insurance Code, | ||
as amended by this Act, apply only to a cause of action that accrues | ||
on or after the effective date of this Act. A cause of action that | ||
accrues before the effective date of this Act is governed by the law | ||
in effect immediately before the effective date of this Act, and | ||
that law is continued in effect for that purpose. | ||
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, 2011. |