Bill Text: TX HB3155 | 2011-2012 | 82nd Legislature | Introduced
Bill Title: Relating to the issuance of certain public securities by the Texas Windstorm Insurance Association.
Sponsorship: Partisan Bill (Republican 1)
Status: (Introduced - Dead) 2011-03-18 - Referred to Insurance [HB3155 Detail]
Download: Texas-2011-HB3155-Introduced.html
| By: Torres | H.B. No. 3155 | |
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| relating to the issuance of certain public securities by the Texas | ||
| Windstorm Insurance Association. | ||
| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
| SECTION 1. Section 2210.072, Insurance Code, is amended by | ||
| amending Subsections (a), (b), and (c) and adding Subsection (b-1) | ||
| to read as follows: | ||
| (a) Losses not paid under Section 2210.071 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 | ||
| 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 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) that are | ||
| issued before an occurrence or series of occurrences that results | ||
| in incurred losses may be issued if the board of directors | ||
| determines, before the date of any occurrence, that the amount | ||
| available from premium and other revenue, in combination with the | ||
| amounts available from the catastrophe reserve trust fund, may be | ||
| insufficient to pay insured losses. | ||
| (b-1) Public securities described by Subsection (a) shall | ||
| be issued as necessary in a principal amount not to exceed $1 | ||
| billion per year, in the aggregate, for securities issued before an | ||
| occurrence or series of occurrences that results in incurred losses | ||
| and securities issued on or after the date of that occurrence or | ||
| series of occurrences. | ||
| (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 from premium surcharges and association | ||
| premium revenue, as applicable. | ||
| SECTION 2. Section 2210.602(2), Insurance Code, is amended | ||
| to read as follows: | ||
| (2) "Class 1 public securities" means public securities | ||
| authorized to be issued before, on, or after an occurrence or series | ||
| of occurrences by Section 2210.072, including a commercial paper | ||
| program authorized before the occurrence of a catastrophic event so | ||
| long as no tranche of commercial paper is issued under the program | ||
| until after the catastrophic event. | ||
| SECTION 3. Section 2210.612(a), Insurance Code, is amended | ||
| to read as follows: | ||
| (a) The association shall pay Class 1 public securities | ||
| issued under Section 2210.072 from: | ||
| (1) the premium surcharge described by Section | ||
| 2210.6121, for principal on pre-event securities; and | ||
| (2) the association's [its] premium and other revenue, | ||
| for interest on pre-event securities and principal and interest on | ||
| post-event securities. | ||
| SECTION 4. Subchapter M, Chapter 2210, Insurance Code, is | ||
| amended by adding Section 2210.6121 to read as follows: | ||
| Sec. 2210.6121. CLASS 1 PREMIUM SURCHARGE. (a) | ||
| Notwithstanding any other provision of this chapter to the | ||
| contrary, to pay principal on pre-event Class 1 public securities, | ||
| each insurer and the association shall collect from their | ||
| policyholders a surcharge in addition to any premiums to pay public | ||
| security obligations and public security administrative expenses, | ||
| if any, on pre-event Class 1 public securities. The association | ||
| shall determine the premium surcharge under this subsection at | ||
| least annually. | ||
| (b) On approval by the commissioner, each insurer and the | ||
| association shall assess a premium surcharge under Subsection (a) | ||
| to their policyholders who have a property or casualty insurance | ||
| policy or Texas windstorm and hail insurance policy that provides | ||
| coverage for premises, locations, operations, or property located | ||
| in the catastrophe area. | ||
| (c) A premium surcharge under Subsection (a) applies to all | ||
| policies that provide coverage on any premises, locations, | ||
| operations, or property located in the catastrophe area for all | ||
| property and casualty lines of insurance, other than federal flood | ||
| insurance, workers' compensation insurance, accident and health | ||
| insurance, and medical malpractice insurance. | ||
| (d) A premium surcharge under this section is a separate | ||
| nonrefundable 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. | ||
| SECTION 5. This Act takes effect September 1, 2011. | ||
