Bill Text: TX SB18 | 2013-2014 | 83rd Legislature | Introduced

---

Bill Title: Relating to the establishment of the Texas Property Insurance Program and the operation of the FAIR Plan Association and the Texas Windstorm Insurance Association.

Sponsorship: Partisan Bill (Republican 1)

Status: (Introduced - Dead) 2013-03-12 - Left pending in committee [SB18 Detail]

Download: Texas-2013-SB18-Introduced.html

---

83R5457 TJS/PMO-F
By: Carona S.B. No. 18

A BILL TO BE ENTITLED
AN ACT
relating to the establishment of the Texas Property Insurance
Program and the operation of the FAIR Plan Association and the Texas
Windstorm Insurance Association.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2210.0081, Insurance Code, is amended to
read as follows:
Sec. 2210.0081. CERTAIN ACTIONS BROUGHT AGAINST
ASSOCIATION BY COMMISSIONER. In an action brought by the
commissioner against the association under Chapter 441, [:
[(1) the association's inability to satisfy
obligations under Subchapter M related to the issuance of public
securities under this chapter constitutes a condition that makes
the association's continuation in business hazardous to the public
or to the association's policyholders for the purposes of Section
441.052;
[(2)] the time for the association to comply with the
requirements of supervision or for the conservator to complete the
conservator's duties, as applicable, is limited to three years from
the date the commissioner commences the action against the
association[; and
[(3) unless the commissioner takes further action
against the association under Chapter 441, as a condition of
release from supervision, the association must demonstrate to the
satisfaction of the commissioner that the association is able to
satisfy obligations under Subchapter M related to the issuance of
public securities under this chapter].
SECTION 2. Section 2210.014(b), Insurance Code, is amended
to read as follows:
(b) Chapter 542 does not apply to the processing and
settlement of claims by the association or to an agent or
representative of the association.
SECTION 3. Sections 2210.056(b) and (c), Insurance Code,
are amended to read as follows:
(b) The association's assets may not be used for or diverted
to any purpose other than to:
(1) satisfy, in whole or in part, the liability of the
association on claims made on policies written by the association;
(2) make investments authorized under applicable law;
(3) pay reasonable and necessary administrative
expenses incurred in connection with the operation of the
association and the processing of claims against the association;
(4) satisfy, in whole or in part, the obligations of
the association incurred in connection with Subchapter
[Subchapters B-1,] J, [and M,] including reinsurance [, public
securities, and financial instruments]; or
(5) make remittance under the laws of this state to be
used by this state to:
(A) pay claims made on policies written by the
association;
(B) purchase reinsurance covering losses under
those policies; or
(C) prepare for or mitigate the effects of
catastrophic natural events.
(c) On dissolution of the association, all assets of the
association [, other than assets pledged for the repayment of
public securities issued under this chapter,] revert to this state.
SECTION 4. Subchapter B, Chapter 2210, Insurance Code, is
amended by adding Section 2210.0561 to read as follows:
Sec. 2210.0561. PAYMENT OF EXCESS LOSSES; PAYMENT FROM
RESERVES AND TRUST FUND. (a) If, in a catastrophe year, an
occurrence or series of occurrences in a catastrophe area results
in insured losses and operating expenses of the association in
excess of premium and other revenue of the association, the excess
losses and operating expenses shall be paid as provided by this
section.
(b) The association shall pay losses in excess of premium
and other revenue of the association from available reserves of the
association and available amounts in the catastrophe reserve trust
fund.
(c) Losses not paid under Subsection (b) shall be paid as
follows:
(1) $2 billion shall be assessed against the members
of the association as provided by Subsection (d); and
(2) losses in excess of those paid under Subdivision
(1) shall be paid by reinsurance purchased as provided in Section
2210.453.
(d) The proportion of the losses allocable to each insurer
under Subsection (c)(1) shall be determined in the manner used to
determine each insurer's participation in the association for the
year under Section 2210.052.
(e) An insurer may credit an amount paid in accordance with
Subsection (c)(1) in a calendar year against the insurer's premium
tax under Chapter 221. The tax credit authorized under this
subsection shall be allowed at a rate not to exceed 20 percent per
year for five or more successive years following the year of payment
of the claims. The balance of payments made by the insurer and not
claimed as a premium tax credit may be reflected in the books and
records of the insurer as an admitted asset of the insurer for all
purposes, including exhibition in an annual statement under Section
862.001.
SECTION 5. Subchapter B, Chapter 2210, Insurance Code, is
amended by adding Section 2210.062 to read as follows:
Sec. 2210.062. ADMINISTRATION BY MANAGING GENERAL AGENT.
Notwithstanding any other law, the managing general agent
contracted to administer the Texas Property Insurance Program under
Chapter 2214 shall manage the association and administer the plan
of operation beginning January 1, 2014.
SECTION 6. Section 2210.152(a), Insurance Code, is amended
to read as follows:
(a) The plan of operation must:
(1) provide for the efficient, economical, fair, and
nondiscriminatory administration of the association; and
(2) include:
(A) a plan for the equitable assessment of the
members of the association to defray losses and expenses;
(B) underwriting standards;
(C) procedures for accepting and ceding
reinsurance;
(D) [procedures for obtaining and repaying
amounts under any financial instruments authorized under this
chapter;
[(E)] procedures for determining the amount of
insurance to be provided to specific risks;
(E) [(F)] time limits and procedures for
processing applications for insurance; and
(F) [(G)] other provisions as considered
necessary by the department to implement the purposes of this
chapter.
SECTION 7. Subchapter E, Chapter 2210, Insurance Code, is
amended by adding Sections 2210.2022, 2210.211, 2210.212, and
2210.213 to read as follows:
Sec. 2210.2022. INFORMATION REQUIRED FOR CERTAIN
APPLICATIONS. An application for an association policy, including
an application to renew a policy, submitted after the later of the
date the Texas Property Insurance Program clearinghouse
established under Chapter 2214 becomes operational or January 1,
2014, must include information on the applicant's policy, if any,
that covers perils other than windstorm and hail, if any,
including:
(1) the total premium for that policy, including a
policy number for coverage issued by the FAIR Plan Association
under Chapter 2211, if applicable, and:
(A) the amount of insurance on the dwelling; or
(B) if the policy is a tenant's or condominium
owner's policy, the insured amount for the contents coverage;
(2) for liability coverage, liability limits for:
(A) personal liability coverage;
(B) medical payments coverage; and
(C) additional living expenses coverage when the
structure is uninhabitable due to damage resulting from an incurred
insured loss; and
(3) the deductibles applicable for each policy.
Sec. 2210.211. MANDATORY MIGRATION OF CERTAIN INSUREDS TO
TEXAS PROPERTY INSURANCE PROGRAM. (a) On the later of the date the
Texas Property Insurance Program clearinghouse established under
Chapter 2214 becomes operational or January 1, 2014, the managing
general agent contracted to administer the clearinghouse under that
chapter shall make a database of association policies available to
all insurers through the clearinghouse for the purpose of
soliciting offers of coverage.
(b) The database must include information on each insured's
association policy and any policy that covers other perils, if
known, including:
(1) the insured's total premium amount on the
association policy; and
(2) for coverage for perils other than windstorm and
hail:
(A) the total premium for that policy, including
a policy issued by the FAIR Plan Association under Chapter 2211, if
applicable, and:
(i) the amount of insurance on the
dwelling; or
(ii) if the policy is a tenant's or
condominium owner's policy, the insured amount for the contents
coverage;
(B) liability limits for liability coverage for:
(i) personal liability coverage;
(ii) medical payments coverage; and
(iii) additional living expenses coverage
when the structure is uninhabitable due to damage resulting from an
incurred insured loss; and
(C) the deductibles applicable for each policy.
(c) If the insured does not have coverage for perils other
than windstorm and hail to provide the information required under
Subsection (b), the managing general agent shall use the applicable
rate for FAIR Plan Association coverage.
(d) The association shall assign the association's rights
and duties under the association policy to an insurer that makes an
offer of coverage through the clearinghouse that provides:
(1) the same or greater limits for coverages listed in
Subsection (b) than are provided by those coverages;
(2) deductibles for coverages that are listed in
Subsection (b) that are not greater than the deductibles on those
coverages; and
(3) a premium per dollar of coverage that is not
greater than the insured's current combined premium per dollar of
coverage for coverages listed in Subsection (b).
(e) The rate calculation method described by Section
2214.402 shall be used to calculate premium per dollar of coverage
in this section.
Sec. 2210.212. RESIDENTIAL INSURANCE PROHIBITED.
Notwithstanding any other law, the association may not:
(1) on or after April 1, 2015, issue any form of
coverage on a residential structure or corporeal movable property
contained in or about a dwelling that the association has not
continuously insured for the 12-month period immediately preceding
the date of application; and
(2) on or after October 1, 2015, issue any form of
coverage on a residential structure or corporeal movable property
contained in or about a dwelling.
Sec. 2210.213. RESIDENTIAL INSURANCE RENEWAL. (a)
Notwithstanding any other law, after April 1, 2015, the association
may not renew any form of coverage on a residential structure or
corporeal movable property in or about a dwelling unless an
application is first made through the Texas Property Insurance
Program clearinghouse established under Chapter 2214.
(b) The information and other materials required under
Section 2214.351 must be submitted to the managing general agent,
as provided by that section, at least 30 days but not more than 45
days before the expiration of the association policy and must
comply with all requirements for an application under that section,
except that the applicant shall submit the premium required for
renewal of association coverage in lieu of the premium required by
that section.
(c) An applicant's agent must submit each offer of coverage
received from the clearinghouse to the applicant.
(d) The application must include information on the
applicant's association policy and any policy that covers other
perils, including:
(1) the applicant's association policy number and
total premium amount on that policy; and
(2) for coverage for perils other than windstorm and
hail:
(A) the total premium for that policy, including
a policy number for coverage issued by the FAIR Plan Association
under Chapter 2211, if applicable, and:
(i) the amount of insurance on the
dwelling; or
(ii) if the policy is a tenant's or
condominium owner's policy, the insured amount for the contents
coverage;
(B) liability limits for liability coverage for:
(i) personal liability coverage;
(ii) medical payments coverage; and
(iii) additional living expenses coverage
when the structure is uninhabitable due to damage resulting from an
incurred insured loss; and
(C) the deductibles applicable for each policy.
(e) If the applicant does not have coverage for perils other
than windstorm and hail to provide the information required under
Subsection (d), the managing general agent shall use the applicable
rate for FAIR Plan Association coverage that would have applied
except for Section 2211.1515.
(f) Notwithstanding Section 2214.352, assigned coverage is
not bound on the submission of an application under this section.
(g) The applicant may not renew association coverage if the
applicant receives an offer for Texas Property Insurance Program
coverage that provides:
(1) the same or greater limits for coverages listed in
Subsection (d) than are provided by those coverages;
(2) deductibles for coverages that are listed in
Subsection (d) that are not greater than the deductibles on those
coverages; and
(3) a premium per dollar of coverage that is not
greater than 110 percent of the applicant's current combined
premium per dollar of coverage for coverages listed in Subsection
(d).
(h) The rate calculation method described by Section
2214.402 shall be used to calculate premium per dollar of coverage
in this section.
(i) If the applicant accepts an offer of coverage placed
through the Texas Property Insurance Program clearinghouse under
this section, the applicant's agent has exclusive use of
expirations on the business as provided by Section 2214.551.
SECTION 8. Section 2210.355(b), Insurance Code, is amended
to read as follows:
(b) In adopting rates under this chapter, the following must
be considered:
(1) the past and prospective loss experience within
and outside this state of hazards for which insurance is made
available through the plan of operation, if any;
(2) expenses of operation, including acquisition
costs;
(3) a reasonable margin for profit and contingencies;
and
(4) [payment of public security obligations for Class
1 public securities issued under this chapter, including the
additional amount of any debt service coverage determined by the
association to be required for the issuance of marketable public
securities; and
[(5)] all other relevant factors, within and outside
this state.
SECTION 9. Section 2210.363(a), Insurance Code, is amended
to read as follows:
(a) The association 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 10. Subchapter H, Chapter 2210, Insurance Code, is
amended by adding Section 2210.364 to read as follows:
Sec. 2210.364. RATES FOR CERTAIN POLICIES. Notwithstanding
any other provision of this subchapter, on or after the later of the
date the Texas Property Insurance Program clearinghouse
established under Chapter 2214 becomes operational or January 1,
2014, any new coverage issued by the association on a residential
structure and corporeal movable property located in or about a
dwelling must use rates that, as closely as practicable, reflect
the market rate for each rating class or territory. The market rate
must be calculated in accordance with the rate calculation method
required by Section 2214.402.
SECTION 11. Section 2210.452(c), Insurance Code, is amended
to read as follows:
(c) At the end of each calendar year or policy year, the
association shall use the net gain from operations of the
association, including all premium and other revenue of the
association in excess of incurred losses and [,] operating
expenses, [public security obligations, and public security
administrative expenses,] to make payments to the trust fund, to
procure reinsurance, or to make payments to the trust fund and to
procure reinsurance.
SECTION 12. Subchapter J, Chapter 2210, Insurance Code, is
amended by adding Section 2210.4521 to read as follows:
Sec. 2210.4521. TRUST FUND ASSESSMENT. (a) In addition to
other funding sources, the trust fund shall be funded by a surcharge
assessed on all policyholders of policies that cover insured
property that is located in this state, including automobiles. The
premium surcharge shall be assessed on each Texas windstorm and
hail insurance policy and each property and casualty insurance
policy, including an automobile insurance policy, issued or renewed
on or after January 1, 2014.
(b) The premium surcharge under Subsection (a) applies to:
(1) all policies written under the following lines of
insurance:
(A) fire and allied lines;
(B) farm and ranch owners;
(C) residential property insurance;
(D) private passenger automobile liability and
physical damage insurance; and
(E) commercial automobile liability and physical
damage insurance; and
(2) the property insurance portion of a commercial
multiple peril insurance policy.
(c) A premium surcharge under this section is a separate
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.
(d) The amount of the surcharge for property and automobiles
located in the catastrophe area shall be five percent.
(e) The amount of the surcharge for property and automobiles
not located in the catastrophe area shall be one percent.
(f) The surcharge shall be collected on all policies issued
or renewed on or after January 1, 2014, through September 30, 2016,
except the commissioner may order that surcharges cease prior to
September 30, 2016, if the commissioner determines that the
association has sufficient funds in the catastrophe reserve trust
fund.
(g) Insurers, including the association, the Texas FAIR
Plan Association, and insurers issuing policies for the Texas
Automobile Insurance Plan Association, shall collect the surcharge
under this section.
SECTION 13. Section 2210.453, Insurance Code, is amended to
read as follows:
Sec. 2210.453. REINSURANCE. (a) Except as provided by
Subsection (b), the association shall annually purchase
reinsurance in the amount of $2 billion.
(b) The amount of reinsurance purchased under Subsection
(a) may not raise the funding sources available to the association
under Sections 2210.0561(b) and (c)(1) to an amount greater than $5
billion.
(c) The association shall assess member insurers the cost of
reinsurance purchased under this section. The proportion of the
reinsurance cost 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. [The association may:
[(1) make payments into the trust fund; and
[(2) purchase reinsurance.
[(b) The association may purchase reinsurance that operates
in addition to or in concert with the trust fund, public securities,
financial instruments, and assessments authorized by this chapter.
[(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. The
report required by this subsection must:
[(1) document and denominate the association's
resources available to pay claims, including cash or other highly
liquid assets, assessments that the association is projected to
impose, pre-event and post-event bonding capacity, and
private-sector recognized risk-transfer mechanisms, including
catastrophe bonds and reinsurance;
[(2) include an independent, third-party appraisal of
the likelihood of an assessment, the maximum potential size of the
assessment, and an estimate of the probability that the assessment
would not be adequate to meet the association's needs; and
[(3) include an analysis of financing alternatives to
assessments that includes the costs of borrowing and the
consequences that additional purchase of reinsurance, catastrophe
bonds, or other private-sector recognized risk-transfer
instruments would have in reducing the size or potential of
assessments.
[(d) A person who prepares a report required by Subsection
(c) may not contract to provide any other service to the
association, except for the preparation of similar reports, before
the third anniversary of the date the last report prepared by the
person under that subsection is submitted.
[(e) The report submitted under this section is for
informational purposes only and does not bind the association to a
particular course of action.]
SECTION 14. Subchapter K, Chapter 2210, Insurance Code, is
amended by adding Section 2210.507 to read as follows:
Sec. 2210.507. LIABILITY LIMITS AND DEDUCTIBLES ON CERTAIN
POLICIES. (a) Notwithstanding any other provision of this
subchapter, on or after the later of the date the Texas Property
Insurance Program clearinghouse established under Chapter 2214
becomes operational or January 1, 2014, the maximum liability limit
for coverage issued on a residential structure and the corporeal
movable property located in or about a dwelling may not exceed
$500,000.
(b) An association policy described by Subsection (a) must
have a standard deductible of five percent of the dwelling coverage
amount for losses due to a covered peril.
SECTION 15. Subchapter L-1, Chapter 2210, Insurance Code,
is amended by adding Section 2210.5725 to read as follows:
Sec. 2210.5725. ASSOCIATION CLAIMS PROCESSING. (a) An
insurer that has primary coverage on property for loss by fire must
adjust all claims made on or after June 1, 2013, on an association
policy covering the same property if the insurer excludes coverage
for the perils of windstorm and hail on more than 10 percent of the
insurance policies the insurer writes in the catastrophe area.
(b) An insurer not subject to Subsection (a) may adjust
claims made after June 1, 2013, on an association policy covering
the property that the insurer covers for loss by fire.
(c) An insurer acting under this section is an agent of the
association for purposes of Sections 2210.014 and 2210.572 and
shall process claims as prescribed by this chapter and the plan of
operation.
(d) An insurer acting under this section is not liable for
any amount payable under the terms of the association policy.
SECTION 16. Subchapter B, Chapter 2211, Insurance Code, is
amended by adding Sections 2211.0522 and 2211.0555 to read as
follows:
Sec. 2211.0522. ADMINISTRATION BY MANAGING GENERAL AGENT.
Notwithstanding Section 2211.052 or any other law, the managing
general agent contracted to administer the Texas Property Insurance
Program under Chapter 2214 shall manage the association and
administer the plan of operation beginning January 1, 2014.
Sec. 2211.0555. ASSOCIATION CLAIMS PROCESSING. (a) The
managing general agent contracted to operate the Texas Property
Insurance Program under Chapter 2214 shall adjust claims made on or
after January 1, 2014, on an association policy.
(b) The managing general agent is not liable for any amount
payable under the terms of an association policy.
SECTION 17. Subchapter D, Chapter 2211, Insurance Code, is
amended by adding Sections 2211.1514, 2211.1515, and 2211.1516 to
read as follows:
Sec. 2211.1514. MANDATORY MIGRATION OF CERTAIN
POLICYHOLDERS TO TEXAS PROPERTY INSURANCE PROGRAM. (a) On the
later of the date the Texas Property Insurance Program
clearinghouse established under Chapter 2214 becomes operational
or January 1, 2014, the managing general agent contracted to
administer the clearinghouse under that chapter shall make a
database of association policies available to all insurers through
the clearinghouse for the purpose of soliciting offers of coverage.
(b) The database must include information on each insured's
association policy and any policy that covers other perils, if
known, including:
(1) the insured's total premium amount on the
association policy;
(2) the total premium for a policy that covers losses
due to windstorm and hail, if any, including a policy issued by the
Texas Windstorm Insurance Association under Chapter 2210, if
applicable, and:
(A) the amount of insurance on the dwelling; or
(B) if the policy is a tenant's or condominium
owner's policy, the insured amount for the contents coverage;
(3) for any policy providing applicable liability
coverage, liability limits for:
(A) personal liability coverage;
(B) medical payments coverage; and
(C) additional living expenses coverage when the
structure is uninhabitable due to damage resulting from an incurred
insured loss; and
(4) the deductibles applicable for each policy.
(c) The association shall assign the association's rights
and duties under the association policy to an insurer that makes an
offer of coverage through the clearinghouse that provides:
(1) the same or greater limits for coverages listed in
Subsection (b) than are provided by those coverages;
(2) deductibles for coverages that are listed in
Subsection (b) that are not greater than the deductibles on those
coverages; and
(3) a premium per dollar of coverage that is not
greater than the insured's current combined premium per dollar of
coverage for coverages listed in Subsection (b).
(d) The rate calculation method described by Section
2214.402 shall be used to calculate premium per dollar of coverage
in this section.
Sec. 2211.1515. RESIDENTIAL PROPERTY INSURANCE PROHIBITED.
Notwithstanding any other law, the association may not:
(1) on or after April 15, 2015, issue any form of
coverage on residential real or tangible personal property that the
association has not continuously insured for the 12-month period
immediately preceding the date of application; and
(2) on or after October 1, 2015, issue any form of
coverage on residential real or tangible personal property.
Sec. 2211.1516. RESIDENTIAL PROPERTY INSURANCE RENEWAL.
(a) Notwithstanding any other law, after April 15, 2015, the
association may not renew any form of coverage on residential real
or tangible personal property unless an application is first made
through the Texas Property Insurance Program clearinghouse
established under Chapter 2214.
(b) The information required under Section 2214.351 must be
submitted to the managing general agent, as provided by that
section, at least 30 days but not more than 45 days before the
expiration of the association policy, and must comply with all
requirements for an application under that section, except that the
applicant may submit the premium required for renewal of
association coverage in lieu of the premium required under that
section.
(c) An applicant's agent must submit each offer of coverage
received from the clearinghouse to the applicant.
(d) The application must include information on the
applicant's association policy and any policy that covers other
perils, including:
(1) the applicant's association policy number and
total premium amount on that policy;
(2) for coverage for windstorm and hail, if not
covered by the association policy, the total premium for that
policy, including a policy number for coverage issued by the Texas
Windstorm Insurance Association under Chapter 2210, if any, and:
(A) the amount of insurance on the dwelling; or
(B) if the policy is a tenant's or condominium
owner's policy, the insured amount for the contents coverage;
(3) for liability coverage, liability limits for:
(A) personal liability coverage;
(B) medical payments coverage; and
(C) additional living expenses coverage when the
structure is uninhabitable due to damage resulting from an incurred
insured loss; and
(4) the deductibles applicable for each policy.
(e) If the applicant does not have windstorm and hail
coverage to provide the information required under Subsection (d),
the managing general agent shall use the applicable rate for Texas
Windstorm Insurance Association coverage that would have applied
except for Section 2210.364.
(f) Notwithstanding the requirements of Section 2214.352,
assigned coverage is not bound upon the submission of an
application under this section.
(g) The applicant may not renew association coverage if the
applicant receives an offer for coverage that provides:
(1) the same or greater limits for coverages listed in
Subsection (d) than are provided by those coverages;
(2) deductibles for coverages that are listed in
Subsection (d) that are greater than the deductibles on those
coverages; and
(3) a premium per dollar of coverage that is not
greater than 110 percent of the applicant's current combined
premium per dollar of coverage for coverages listed in Subsection
(d).
(h) The method described by Section 2214.402 shall be used
to calculate premium per dollar of coverage in this section.
(i) If the applicant accepts an offer of coverage placed
through the Texas Property Insurance Program clearinghouse under
this section, the applicant's agent shall have exclusive use of
expirations on the business as provided by Section 2214.551.
SECTION 18. Subtitle G, Title 10, Insurance Code, is
amended by adding Chapter 2214 to read as follows:
CHAPTER 2214. TEXAS PROPERTY INSURANCE PROGRAM
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 2214.001. DEFINITIONS. In this chapter:
(1) "Affiliated group of insurers" means two or more
insurers that are subject to common ownership or that operate in
this state under common management or control.
(2) "Applicant" means an applicant for a program
policy and includes a policyholder renewing coverage.
(3) "Clearinghouse" means the electronic property
insurance clearinghouse established under Subchapter C.
(4) "Insurer" means an authorized insurer writing
residential property insurance in this state, including:
(A) a Lloyd's plan;
(B) a reciprocal or interinsurance exchange;
(C) a farm mutual insurance company operating
under Chapter 911;
(D) a county mutual insurance company, including
a nonaffiliated county mutual fire insurance company described by
Section 912.310 that is writing exclusively industrial fire
insurance policies as described by Section 912.310(a)(2); and
(E) a mutual insurance company or a statewide
mutual assessment company engaged in business under Chapter 12 or
13, Title 78, Revised Statutes, respectively, before those
chapters' repeal by Section 18, Chapter 40, Acts of the 41st
Legislature, 1st Called Session, 1929, as amended by Section 1,
Chapter 60, General Laws, Acts of the 41st Legislature, 2nd Called
Session, 1929, that retains the rights and privileges under the
repealed law to the extent provided by those sections.
(5) "Managing general agent" means the managing
general agent licensed under Chapter 4053 and contractually
retained to administer the plan of operation.
(6) "Program" means the Texas Property Insurance
Program established under this chapter.
(7) "Program policy" means a residential insurance
policy issued using a form promulgated by the commissioner under
Subchapter M.
(8) "Residential property insurance" means insurance
coverage against loss to real or tangible personal property at a
fixed location that is provided through a homeowners insurance
policy, including a tenants insurance policy, a condominium owners
insurance policy, or a residential dwelling fire and allied lines
insurance policy.
Sec. 2214.002. STATEWIDE APPLICATION. The program applies
throughout the state and is not limited to any particular
geographic region.
Sec. 2214.003. COMMISSIONER IMPLEMENTATION AUTHORITY. (a)
The commissioner may issue any order that the commissioner
considers necessary to implement this chapter.
(b) The commissioner may adopt rules in the manner
prescribed by Subchapter A, Chapter 36, as reasonable and necessary
to implement this chapter.
Sec. 2214.004. APPEALS TO COMMISSIONER AND JUDICIAL REVIEW.
(a) An applicant or affected insurer may appeal an action of the
managing general agent to the managing general agent. The managing
general agent's decision may be appealed to the commissioner not
later than the 30th day after the date of the managing general
agent's decision.
(b) The commissioner may refer an appeal under this section
to the State Office of Administrative Hearings.
(c) An order or decision issued by the commissioner under
this chapter is subject to judicial review in accordance with
Subchapter D, Chapter 36.
Sec. 2214.005. DATA COLLECTION. The commissioner may
require each insurer to submit information necessary to implement
this chapter, including information necessary to establish the
assignment algorithm described by Section 2214.052.
Sec. 2214.006. PREMIUM AND OTHER CHARGES EXCLUSIVE. An
agent or insurer may not charge an applicant or insured any fee or
other amount not authorized by this chapter.
SUBCHAPTER B. INSURER PARTICIPATION
Sec. 2214.051. PARTICIPATION REQUIREMENT. (a) Except as
otherwise provided by this section, on or after April 1, 2015, each
insurer, as a condition of the insurer's authority to engage in the
business of residential property insurance in this state, shall
participate in the program as provided by this chapter, including
accepting program policy assignments through the clearinghouse in
accordance with this chapter.
(b) An insurer may not be assigned an insurance policy
through the clearinghouse if:
(1) the insurer has a surplus of less than $10 million;
or
(2) the insurer or, if applicable, the affiliated
group of insurers to which the insurer belongs, has statewide
residential property insurance premium of less than $25 million and
the insurer is independently operating as:
(A) a farm mutual insurance company operating
under Chapter 911;
(B) a nonaffiliated county mutual fire insurance
company described by Section 912.310 that is writing exclusively
industrial fire insurance policies as described by Section
912.310(a)(2); or
(C) a mutual insurance company or a statewide
mutual assessment company engaged in business under Chapter 12 or
13, Title 78, Revised Statutes, respectively, before those
chapters' repeal by Section 18, Chapter 40, Acts of the 41st
Legislature, 1st Called Session, 1929, as amended by Section 1,
Chapter 60, General Laws, Acts of the 41st Legislature, 2nd Called
Session, 1929, that retains the rights and privileges under the
repealed law to the extent provided by those sections.
(c) The Texas Windstorm Insurance Association established
by Chapter 2210 and the FAIR Plan Association established by
Chapter 2211 may not participate in the program for any purpose.
Sec. 2214.052. ASSIGNMENT ALGORITHM. (a) The managing
general agent shall develop an algorithm to determine the
assignment of coverage under Section 2214.352 in accordance with
this section. The assignment algorithm is subject to approval by
the commissioner and must be included in the plan of operation.
(b) The assignment algorithm developed under this section
must provide that each insurer's participation in the program be
based on the insurer's risk-adjusted exposure in this state during
the preceding relevant period as determined under Section 2214.053,
in the proportion that the insurer's risk-adjusted exposure bears
to the aggregate risk-adjusted exposure in this state of all
participating insurers for that period as determined under Section
2214.053.
(c) For purposes of determining risk-adjusted exposure
under Subsection (b), an insurer shall receive a risk-based
exposure credit for residential property insurance voluntarily
written.
(d) For purposes of determining program participation
requirements, an affiliated group of insurers are treated as a
single insurer.
(e) The managing general agent shall review the assignment
algorithm at least once every three years.
Sec. 2214.053. COMPUTATION OF ASSIGNMENT RATIOS. (a) Not
later than January 1 of each year, the managing general agent shall
compute each insurer's risk-adjusted exposure based on information
the department provides to the managing general agent. The
department shall provide the information necessary to comply with
this section not later than September 30 of the preceding year.
(b) If the managing general agent determines, in accordance
with the plan of operation, that a participating insurer can no
longer participate in the program, the managing general agent shall
immediately:
(1) recompute the risk-adjusted exposure assignment
ratios to exclude from the ratios assignment to that insurer; and
(2) redistribute assignments among the remaining
participating insurers.
(c) At least quarterly, the managing general agent shall
recompute the risk-adjusted exposure assignment ratios to adjust
for assignments and other insurer writings.
(d) The managing general agent shall review the formula and
method for determining the risk-adjusted exposure assignment
ratios and assigning policies at least once every three years.
Sec. 2214.054. MANDATORY OFFER OF COVERAGE. (a) An insurer
shall offer a program policy to each person who applies to the
insurer for residential property insurance on or after April 1,
2014, if the person meets the insurer's underwriting guidelines for
a program policy voluntarily written by the insurer.
(b) The insurer's underwriting guidelines for a program
policy voluntarily written by the insurer must not differ
substantially from the insurer's other residential property
insurance underwriting guidelines, unless the differences are
actuarially justified and substantially commensurate with the
contemplated risk as a result of differences in coverage offered
under the program policy.
(c) Each insurer must submit the insurer's program policy
underwriting guidelines for a program policy voluntarily written by
the insurer under Section 38.002.
(d) Subsection (a) does not apply to applications submitted
through the clearinghouse.
Sec. 2214.055. CLAIMS. Each insurer shall adjust and pay
each claim made on a program policy assigned to or voluntarily
written by the insurer.
SUBCHAPTER C. ELECTRONIC PROPERTY INSURANCE CLEARINGHOUSE
Sec. 2214.101. ELECTRONIC PROPERTY INSURANCE
CLEARINGHOUSE. The department shall establish and maintain an
electronic property insurance clearinghouse through which an agent
may submit a residential property insurance application, including
a program policy application, to insurers to solicit offers of
coverage.
Sec. 2214.102. CONTRACT WITH VENDOR. The commissioner may
enter into a contract with a vendor to establish the clearinghouse,
including a contract for:
(1) the purchase of hardware; or
(2) the development of software and technology.
Sec. 2214.103. ASSESSMENT TO ESTABLISH CLEARINGHOUSE. (a)
After notice and opportunity for hearing, the commissioner shall
assess insurers participating in the Texas Windstorm Insurance
Association under Chapter 2210 for the necessary cost to establish
the clearinghouse. Each insurer's proportion of the assessment
shall be based on the insurer's participation level as determined
in Section 2210.052.
(b) The commissioner may make one or more assessments under
this section.
(c) The department shall return to the insurers assessed
under this section any money collected under this section that is
not used to establish the clearinghouse.
Sec. 2214.104. COMMISSIONS, FEES, AND ASSESSMENTS TO
MAINTAIN AND ADMINISTER CLEARINGHOUSE. (a) The managing general
agent may charge an applicant a fee or collect a commission as
necessary to provide for the cost of administering and maintaining
the clearinghouse. The fee and commission rates must be specified
in the managing general agent's contract with the department.
(b) If the amount of the fees and commissions collected by
the managing general agent is not sufficient to meet the minimum
costs of maintaining and administering the clearinghouse, the
commissioner may assess insurers for the amount necessary to
maintain and administer the clearinghouse based on the insurer's
participation level as determined under Section 2214.052.
Sec. 2214.105. HARDWARE AND PROPRIETARY INFORMATION. (a)
Any hardware purchased under this subchapter and any information,
analyses, programs, or data acquired or created by a vendor under a
contract under this subchapter are property of the state.
(b) Information, analyses, programs, or data described by
Subsection (a) are confidential and exempt from public disclosure
under Chapter 552, Government Code.
SUBCHAPTER D. MANAGING GENERAL AGENT
Sec. 2214.151. MANAGING GENERAL AGENT CONTRACT. (a) The
department may contract with a managing general agent to administer
the program plan of operation, including administering and
maintaining the clearinghouse.
(b) The commissioner shall supervise the managing general
agent in the function of the agent's duties and the implementation
of this chapter. The commissioner may require the managing general
agent to:
(1) correspond directly with insurers, agents, and
applicants with regard to the administration of the clearinghouse;
(2) collect and remit premiums for policies processed
through the clearinghouse directly from and to insurers, agents,
and applicants;
(3) collect fees and commissions for administration of
the program directly from insurers, agents, and applicants;
(4) provide for the administration and maintenance of
the clearinghouse;
(5) provide reports concerning risks insured under
this chapter as the commissioner considers necessary; and
(6) perform any other duties required under this
chapter.
(c) Except as provided by Sections 2210.062 and 2211.0555,
the managing general agent may not adjust or process claims or
complaints related to program policies or coverage.
(d) The term of the managing general agent contract may not
exceed five years.
(e) In awarding a contract to a managing general agent under
this section, the commissioner shall, to the extent the
commissioner considers practicable, consider the effect of any
affiliation, common ownership or control, or other potential
conflict of interest between the managing general agent and a
participating insurer.
Sec. 2214.152. COMPENSATION OF MANAGING GENERAL AGENT. The
contract between the commissioner and the managing general agent
must specify the managing general agent's minimum compensation.
The compensation must be based in part on reasonable projections of
the cost to administer and maintain the clearinghouse.
Sec. 2214.153. PROPRIETARY INFORMATION. (a) Any
information, analyses, programs, or data acquired or created by the
managing general agent under a contract under this subchapter are
property of the state.
(b) Information, analyses, programs, or data described by
Subsection (a) are confidential and exempt from public disclosure
under Chapter 552, Government Code.
Sec. 2214.154. OFFICE; RECORDS. (a) The managing general
agent shall maintain an office in Austin, Texas.
(b) Records and other information relating to the operation
of the program must be maintained in the managing general agent's
Austin office.
Sec. 2214.155. AUDIT. The managing general agent is
subject to audit by the commissioner and shall pay the costs
incurred by the commissioner in performing an audit under this
section.
Sec. 2214.156. ANNUAL REPORT TO COMMISSIONER. Not later
than March 1 of each year, the managing general agent shall submit a
report to the commissioner regarding the operation of the program.
The report must be made in accordance with the terms of the managing
general agent's contract with the department.
SUBCHAPTER E. PLAN OF OPERATION
Sec. 2214.201. PLAN OF OPERATION; AMENDMENTS. (a) The
managing general agent shall administer the program under a plan of
operation approved by the commissioner after notice and opportunity
for hearing.
(b) The plan of operation must provide for:
(1) the efficient, economical, fair, and
nondiscriminatory administration of the program; and
(2) automated electronic insurance transactions
between insurers, agents, and the managing general agent, including
the clearinghouse.
(c) The commissioner may amend the plan of operation as
necessary after notice and opportunity for hearing.
SUBCHAPTER F. ELIGIBLE PROPERTY
Sec. 2214.251. ELIGIBILITY REQUIREMENTS. (a) The managing
general agent may not assign or bind program coverage and an insurer
may not issue or renew assigned program coverage for a risk, unless:
(1) the risk is insurable property;
(2) the property is covered by a flood insurance
policy if all or any part of the property is located in Zone V or
another similar zone with an additional hazard associated with
storm waves, as defined by the National Flood Insurance Program,
and if flood insurance under that federal program is available,
except that the flood insurance coverage policy need not exceed the
lesser of the amount of program coverage applied for or the maximum
amount of available National Flood Insurance Program flood
insurance; and
(3) after diligent efforts, the applicant and the
applicant's agent are unable to obtain residential property
insurance through the voluntary market, as evidenced by one
declination from an insurer authorized to engage in the business
of, and writing, residential property insurance in this state.
(b) An insurer's refusal to offer, or an applicant's
inability to obtain, insurance coverage that is substantially
equivalent to insurance coverage available through a program policy
constitutes a declination for purposes of this section.
Sec. 2214.252. CONFIRMATION OF DECLINATION. (a) An
applicant's agent shall document and maintain evidence of the
declination required by Section 2214.251, including the name of the
insurer that provided the declination, for review and audit by the
managing general agent on request.
(b) The agent must submit an electronic certification with
the electronic program application under Section 2214.351
confirming the declination and providing the name of the insurer.
Sec. 2214.253. CONFIRMATION OF FLOOD INSURANCE. (a) For an
applicant that must provide the proof of flood insurance required
under Section 2214.251, the agent submitting the application for
new or renewal program residential property insurance coverage
must:
(1) document and maintain evidence of the required
flood insurance policy for review and audit by the managing general
agent on request;
(2) submit an electronic certification with the
electronic program application under Section 2214.351 that flood
insurance, if required, is in force; and
(3) submit for review and audit the policy or binder
for flood insurance coverage to the managing general agent not
later than the 10th day after the date of notice of a request by the
managing general agent.
(b) The assigned insurer may cancel a program policy after
10 days' written notice to the managing general agent, insured's
agent, and policyholder if the flood insurance coverage required
under Section 2214.251 is not in force, is not renewed, or is
canceled.
Sec. 2214.254. DEFINITION OF INSURABLE PROPERTY. (a)
"Insurable property" means immovable property at a fixed location
in this state, or tangible property located in that immovable
property, that has been inspected under Section 2214.301 and
determined to be in an insurable condition against the perils
covered by the program policy, as determined by the underwriting
guidelines adopted in the plan of operation.
(b) For purposes of this chapter, a residential structure
located within an area designated as a unit under the Coastal
Barrier Resources Act (16 U.S.C. Section 3501) is insurable
property if:
(1) the residential structure is not:
(A) a condominium, apartment, duplex, or other
multifamily residence; or
(B) a hotel or resort facility;
(2) a building permit or plat for the residential
structure was filed with the municipality, the county, or the
United States Army Corps of Engineers before June 11, 2003; and
(3) the residential structure is insured by the Texas
Windstorm Insurance Association as of December 31, 2014.
(c) For purposes of this chapter, a residential structure
that is built wholly or partly over water, including the corporeal
movable property contained in the structure, is insurable property
if it is insured by the Texas Windstorm Insurance Association as of
December 31, 2014.
(d) For purposes of this chapter, a structure is not
insurable property if the commissioner of the General Land Office
notifies the managing general agent of a determination that the
structure is located on the public beach under procedures
established under Section 61.011, Natural Resources Code, and that
the structure:
(1) constitutes an imminent hazard to safety, health,
or public welfare; or
(2) substantially interferes with the free and
unrestricted right of the public to enter or leave the public beach
or traverse any part of the public beach.
Sec. 2214.255. UNDERWRITING GUIDELINES. (a) The managing
general agent shall develop program policy underwriting guidelines
for coverage assigned through the clearinghouse. The guidelines
must:
(1) be consistent with this chapter; and
(2) consider prior conduct of the applicant, including
fraud or arson.
(b) The program policy underwriting guidelines become
effective on approval of the commissioner and are included in the
plan of operation.
SUBCHAPTER G. INSPECTIONS
Sec. 2214.301. PROPERTY INSPECTIONS FOR INSURABILITY. (a)
An agent submitting an application for program insurance through
the clearinghouse must provide an inspection report to the managing
general agent certifying that the structure meets the program
policy underwriting guidelines and is insurable property.
(b) The inspection must:
(1) be completed by a person determined by the
managing general agent to be qualified because of training or
experience to perform building inspections;
(2) determine that the structure meets the minimum
requirements for coverage set forth in the plan of operation; and
(3) take place not earlier than the 90th day before the
effective date of the policy.
(c) The managing general agent, or the agent's designee, may
inspect any property with assigned program coverage for compliance
with the program policy underwriting guidelines.
SUBCHAPTER H. ASSIGNMENT PROCESS
Sec. 2214.351. APPLICATION FOR NEW AND RENEWAL COVERAGE.
(a) An application for new and renewal program coverage through the
clearinghouse must be submitted by a licensed property and casualty
agent who:
(1) is appointed by at least one insurer; and
(2) has consented to the managing general agent's
agent agreement.
(b) The request for new or renewal coverage must include:
(1) a completed electronic application;
(2) the required payment;
(3) the inspection report described by Section
2214.301;
(4) a report of a building code inspection, if
required by the protocol described by Section 2214.502;
(5) an electronic certification of a declination of
coverage providing the name of the declining insurer; and
(6) an electronic certification of flood insurance, if
required under Section 2214.251.
(c) The request for renewal of assigned program coverage
must be submitted not later than the 30th day, but not before the
45th day, before the date the existing policy expires.
Sec. 2214.352. BINDER AND ISSUANCE OF NEW POLICY. (a) On
receipt of an application for a new assigned program policy and the
information and payment required by Section 2214.351, the managing
general agent immediately shall bind eligible coverage with an
assigned insurer selected using the assignment algorithm required
to be included in the plan of operation by Section 2214.052.
(b) A binder issued under Subsection (a) provides the
coverage of a program policy except that the binder does not provide
coverage for a wildfire or weather event that occurs within 72 hours
of the time the binder is issued.
(c) The managing general agent shall make the request for
coverage available to all insurers through the clearinghouse until
the 20th day after the date the binder is issued. During the 20-day
period, an insurer may offer the applicant coverage through the
managing general agent and the applicant's agent.
(d) The agent must present each offer received from the
managing general agent to the applicant. The applicant may accept
any offer of coverage at any time.
(e) On the first business day after the expiration of the
20-day period described by Subsection (c):
(1) if the applicant has not received a qualifying
offer of coverage as defined by Section 2214.355, the binder
converts into a program policy; or
(2) if the applicant receives a qualifying offer of
coverage as defined by Section 2214.355, the binder continues in
effect until the 30th day after the date the binder is issued, at
which time the binder terminates and the applicant becomes
ineligible to apply for coverage through the clearinghouse as
described by Section 2214.354.
(f) If the applicant accepts a qualifying offer of program
coverage or other offer of coverage, the coverage is effective as of
the date the assigned coverage was bound under Subsection (a),
except as provided in Subsection (g).
(g) The assigned carrier is responsible for all claims
incurred during the binder period. If a claim is incurred during the
binder period, the assigned carrier is entitled to premium for the
binder period and the managing general agent shall credit the
assigned carrier with that premium in the assignment algorithm
under Section 2214.052.
Sec. 2214.353. CLEARINGHOUSE RENEWAL COVERAGE. (a) An
insurer assigned a policy under this chapter shall renew the policy
on the first and second anniversary of the date the binder is issued
under Section 2214.352, even if the insurer withdraws from the
business of insurance in the state, unless:
(1) the insured accepts a voluntary offer of coverage;
(2) the structure to be insured is determined to be
ineligible for coverage under Section 2214.251;
(3) the insured cancels the coverage;
(4) the insured does not pay any portion of premium
when due;
(5) the insured submits a fraudulent claim;
(6) there is an increase in the hazard covered by the
policy that is within the control of the insured that would result
in an increase in the premium rate of the policy; or
(7) the insurer becomes insolvent.
(b) At least 45 days before renewal, the assigned insurer
shall notify the managing general agent, the insured's agent, and
the insured of the coverage renewal date.
(c) On receipt of an application for renewal coverage and
the information and payment required by Section 2214.351, the
managing general agent shall make the request for coverage
available to all insurers through the clearinghouse until the 20th
day after the date the request is made available. During the 20-day
period, an insurer may offer the applicant coverage through the
managing general agent and the applicant's agent.
(d) The agent must present each offer received from the
managing general agent to the applicant. The applicant may accept
any offer of coverage at any time.
(e) If on termination of an applicant's assigned program
policy the applicant has not received a qualifying offer of
coverage as defined by Section 2214.355:
(1) the assigned insurer shall renew the assigned
program policy, unless the assigned insurer has twice previously
renewed coverage as required by Subsection (a); or
(2) the managing general agent shall assign the policy
to another insurer in a manner consistent with the requirements of
this subchapter if the assigned insurer has twice previously
renewed coverage as required by Subsection (a).
(f) If on termination of an applicant's assigned program
policy the applicant has received a qualifying offer of coverage as
defined by Section 2214.355, the assigned insurer is not required
to renew the program policy, the managing general agent may not
assign the policy to another insurer, and the applicant becomes
ineligible to apply for coverage through the clearinghouse as
provided by Section 2214.354.
Sec. 2214.354. ACCEPTANCE OF OTHER COVERAGE; REAPPLICATION
TO CLEARINGHOUSE. (a) Except as provided by Sections 2214.352(f)
and (g), if an applicant accepts another offer of coverage, an
assigned program policy is canceled without notice on the date the
other coverage becomes effective.
(b) Except for a renewal application under Section
2214.351, an applicant may not apply to the clearinghouse for
coverage on the same property more than once in a 12-month period
unless the assigned insurer becomes insolvent.
Sec. 2214.355. QUALIFYING OFFER OF COVERAGE. For purposes
of this subchapter, "qualifying offer of coverage" means an offer
of residential property insurance that provides:
(1) the same program policy the applicant requested;
(2) the same coverage limits and optional coverages
that must be offered on an assigned program policy and that have
been requested by the applicant;
(3) the same deductible as the deductible that would
be applicable to the program policy; and
(4) coverage at a rate that is equal to or less than
the rate that would apply to an assigned program policy.
Sec. 2214.356. EARNED PREMIUM. Premium on a binder issued
under this subchapter and the assigned program policy is earned on a
pro rata basis beginning on the date the binder is issued.
Sec. 2214.357. ASSIGNMENT DISTRIBUTION PLAN. (a) An
insurer may contract with a servicing carrier to accept the
insurer's assignments under Sections 2214.352 and 2214.353.
(b) A contract under this section must be approved by the
commissioner in writing before an assignment may be transferred
under the contract. In reviewing the contract for approval or
disapproval, the commissioner shall consider each insurer's:
(1) risk-based exposure, including the number of
assignments that are expected and the number that would be
transferred under the agreement;
(2) surplus;
(3) location and concentration of risk;
(4) claims handling capacity and history; and
(5) compliance with rules adopted under this section.
(c) The contract described by Subsection (a) must determine
which insurer will recognize the assignment as the insurer's
writing for the purpose of calculating program participation.
(d) The commissioner may:
(1) adopt reasonable rules for the conduct of business
under a contract described by this section; and
(2) establish reasonable standards of eligibility for
servicing carriers.
(e) After notice and opportunity for hearing, the
commissioner may prohibit an insurer from acting as a servicing
carrier.
SUBCHAPTER I. RATES
Sec. 2214.401. RATES FOR CERTAIN POLICIES. (a) Each
insurer shall file with the commissioner all rates, rating factors,
and supplementary rating information used to determine the premium
charged for the program policies the insurer is required to offer
under Section 2214.054.
(b) Each insurer shall file with the commissioner the
average or neutral rating factor for each rating class used in a
rate filing under this section.
(c) Rates and rate filings under this section are governed
by Chapter 2251.
Sec. 2214.402. RATE CALCULATION METHOD FILING. (a) The
managing general agent shall submit to the commissioner a rate
calculation method filing that specifies:
(1) the complete list of all rating classes the
managing general agent proposes to use to determine the premium for
assigned program policies;
(2) the territories that the managing general agent
proposes to use to determine the premium for assigned program
policies; and
(3) the precise method the managing general agent
proposes to use to calculate the market rate for each rating class
and rating territory.
(b) The managing general agent may not use a method filed
under Subsection (a) without prior approval by the commissioner as
provided by this subchapter.
(c) The rating classes, territories, and method used to
determine the market rate must be designed in a manner to ensure
that the assigned program rating manual is as compatible as
possible with the voluntary market's rating method.
(d) Except as provided by Section 2214.501, the assigned
program rates shall use rating classes used by more than 50 percent
of the residential property insurance market in this state.
(e) Notwithstanding Subsections (c) and (d), assigned
program rates may not:
(1) provide a renewal discount or a multiline
discount; or
(2) result in a lower premium based on:
(A) how long the insured has been assigned
through the clearinghouse; or
(B) whether the insured has had another policy
assigned through the clearinghouse.
(f) Notwithstanding Subsection (c), rating territories used
for assigned program rates must:
(1) consist of a single, undivided zip code or a
collection of undivided zip codes; and
(2) be based on sound actuarial principles.
(g) Market rates developed by the managing general agent
must be based on rates filed under Section 2214.401 by the insurers
that constitute at least 80 percent of the market in each rating
territory, but not more than the 10 largest insurers in each rating
territory. The rate calculation method must use an average that
excludes the highest and lowest rate for each combination of rating
class and territory, unless there are fewer than four insurers for a
given combination of rating class and territory.
(h) A rate calculation method approved under this section
must use actuarial assumptions that, for each rating class and
territory, produce reasonable estimates of the average rate charged
by voluntary insurers.
(i) Each year, the managing general agent shall review the
rates, rating classes, territories, and rating method used in the
voluntary residential property insurance market to determine
whether a change in the rate calculation method established under
this section is reasonable and appropriate.
(j) The managing general agent shall submit a rate
calculation method filing under this section at least once every
four years.
Sec. 2214.403. NOTICE OF RATE CALCULATION METHOD FILING.
Not later than the 10th day after the date the managing general
agent submits a rate calculation method filing under this
subchapter, the department shall post on its Internet website a
notice that the managing general agent has submitted a rate
calculation method filing for the program.
Sec. 2214.404. HEARING ON RATE CALCULATION METHOD FILING.
(a) The commissioner may not approve or disapprove a managing
general agent's rate calculation method filing under this
subchapter without notice and opportunity for hearing. The
commissioner shall schedule a hearing on the filing at the request
of the managing general agent or a member of the public.
(b) A hearing under this section is not a contested case
under Chapter 2001, Government Code.
Sec. 2214.405. ACTION OF COMMISSIONER ON RATE CALCULATION
METHOD FILING. Not later than the 60th day after the date a rate
calculation method filing under this subchapter is received, the
commissioner shall approve or disapprove the filing. If the
commissioner disapproves the filing, the commissioner shall
specify:
(1) the reasons for disapproval; and
(2) the changes to the rate calculation method the
managing general agent must make in order for the commissioner to
approve the filing.
Sec. 2214.406. ASSIGNED PROGRAM RATE FILING. (a) Not later
than August 15 of each year, the managing general agent shall file
with the commissioner a manual of rates and rating factors for all
classes of risks and territories for program policies assigned
through the clearinghouse. The filing must contain the data and
calculations used to establish each manual rate and rating factor
used to determine the premium for a program policy assigned through
the clearinghouse.
(b) The rate filing must reflect rates that are 25 percent
greater than the market rate for each class and territory. The
market rate for each class and territory must be calculated using
the rate calculation method approved under Section 2214.405.
(c) The department may review the rate filing only to
determine whether the filing contains a computational error and to
verify that the filing reflects a correct application of the rate
calculation method approved under Section 2214.405.
(d) If, not later than the 30th day after the date of the
filing, the department determines that the filing contains a
computational error or is not a correct application of the rate
calculation method approved under Section 2214.405, the department
shall provide a notice to the managing general agent identifying
the computational error and any necessary correction. Not later
than the 10th day after the date the notice from the department is
received, the managing general agent shall submit a corrected
filing. The corrected filing is subject to the standard of review
described by Subsection (c).
(e) Rates filed under Subsection (a), or a corrected filing
described by Subsection (d), take effect January 1 of the year
following the year in which the filing is made. Rates resulting
from a correct application of the rate calculation method approved
under Section 2214.405 are presumed to be adequate, not excessive,
and not unfairly discriminatory.
(f) The managing general agent may submit an interim rate
filing as reasonably necessary following the occurrence of an
extraordinary event or any significant change in the residential
property insurance market in this state. The commissioner may
direct the managing general agent to submit an interim rate filing,
and the public insurance counsel, or an insurer with a statewide
residential property market share of five percent or more, may
request the managing general agent to submit an interim rate
filing.
(g) An interim rate filing under Subsection (f) may not be
used without commissioner approval. The commissioner shall approve
or disapprove the interim filing after notice and opportunity for
hearing. The commissioner may disapprove an interim filing only if
the commissioner determines that the filing:
(1) is not reasonably necessary due to an
extraordinary event or significant change in the residential
property insurance market in this state; or
(2) contains a computational error or does not reflect
a correct application of the rate calculation method approved under
Section 2214.405.
(h) A rate in effect under this section continues in effect
until a subsequent rate takes effect.
Sec. 2214.407. RATE CHALLENGE. (a) An interested person or
the managing general agent may bring an action in the district court
of Travis County to vacate rates approved under Section 2214.406
and to seek an order directing the managing general agent to
recalculate the rates. The district court may grant relief under
this section only on finding that:
(1) the filed rates contain a computational error; or
(2) the filed rates result from an incorrect
application of the rate calculation method approved under Section
2214.405.
(b) An action under Subsection (a) must be brought not later
than, as applicable, the 30th day after:
(1) the date the 30-day period under Section
2214.406(d) expires;
(2) the date the managing general agent submits
corrected rates under Section 2214.406(d); or
(3) the date the commissioner approves or disapproves
rates under Section 2214.406(g).
SUBCHAPTER J. TRANSITION PERIOD RATES
Sec. 2214.451. DEFINITIONS. In this subchapter:
(1) "Starting transition rate" means the starting
transition rate calculated under Section 2214.454.
(2) "Ending transition rate" means the ending
transition rate calculated under Section 2214.455.
(3) "Transition premium rate" means the transition
premium rate calculated under Section 2214.456.
(4) "Transition premium" means the transition premium
amount calculated under Section 2214.457.
Sec. 2214.452. TRANSITION RATE ELIGIBILITY. (a) An
applicant is eligible for a transition rate on a program policy that
covers a residential property that is occupied as the applicant's
primary residence and is insured through the Texas Windstorm
Insurance Association under Chapter 2210 or the FAIR Plan
Association under Chapter 2211, if:
(1) the applicant's FAIR Plan Association or Texas
Windstorm Insurance Association policy is being nonrenewed
effective January 1, 2014, or later;
(2) the applicant has been continuously insured
through the FAIR Plan Association or the Texas Windstorm Insurance
Association for the 12 months immediately preceding the nonrenewal
date described by Subdivision (1);
(3) the replacement cost value of the applicant's
insured dwelling is less than $250,000, if the applicant seeks a
homeowners policy or a residential dwelling fire and allied lines
policy;
(4) the replacement cost value of the applicant's
insured contents is less than $80,000, if the applicant seeks a
tenant policy or a condominium owners policy; and
(5) the applicant submits the information required
under this section.
(b) To maintain eligibility for transition rates under this
section, an insured must be continuously insured under an assigned
program policy or by a program policy from a voluntary insurer
through the clearinghouse. A program policy that is otherwise
eligible for transition rates under this section does not become
ineligible due to a change in the name on the policy due to
marriage, divorce, or death of the named insured.
Sec. 2214.453. REQUIRED INFORMATION. Not later than the
30th day before the effective date of a program policy assigned
through the clearinghouse, an applicant seeking a transition rate
under this subchapter, or the applicant's agent, must provide to
the managing general agent the following information, as
applicable:
(1) if the FAIR Plan Association provided coverage for
perils other than windstorm and hail, the insured location and the
policy number assigned by the FAIR Plan Association;
(2) if the Texas Windstorm Insurance Association
provided windstorm and hail coverage, and no insurer provided
coverage of other perils, the insured location and the policy
number assigned by the Texas Windstorm Insurance Association; or
(3) if the Texas Windstorm Insurance Association
provided windstorm and hail coverage and the FAIR Plan Association
or an insurer voluntarily provided coverage of other perils:
(A) the insured location and the policy number
assigned by the Texas Windstorm Insurance Association and the FAIR
Plan Association, if applicable;
(B) for homeowners policies and residential
dwelling fire and allied lines policies, the insured amount for the
dwelling on the voluntary policy in effect immediately before the
effective date of the program policy;
(C) for tenant policies and condominium owners
policies, the insured amount for the contents on the voluntary
policy in effect immediately before the effective date of the
program policy; and
(D) for any policy that covered perils other than
windstorm and hail, the total premium on the policy in effect
immediately before the effective date of the program policy.
Sec. 2214.454. STARTING TRANSITION RATE CALCULATION. (a)
The managing general agent shall determine the starting transition
rate for each applicant eligible for transition rates under this
subchapter.
(b) For a homeowners or residential dwelling fire and allied
lines policy with respect to which windstorm and hail coverage was
provided by the Texas Windstorm Insurance Association and coverage
of other perils was voluntarily provided by an insurer or provided
by the FAIR Plan Association, the starting transition rate is
calculated as:
(1) the total annual premium on the policy issued by
the Texas Windstorm Insurance Association divided by the amount of
dwelling coverage provided on that policy; plus
(2) the total annual premium on the policy that
covered other perils divided by the amount of dwelling coverage
provided on that policy.
(c) For a homeowners or residential dwelling fire and allied
lines policy with respect to which windstorm and hail coverage was
provided by the Texas Windstorm Insurance Association and coverage
of other perils was not purchased, the starting transition rate is
calculated as the total annual premium on the policy issued by the
Texas Windstorm Insurance Association divided by the amount of
dwelling coverage provided on that policy, plus 0.004.
(d) For a homeowners or residential dwelling fire and allied
lines policy with respect to which both windstorm and hail coverage
and coverage of other perils were provided by the FAIR Plan
Association, the starting transition rate is calculated as the
total annual premium on the policy issued by the FAIR Plan
Association divided by the amount of dwelling coverage provided on
that policy.
(e) For a tenant and condominium owners policy with respect
to which windstorm and hail coverage was provided by the Texas
Windstorm Insurance Association and coverage of other perils was
voluntarily provided by an insurer or provided by the FAIR Plan
Association, the starting transition rate is calculated as:
(1) the total premium on the policy issued by the Texas
Windstorm Insurance Association divided by the amount of contents
coverage provided on that policy; plus
(2) the total annual premium on the policy that
covered other perils divided by the amount of contents coverage
provided on that policy.
(f) For a tenant and condominium owners policy with respect
to which windstorm and hail coverage was provided by the Texas
Windstorm Insurance Association and coverage of other perils was
not purchased, the starting transition rate is calculated as the
total premium on the policy issued by the Texas Windstorm Insurance
Association divided by the amount of contents coverage provided on
that policy, plus 0.0055.
(g) For a tenant and condominium owners policy with respect
to which both windstorm and hail coverage and coverage of other
perils were provided by the FAIR Plan Association, the starting
transition rate is calculated as the total annual premium on the
policy issued by the FAIR Plan Association divided by the amount of
contents coverage provided on that policy.
Sec. 2214.455. ENDING TRANSITION RATE CALCULATION. (a)
The managing general agent shall determine the ending transition
rate for each applicant eligible for transition rates under this
section.
(b) For policies assigned under this chapter, the ending
transition rate is the applicant's assigned program policy premium,
as determined by the rates filed pursuant to Section 2214.406, on
the policy to become effective, divided by:
(1) the amount of dwelling coverage on a homeowners or
residential dwelling fire and allied lines policy; or
(2) the amount of contents coverage on a tenant and
condominium owners policy.
(c) For a policy voluntarily written through the
clearinghouse, the ending transition rate is the premium charged by
the insurer, as determined by the rates filed by the insurer
pursuant to Chapter 2251, on the policy to become effective,
divided by:
(1) the amount of dwelling coverage on a homeowners or
residential dwelling fire and allied lines policy; or
(2) the amount of contents coverage on a tenant and
condominium owners policy.
Sec. 2214.456. TRANSITION PREMIUM RATE CALCULATION. (a)
The managing general agent shall determine the transition premium
rate for each applicant eligible for transition rates under this
subchapter. The transition premium is determined based on the
applicant's amount of insurance.
(b) During the first year of the transition period, the
transition premium rate is equal to the starting transition rate
calculated under Section 2214.454.
(c) For any policy year during the transition period other
than the first year of the transition period, the transition
premium rate is equal to the greater of:
(1) five percent more than the transition premium rate
that applied during the immediately preceding policy term; or
(2) the transition premium rate used during the
immediately preceding policy term, plus an amount equal to a
fraction with respect to which:
(A) the numerator is the difference between the
ending transition rate and the starting transition rate; and
(B) the denominator is:
(i) 10, for a homeowners policy or
residential dwelling fire and allied lines policy in which the
dwelling has a replacement cost value of $100,000 or less;
(ii) five, for a homeowners policy or
residential dwelling fire and allied lines policy in which the
dwelling has a replacement cost value of greater than $100,000 and
less than or equal to $150,000;
(iii) three, for a homeowners policy or
residential dwelling fire and allied lines policy in which the
dwelling has a replacement cost value of greater than $150,000 and
less than $250,000; or
(iv) three, for a tenant and condominium
owners policy.
(d) The transition premium rate may not exceed the ending
transition rate calculated under Section 2214.455.
Sec. 2214.457. TRANSITION PREMIUM CALCULATION. (a) For
each policy eligible for transition rates under this subchapter,
the premium on the applicant's policy each year is determined as
provided by this section.
(b) For homeowners policies and residential dwelling fire
and allied lines policies, the transition premium is equal to the
transition premium rate multiplied by the dwelling coverage amount
on the program policy.
(c) For tenant and condominium owners policies, the
transition premium is equal to the transition premium rate
multiplied by the contents coverage amount on the program policy.
Sec. 2214.458. RECOVERY OF TRANSITION PERIOD RATES. (a) On
or before February 1 of each year, the managing general agent shall
report to each insurer writing residential property insurance in
this state the total transition premium written by the insurer
during the previous calendar year. On or before February 1 of each
year, the managing general agent shall report to the comptroller
the total transition premium written by each insurer during the
previous calendar year. The total transition premium for each
insurer is equal to the difference between the premium determined
by the assigned program rates filed under Section 2214.406, or the
insurer's rates filed under Chapter 2251, as applicable, and the
transition premium charged under this subchapter.
(b) An insurer may include a provision in its residential
property insurance rates to recoup up to 50 percent of the
transition premiums not collected by the insurer in the previous
calendar year.
(c) A rate provision permitted under this section may vary
by policy type, class, or geographic region.
(d) Residential property insurance rates that include a
rate provision permitted under this section are subject to the rate
standards established by Chapter 2251.
(e) An insurer may claim, as a premium tax credit for a
calendar year, an amount up to 50 percent of the transition premiums
not collected by the insurer in the previous calendar year.
Sec. 2214.459. EXPIRATION OF SUBCHAPTER. This subchapter
expires December 31, 2025.
SUBCHAPTER K. BUILDING CODE SURCHARGE
Sec. 2214.501. BUILDING CODE SURCHARGE. (a) An insurer may
assess an actuarially justified premium surcharge on an assigned
program policy issued if the insured structure does not meet
building code standards set forth in the program plan of operation.
(b) Building code surcharges may vary by location.
(c) The managing general agent shall periodically evaluate
building codes and construction specifications to maintain the
rating system and standards to ensure that the plan of operation
reflects current industry standards.
Sec. 2214.502. BUILDING CODE INSPECTIONS REQUIRED. (a)
The plan of operation shall provide for an inspection protocol for
determining a building code surcharge. The protocol must address
which structures to inspect to determine whether a surcharge is
applicable.
(b) The protocol must rely on documentation and physical
inspection, and may include:
(1) inspections certified by qualified inspectors
appointed by the managing general agent;
(2) prior department certifications; and
(3) physical inspections by a qualified inspector of
exterior components, including roofing, external openings, and
siding.
Sec. 2214.503. INSPECTORS. (a) For purposes of this
chapter, "qualified inspector" includes:
(1) a licensed professional engineer who is on the
roster described by Section 1001.652, Occupations Code, and meets
the requirements specified by the managing general agent to conduct
windstorm inspections;
(2) an inspector who:
(A) is certified by the International Code
Council, the Building Officials and Code Administrators
International, Inc., the International Conference of Building
Officials, or the Southern Building Code Congress International,
Inc.;
(B) has certifications as a building inspector
and coastal construction inspector; and
(C) complies with other requirements specified
by the plan of operation; or
(3) a person determined by the managing general agent
to be qualified because of training or experience to perform
building inspections.
(b) An inspection under this subchapter must be performed by
a qualified inspector. The plan of operation shall identify the
qualifications required to perform particular types of
inspections.
(c) Before performing a building inspection under this
subchapter, a qualified inspector must be approved and appointed or
employed by the managing general agent.
(d) The managing general agent may appoint or employ
qualified inspectors on an at-will basis.
Sec. 2214.504. BUILDING CODE INSPECTION INFORMATION. The
managing general agent shall collect and maintain information
developed from inspections under this subchapter and report the
information to the department. Information developed under this
section is property of the state under Section 2214.153.
SUBCHAPTER L. AGENTS
Sec. 2214.551. EXCLUSIVE USE OF EXPIRATIONS. (a) Except as
otherwise provided by this section, an agent has the exclusive use
of expirations, records, or other written or electronic information
directly related to an application submitted to, or a residential
property insurance policy written through, the clearinghouse on a
voluntary or assignment basis for purposes of soliciting, selling,
or negotiating the renewal or sale of residential property
insurance coverage.
(b) If the agent has, by contract, entered into an agreement
with an insurer or a group of affiliated insurers concerning the use
of expirations, the parties' rights to the use of the expirations
described by Subsection (a) are determined by the terms of the
agent's contract with that insurer or group. An agent, insurer, or
group does not have greater rights than those otherwise provided by
this section.
(c) Expirations, records, or other written or electronic
information provided to the managing general agent or otherwise
created by the managing general agent are the property of the state
under Section 2214.153.
(d) The managing general agent and an insurer may use any
information described by Subsection (a) to review an application or
issue a policy, or for any other purpose necessary for placing
business through the clearinghouse or reporting, or a purpose
otherwise authorized in this chapter.
(e) The rights set forth in Subsections (a) and (b)
terminate:
(1) on the date the second renewal of any residential
property insurance policy written through the clearinghouse by the
insurer terminates, except that if the insurance coverage is again
written through the clearinghouse after the second renewal, the
exclusive use of expirations period continues;
(2) on the date the insured:
(A) notifies the insurance company that the
insured has selected another agent;
(B) submits a renewal application to the
clearinghouse through another agent; or
(C) obtains coverage outside of the
clearinghouse;
(3) on the date the agent is in default for nonpayment
of premiums or other money owed under the agent's agreement with the
managing general agent, unless a legitimate dispute exists as to
the money owed; or
(4) on the date the managing general agent terminates
the agent's agreement, in which case the insurer shall continue
coverage for the insured.
(f) An agent or insurer may not enter into a contract with an
applicant or insured that is inconsistent with this section.
Sec. 2214.552. AGENT COMMISSIONS. (a) Unless an insurer
and an agent enter into an agreement for a different commission rate
on program coverage written through the clearinghouse on a
voluntary basis, an insurer shall pay the commission rate specified
in the plan of operation for that coverage.
(b) An assigned insurer shall pay the commission rate in the
plan of operation for program coverage written through the
clearinghouse on an assignment basis.
(c) The commission rate must be reasonable, adequate, not
unfairly discriminatory, and nonconfiscatory, taking into
consideration:
(1) the amount of work performed by an agent in
submitting a program application;
(2) the prevailing commission structure in the
residential property insurance market;
(3) the uniform electronic filing procedures of the
clearinghouse; and
(4) the exclusive use of expirations provided by
Section 2214.551.
(d) An agent shall earn a commission at the same rate policy
premium is earned in accordance with Section 2214.356.
SUBCHAPTER M. PROGRAM POLICY FORMS
Sec. 2214.601. PROGRAM POLICY FORMS. (a) The commissioner
shall promulgate forms and endorsements necessary to implement this
chapter.
(b) The promulgated forms must include coverage based on the
coverage in nonprogram policies used by more than 50 percent of the
insurance market in this state for the following lines:
(1) homeowners;
(2) condominium owners;
(3) tenants; and
(4) residential dwelling fire and allied lines.
(c) The promulgated forms must provide actual cash value
coverage, with the option to separately purchase:
(1) replacement cost coverage for dwelling and
contents; and
(2) coverage for sudden and accidental discharge,
leakage, or overflow of water or steam from or within a plumbing,
heating, or air conditioning system or household appliance up to a
per-occurrence limit of 10 percent of the dwelling coverage, or 20
percent of the contents coverage for a tenant and condominium
owners policy.
(d) The policy must provide coverage for the following
perils:
(1) fire and lightning;
(2) sudden and accidental damage from smoke;
(3) wind and hail;
(4) explosion;
(5) aircraft and vehicles;
(6) vandalism and malicious mischief;
(7) riot and civil commotion; and
(8) theft.
(e) The policy must exclude coverage for damage resulting
from:
(1) flood, including surface water, waves, storm
surge, tides, tidal water, tidal waves, tsunami, seiche, overflow
of streams or other bodies of water, or spray from any of these, all
whether driven by wind or not;
(2) earth movement;
(3) settling, cracking, bulging, shrinkage, or
expansion of foundations;
(4) governmental action;
(5) war;
(6) nuclear hazard;
(7) power failure;
(8) rain, whether driven by wind or not, unless direct
force of wind or hail makes an opening in a roof or wall and rain
enters through this opening and causes the damage;
(9) electricity;
(10) ordinance or law;
(11) mold, fungi, or other microorganisms; and
(12) asbestos.
(f) The promulgated forms may not exclude coverage for wind
and hail.
(g) With the exception of the residential dwelling fire and
allied lines form, each program policy must also provide:
(1) personal liability coverage;
(2) medical payments coverage; and
(3) additional living expense coverage when the
structure is uninhabitable due to damage resulting from an insured
loss.
Sec. 2214.602. DEDUCTIBLE. (a) Homeowners and residential
dwelling fire and allied lines program policies assigned through
the clearinghouse must have a standard deductible for losses due to
a covered peril of three percent of the dwelling coverage amount.
(b) Condominium owners and tenants program policies
assigned through the clearinghouse must have a standard deductible
for losses due to a covered peril of the greater of three percent of
the contents coverage amount or $1,500.
(c) For an additional premium, the managing general agent
shall make lower deductibles available to applicants as specified
in the plan of operation.
(d) An insurer may offer other deductibles on program
policies issued on a voluntary basis.
Sec. 2214.603. COVERAGE LIMITS. (a) The maximum limits for
assigned program coverage may not exceed:
(1) $1 million on a single insurable structure used as
a dwelling, including an individually owned townhouse unit;
(2) 10 percent of the purchased dwelling coverage
limit for other structures; and
(3) either:
(A) 40 percent of the purchased dwelling coverage
limit for individually owned corporeal movable property located in
the dwelling that is occupied by the owner of that property as the
owner's primary residence and, as an extension of coverage, away
from those premises, as provided under the policy; or
(B) $80,000 for individually owned corporeal
movable property located in an apartment unit, residential
condominium unit, or townhouse unit that is occupied by the owner of
that property and, as an extension of coverage, away from those
premises, as provided under the policy.
(b) In addition to the limits provided by Subsection (a),
the maximum limits for coverage for an assigned program homeowners,
tenants, or condominium owners policy may not exceed:
(1) $300,000 liability insurance;
(2) $2,500 medical payments; and
(3) either:
(A) 20 percent of the purchased dwelling coverage
limit for other additional living expense when the dwelling is
uninhabitable due to damage resulting from an insured loss; or
(B) 20 percent of the purchased contents coverage
limit under a tenants or condominium owners policy for other
additional living expense when the insured location is
uninhabitable due to damage resulting from an insured loss.
(c) Notwithstanding Subsections (a) and (b), the
commissioner shall review the limits set forth in this section not
less than once every five years. After notice and opportunity for
hearing, the commissioner may revise the limits and coverages based
on residential property insurance policies, other than program
policies, used by more than 50 percent of the residential property
insurance market in this state.
SECTION 19. Subchapters B-1 and M, Chapter 2210, Insurance
Code, are repealed.
SECTION 20. (a) The managing general agent contracted to
administer the plan of operation of the Texas Property Insurance
Program under Chapter 2214, Insurance Code, as added by this Act,
shall establish the electronic property insurance clearinghouse
described by Subchapter C of that chapter as soon as practicable
after the effective date of this Act, but not later than January 1,
2014.
(b) An insurer shall file all rates, rating factors, and
supplementary rating information with the commissioner of
insurance as required by Subchapter I, Chapter 2214, Insurance
Code, as added by this Act, as soon as practicable after the
effective date of this Act, but not later than January 1, 2014.
(c) Notwithstanding Section 2214.406(a), Insurance Code, as
added by this Act, the managing general agent contracted to
administer the plan of operation of the Texas Property Insurance
Program under Chapter 2214, Insurance Code, as added by this Act,
shall make the initial rate filing described by that section not
later than January 1, 2014.
(d) The commissioner of insurance shall promulgate forms
and endorsements under Subchapter M, Chapter 2214, Insurance Code,
as added by this Act, as soon as practicable after the effective
date of this Act, but not later than January 1, 2014.
SECTION 21. 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 on the 91st day after the last day of
the legislative session.