Bill Text: TX SB44 | 2011 | 82nd Legislature 1st Special | Introduced
Bill Title: Relating to the cessation of operations of the Texas Windstorm Insurance Association and the provision of windstorm and hail insurance in the seacoast territory of this state.
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2011-06-16 - Filed [SB44 Detail]
Download: Texas-2011-SB44-Introduced.html
By: Fraser, et al. | S.B. No. 44 | |
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relating to the cessation of operations of the Texas Windstorm | ||
Insurance Association and the provision of windstorm and hail | ||
insurance in the seacoast territory of this state. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
ARTICLE 1. CESSATION OF OPERATIONS OF TEXAS WINDSTORM INSURANCE | ||
ASSOCIATION | ||
SECTION 1.01. Chapter 2210, Insurance Code, is amended by | ||
adding Subchapter O to read as follows: | ||
SUBCHAPTER O. CESSATION OF OPERATIONS OF ASSOCIATION | ||
Sec. 2210.701. CESSATION OF OPERATIONS. | ||
(a) Notwithstanding any other law, the commissioner, as soon as | ||
practicable after the effective date of this section, shall by rule | ||
adopt and implement a transition plan for the cessation of all | ||
operations of the association. | ||
(b) The plan adopted under Subsection (a) must: | ||
(1) provide for the repayment of the association's | ||
public security obligations, public security administrative | ||
expenses, and other lawful obligations in the manner provided by | ||
Section 2210.609; | ||
(2) permit the continued operation of the association, | ||
including the continued issuance of policies and collection of | ||
premiums and premium surcharges, for an amount of time and to the | ||
extent reasonably necessary to satisfy the requirement of | ||
Subdivision (1); | ||
(3) be consistent with Section 2210.616; and | ||
(4) on repayment of all obligations of the | ||
association, provide for the transfer of any remaining assets of | ||
the catastrophe reserve trust fund, as defined by Section 2210.003, | ||
to the department for use in the development and implementation of a | ||
mitigation and preparedness plan, in order to: | ||
(A) improve preparedness for windstorm and hail | ||
catastrophes in the seacoast territory; | ||
(B) reduce potential losses in the event of such | ||
a catastrophe; and | ||
(C) provide research into the means to: | ||
(i) reduce those losses; | ||
(ii) educate or inform the public in | ||
determining the appropriateness of particular upgrades to | ||
structures; and | ||
(iii) protect infrastructure from | ||
potential damage from those catastrophes. | ||
ARTICLE 2. WINDSTORM AND HAIL INSURANCE IN SEACOAST TERRITORY | ||
SECTION 2.01. Subtitle G, Title 10, Insurance Code, is | ||
amended by adding Chapter 2214 to read as follows: | ||
CHAPTER 2214. WINDSTORM AND HAIL INSURANCE IN SEACOAST TERRITORY | ||
Sec. 2214.001. DEFINITIONS. In this chapter: | ||
(1) "First tier coastal county" means: | ||
(A) Aransas County; | ||
(B) Brazoria County; | ||
(C) Calhoun County; | ||
(D) Cameron County; | ||
(E) Chambers County; | ||
(F) Galveston County; | ||
(G) Jefferson County; | ||
(H) Kenedy County; | ||
(I) Kleberg County; | ||
(J) Matagorda County; | ||
(K) Nueces County; | ||
(L) Refugio County; | ||
(M) San Patricio County; or | ||
(N) Willacy County. | ||
(2) "Seacoast territory" means the territory of this | ||
state composed of the first tier coastal counties and the second | ||
tier coastal counties. | ||
(3) "Second tier coastal county" means: | ||
(A) Bee County; | ||
(B) Brooks County; | ||
(C) Fort Bend County; | ||
(D) Goliad County; | ||
(E) Hardin County; | ||
(F) Harris County; | ||
(G) Hidalgo County; | ||
(H) Jackson County; | ||
(I) Jim Wells County; | ||
(J) Liberty County; | ||
(K) Live Oak County; | ||
(L) Orange County; | ||
(M) Victoria County; or | ||
(N) Wharton County. | ||
(4) "Windstorm and hail insurance" means deductible | ||
insurance against: | ||
(A) direct loss to insurable property incurred as | ||
a result of windstorm or hail, as those terms are defined and | ||
limited in policies and forms approved by the department; and | ||
(B) indirect losses resulting from the direct | ||
loss. | ||
Sec. 2214.002. APPLICABILITY. (a) Except as provided by | ||
Subsection (b), this chapter applies to each insurer authorized to | ||
engage in the business of property insurance in this state, | ||
including a county mutual insurance company, a Lloyd's plan, and a | ||
reciprocal or interinsurance exchange. | ||
(b) This chapter does not apply to: | ||
(1) a farm mutual insurance company operating under | ||
Chapter 911; | ||
(2) 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 | ||
(3) 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 (S.B. 37), Acts of the 41st | ||
Legislature, 1st Called Session, 1929, as amended by Section 1, | ||
Chapter 60 (S.B. 106), 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. | ||
Sec. 2214.003. REQUIREMENT TO ISSUE WINDSTORM AND HAIL | ||
INSURANCE IN SEACOAST TERRITORY; PHASE-IN PERIOD AUTHORIZED. | ||
(a) As a condition of the insurer's authority to engage in the | ||
business of insurance in this state, each insurer to which this | ||
chapter applies shall issue windstorm and hail insurance policies | ||
to applicants in the seacoast territory of this state, in an amount | ||
such that the insurer's share of the market for windstorm and hail | ||
insurance in the aggregated first tier coastal counties and | ||
aggregated second tier coastal counties, respectively, is in | ||
proportion to the insurer's statewide market share, exclusive of | ||
the seacoast territory. | ||
(b) For purposes of satisfying the requirement of | ||
Subsection (a), each insurer's market share is determined in a | ||
manner provided by Section 2210.052 for determining an insurer's | ||
participation in the Texas Windstorm Insurance Association. | ||
(c) An insurer's duty to comply with this section begins on | ||
the date specified in the transition plan adopted by the | ||
commissioner under Section 2210.701. To the extent consistent with | ||
Sections 2210.701(b)(2) and (3), the transition plan may provide | ||
for a reasonable schedule during which the duty to comply with this | ||
section becomes effective in increments. | ||
Sec. 2214.004. ORDERS AND RULES. (a) The commissioner may | ||
issue any orders 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. 2214.005. RATES. Rates for windstorm and hail | ||
insurance issued as required by this chapter are determined in the | ||
manner provided by Chapter 2251. | ||
ARTICLE 3. EFFECTIVE DATE | ||
SECTION 3.01. This Act takes effect on the 91st day after | ||
the last day of the legislative session. |