81R7832 TJS-F
By: Hunter H.B. No. 1219
A BILL TO BE ENTITLED
AN ACT
relating to the operation of the Texas Windstorm Insurance
Association.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2210.052, Insurance Code, is amended by
amending Subsections (a) and (d) to read as follows:
(a) Each member of the association shall participate in the
assessments [writings, expenses, profits, and losses] of the
association in the proportion that the net direct premiums of that
member during the preceding calendar year bears to the aggregate
net direct premiums by all members of the association, as
determined using the information provided under Subsection (b).
(d) Notwithstanding Subsection (a), a member, in accordance
with the plan of operation, is entitled to receive credit for
similar insurance voluntarily written in an area designated by the
commissioner. The member's participation in the assessments
[writings] of the association shall be reduced in accordance with
the plan of operation.
SECTION 2. Section 2210.060(c), Insurance Code, is amended
to read as follows:
(c) Subsection (a) does not authorize the association to
indemnify a member of the association for participating in the
assessments made by [writings, expenses, profits, and losses of]
the association in the manner provided by this chapter.
SECTION 3. Section 2210.102, Insurance Code, is amended to
read as follows:
Sec. 2210.102. COMPOSITION. (a) The board of directors is
composed of the following 11 [nine] members appointed by the
commissioner:
(1) five members who represent the interests of
insurers [representatives of different insurers who are members of
the association, elected by the members as provided by the plan of
operation];
(2) four [two] public representatives, two of whom
[who are nominated by the office of public insurance counsel and
who, as of the date of the appointment:
[(A)] reside in a catastrophe area[;] and
[(B)] are policyholders of the association as of
the date of the appointment; and
(3) two property and casualty agents, each of whom
must hold a license under Chapter 4051 as a general property and
casualty agent or a personal lines property and casualty agent, and
at least one of whom must:
(A) have demonstrated experience in the
association; and
(B) maintain the agent's principal office, as of
the date of the appointment, in a catastrophe area[; and
[(C) hold a license under Chapter 4051 as a
general property and casualty agent or a personal lines property
and casualty agent].
(b) Each member of the board of directors who represents the
interests of insurers must be a full-time employee of an authorized
insurer that is a member of the association at the time of the
appointment [The persons appointed under Subsections (a)(2) and (3)
must be from different counties].
(c) A member of the board of directors serves at the
pleasure of the commissioner. The commissioner shall appoint a
replacement for a member who leaves or is removed from the board of
directors in the manner provided by Section 2210.102.
SECTION 4. Section 2210.103(a), Insurance Code, is amended
to reads as follows:
(a) Members of the board of directors serve three-year
staggered terms, with the terms of three or four members expiring on
the third Tuesday of March of each year.
SECTION 5. Section 2210.452, Insurance Code, is amended by
amending Subsections (a) and (c) to read as follows:
(a) The commissioner shall adopt rules under which the
association makes [members relinquish their net equity on an annual
basis as provided by those rules by making] payments to the
catastrophe reserve trust fund. The trust fund may be used only to
fund:
(1) the obligations of the trust fund under Section
2210.058(a); and
(2) the mitigation and preparedness plan established
under Section 2210.454 to reduce the potential for payments by
association members that give rise to tax credits in the event of
loss.
(c) At the end of each calendar year or policy year, the
association shall pay the net gain from operations [equity] of the
association to the trust fund. For purposes of this subsection,
"net gain from operations" includes [a member, including] all
premium and other revenue of the association in excess of incurred
losses and operating expenses, and operating expenses includes the
cost of any reinsurance [to the trust fund or a reinsurance program
approved by the commissioner].
SECTION 6. Section 2210.453, Insurance Code, is amended to
read as follows:
Sec. 2210.453. REINSURANCE PROGRAM. (a) The association
shall:
(1) make payments into the trust fund; or
(2) purchase [establish a] reinsurance as part of its
annual operating expenses to the extent [program] approved by the
department.
(b) With the approval of the department, the association may
use [establish a] reinsurance [program] that operates in addition
to or in concert with the trust fund and with assessments authorized
by this section.
SECTION 7. (a) The board of directors of the Texas
Windstorm Insurance Association established under Section
2210.102, Insurance Code, as that section existed before amendment
by this Act, is abolished on the 30th day after the effective date
of this Act.
(b) The commissioner of insurance shall appoint the members
of the board of directors of the Texas Windstorm Insurance
Association under Section 2210.102, Insurance Code, as amended by
this Act, for terms beginning on the 31st day after the effective
date of this Act.
(c) The term of a person who is serving as a member of the
board of directors of the Texas Windstorm Insurance Association
immediately before the abolition of that board under Subsection (a)
of this section expires on the 30th day after the effective date of
this Act. Such a person is eligible for appointment by the
commissioner of insurance to the new board of directors of the Texas
Windstorm Insurance Association under Section 2210.102, Insurance
Code, as amended by this Act.
SECTION 8. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2009.