Texas 2009 - 81st Regular

Texas House Bill HB1219 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	81R7832 TJS-F
2	2	By: Hunter H.B. No. 1219
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the operation of the Texas Windstorm Insurance
8	8	Association.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 2210.052, Insurance Code, is amended by
11	11	amending Subsections (a) and (d) to read as follows:
12	12	(a) Each member of the association shall participate in the
13	13	assessments [writings, expenses, profits, and losses] of the
14	14	association in the proportion that the net direct premiums of that
15	15	member during the preceding calendar year bears to the aggregate
16	16	net direct premiums by all members of the association, as
17	17	determined using the information provided under Subsection (b).
18	18	(d) Notwithstanding Subsection (a), a member, in accordance
19	19	with the plan of operation, is entitled to receive credit for
20	20	similar insurance voluntarily written in an area designated by the
21	21	commissioner. The member's participation in the assessments
22	22	[writings] of the association shall be reduced in accordance with
23	23	the plan of operation.
24	24	SECTION 2. Section 2210.060(c), Insurance Code, is amended
25	25	to read as follows:
26	26	(c) Subsection (a) does not authorize the association to
27	27	indemnify a member of the association for participating in the
28	28	assessments made by [writings, expenses, profits, and losses of]
29	29	the association in the manner provided by this chapter.
30	30	SECTION 3. Section 2210.102, Insurance Code, is amended to
31	31	read as follows:
32	32	Sec. 2210.102. COMPOSITION. (a) The board of directors is
33	33	composed of the following 11 [nine] members appointed by the
34	34	commissioner:
35	35	(1) five members who represent the interests of
36	36	insurers [representatives of different insurers who are members of
37	37	the association, elected by the members as provided by the plan of
38	38	operation];
39	39	(2) four [two] public representatives, two of whom
40	40	[who are nominated by the office of public insurance counsel and
41	41	who, as of the date of the appointment:
42	42	[(A)] reside in a catastrophe area[;] and
43	43	[(B)] are policyholders of the association as of
44	44	the date of the appointment; and
45	45	(3) two property and casualty agents, each of whom
46	46	must hold a license under Chapter 4051 as a general property and
47	47	casualty agent or a personal lines property and casualty agent, and
48	48	at least one of whom must:
49	49	(A) have demonstrated experience in the
50	50	association; and
51	51	(B) maintain the agent's principal office, as of
52	52	the date of the appointment, in a catastrophe area[; and
53	53	[(C) hold a license under Chapter 4051 as a
54	54	general property and casualty agent or a personal lines property
55	55	and casualty agent].
56	56	(b) Each member of the board of directors who represents the
57	57	interests of insurers must be a full-time employee of an authorized
58	58	insurer that is a member of the association at the time of the
59	59	appointment [The persons appointed under Subsections (a)(2) and (3)
60	60	must be from different counties].
61	61	(c) A member of the board of directors serves at the
62	62	pleasure of the commissioner. The commissioner shall appoint a
63	63	replacement for a member who leaves or is removed from the board of
64	64	directors in the manner provided by Section 2210.102.
65	65	SECTION 4. Section 2210.103(a), Insurance Code, is amended
66	66	to reads as follows:
67	67	(a) Members of the board of directors serve three-year
68	68	staggered terms, with the terms of three or four members expiring on
69	69	the third Tuesday of March of each year.
70	70	SECTION 5. Section 2210.452, Insurance Code, is amended by
71	71	amending Subsections (a) and (c) to read as follows:
72	72	(a) The commissioner shall adopt rules under which the
73	73	association makes [members relinquish their net equity on an annual
74	74	basis as provided by those rules by making] payments to the
75	75	catastrophe reserve trust fund. The trust fund may be used only to
76	76	fund:
77	77	(1) the obligations of the trust fund under Section
78	78	2210.058(a); and
79	79	(2) the mitigation and preparedness plan established
80	80	under Section 2210.454 to reduce the potential for payments by
81	81	association members that give rise to tax credits in the event of
82	82	loss.
83	83	(c) At the end of each calendar year or policy year, the
84	84	association shall pay the net gain from operations [equity] of the
85	85	association to the trust fund. For purposes of this subsection,
86	86	"net gain from operations" includes [a member, including] all
87	87	premium and other revenue of the association in excess of incurred
88	88	losses and operating expenses, and operating expenses includes the
89	89	cost of any reinsurance [to the trust fund or a reinsurance program
90	90	approved by the commissioner].
91	91	SECTION 6. Section 2210.453, Insurance Code, is amended to
92	92	read as follows:
93	93	Sec. 2210.453. REINSURANCE PROGRAM. (a) The association
94	94	shall:
95	95	(1) make payments into the trust fund; or
96	96	(2) purchase [establish a] reinsurance as part of its
97	97	annual operating expenses to the extent [program] approved by the
98	98	department.
99	99	(b) With the approval of the department, the association may
100	100	use [establish a] reinsurance [program] that operates in addition
101	101	to or in concert with the trust fund and with assessments authorized
102	102	by this section.
103	103	SECTION 7. (a) The board of directors of the Texas
104	104	Windstorm Insurance Association established under Section
105	105	2210.102, Insurance Code, as that section existed before amendment
106	106	by this Act, is abolished on the 30th day after the effective date
107	107	of this Act.
108	108	(b) The commissioner of insurance shall appoint the members
109	109	of the board of directors of the Texas Windstorm Insurance
110	110	Association under Section 2210.102, Insurance Code, as amended by
111	111	this Act, for terms beginning on the 31st day after the effective
112	112	date of this Act.
113	113	(c) The term of a person who is serving as a member of the
114	114	board of directors of the Texas Windstorm Insurance Association
115	115	immediately before the abolition of that board under Subsection (a)
116	116	of this section expires on the 30th day after the effective date of
117	117	this Act. Such a person is eligible for appointment by the
118	118	commissioner of insurance to the new board of directors of the Texas
119	119	Windstorm Insurance Association under Section 2210.102, Insurance
120	120	Code, as amended by this Act.
121	121	SECTION 8. This Act takes effect immediately if it receives
122	122	a vote of two-thirds of all the members elected to each house, as
123	123	provided by Section 39, Article III, Texas Constitution. If this
124	124	Act does not receive the vote necessary for immediate effect, this
125	125	Act takes effect September 1, 2009.