| 1 | 1 | | 81R10752 PB-D |
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| 2 | 2 | | By: Weber H.B. No. 2135 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to assessment of a premium surcharge by the Texas |
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| 8 | 8 | | Windstorm Insurance Association for coverage of improvements to |
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| 9 | 9 | | certain commercial structures. |
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| 10 | 10 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 11 | 11 | | SECTION 1. Subchapter F, Chapter 2210, Insurance Code, is |
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| 12 | 12 | | amended by adding Section 2210.258 to read as follows: |
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| 13 | 13 | | Sec. 2210.258. SURCHARGE FOR CERTAIN NONCOMPLIANT |
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| 14 | 14 | | CONSTRUCTION. (a) Notwithstanding any other provision of this |
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| 15 | 15 | | chapter, a person may obtain windstorm and hail insurance coverage |
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| 16 | 16 | | through the association as provided by this section for |
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| 17 | 17 | | improvements to a commercial structure and property located inside |
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| 18 | 18 | | the structure even though: |
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| 19 | 19 | | (1) the structure has not been inspected for |
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| 20 | 20 | | compliance with the plan of operation in accordance with Section |
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| 21 | 21 | | 2210.251(a); and |
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| 22 | 22 | | (2) a certificate of compliance has not been issued on |
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| 23 | 23 | | the structure in accordance with Section 2210.251(f). |
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| 24 | 24 | | (b) An applicant for coverage from the association or a |
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| 25 | 25 | | policyholder of the association under Subsection (a) is subject to |
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| 26 | 26 | | a premium surcharge for insurance coverage obtained through the |
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| 27 | 27 | | association. The commissioner shall set the surcharge, after |
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| 28 | 28 | | notice and a hearing, in an amount not less than an amount equal to |
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| 29 | 29 | | 10 percent of the premium that would be assessed if the structure |
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| 30 | 30 | | were in compliance. |
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| 31 | 31 | | (c) A premium surcharge collected under this section shall |
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| 32 | 32 | | be deposited in the catastrophe reserve trust fund under Subchapter |
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| 33 | 33 | | J. |
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| 34 | 34 | | (d) A premium surcharge under this section is a separate |
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| 35 | 35 | | charge in addition to the premiums collected and is not subject to |
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| 36 | 36 | | premium tax or commissions. Failure to pay the surcharge by a |
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| 37 | 37 | | policyholder constitutes failure to pay a premium for purposes of |
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| 38 | 38 | | policy cancellation. |
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| 39 | 39 | | (e) The commissioner shall adopt rules as necessary to |
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| 40 | 40 | | implement this section. |
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| 41 | 41 | | SECTION 2. This Act applies only to an insurance policy |
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| 42 | 42 | | delivered, issued for delivery, or renewed by the Texas Windstorm |
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| 43 | 43 | | Insurance Association on or after January 1, 2010. A policy |
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| 44 | 44 | | delivered, issued for delivery, or renewed before January 1, 2010, |
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| 45 | 45 | | is governed by the law as it existed immediately before the |
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| 46 | 46 | | effective date of this Act, and that law is continued in effect for |
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| 47 | 47 | | that purpose. |
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| 48 | 48 | | SECTION 3. This Act takes effect September 1, 2009. |
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