| 1 | 1 | | 81R10803 AJA-F |
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| 2 | 2 | | By: West S.B. No. 1452 |
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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 a residential property insurance premium discount for |
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| 8 | 8 | | certain dwellings. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Chapter 2006, Insurance Code, is amended by |
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| 11 | 11 | | adding Subchapter D to read as follows: |
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| 12 | 12 | | SUBCHAPTER D. REQUIRED PREMIUM DISCOUNT FOR CERTAIN DWELLINGS |
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| 13 | 13 | | Sec. 2006.151. DEFINITIONS. In this subchapter: |
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| 14 | 14 | | (1) "Applicant" includes: |
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| 15 | 15 | | (A) an applicant for new insurance coverage; and |
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| 16 | 16 | | (B) a policyholder renewing insurance coverage. |
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| 17 | 17 | | (2) "Residential property insurance" has the meaning |
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| 18 | 18 | | assigned by Section 2251.002. |
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| 19 | 19 | | (3) "Insurer" means: |
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| 20 | 20 | | (A) an insurer subject to Chapter 2251; |
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| 21 | 21 | | (B) the Texas Windstorm Insurance Association; |
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| 22 | 22 | | and |
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| 23 | 23 | | (C) the FAIR Plan Association. |
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| 24 | 24 | | Sec. 2006.152. REQUIRED PREMIUM DISCOUNT. (a) The |
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| 25 | 25 | | commissioner by rule shall authorize an insurer to grant to an |
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| 26 | 26 | | applicant for residential property insurance a discount on the |
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| 27 | 27 | | applicant's premium for an insured dwelling that is certified by |
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| 28 | 28 | | the Institute for Business and Home Safety (IBHS) as an IBHS |
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| 29 | 29 | | Fortified Home for the geographic location in which the dwelling is |
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| 30 | 30 | | located or by a similar organization as meeting similar home |
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| 31 | 31 | | fortification standards for the geographic location in which the |
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| 32 | 32 | | dwelling is located if the commissioner determines that the |
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| 33 | 33 | | standards being certified reflect a reduction in the risk being |
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| 34 | 34 | | insured under the policy. |
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| 35 | 35 | | (b) The commissioner shall prescribe requirements for a |
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| 36 | 36 | | policy applicant to submit verification of the certification of the |
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| 37 | 37 | | dwelling to the insurer. |
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| 38 | 38 | | Sec. 2006.153. DWELLING INSPECTION. (a) The rules adopted |
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| 39 | 39 | | under this subchapter may authorize an insurer to conduct an |
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| 40 | 40 | | inspection of a dwelling to be insured to confirm that the dwelling |
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| 41 | 41 | | meets the applicable standards for the geographic location in which |
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| 42 | 42 | | the dwelling is located. |
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| 43 | 43 | | (b) The insurer shall pay the costs of an inspection under |
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| 44 | 44 | | this section. |
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| 45 | 45 | | Sec. 2006.154. PREMIUM DISCOUNT; EXCEPTION. (a) The |
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| 46 | 46 | | commissioner by rule shall establish the premium discount under |
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| 47 | 47 | | this subchapter based on sound actuarial principles. The |
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| 48 | 48 | | commissioner may vary the discount based on the coverage offered or |
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| 49 | 49 | | excluded under the insurance policy, including windstorm and hail |
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| 50 | 50 | | coverage. |
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| 51 | 51 | | (b) The commissioner may approve a premium discount greater |
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| 52 | 52 | | or less than the discount established under Subsection (a) if: |
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| 53 | 53 | | (1) the insurer files the proposed discount with the |
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| 54 | 54 | | department; and |
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| 55 | 55 | | (2) the commissioner determines that the proposed |
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| 56 | 56 | | discount is actuarially justified. |
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| 57 | 57 | | Sec. 2006.155. RULES. The commissioner may adopt rules as |
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| 58 | 58 | | necessary to implement this subchapter in addition to other rules |
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| 59 | 59 | | specifically required to be adopted under this chapter. |
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| 60 | 60 | | SECTION 2. Not later than December 1, 2009, the |
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| 61 | 61 | | commissioner of insurance shall adopt rules required by Subchapter |
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| 62 | 62 | | D, Chapter 2006, Insurance Code, as added by this Act. |
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| 63 | 63 | | SECTION 3. This Act applies only to a residential property |
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| 64 | 64 | | insurance policy delivered, issued for delivery, or renewed on or |
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| 65 | 65 | | after January 1, 2010. A policy delivered, issued for delivery, or |
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| 66 | 66 | | renewed before January 1, 2010, is governed by the law as it existed |
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| 67 | 67 | | immediately before the effective date of this Act, and that law is |
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| 68 | 68 | | continued in effect for that purpose. |
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| 69 | 69 | | SECTION 4. This Act takes effect September 1, 2009. |
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