82R10241 KCR-D
By: Smithee H.B. No. 3023
A BILL TO BE ENTITLED
AN ACT
relating to the institution of a formal delinquency proceeding
against the Texas Windstorm Insurance Association.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. In this Act:
(1) "Association" means the Texas Windstorm Insurance
Association established under Chapter 2210, Insurance Code.
(2) "Commissioner" means the commissioner of
insurance.
(3) "Formal delinquency proceeding" and
"receivership" have the meanings assigned by Section 443.004,
Insurance Code.
(4) "First tier coastal county" and "second tier
coastal county" have the meanings assigned by Section 2210.003,
Insurance Code.
SECTION 2. The commissioner of insurance shall, as soon as
practicable after the effective date of this Act and in accordance
with Chapter 443, Insurance Code, petition a court for an order to
liquidate the business of the Texas Windstorm Insurance
Association.
SECTION 3. Notwithstanding any contrary provision of
Chapter 2210, Insurance Code, on the date that the commissioner
files the petition for an order to liquidate the business of the
Texas Windstorm Insurance Association, the board of the association
is dissolved. Persons described by Section 443.010, Insurance
Code, shall cooperate with the commissioner in the manner required
by that section during the pendency of the formal delinquency
proceeding against the association.
SECTION 4. In accordance with Section 443.015(i), Insurance
Code, the Texas Windstorm Insurance Association shall pay all
expenses of the receivership initiated against the association.
SECTION 5. The commissioner shall appoint an advisory
committee as authorized by Section 443.154, Insurance Code.
Notwithstanding any contrary provision of Chapter 443, Insurance
Code, the committee shall be composed of:
(1) five members, appointed from a list of names
submitted to the commissioner by the governor, all of whom must have
experience in the business of insurance, loss adjustment, business
management, or finance and no more than two of whom are residents of
a first tier coastal county;
(2) two members, appointed from a list of names
submitted to the commissioner by the speaker of the house of
representatives, both of whom must be members of the house of
representatives and only one of whom may be a resident of a first or
second tier coastal county; and
(3) two members, appointed from a list of names
submitted to the commissioner by the lieutenant governor, both of
whom must be members of the senate and only one of whom may be a
resident of a first or second tier coastal county.
SECTION 6. (a) The advisory committee appointed by the
commissioner under Section 5 of this Act shall, as soon as
practicable after the effective date of this Act, develop and
recommend to the commissioner a plan of liquidation to govern the
liquidation of the association. After consideration of the
recommendations of the advisory committee, the commissioner shall
adopt a plan of liquidation.
(b) The plan of liquidation adopted under Subsection (a) of
this section must include provisions concerning:
(1) the transfer of the association's policy
obligations to a solvent assuming insurer authorized to write
windstorm and hail insurance in this state; and
(2) the establishment of a program that will replace
the association and provide a residual market for windstorm and
hail insurance in first tier coastal counties.
(c) The program described by Subsection (b) of this section:
(1) must, if possible, operate in the private
windstorm and hail insurance market in this state;
(2) must be actuarially sound and have proper internal
controls and safeguards to ensure accurate, efficient, and timely
adjustment of claims; and
(3) may, if necessary, include a source of funding to
support the program.
SECTION 7. (a) The commissioner shall take all steps
necessary to ensure that the liquidation of the association is
finalized not later than September 1, 2014, or if possible, by
September 1, 2013.
(b) On the date that the liquidation is final, the program
to replace the association must be fully operational and capable of
issuing, or causing the issuance of, windstorm and hail insurance
policies in first tier coastal counties.
SECTION 8. If necessary to accomplish the purposes of this
Act or to effect a specific action required by this Act, the
commissioner may, before commencing the formal delinquency
proceeding against the association or at the time the formal
delinquency proceeding is commenced, petition a court for a seizure
order under Section 443.051, Insurance Code, to allow the
commissioner to take possession and control of the Texas Windstorm
Insurance Association in the same manner that the commissioner
could take possession and control of an insurer under that section.
SECTION 9. The commissioner may adopt rules necessary to
implement this Act.
SECTION 10. 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, 2011.