By: Fraser S.B. No. 1740
A BILL TO BE ENTITLED
AN ACT
relating to the Texas Windstorm Insurance Association.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter L, Chapter 2210, Insurance Code, is
amended to read as follows:
SUBCHAPTER L. APPEALS AND OTHER ACTIONS
Sec. 2210.551. APPEAL BY THE ASSOCIATION. [APPEALS]
(a) This section applies to:
(1) a person insured under this chapter or an
authorized representative of the person; or
(2) an affected insurer.
[(b) A person or entity described by Subsection (a) who is
aggrieved by an act, ruling, or decision of the association may
appeal to the commissioner not later than the 30th day after the
date of that act, ruling, or decision.]
[c] If the association is aggrieved by the action of the
commissioner with respect to a ruling, order, or determination of
the commissioner, the association may, not later than the 30th day
after the date of the action, make a written request to the
commissioner for a hearing on the action.
(b [d]) On 10 days' written notice of the time and place of
the hearing, the commissioner shall conduct a hearing on the
association's request or the appeal from an act, ruling, or
decision of the association, not later than the 30th day after the
date of receipt of the request or appeal.
[(e) A hearing on an act, ruling, or decision of the
association relating to the payment of, the amount of, or the denial
of a particular claim shall be held, at the request of the claimant,
in the county in which the insured property is located or in Travis
County.]
(c [f]) Not later than the 30th day after the date of the
hearing, the commissioner shall affirm, reverse, or modify the
commissioner's previous action or the act, ruling, or decision
appealed to the commissioner. Pending the hearing and decision,
the commissioner may suspend or postpone the effective date of the
previous action or of the act, ruling, or decision appealed to the
commissioner.
(d [g]) The association [, or the person or entity aggrieved
by the order or decision of the commissioner,] may appeal to a
district court in the county in which the covered property is
located or a district court in Travis County.
(e [h]) An action brought under this section is subject to
the procedures established under Subchapter D, Chapter 36.
Sec. 2210.552. DEFINITIONS. "Damages" means all claims
under common law, statutory and equitable causes of action, for
actual damages including economic and non-economic damages, and all
forms of additional damages including without limitation
additional damages, knowing damages, punitive damages, trebling of
damages of any kind, penalties, prejudgment interest, post judgment
interest, attorneys fees, litigation costs, costs of court, and all
other damages of any kind or character.
[CLAIM DISPUTES; VENUE. (a) Except as provided by Sections
2210.007 and 2210.106, a person insured under this chapter who is
aggrieved by an act, ruling, or decision of the association
relating to the payment of, the amount of, or the denial of a claim
may:
[(1) bring an action against the association,
including an action under Chapter 541; or
[(2) appeal the act, ruling, or decision under Section
2210.551.
[(b) A person may not proceed under both Section 2210.551
and this section for the same act, ruling, or decision.
[(c) Except as provided by Subsection (d), venue in an
action brought under this section, including an action under
Chapter 541, against the association is in the county in which the
insured property is located or in a district court in Travis County.
[(d) Venue in an action, including an action under Chapter
541, brought under this section in which the claimant joins the
department as a party to the action is only in a district court in
Travis County.]
Sec. 2210.553. APPEALS TO BOARD OF DIRECTORS. A person
aggrieved by a decision of the association relating to eligibility
for or amount of benefits payable to the person, or for damages
claimed by a person related to the eligibility for or amount of
benefits payable to a person may appeal the decision to the
Executive Director. An appeal to the Executive Director shall be
filed no more than 30 days after the date of the decision is made for
which review is sought. This subchapter provides the sole remedy
for the aggrieved person.
Sec. 2210.554. HEARING BY STATE OFFICE OF ADMINISTRATIVE
HEARINGS. The executive director or a person designated by the
executive director shall refer an appeal under this section to the
State Office of Administrative Hearings to conduct a hearing as
provided by Chapter 2001, Government Code.
Sec. 2210.555. CONTESTED CASE. An appeal under this
section is a contested case as defined by Chapter 2001, Government
Code. An aggrieved person appealing a decision under this section
has the burden of proof on all issues, including any affirmative
defense.
Sec. 2210.556. FINAL DECISION. A decision by the State
Office of Administrative Hearings is final within the meaning of
Sec. 2210.557
Sec. 2210.557. NEGOTIATED SETTLEMENT. (a) Notwithstanding
this Section, the association and a person aggrieved by a decision
of the association may at any time informally negotiate a
settlement of a claim.
(b) A negotiated settlement must be approved by the board of
directors if the settlement amount is in excess of $25,000, or
includes consideration for attorney fees.
(c) A settlement negotiated under this section may not
exceed the applicable maximum liability limit established under the
policy.
Sec. 2210.558. JUDICIAL REVIEW. (a) A person aggrieved by
a final decision of the State Office of Administrative Hearings in a
contested case under this section is entitled to judicial review in
accordance with Chapter 2001, Government Code.
(b) The venue for appeal from a final decision of the State
Office of Administrative Hearings under this section is in district
court in Travis County.
(c) The review on appeal is governed by the substantial
evidence rule as described by Section 2001.174, Government Code.
Sec. 2210.559. PLAN OF OPERATION. The board of directors
may submit proposed changes to the plan of operation to implement
this subchapter.
Sec. 2210.560. NOTICE; INSPECTION. (a) As a prerequisite
to filing a an appeal under Sec. 2210.552 of this subchapter, a
person covered by an association policy shall give written notice
to the association at least 60 days before filing the appeal
advising the association in reasonable detail of the person's
specific complaint and the amount of damage and expenses, including
attorneys' fees, if any, reasonably incurred to date by the person
in asserting the claim against the association. During the 60-day
period a written request to inspect, in a reasonable manner and at a
reasonable time and place, the property that is the subject of the
person's action or claim may be presented to the person.
(b) If the giving of 60 days' written notice is rendered
impracticable by reason of the necessity of filing a claim in order
to prevent the expiration of the statute of limitations or if the
person's claim is asserted by way of counterclaim, the notice
provided for in Subsection (a) of this section is not required, but
the tender provided for by this subchapter may be made within 60
days after filing the appeal or counterclaim.
(c) If the association does not receive written notice, as
required by Subsection (a), then the association may file a plea in
abatement not later than the 30th day after the date the person
files an original answer in the venue in which the appeal is
pending. This subsection does not apply if Subsection (b) applies.
(d) The State Office of Administrative Hearings shall abate
the appeal if the administrative law judge, after a hearing, finds
that the association is entitled to an abatement because notice was
not provided as required by this section. An appeal is
automatically abated without the order of the administrative law
judge beginning on the 11th day after the date a plea in abatement
is filed under Subsection (c) if the plea in abatement:
(1) is verified and alleges that the association did
not receive the written notice as required by Subsection (a); and
(2) is not controverted by an affidavit filed by the
person before the 11th day after the date on which the plea in
abatement is filed.
(e) An abatement under Subsection (d) continues until the
60th day after the date that written notice is served in compliance
with Subsection (a).
Sec. 2210.561 (a) A person must file an appeal based in
whole or in part on an association policy not later than two years
after the day the cause of action accrues. The cause of action
accrues on the date of the loss.
(b) Civil Practices and Remedies Code Sec. 33.004 (e) does
not apply to a claim, civil action or appeal against or involving
the association, an officer agent or employee of the association,
or anyone acting on behalf of the association.
(c) A person is barred from filing an appeal or an original
civil action against the association, an officer, agent or employee
of the association, or anyone acting on behalf of association more
than four years of the date of the loss. This subsection is
intended as a statute of repose so that all claims of any type or
description must be brought within four years or they are time
barred.
(d) An appeal must be filed with the association within one
year of the date the right to file the appeal accrued.
Sec. 2210.562. STATE OF DISASTER. (a) When the Governor
issues a Declaration of State of Disaster pursuant to Gov. Code Sec.
418.014 then the Commissioner of Insurance shall toll the
application of Chapters 541 and 542 to the association. (b) The
Commissioner's authority under this section is limited (1) to the
geographical area identified in the Declaration and (2) for the
duration of the Declaration.
SECTION 2. EFFECTIVE DATE. (a) 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.
(b) The change in law made by this Act applies only to an
appeal from a decision of the Texas Windstorm Insurance Association
made on or after January 1, 2012. An appeal from a decision of that
association made before January 1, 2012, applies to the law as it
existed immediately before the effective date of this Act, and that
law is continued in effect for that purpose.
(c) This Act, applies to all claims filed with the Texas
Windstorm Insurance Association on or after the effective date of
the Act.