Texas 2013 - 83rd Regular

Texas Senate Bill SB1700 Compare Versions

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1	1	By: Taylor S.B. No. 1700
2	2	(In the Senate - Filed March 8, 2013; March 18, 2013, read
3	3	first time and referred to Committee on Business and Commerce;
4	4	May 9, 2013, reported adversely, with favorable Committee
5	5	Substitute by the following vote: Yeas 6, Nays 1; May 9, 2013,
6	6	sent to printer.)
7	7	COMMITTEE SUBSTITUTE FOR S.B. No. 1700 By: Taylor
8	8
9	9
10	10	A BILL TO BE ENTITLED
11	11	AN ACT
12	12	relating to the operation of the Texas Windstorm Insurance
13	13	Association and the FAIR Plan Association and the renaming of the
14	14	Texas Windstorm Insurance Association as the Texas Residual
15	15	Insurance Plan.
16	16	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
17	17	SECTION 1. Section 2210.001, Insurance Code, is amended to
18	18	read as follows:
19	19	Sec. 2210.001. PURPOSE. The primary purpose of the Texas
20	20	Residual [Windstorm] Insurance Plan [Association] is the provision
21	21	of an adequate market for windstorm and hail insurance in the
22	22	seacoast territory of this state. The legislature finds that the
23	23	provision of adequate windstorm and hail insurance is necessary to
24	24	the economic welfare of this state, and without that insurance, the
25	25	orderly growth and development of this state would be severely
26	26	impeded. This chapter provides a method by which adequate
27	27	windstorm and hail insurance may be obtained in certain designated
28	28	portions of the seacoast territory of this state. The plan
29	29	[association] is intended to serve as a residual insurer of last
30	30	resort for windstorm and hail insurance in the seacoast territory.
31	31	The plan [association] shall:
32	32	(1) function in such a manner as to not be a direct
33	33	competitor in the private market; and
34	34	(2) provide windstorm and hail insurance coverage to
35	35	those who are unable to obtain that coverage in the private market.
36	36	SECTION 2. Section 2210.002, Insurance Code, is amended by
37	37	amending Subsection (a) and adding Subsection (a-1) to read as
38	38	follows:
39	39	(a) This chapter may be cited as the Texas Residual
40	40	[Windstorm] Insurance Plan [Association] Act.
41	41	(a-1) A reference in this chapter or other law to the Texas
42	42	Windstorm Insurance Association means the Texas Residual Insurance
43	43	Plan.
44	44	SECTION 3. Section 2210.003, Insurance Code, is amended by
45	45	amending Subdivision (1) and adding Subdivisions (1-a), (3-c), and
46	46	(14) to read as follows:
47	47	(1) "Administrator" means the entity contractually
48	48	retained to:
49	49	(A) manage the association and administer the
50	50	plan of operation under Section 2210.062;
51	51	(B) establish, administer, and maintain the
52	52	electronic portal under Section 2210.211; and
53	53	(C) manage the FAIR Plan Association and
54	54	administer the plan of operation under Section 2211.0522.
55	55	(1-a) "Association" means the Texas Residual
56	56	[Windstorm] Insurance Plan [Association].
57	57	(3-c) "Exposure reduction plan fund" means the
58	58	dedicated trust fund established by the board of directors and held
59	59	by the Texas Treasury Safekeeping Trust Company into which
60	60	assessments collected under Section 2210.212 are deposited for the
61	61	purpose of achieving the association's required exposure reduction
62	62	through means including mitigation, rate assistance, or any other
63	63	means related to that purpose considered necessary by the board.
64	64	(14) "Total insured exposure" means the total of all
65	65	risks insured by the association in any class of business.
66	66	SECTION 4. Section 2210.014, Insurance Code, is amended by
67	67	amending Subsection (b) and adding Subsection (c) to read as
68	68	follows:
69	69	(b) Chapter 542 does not apply to the processing and
70	70	settlement of claims by the association or to an agent or
71	71	representative of the association.
72	72	(c) An insurer or adjuster, or the administrator contracted
73	73	under Section 2210.062, is an agent of the association for purposes
74	74	of adjusting association claims under this section.
75	75	SECTION 5. Subchapter A, Chapter 2210, Insurance Code, is
76	76	amended by adding Section 2210.015 to read as follows:
77	77	Sec. 2210.015. STUDY OF MARKET INCENTIVES; BIENNIAL
78	78	REPORTING. (a) Each biennium, the department shall conduct a
79	79	study of market incentives to promote participation in the
80	80	voluntary windstorm and hail insurance market in the seacoast
81	81	territory of this state. The study must address as possible
82	82	incentives the mandatory or voluntary issuance of windstorm and
83	83	hail insurance in conjunction with the issuance of a homeowners
84	84	policy in the seacoast territory.
85	85	(b) The department shall include the results of the study
86	86	conducted under this section in the report submitted under Section
87	87	32.022.
88	88	SECTION 6. Subchapter B, Chapter 2210, Insurance Code, is
89	89	amended by adding Sections 2210.062, 2210.063, 2210.064, 2210.065,
90	90	and 2210.066 to read as follows:
91	91	Sec. 2210.062. ADMINISTRATION BY CONTRACTED ADMINISTRATOR.
92	92	(a) Notwithstanding any other law, the commissioner shall
93	93	contract with an administrator to manage the association and
94	94	administer the plan of operation beginning January 1, 2014. The
95	95	administrator may not exercise any power under the contract before
96	96	January 1, 2014.
97	97	(b) The administrator must hold either a managing general
98	98	agent license issued under Chapter 4053 or a third-party
99	99	administrator certificate of authority issued under Chapter 4151.
100	100	(c) The term of the administrator's contract may not exceed
101	101	five years. The contract may be renewed for additional terms not to
102	102	exceed five years for each term.
103	103	(d) In establishing the compensation paid to the
104	104	administrator under the contract, the commissioner shall consider
105	105	the cost of operations of the association and make every reasonable
106	106	effort to ensure that the cost of operations of the association
107	107	under the contract does not exceed average historical costs.
108	108	Sec. 2210.063. PROPRIETARY INFORMATION. (a) Any
109	109	information, analyses, programs, or data acquired or created by the
110	110	administrator under a contract under this chapter or Chapter 2211
111	111	are property of the department.
112	112	(b) Information, analyses, programs, or data described by
113	113	Subsection (a) are confidential and exempt from public disclosure
114	114	under Chapter 552, Government Code.
115	115	Sec. 2210.064. OFFICE; RECORDS. (a) The administrator
116	116	shall maintain an office in Austin, Texas.
117	117	(b) The commissioner may arrange to lease office space of
118	118	the department to the administrator.
119	119	Sec. 2210.065. AUDIT. (a) The administrator is subject to
120	120	audit by the commissioner and shall pay the costs incurred by the
121	121	commissioner in performing an audit under this section in an amount
122	122	the commissioner finds reasonable.
123	123	(b) Work papers, as defined by Section 401.020(a), from an
124	124	audit are confidential and not subject to disclosure under Chapter
125	125	552, Government Code.
126	126	Sec. 2210.066. ANNUAL REPORT OF ADMINISTRATOR. (a) Not
127	127	later than March 1 of each year, the administrator shall submit a
128	128	report regarding the administrator's duties under this chapter and
129	129	Chapter 2211 to:
130	130	(1) the governor;
131	131	(2) the lieutenant governor;
132	132	(3) the speaker of the house of representatives;
133	133	(4) the Senate Committee on Business and Commerce or
134	134	the successor of that committee with jurisdiction over insurance;
135	135	(5) the House Committee on Insurance or the successor
136	136	of that committee with jurisdiction over insurance; and
137	137	(6) the legislative oversight board established under
138	138	Subchapter N.
139	139	(b) The report must be made in accordance with the terms of
140	140	the administrator's contract with the department.
141	141	SECTION 7. Subchapter B-1, Chapter 2210, Insurance Code, is
142	142	amended by amending Section 2210.071 and adding Section 2210.0715
143	143	to read as follows:
144	144	Sec. 2210.071. PAYMENT OF EXCESS LOSSES[; PAYMENT FROM
145	145	RESERVES AND TRUST FUND]. [(a)] If, in a catastrophe year, an
146	146	occurrence or series of occurrences in a catastrophe area results
147	147	in insured losses and operating expenses of the association in
148	148	excess of premium and other revenue of the association, the excess
149	149	losses and operating expenses shall be paid as provided by this
150	150	subchapter.
151	151	Sec. 2210.0715. PAYMENT FROM RESERVES AND TRUST FUND. [(b)]
152	152	The association shall pay losses in excess of premium and other
153	153	revenue of the association from available reserves of the
154	154	association and available amounts in the catastrophe reserve trust
155	155	fund.
156	156	[(c) Losses not paid under Subsection (b) shall be paid from
157	157	the proceeds from public securities issued in accordance with this
158	158	subchapter and Subchapter M and, notwithstanding Subsection (a),
159	159	may be paid from the proceeds of public securities issued under
160	160	Section 2210.072(a) before an occurrence or series of occurrences
161	161	that results in insured losses.]
162	162	SECTION 8. Subchapter B-1, Chapter 2210, Insurance Code, is
163	163	amended by adding Section 2210.0716 to read as follows:
164	164	Sec. 2210.0716. PAYMENT FROM CLASS 1 ASSESSMENTS.
165	165	(a) Losses in a catastrophe year not paid under Section 2210.0715
166	166	shall be paid as provided by this section from member assessments
167	167	not to exceed $500 million for that catastrophe year.
168	168	(b) The administrator, with the approval of the
169	169	commissioner, shall notify each member of the amount of the
170	170	member's assessment under this section. The proportion of the
171	171	losses allocable to each insurer under this section shall be
172	172	determined in the manner used to determine each insurer's
173	173	participation in the association for the year under Section
174	174	2210.052.
175	175	(c) A member of the association may not recoup an assessment
176	176	paid under this section through a premium surcharge or tax credit.
177	177	SECTION 9. Subsections (a), (b), (b-1), (c), and (f),
178	178	Section 2210.072, Insurance Code, are amended to read as follows:
179	179	(a) Losses not paid under Sections 2210.0715 and 2210.0716
180	180	[Section 2210.071(b)] shall be paid as provided by this section
181	181	from the proceeds from Class 1 public securities authorized to be
182	182	issued in accordance with Subchapter M before, on, or after the date
183	183	of any occurrence or series of occurrences that results in insured
184	184	losses. Public securities issued under this section must be paid
185	185	[repaid] within a period not to exceed 10 [14] years, and may be
186	186	paid [repaid] sooner if the board of directors elects to do so and
187	187	the commissioner approves.
188	188	(b) Public securities described by Subsection (a) that are
189	189	issued before an occurrence or series of occurrences that results
190	190	in incurred losses:
191	191	(1) may be issued on the request of the board of
192	192	directors with the approval of the commissioner; and
193	193	(2) may not, in the aggregate, exceed $500 million [$1
194	194	billion] at any one time, regardless of the calendar year or years
195	195	in which the outstanding public securities were issued.
196	196	(b-1) Public securities described by Subsection (a):
197	197	(1) shall be issued as necessary in a principal amount
198	198	not to exceed $500 million [$1 billion] per catastrophe year, in the
199	199	aggregate, for securities issued during that catastrophe year
200	200	before the occurrence or series of occurrences that results in
201	201	incurred losses in that year and securities issued on or after the
202	202	date of that occurrence or series of occurrences, and regardless of
203	203	whether for a single occurrence or a series of occurrences; and
204	204	(2) subject to the $500 million [$1 billion] maximum
205	205	described by Subdivision (1), may be issued, in one or more
206	206	issuances or tranches, during the calendar year in which the
207	207	occurrence or series of occurrences occurs or, if the public
208	208	securities cannot reasonably be issued in that year, during the
209	209	following calendar year.
210	210	(c) If public securities are issued as described by this
211	211	section, the public securities shall be paid [repaid] in the manner
212	212	prescribed by Subchapter M [from association premium revenue].
213	213	(f) If, under Subsection (e), the proceeds of any
214	214	outstanding public securities issued during a previous catastrophe
215	215	year must be depleted, those proceeds shall count against the $500
216	216	million [$1 billion] limit on public securities described by this
217	217	section in the catastrophe year in which the proceeds must be
218	218	depleted.
219	219	SECTION 10. Subchapter B-1, Chapter 2210, Insurance Code,
220	220	is amended by adding Section 2210.0725 to read as follows:
221	221	Sec. 2210.0725. PAYMENT FROM CLASS 2 ASSESSMENTS.
222	222	(a) Losses in a catastrophe year not paid under Sections
223	223	2210.0715, 2210.0716, and 2210.072 shall be paid as provided by
224	224	this section from member assessments not to exceed $500 million for
225	225	that catastrophe year.
226	226	(b) The administrator, with the approval of the
227	227	commissioner, shall notify each member of the amount of the
228	228	member's assessment under this section. The proportion of the
229	229	losses allocable to each insurer under this section shall be
230	230	determined in the manner used to determine each insurer's
231	231	participation in the association for the year under Section
232	232	2210.052.
233	233	(c) A member of the association may not recoup an assessment
234	234	paid under this section through a premium surcharge or tax credit.
235	235	SECTION 11. Section 2210.073, Insurance Code, is amended to
236	236	read as follows:
237	237	Sec. 2210.073. PAYMENT FROM CLASS 2 PUBLIC SECURITIES.
238	238	(a) Losses not paid under Sections 2210.0715, 2210.0716,
239	239	[2210.071 and] 2210.072, and 2210.0725 shall be paid as provided by
240	240	this section from the proceeds from Class 2 public securities
241	241	authorized to be issued in accordance with Subchapter M on or after
242	242	the date of any occurrence or series of occurrences that results in
243	243	insured losses [under this subsection]. Public securities issued
244	244	under this section must be paid [repaid] within a period not to
245	245	exceed 10 years, and may be paid [repaid] sooner if the board of
246	246	directors elects to do so and the commissioner approves.
247	247	(b) Public securities described by Subsection (a):
248	248	(1) shall [may] be issued as necessary in a principal
249	249	amount not to exceed $500 million [$1 billion] per catastrophe
250	250	year, in the aggregate, whether for a single occurrence or a series
251	251	of occurrences; and
252	252	(2) subject to the $500 million [$1 billion] maximum
253	253	described by Subdivision (1), may be issued, in one or more
254	254	issuances or tranches, during the calendar year in which the
255	255	occurrence or series of occurrences occurs or, if the public
256	256	securities cannot reasonably be issued in that year, during the
257	257	following calendar year.
258	258	(c) If the losses are paid with public securities described
259	259	by this section, the public securities shall be paid [repaid] in the
260	260	manner prescribed by Subchapter M.
261	261	SECTION 12. Section 2210.102, Insurance Code, is amended to
262	262	read as follows:
263	263	Sec. 2210.102. COMPOSITION. (a) The board of directors is
264	264	composed of nine members appointed by the governor [commissioner]
265	265	in accordance with this section.
266	266	(b) Three [Four] members must be representatives of the
267	267	insurance industry who actively write and renew windstorm and hail
268	268	insurance in the first tier coastal counties.
269	269	(c) Three [Four] members must, as of the date of the
270	270	appointment, reside in the first tier coastal counties. Each of
271	271	the following regions must be represented by a member residing in
272	272	the region and [At least one of the members] appointed under this
273	273	subsection:
274	274	(1) the region consisting of Cameron, Kenedy, Kleberg,
275	275	and Willacy Counties;
276	276	(2) the region consisting of Aransas, Calhoun, Nueces,
277	277	Refugio, and San Patricio Counties; and
278	278	(3) the region consisting of Brazoria, Chambers,
279	279	Galveston, Jefferson, and Matagorda Counties and any part of Harris
280	280	County designated as a catastrophe area under Section 2210.005.
281	281	(c-1) One of the members appointed under Subsection (c) must
282	282	be a property and casualty agent who is licensed under this code and
283	283	is not a captive agent.
284	284	(d) One member must be a representative of an area of this
285	285	state that is not located in the seacoast territory [with
286	286	demonstrated expertise in insurance and actuarial principles].
287	287	(d-1) One member must be an engineer who:
288	288	(1) is knowledgeable of, and has professional
289	289	expertise in, wind-related design and construction practices in
290	290	coastal areas that are subject to high winds and hurricanes; and
291	291	(2) resides in a second tier coastal county.
292	292	(d-2) One member must be a representative of the financial
293	293	industry who resides in a second tier coastal county.
294	294	(e) All members must have demonstrated experience in
295	295	insurance, general business, or actuarial principles and the
296	296	member's area of expertise, if any, sufficient to make the success
297	297	of the association probable.
298	298	(f) Insurers who are members of the association shall
299	299	nominate, from among those members, persons to fill any vacancy in
300	300	the three [four] board of director seats reserved for
301	301	representatives of the insurance industry. The board of directors
302	302	shall solicit nominations from the members and submit the
303	303	nominations to the governor [commissioner]. The nominee slate
304	304	submitted to the governor [commissioner] under this subsection must
305	305	include at least three more names than the number of vacancies. The
306	306	governor may [commissioner shall] appoint replacement insurance
307	307	industry representatives from the nominee slate.
308	308	(g) In addition to the nine members appointed under
309	309	Subsection (a), the governor [The commissioner] shall appoint three
310	310	individuals [one person] to serve as [a] nonvoting ex officio
311	311	members [member] of the board to advise the board [regarding issues
312	312	relating to the inspection process. The commissioner may give
313	313	preference in an appointment under this subsection to a person who
314	314	is a qualified inspector under Section 2210.254]. Each [The]
315	315	nonvoting member appointed under this section must:
316	316	(1) hold an elective office of this state or a
317	317	political subdivision of this state; and
318	318	(2) reside in and represent one of the following
319	319	areas:
320	320	(A) the northern portion of the seacoast
321	321	territory [be an engineer licensed by, and in good standing with,
322	322	the Texas Board of Professional Engineers];
323	323	(B) the southern portion of the seacoast
324	324	territory [(2) reside in a first tier coastal county]; or [and]
325	325	(C) an area of this state that is not located in
326	326	the seacoast territory [(3) be knowledgeable of, and have
327	327	professional expertise in, wind-related design and construction
328	328	practices in coastal areas that are subject to high winds and
329	329	hurricanes].
330	330	(h) The persons appointed under Subsection (c) must reside
331	331	in [be from] different counties. The persons appointed under
332	332	Subsection (g) must reside in different counties.
333	333	SECTION 13. Subsection (c), Section 2210.103, Insurance
334	334	Code, is amended to read as follows:
335	335	(c) A member of the board of directors may be removed by the
336	336	governor [commissioner] with cause stated in writing and posted on
337	337	the association's website. The governor [commissioner] shall
338	338	appoint a replacement in the manner provided by Section 2210.102
339	339	for a member who leaves or is removed from the board of directors.
340	340	SECTION 14. Subchapter E, Chapter 2210, Insurance Code, is
341	341	amended by adding Sections 2210.2022, 2210.211, 2210.212, and
342	342	2210.213 to read as follows:
343	343	Sec. 2210.2022. INFORMATION REQUIRED FOR CERTAIN
344	344	APPLICATIONS. An application for association coverage, including
345	345	an application for new or renewal coverage on or after January 1,
346	346	2014, must include information on the applicant's policy that
347	347	covers perils other than windstorm and hail, if any, including:
348	348	(1) the total premium for that policy, including a
349	349	policy number for coverage issued by the FAIR Plan Association
350	350	under Chapter 2211, if applicable, and:
351	351	(A) the amount of insurance on the dwelling and
352	352	contents; or
353	353	(B) if the policy is a tenants policy or
354	354	condominium owners policy, the insured amount for the contents
355	355	coverage; and
356	356	(2) the deductibles applicable for each policy.
357	357	Sec. 2210.211. VOLUNTARY ELECTRONIC PORTAL. (a) As soon
358	358	as practicable after January 1, 2014, the administrator shall make
359	359	available to all insurers an electronic portal to provide insurers
360	360	access to information described by Subsection (b).
361	361	(b) The portal must provide insurers access to information
362	362	on each insured's association policy and other policy, if any, that
363	363	covers other perils, if known, including:
364	364	(1) the insured's total premium amount on the
365	365	association policy; and
366	366	(2) for coverage for perils other than windstorm and
367	367	hail:
368	368	(A) the total premium for that policy, including
369	369	a policy issued by the FAIR Plan Association under Chapter 2211, if
370	370	applicable, and:
371	371	(i) the amount of insurance on the dwelling
372	372	and its contents; or
373	373	(ii) if the policy is a tenants policy or
374	374	condominium owners policy, the insured amount for the contents
375	375	coverage; and
376	376	(B) the deductibles applicable for each policy.
377	377	Sec. 2210.212. EXPOSURE REDUCTION PLAN. (a) The
378	378	association shall reduce the association's total insured exposure
379	379	determined as of January 1, 2013, according to the following
380	380	schedule:
381	381	(1) not later than January 1, 2016, the amount of the
382	382	association's total insured exposure must reflect a 20 percent
383	383	reduction from the association's total insured exposure as of
384	384	January 1, 2013;
385	385	(2) not later than January 1, 2018, the amount of the
386	386	association's total insured exposure must reflect a 35 percent
387	387	reduction from the total insured exposure as of January 1, 2013;
388	388	(3) not later than January 1, 2020, the amount of the
389	389	association's total insured exposure must reflect a 45 percent
390	390	reduction from the association's total insured exposure as of
391	391	January 1, 2013;
392	392	(4) not later than January 1, 2022, the amount of the
393	393	association's total insured exposure must reflect a 55 percent
394	394	reduction from the association's total insured exposure as of
395	395	January 1, 2013; and
396	396	(5) not later than January 1, 2024, the amount of the
397	397	association's total insured exposure must reflect a 60 percent
398	398	reduction from the association's total insured exposure as of
399	399	January 1, 2013.
400	400	(b) As soon as practicable after January 1, 2016, January 1,
401	401	2018, January 1, 2020, and January 1, 2024, respectively, the board
402	402	of directors shall determine whether the reductions in the
403	403	association's total insured exposure required under Subsection (a)
404	404	have been achieved.
405	405	(c) If on January 1, 2016, the association did not achieve
406	406	the reduction in the total insured exposure required by Subsection
407	407	(a)(1), the board of directors shall establish a plan to reduce the
408	408	association's total insured exposure, which must include imposing
409	409	an assessment as described by Subsection (f).
410	410	(d) If on January 1, 2018, January 1, 2020, and January 1,
411	411	2024, respectively, the association did not achieve the reduction
412	412	in the total insured exposure required for that date, the board of
413	413	directors shall establish a plan to reduce the association's total
414	414	insured exposure, which must include imposing an assessment as
415	415	described by Subsection (f).
416	416	(e) An exposure reduction plan under Subsection (c) or (d)
417	417	must be implemented not later than March 31 in the year in which the
418	418	board of directors determines that the required reduction was not
419	419	achieved and must result in the achievement of the required
420	420	reduction by not later than December 31 of that year.
421	421	(f) An assessment imposed under this section must be paid
422	422	into the exposure reduction plan fund and is assessed against each
423	423	member of the association that, as determined by the board of
424	424	directors, has not met the member's proportionate responsibility
425	425	for reduction of the association's total insured exposure. The
426	426	total aggregate amount of an assessment under this section, if
427	427	assessed against all members of the association, is $200 million.
428	428	(g) The amount of a member's assessment paid under
429	429	Subsection (f) must be equal to the portion of $200 million that is
430	430	consistent with the member's proportionate participation in the
431	431	association as determined under Section 2210.052.
432	432	(h) A member of the association may not recoup an assessment
433	433	paid under this section through a premium surcharge or tax credit or
434	434	through a rate increase.
435	435	(i) At the request of the commissioner, but not less
436	436	frequently than twice each year, the administrator shall submit a
437	437	report to the commissioner detailing the amount of the
438	438	association's total insured exposure and any statistical
439	439	information or experience data requested by the commissioner
440	440	concerning the characteristics of that exposure.
441	441	(j) Not later than May 15 and November 15 of each year, the
442	442	commissioner shall submit a report to the windstorm insurance
443	443	legislative oversight board established under Subchapter N
444	444	summarizing the contents of the report submitted to the
445	445	commissioner under Subsection (i).
446	446	(k) In determining whether the association has met the goal
447	447	established under Subsection (a), the commissioner shall make
448	448	adjustments to book value of the total insured exposure as of
449	449	January 1, 2013, to reflect any change in the BOECKH Index. If the
450	450	BOECKH Index ceases to exist, the commissioner shall make
451	451	adjustments in the same manner based on another index that the board
452	452	of directors determines accurately reflects changes in the cost of
453	453	construction or residential values in the catastrophe area.
454	454	(l) Not later than January 1 of each year, beginning January
455	455	1, 2014, the department shall notify each member of the member's
456	456	proportionate share of the association's total insured exposure
457	457	required to be reduced under this section and of the member's
458	458	potential liability for an assessment under this section.
459	459	(m) The commissioner shall adopt rules necessary to
460	460	implement and enforce this section.
461	461	Sec. 2210.213. CONFIDENTIAL INFORMATION. (a) Except as
462	462	provided by Subsection (b), all information, data, and databases
463	463	collected and used under Sections 2210.2022, 2210.211, and 2210.212
464	464	are confidential information not subject to disclosure under
465	465	Chapter 552, Government Code.
466	466	(b) Information described by Subsection (a) may be used for
467	467	the purposes and in the manner described by this chapter and Chapter
468	468	2211.
469	469	SECTION 15. Section 2210.451, Insurance Code, is amended to
470	470	read as follows:
471	471	Sec. 2210.451. DEFINITION. Except to the extent that
472	472	context clearly requires otherwise, in [In] this subchapter, "trust
473	473	fund" means the catastrophe reserve trust fund.
474	474	SECTION 16. Section 2210.452, Insurance Code, is amended by
475	475	amending Subsections (a), (c), and (d) and adding Subsection (f) to
476	476	read as follows:
477	477	(a) The commissioner shall adopt rules under which the
478	478	association makes payments to the catastrophe reserve trust fund.
479	479	Except as otherwise specifically provided by this section, the
480	480	[The] trust fund may be used only for purposes directly related to
481	481	funding the payment of insured losses, including:
482	482	(1) funding [to fund] the obligations of the trust
483	483	fund under Subchapter B-1; and
484	484	(2) purchasing reinsurance or using alternative risk
485	485	financing mechanisms under Sections 2210.453 and 2210.4531.
486	486	(c) At the end of each calendar year or policy year, the
487	487	association shall use the net gain from operations of the
488	488	association, including all premium and other revenue of the
489	489	association in excess of incurred losses, operating expenses,
490	490	deposits to the fund under Section 2210.4521, public security
491	491	obligations, and public security administrative expenses, to make
492	492	payments to the trust fund, to procure reinsurance, or to make
493	493	payments to the trust fund and to procure reinsurance.
494	494	(d) The commissioner by rule shall establish the procedure
495	495	relating to the disbursement of money from the trust fund to
496	496	policyholders and for association administrative expenses directly
497	497	related to funding the payment of insured losses in the event of an
498	498	occurrence or series of occurrences within a catastrophe area that
499	499	results in a disbursement under Subchapter B-1.
500	500	(f) The commissioner by rule shall establish the procedure
501	501	relating to the disbursement of money from the trust fund to pay for
502	502	operating expenses, including reinsurance or alternate risk
503	503	financing mechanisms under Sections 2210.453 and 2210.4531, if the
504	504	association does not have sufficient premium and other revenue.
505	505	SECTION 17. Subchapter J, Chapter 2210, Insurance Code, is
506	506	amended by adding Section 2210.4521 to read as follows:
507	507	Sec. 2210.4521. CATASTROPHE RESERVE TRUST FUND DEDICATION.
508	508	(a) Notwithstanding any other provision in this chapter, as
509	509	provided for in the plan of operation, the association shall
510	510	deposit monthly in a fund, separate from the catastrophe reserve
511	511	trust fund established under Section 2210.452, an amount sufficient
512	512	to accumulate on an annual calendar year basis an amount equal to 30
513	513	percent of the association's earned premium for the preceding
514	514	calendar year.
515	515	(b) The fund described by Subsection (a) is a trust fund
516	516	with the Texas Treasury Safekeeping Trust Company to be held
517	517	outside the state treasury.
518	518	(c) Not later than February 1 of each year the association
519	519	shall direct the Texas Treasury Safekeeping Trust Company to
520	520	deposit all amounts deposited in the fund described by Subsection
521	521	(a) during the preceding calendar year, and interest earned on
522	522	those amounts, into the catastrophe reserve trust fund.
523	523	(d) Money deposited in the fund described by Subsection (a)
524	524	is irrevocably pledged to be distributed to the catastrophe reserve
525	525	trust fund as provided in this section and is exempt from any other
526	526	claim or attachment under law.
527	527	(e) Money deposited under this section may be invested by
528	528	the Texas Treasury Safekeeping Trust Company as permitted by
529	529	general law.
530	530	SECTION 18. Section 2210.453, Insurance Code, is amended to
531	531	read as follows:
532	532	Sec. 2210.453. REINSURANCE AND ALTERNATIVE RISK FINANCING
533	533	MECHANISMS. (a) The association shall [may:
534	534	[(1) make payments into the trust fund; and
535	535	[(2)] purchase reinsurance or use alternative risk
536	536	financing mechanisms in an amount equal to $1 billion.
537	537	(b) The [association may purchase] reinsurance or
538	538	alternative risk financing mechanisms purchased or used under this
539	539	section operate [that operates] in addition to [or in concert with
540	540	the trust fund,] public securities, other approved financial
541	541	instruments, and assessments authorized by this chapter.
542	542	(c) The attachment point for reinsurance purchased under
543	543	this section may not be less than the aggregate amount of all
544	544	funding available to the association under Subchapter B-1. [If the
545	545	association does not purchase reinsurance as authorized by this
546	546	section, the board, not later than June 1 of each year, shall submit
547	547	to the commissioner, the legislative oversight board established
548	548	under Subchapter N, the governor, the lieutenant governor, and the
549	549	speaker of the house of representatives a report containing an
550	550	actuarial plan for paying losses in the event of a catastrophe with
551	551	estimated damages of $2.5 billion or more. The report required by
552	552	this subsection must:
553	553	[(1) document and denominate the association's
554	554	resources available to pay claims, including cash or other highly
555	555	liquid assets, assessments that the association is projected to
556	556	impose, pre-event and post-event bonding capacity, and
557	557	private-sector recognized risk-transfer mechanisms, including
558	558	catastrophe bonds and reinsurance;
559	559	[(2) include an independent, third-party appraisal of
560	560	the likelihood of an assessment, the maximum potential size of the
561	561	assessment, and an estimate of the probability that the assessment
562	562	would not be adequate to meet the association's needs; and
563	563	[(3) include an analysis of financing alternatives to
564	564	assessments that includes the costs of borrowing and the
565	565	consequences that additional purchase of reinsurance, catastrophe
566	566	bonds, or other private-sector recognized risk-transfer
567	567	instruments would have in reducing the size or potential of
568	568	assessments.
569	569	[(d) A person who prepares a report required by Subsection
570	570	(c) may not contract to provide any other service to the
571	571	association, except for the preparation of similar reports, before
572	572	the third anniversary of the date the last report prepared by the
573	573	person under that subsection is submitted.
574	574	[(e) The report submitted under this section is for
575	575	informational purposes only and does not bind the association to a
576	576	particular course of action.]
577	577	SECTION 19. Subchapter J, Chapter 2210, Insurance Code, is
578	578	amended by adding Section 2210.4531 to read as follows:
579	579	Sec. 2210.4531. ADDITIONAL REINSURANCE. (a) The
580	580	association shall purchase, in addition to any reinsurance
581	581	purchased under Section 2210.453, reinsurance in an amount not
582	582	greater than the lesser of:
583	583	(1) $800 million; or
584	584	(2) an amount such that the association's total loss
585	585	funding is sufficient to fund its probable maximum loss for a
586	586	catastrophe year with a probability of 1 in 100.
587	587	(b) The attachment point for reinsurance purchased under
588	588	this section may not be less than the aggregate amount of all
589	589	funding available to the association under Subchapter B-1 and
590	590	Section 2210.453.
591	591	(c) The association shall assess member insurers the cost of
592	592	reinsurance purchased under this section. The proportion of the
593	593	reinsurance cost allocable to each insurer under this section shall
594	594	be determined in the manner used to determine each insurer's
595	595	participation in the association for the year under Section
596	596	2210.052.
597	597	SECTION 20. Subchapter L-1, Chapter 2210, Insurance Code,
598	598	is amended by adding Section 2210.5725 to read as follows:
599	599	Sec. 2210.5725. ASSOCIATION CLAIMS PROCESSING. (a) An
600	600	insurer that has primary coverage on property for loss by fire must
601	601	adjust all claims made on an association policy covering the same
602	602	property.
603	603	(b) An insurer acting under this section is an agent of the
604	604	association for purposes of Sections 2210.014 and 2210.572 and
605	605	shall process claims as prescribed by this chapter and the plan of
606	606	operation.
607	607	(c) An insurer acting under this section is not liable for
608	608	any amount payable under the terms of the association policy.
609	609	SECTION 21. Section 2210.602, Insurance Code, is amended by
610	610	adding Subdivisions (2-a) and (3-a) to read as follows:
611	611	(2-a) "Class 1 public security trust fund" means the
612	612	dedicated trust fund established by the board and held by the Texas
613	613	Treasury Safekeeping Trust Company into which premium surcharges
614	614	collected under Section 2210.612 for the purpose of repaying Class
615	615	1 public securities are deposited.
616	616	(3-a) "Class 2 public security trust fund" means the
617	617	dedicated trust fund established by the board and held by the Texas
618	618	Treasury Safekeeping Trust Company into which premium surcharges
619	619	collected under Section 2210.613 for the purpose of repaying Class
620	620	2 public securities are deposited.
621	621	SECTION 22. Subsection (a), Section 2210.604, Insurance
622	622	Code, is amended to read as follows:
623	623	(a) At the request of the association and with the approval
624	624	of the commissioner, the Texas Public Finance Authority shall issue
625	625	Class 1 or [,] Class 2[, or Class 3] public securities. The
626	626	association shall submit to the commissioner a cost-benefit
627	627	analysis of various financing methods and funding structures when
628	628	requesting the issuance of public securities under this subsection.
629	629	SECTION 23. Section 2210.609, Insurance Code, is amended to
630	630	read as follows:
631	631	Sec. 2210.609. REPAYMENT OF ASSOCIATION'S PUBLIC SECURITY
632	632	OBLIGATIONS. (a) The board and the association shall enter into
633	633	an agreement under which the association shall provide for the
634	634	payment of all public security obligations from available funds
635	635	collected by the association and deposited as required by this
636	636	subchapter [into the public security obligation revenue fund]. If
637	637	the association determines that it is unable to pay the public
638	638	security obligations and public security administrative expenses,
639	639	if any, with available funds, the association shall pay those
640	640	obligations and expenses in accordance with Sections 2210.612 and
641	641	[,] 2210.613, [2210.6135, and 2210.6136] as applicable. Class 1 or
642	642	[,] Class 2[, or Class 3] public securities may be issued on a
643	643	parity or subordinate lien basis with other Class 1 or [,] Class 2[,
644	644	or Class 3] public securities, respectively.
645	645	(b) If any public securities issued under this chapter are
646	646	outstanding, the authority shall notify the association of the
647	647	amount of the public security obligations and the estimated amount
648	648	of public security administrative expenses, if any, each calendar
649	649	year in a period sufficient, as determined by the association, to
650	650	permit the association to determine the availability of funds[,
651	651	assess members of the association under Sections 2210.613 and
652	652	2210.6135,] and assess a premium surcharge if necessary.
653	653	(c) The association shall deposit all revenue collected
654	654	under Section 2210.612 in the Class 1 public security trust fund
655	655	[public security obligation revenue fund,] and all revenue
656	656	collected under Section 2210.613 [2210.613(b)] in the Class 2
657	657	public security trust fund [premium surcharge trust fund, and all
658	658	revenue collected under Sections 2210.613(a) and 2210.6135 in the
659	659	member assessment trust fund]. Money deposited in a fund may be
660	660	invested as permitted by general law. Money in a fund required to
661	661	be used to pay public security obligations and public security
662	662	administrative expenses, if any, shall be transferred to the
663	663	appropriate funds in the manner and at the time specified in the
664	664	proceedings authorizing the public securities to ensure timely
665	665	payment of obligations and expenses. This may include the board
666	666	establishing funds and accounts with the comptroller that the board
667	667	determines are necessary to administer and repay the public
668	668	security obligations. If the association has not transferred
669	669	amounts sufficient to pay the public security obligations to the
670	670	board's designated interest and sinking fund in a timely manner,
671	671	the board may direct the Texas Treasury Safekeeping Trust Company
672	672	to transfer from the Class 1 public security trust fund [public
673	673	security obligation revenue fund, the premium surcharge trust
674	674	fund,] or the Class 2 public security trust fund [member assessment
675	675	trust fund] to the appropriate account the amount necessary to pay
676	676	the public security obligation.
677	677	(d) The association shall provide for the payment of the
678	678	public security obligations and the public security administrative
679	679	expenses by irrevocably pledging revenues received from premiums,
680	680	[member assessments,] premium surcharges, and amounts on deposit in
681	681	the Class 1 public security trust fund [public security obligation
682	682	revenue fund, the premium surcharge trust fund,] and the Class 2
683	683	public security trust fund [member assessment trust fund], together
684	684	with any public security reserve fund, as provided in the
685	685	proceedings authorizing the public securities and related credit
686	686	agreements.
687	687	(e) An amount owed by the board under a credit agreement
688	688	shall be payable from and secured by a pledge of revenues received
689	689	by the association [or amounts from the public security obligation
690	690	trust fund], the Class 1 public security trust fund [premium
691	691	surcharge trust fund], and the Class 2 public security trust fund
692	692	[member assessment trust fund] to the extent provided in the
693	693	proceedings authorizing the credit agreement.
694	694	SECTION 24. Subsection (a), Section 2210.610, Insurance
695	695	Code, is amended to read as follows:
696	696	(a) Revenues received from the premium surcharges under
697	697	Sections 2210.612 and [Section] 2210.613 [and member assessments
698	698	under Sections 2210.613 and 2210.6135] may be applied only as
699	699	provided by this subchapter.
700	700	SECTION 25. Section 2210.611, Insurance Code, is amended to
701	701	read as follows:
702	702	Sec. 2210.611. EXCESS REVENUE COLLECTIONS AND INVESTMENT
703	703	EARNINGS. Revenue collected in any calendar year from a premium
704	704	surcharge under Sections 2210.612 and [Section] 2210.613 [and
705	705	member assessments under Sections 2210.613 and 2210.6135] that
706	706	exceeds the amount of the public security obligations and public
707	707	security administrative expenses payable in that calendar year and
708	708	interest earned on the funds [public security obligation fund] may,
709	709	in the discretion of the association, be:
710	710	(1) used to pay public security obligations payable in
711	711	the subsequent calendar year, offsetting the amount of the premium
712	712	surcharge [and member assessments, as applicable,] that would
713	713	otherwise be required to be levied for the year under this
714	714	subchapter;
715	715	(2) used to redeem or purchase outstanding public
716	716	securities; or
717	717	(3) deposited in the catastrophe reserve trust fund.
718	718	SECTION 26. Section 2210.612, Insurance Code, is amended to
719	719	read as follows:
720	720	Sec. 2210.612. PAYMENT OF CLASS 1 PUBLIC SECURITIES.
721	721	(a) The association shall pay Class 1 public securities issued
722	722	under Section 2210.072 from:
723	723	(1) [its] net premium and other revenue; and
724	724	(2) if net premium and other revenue are not
725	725	sufficient to pay the securities, a catastrophe area premium
726	726	surcharge collected in accordance with this section.
727	727	(b) On approval by the commissioner, the association and
728	728	each insurer that provides insurance in a catastrophe area shall
729	729	assess, as provided by this section, a premium surcharge to each
730	730	policyholder of a policy described by Subsection (c). The premium
731	731	surcharge must be set in an amount sufficient to pay, for the
732	732	duration of the issued public securities, all debt service not
733	733	already covered by available funds and all related expenses on the
734	734	public securities.
735	735	(c) The premium surcharge under this section shall be
736	736	assessed on all policyholders of policies that cover insured
737	737	property that is located in a catastrophe area, including an
738	738	automobile principally garaged in a catastrophe area. The premium
739	739	surcharge shall be assessed on each Texas windstorm and hail
740	740	insurance policy and each property and casualty insurance policy,
741	741	including an automobile insurance policy, issued for an automobile
742	742	or other property located in the catastrophe area. The premium
743	743	surcharge applies to:
744	744	(1) all policies written under the following lines of
745	745	insurance:
746	746	(A) fire and allied lines;
747	747	(B) farm and ranch owners;
748	748	(C) residential property insurance;
749	749	(D) private passenger automobile liability and
750	750	physical damage insurance; and
751	751	(E) commercial automobile liability and physical
752	752	damage insurance; and
753	753	(2) the property insurance portion of a commercial
754	754	multiple peril insurance policy.
755	755	(d) A premium surcharge under this section is a separate
756	756	charge in addition to the premiums collected and is not subject to
757	757	premium tax or commissions. Failure by a policyholder to pay the
758	758	surcharge constitutes failure to pay premium for purposes of policy
759	759	cancellation.
760	760	(e) [(b)] The association may enter financing arrangements
761	761	as described by Section 2210.072(d) as necessary to obtain public
762	762	securities issued under Section 2210.072. Nothing in this
763	763	subsection shall prevent the authorization and creation of one or
764	764	more programs for the issuance of commercial paper before the date
765	765	of an occurrence or series of occurrences that results in insured
766	766	losses under Section 2210.072(a).
767	767	SECTION 27. Section 2210.613, Insurance Code, is amended to
768	768	read as follows:
769	769	Sec. 2210.613. PAYMENT OF CLASS 2 PUBLIC SECURITIES.
770	770	(a) The association shall pay Class 2 public securities issued
771	771	under Section 2210.073 from:
772	772	(1) net premium and other revenue; and
773	773	(2) if net premium and other revenue are not
774	774	sufficient to pay the securities, a catastrophe area premium
775	775	surcharge collected in accordance with this section.
776	776	(b) On approval by the commissioner, the association and
777	777	each insurer that provides insurance in a catastrophe area shall
778	778	assess, as provided by this section, a premium surcharge to each
779	779	policyholder of a policy described by Subsection (c). The premium
780	780	surcharge must be set in an amount sufficient to pay, for the
781	781	duration of the issued public securities, all debt service not
782	782	already covered by available funds and all related expenses on the
783	783	public securities. [as provided by this section. Thirty percent of
784	784	the cost of the public securities shall be paid through member
785	785	assessments as provided by this section. The association shall
786	786	notify each member of the association of the amount of the member's
787	787	assessment under this section. The proportion of the losses
788	788	allocable to each insurer under this section shall be determined in
789	789	the manner used to determine each insurer's participation in the
790	790	association for the year under Section 2210.052. A member of the
791	791	association may not recoup an assessment paid under this subsection
792	792	through a premium surcharge or tax credit.
793	793	[(b) Seventy percent of the cost of the public securities
794	794	shall be paid by a premium surcharge collected under this section in
795	795	an amount set by the commissioner. On approval by the
796	796	commissioner, each insurer, the association, and the Texas FAIR
797	797	Plan Association shall assess, as provided by this section, a
798	798	premium surcharge to each policyholder of a policy that is in effect
799	799	on or after the 180th day after the date the commissioner issues
800	800	notice of the approval of the public securities. The premium
801	801	surcharge must be set in an amount sufficient to pay, for the
802	802	duration of the issued public securities, all debt service not
803	803	already covered by available funds or member assessments and all
804	804	related expenses on the public securities.]
805	805	(c) The premium surcharge under this section [Subsection
806	806	(b)] shall be assessed on all policyholders of policies that cover
807	807	insured property that is located in a catastrophe area, including
808	808	automobiles principally garaged in a catastrophe area. The
809	809	premium surcharge shall be assessed on each Texas windstorm and
810	810	hail insurance policy and each property and casualty insurance
811	811	policy, including an automobile insurance policy, issued for
812	812	automobiles and other property located in the catastrophe area.
813	813	The [A] premium surcharge under this section [Subsection (b)]
814	814	applies to:
815	815	(1) all policies written under the following lines of
816	816	insurance:
817	817	(A) fire and allied lines;
818	818	(B) farm and ranch owners;
819	819	(C) residential property insurance;
820	820	(D) private passenger automobile liability and
821	821	physical damage insurance; and
822	822	(E) commercial automobile liability and physical
823	823	damage insurance; and
824	824	(2) the property insurance portion of a commercial
825	825	multiple peril insurance policy.
826	826	(d) A premium surcharge under this section [Subsection (b)]
827	827	is a separate charge in addition to the premiums collected and is
828	828	not subject to premium tax or commissions. Failure by a
829	829	policyholder to pay the surcharge constitutes failure to pay
830	830	premium for purposes of policy cancellation.
831	831	SECTION 28. Section 2210.614, Insurance Code, is amended to
832	832	read as follows:
833	833	Sec. 2210.614. REFINANCING PUBLIC SECURITIES. The
834	834	association may request the board to refinance any public
835	835	securities issued in accordance with Subchapter B-1, whether Class
836	836	1 or [,] Class 2[, or Class 3] public securities, with public
837	837	securities payable from the same sources as the original public
838	838	securities.
839	839	SECTION 29. Subsection (a), Section 2210.616, Insurance
840	840	Code, is amended to read as follows:
841	841	(a) The state pledges for the benefit and protection of
842	842	financing parties, the board, and the association that the state
843	843	will not take or permit any action that would:
844	844	(1) impair the collection of [member assessments and]
845	845	premium surcharges or the deposit of those funds into the Class 1
846	846	public security [member assessment] trust fund or Class 2 public
847	847	security [premium surcharge] trust fund;
848	848	(2) reduce, alter, or impair the [member assessments
849	849	or] premium surcharges to be imposed, collected, and remitted to
850	850	financing parties until the principal, interest, and premium, and
851	851	any other charges incurred and contracts to be performed in
852	852	connection with the related public securities, have been paid and
853	853	performed in full; or
854	854	(3) in any way impair the rights and remedies of the
855	855	public security owners until the public securities are fully
856	856	discharged.
857	857	SECTION 30. Section 2210.6165, Insurance Code, is amended
858	858	to read as follows:
859	859	Sec. 2210.6165. PROPERTY RIGHTS. If public securities
860	860	issued under this subchapter are outstanding, the rights and
861	861	interests of the association, a successor to the association, any
862	862	member of the association, or any member of the Texas FAIR Plan
863	863	Association, including the right to impose, collect, and receive a
864	864	premium surcharge [or a member assessment] authorized under this
865	865	subchapter, are only contract rights until those revenues are first
866	866	pledged for the repayment of the association's public security
867	867	obligations as provided by Section 2210.609.
868	868	SECTION 31. Subsection (a), Section 2210.653, Insurance
869	869	Code, is amended to read as follows:
870	870	(a) The board shall:
871	871	(1) receive information about rules proposed by the
872	872	department relating to windstorm insurance and may submit comments
873	873	to the commissioner on the proposed rules;
874	874	(2) review the reports required by Section
875	875	2210.212(j);
876	876	(3) monitor windstorm insurance in this state,
877	877	including:
878	878	(A) the adequacy of rates;
879	879	(B) the operation of the association; and
880	880	(C) the availability of coverage; [and]
881	881	(4) monitor the activities of the administrator under
882	882	Section 2210.212, including:
883	883	(A) the performance of the administrator
884	884	contracted to administer the association;
885	885	(B) the progress toward meeting the requirements
886	886	of Section 2210.212; and
887	887	(C) the extent of voluntary market participation
888	888	in coastal and historically underserved areas in this state;
889	889	(5) review and provide input with regard to efforts to
890	890	meet the requirements of Section 2210.212; and
891	891	(6) [(3)] review recommendations for legislation
892	892	proposed by the department or the association.
893	893	SECTION 32. Section 2211.001, Insurance Code, is amended by
894	894	amending Subdivision (1) and adding Subdivision (1-a) to read as
895	895	follows:
896	896	(1) "Administrator" means the entity contractually
897	897	retained to manage:
898	898	(A) the Texas Residual Insurance Plan under
899	899	Section 2210.062; and
900	900	(B) the association under Section 2211.0522.
901	901	(1-a) "Association" means the FAIR Plan Association
902	902	established under this chapter.
903	903	SECTION 33. Subchapter B, Chapter 2211, Insurance Code, is
904	904	amended by adding Sections 2211.0522 and 2211.0555 to read as
905	905	follows:
906	906	Sec. 2211.0522. ADMINISTRATION BY ADMINISTRATOR.
907	907	Notwithstanding Section 2211.052 or any other law, the
908	908	administrator shall manage the association and administer the plan
909	909	of operation beginning January 1, 2014. The administrator may not
910	910	exercise any power under the contract before January 1, 2014.
911	911	Sec. 2211.0555. ASSOCIATION CLAIMS PROCESSING. (a) The
912	912	administrator shall adjust claims made on or after January 1, 2014,
913	913	on an association policy.
914	914	(b) The administrator is not liable for any amount payable
915	915	under the terms of an association policy.
916	916	SECTION 34. Subchapter D, Chapter 2211, Insurance Code, is
917	917	amended by adding Sections 2211.1514 and 2211.1515 to read as
918	918	follows:
919	919	Sec. 2211.1514. VOLUNTARY ELECTRONIC PORTAL. (a) As soon
920	920	as practicable after January 1, 2014, the administrator shall make
921	921	available to all insurers an electronic portal to provide insurers
922	922	access to information described by Subsection (b).
923	923	(b) The portal must provide insurers access to information
924	924	on each insured's association policy and other policy, if any, that
925	925	covers other perils, if known, including:
926	926	(1) the insured's total premium amount on the
927	927	association policy;
928	928	(2) the total premium for a policy that covers losses
929	929	due to windstorm and hail, if any, including a policy issued by the
930	930	Texas Residual Insurance Plan under Chapter 2210, if applicable,
931	931	and:
932	932	(A) the amount of insurance on the dwelling and
933	933	its contents; or
934	934	(B) if the policy is a tenants policy or
935	935	condominium owners policy, the insured amount for the contents
936	936	coverage; and
937	937	(3) the deductibles applicable for each policy.
938	938	Sec. 2211.1515. CONFIDENTIAL INFORMATION. (a) Except as
939	939	provided by Subsection (b), all information and data collected and
940	940	used under Section 2211.1514 constitute confidential information
941	941	not subject to disclosure under Chapter 552, Government Code.
942	942	(b) Information described by Subsection (a) may be used for
943	943	the purposes and in the manner described by this chapter and Chapter
944	944	2210.
945	945	SECTION 35. The Texas Department of Insurance shall conduct
946	946	a study to consider possible exposure reduction plans for the FAIR
947	947	Plan Association established under Chapter 2211, Insurance Code.
948	948	Not later than January 1, 2014, the department shall submit a report
949	949	containing the findings of the study to:
950	950	(1) the governor;
951	951	(2) the lieutenant governor;
952	952	(3) the speaker of the house of representatives;
953	953	(4) the Senate Committee on Business and Commerce or
954	954	the successor of that committee with jurisdiction over insurance;
955	955	(5) the House Committee on Insurance or the successor
956	956	of that committee with jurisdiction over insurance; and
957	957	(6) the legislative oversight board established under
958	958	Subchapter N, Chapter 2210, Insurance Code.
959	959	SECTION 36. The following provisions of Chapter 2210,
960	960	Insurance Code, are repealed:
961	961	(1) Sections 2210.074 and 2210.075;
962	962	(2) Subdivisions (4), (5-a), (6-b), (6-c), and (10),
963	963	Section 2210.602;
964	964	(3) Subsection (c), Section 2210.605; and
965	965	(4) Sections 2210.6135 and 2210.6136.
966	966	SECTION 37. (a) The board of directors of the Texas
967	967	Windstorm Insurance Association established under Section
968	968	2210.102, Insurance Code, as that section existed before amendment
969	969	by this Act, is abolished effective November 1, 2013.
970	970	(b) The governor shall appoint the members of the board of
971	971	directors of the Texas Residual Insurance Plan under Section
972	972	2210.102, Insurance Code, as amended by this Act, effective
973	973	November 1, 2013. The initial directors shall draw lots to achieve
974	974	staggered terms, with three of the directors serving one-year
975	975	terms, three of the directors serving two-year terms, and three of
976	976	the directors serving three-year terms.
977	977	(c) The term of a person who is serving as a member of the
978	978	board of directors of the Texas Windstorm Insurance Association
979	979	immediately before the abolition of that board under Subsection (a)
980	980	of this section expires on November 1, 2013. Such a person is
981	981	eligible for appointment by the governor to the new board of
982	982	directors of the Texas Residual Insurance Plan under Section
983	983	2210.102, Insurance Code, as amended by this Act.
984	984	(d) Notwithstanding Section 2210.4521, Insurance Code, as
985	985	added by this Act, beginning on the effective date of this Act and
986	986	continuing until December 31, 2013, the Texas Residual Insurance
987	987	Plan shall deposit 30 percent of its earned premium into the trust
988	988	fund described by that section. Not later than February 1, 2014,
989	989	the plan shall direct the Texas Treasury Safekeeping Trust Company
990	990	to deposit all amounts deposited in the trust fund during the 2013
991	991	calendar year, and interest earned on those funds, into the
992	992	catastrophe reserve trust fund as described by that section.
993	993	(e) Section 2210.4521, Insurance Code, as added by this Act,
994	994	applies to all Texas Residual Insurance Plan premiums earned on and
995	995	after January 1, 2014.
996	996	(f) Notwithstanding Subsection (d) of this section and
997	997	Section 2210.0715, Insurance Code, as added by this Act, amounts
998	998	collected under Section 2210.4521, Insurance Code, as added by this
999	999	Act, may not be used to pay for a covered insured association loss
1000	1000	incurred before June 1, 2013.
1001	1001	(g) Section 2210.5725, Insurance Code, as added by this Act,
1002	1002	applies only to adjustment of a claim made on or after the effective
1003	1003	date of this Act.
1004	1004	(h) It is the intent of the legislature that each member of
1005	1005	the legislative oversight board appointed under Section 2210.652,
1006	1006	Insurance Code, and serving on the effective date of this Act
1007	1007	continues to serve after the effective date of this Act until a
1008	1008	successor is appointed under that section.
1009	1009	SECTION 38. This Act takes effect immediately if it
1010	1010	receives a vote of two-thirds of all the members elected to each
1011	1011	house, as provided by Section 39, Article III, Texas Constitution.
1012	1012	If this Act does not receive the vote necessary for immediate
1013	1013	effect, this Act takes effect September 1, 2013.
1014	1014	* * * * *