S.B. No. 1702
AN ACT
relating to residential property insured by the Texas Windstorm
Insurance Association.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subsection (f), Section 2210.251, Insurance
Code, is amended to read as follows:
(f) Notwithstanding any other provision of this section,
insurance coverage for a residential structure [insured by the
association as of September 1, 2009,] may be issued or renewed
[continue coverage] through the association subject to the
inspection requirements imposed under Section 2210.258, if
applicable. This subsection expires December 31, 2015.
SECTION 2. Section 2210.258, Insurance Code, is amended to
read as follows:
Sec. 2210.258. [MANDATORY] COMPLIANCE WITH BUILDING CODES;
ELIGIBILITY. (a) Except as provided by Subsection (c) and Section
2210.2581 and notwithstanding [Notwithstanding] any other
provision of this chapter, to be eligible for insurance through the
association, all construction, alteration, remodeling,
enlargement, and repair of, or addition to, any structure located
in the catastrophe area that is begun on or after the effective date
of Sections 5 through 49, H.B. No. 4409, Acts of the 81st
Legislature, Regular Session, 2009, must be performed in compliance
with the applicable building code standards, as set forth in the
plan of operation.
(b) Except as provided by Subsection (c), the [The]
association may not insure a structure described by Subsection (a)
until:
(1) the structure has been inspected for compliance
with the plan of operation in accordance with Section 2210.251(a);
and
(2) a certificate of compliance has been issued for
the structure in accordance with Section 2210.251(g).
(c) The association may insure a residential structure
constructed, altered, remodeled, enlarged, repaired, or added to on
or after June 19, 2009, that is not in compliance with the
applicable building code standards, as set forth in the plan of
operation, provided that:
(1) the structure had been insured on or after June 19,
2009, by an insurer in the private market that canceled or
nonrenewed the insurance coverage of the structure before December
31, 2015;
(2) the applicant provides to the association proof
that insurance coverage that was issued to the applicant or the
previous insured for the structure was canceled or nonrenewed in
the private market as described by Subdivision (1); and
(3) no construction, alteration, remodeling,
enlargement, or repair of, or addition to, the structure occurred
after cancellation or nonrenewal of the coverage and before
submission of an application for coverage through the association.
SECTION 3. Subchapter F, Chapter 2210, Insurance Code, is
amended by adding Section 2210.2581 to read as follows:
Sec. 2210.2581. MANDATORY COMPLIANCE WITH BUILDING
STANDARDS; CERTAIN STRUCTURES. Except as provided by Section
2210.251(d) and (e), and notwithstanding Section 2210.258 or any
other provision of this chapter, on and after December 31, 2015, the
association may not issue or renew insurance coverage for a
structure unless the structure complies with the applicable
building code standards in effect on the date the construction,
alteration, remodeling, enlargement, or repair of, or addition to,
the structure begins, as set forth in the plan of operation.
SECTION 4. Section 2210.259, Insurance Code, is amended by
amending Subsection (a) and adding Subsection (a-1) to read as
follows:
(a) Except as provided by Subsection (a-1), an insurance
policy insuring a [A] noncompliant residential structure under
Section 2210.251(f) [insured by the association as of September 1,
2009, under Section 2210.251(f) that had been approved for
insurability under the approval process regulations in effect on
September 1, 2009,] is subject to an annual premium surcharge in an
amount equal to 15 percent of the premium for insurance coverage
obtained through the association. The surcharge under this
subsection applies to each policy issued or renewed by the
association on or after the effective date of Sections 5 through 49,
H.B. No. 4409, Acts of the 81st Legislature, Regular Session, 2009,
and is due on the issuance or renewal of the policy.
(a-1) For a policy insuring a noncompliant residential
structure eligible for coverage under Section 2210.258(c), the
association shall charge:
(1) a premium based on the rate charged in the
voluntary market for the portion of the canceled or nonrenewed
policy that provides windstorm and hail insurance coverage for the
applicable risk; and
(2) an annual premium surcharge in an amount equal to
10 percent of that premium.
SECTION 5. Section 2210.260, Insurance Code, is repealed.
SECTION 6. 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, 2013.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 1702 passed the Senate on
April 11, 2013, by the following vote: Yeas 31, Nays 0; and that
the Senate concurred in House amendments on May 25, 2013, by the
following vote: Yeas 30, Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 1702 passed the House, with
amendments, on May 22, 2013, by the following vote: Yeas 134,
Nays 11, three present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor