Texas 2015 - 84th Regular

Texas House Bill HB3204 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	84R9618 SCL-D
2	2	By: Sheets H.B. No. 3204
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to a depopulation program for the Texas Windstorm
8	8	Insurance Association.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Chapter 2210, Insurance Code, is amended by
11	11	adding Subchapter O to read as follows:
12	12	SUBCHAPTER O. DEPOPULATION PROGRAM
13	13	Sec. 2210.701. DEPOPULATION PROGRAM. (a) The association
14	14	shall administer, subject to commissioner approval, a depopulation
15	15	program that encourages the transfer of association policies to
16	16	insurers through the voluntary market or assumption reinsurance.
17	17	(b) An insurer engaged in the business of property and
18	18	casualty insurance in this state may elect to participate in the
19	19	depopulation program.
20	20	(c) An eligible surplus lines insurer may elect to
21	21	participate in the depopulation program if the surplus lines
22	22	insurer has at least a minimum A7 rating from A. M. Best or a
23	23	comparable rating determined by the commissioner. The commissioner
24	24	by rule shall establish the manner in which an eligible surplus
25	25	lines insurer may participate in the depopulation program. The
26	26	rules must address the transmission of information to participating
27	27	surplus lines insurers or surplus lines agents under Section
28	28	2210.702(a) or 2210.703(a) and the manner in which compliance with
29	29	Section 981.004(a)(1) must be established.
30	30	Sec. 2210.702. VOLUNTARY MARKET DEPOPULATION. (a) The
31	31	association shall notify each insurer who elects to participate in
32	32	the depopulation program of the expiration of an association
33	33	policy.
34	34	(b) In the notice provided under Subsection (a), the
35	35	association shall provide necessary information for the insurer to
36	36	determine whether to issue a policy in the voluntary market to the
37	37	association policyholder.
38	38	(c) If an insurer elects to issue a policy to an association
39	39	policyholder under this section, the insurer is legally and
40	40	contractually responsible for the issued policy regardless of
41	41	whether the association continues to provide some services on the
42	42	policy. Except as specifically provided in an agreement between
43	43	the association and the insurer, the insurer shall administer the
44	44	policy and process, adjust, and pay claims in accordance with the
45	45	policy.
46	46	(d) If an insurer offers a policy to a policyholder under
47	47	this section that contains generally comparable coverage and
48	48	premiums to the association policy as determined by commissioner
49	49	rule, the association may not renew or issue a new association
50	50	policy to the policyholder. The commissioner by rule shall
51	51	establish, as a percentage, a reasonable difference in premium cost
52	52	that qualifies as comparable premiums for purposes of this
53	53	subsection.
54	54	Sec. 2210.703. ASSUMPTION REINSURANCE DEPOPULATION. (a)
55	55	The association shall make available to insurers who elect to
56	56	participate in the depopulation program association policy
57	57	information necessary for the insurers to determine whether to
58	58	reinsure a policy ceded to the insurer by the association.
59	59	(b) If an insurer elects to reinsure a policy under this
60	60	section, the reinsurance must be provided as assumption reinsurance
61	61	and the insurer is legally and contractually responsible for the
62	62	association policy ceded to the insurer on the effective date of the
63	63	reinsurance agreement regardless of whether the association
64	64	continues to provide some services on the policy. Except as
65	65	specifically provided in an agreement between the association and
66	66	the insurer, the insurer shall administer the policy and process,
67	67	adjust, and pay claims in accordance with the policy.
68	68	Sec. 2210.704. CONFIDENTIALITY OF INFORMATION. An insurer
69	69	may use information concerning a specific policy or insured
70	70	provided by the association under Sections 2210.702(a) and
71	71	2210.703(a) only for the purposes of this subchapter and may not use
72	72	or disclose the information for any other purpose.
73	73	SECTION 2. As soon as practicable after the effective date
74	74	of this Act, the board of directors of the Texas Windstorm Insurance
75	75	Association shall propose amendments to the plan of operation of
76	76	the association and the commissioner of insurance shall adopt rules
77	77	to implement Subchapter O, Chapter 2210, Insurance Code, as added
78	78	by this Act.
79	79	SECTION 3. This Act takes effect September 1, 2015.