Texas 2021 - 87th Regular

Texas House Bill HB3809 Compare Versions

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

Old	New	Differences
1	1	87R8211 SMT-D
2	2	By: Hunter H.B. No. 3809
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the setting of premium rates for Texas Windstorm
8	8	Insurance Association policies by the commissioner of insurance.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 560.001, Insurance Code, is amended to
11	11	read as follows:
12	12	Sec. 560.001. DEFINITION OF INSURER. In this chapter,
13	13	"insurer" means an insurance company, reciprocal or interinsurance
14	14	exchange, mutual insurance company, farm mutual insurance company,
15	15	capital stock insurance company, county mutual insurance company,
16	16	Lloyd's plan, surplus lines insurer, or other legal entity engaged
17	17	in the business of insurance in this state. The term includes:
18	18	(1) an affiliate described by Section 823.003(a);
19	19	(2) [the Texas Windstorm Insurance Association
20	20	established under Chapter 2210;
21	21	[(3)] the FAIR Plan Association established under
22	22	Chapter 2211; and
23	23	(3) [(4)] the Texas Automobile Insurance Plan
24	24	Association established under Chapter 2151.
25	25	SECTION 2. Section 2210.259(a-1), Insurance Code, is
26	26	amended to read as follows:
27	27	(a-1) For a policy insuring a noncompliant residential
28	28	structure eligible for coverage under Section 2210.258(c), the
29	29	association shall charge:
30	30	(1) a premium set by the commissioner that is based on
31	31	the rate charged in the voluntary market for the portion of the
32	32	canceled or nonrenewed policy that provides windstorm and hail
33	33	insurance coverage for the applicable risk; and
34	34	(2) an annual premium surcharge in an amount equal to
35	35	10 percent of that premium.
36	36	SECTION 3. Subchapter H, Chapter 2210, Insurance Code, is
37	37	amended by adding Sections 2210.331, 2210.332, 2210.333, 2210.334,
38	38	2210.335, 2210.336, 2210.337, and 2210.338 to read as follows:
39	39	Sec. 2210.331. SETTING OF PREMIUM RATES. (a) The
40	40	commissioner shall set and adopt the premium rates to be charged
41	41	for:
42	42	(1) association policies, including reinsured
43	43	policies;
44	44	(2) reinsurance to cover an assessment purchased by a
45	45	member insurer under Section 2210.075; and
46	46	(3) reinsurance purchased by the association to
47	47	maintain required funding levels under Section 2210.453.
48	48	(b) A premium may not be charged for an association policy
49	49	at a rate different from the rate set and adopted by the
50	50	commissioner.
51	51	Sec. 2210.332. FACTORS CONSIDERED IN SETTING PREMIUM RATES.
52	52	(a) In setting premium rates, the commissioner shall consider all
53	53	relevant revenue and expenses of the association.
54	54	(b) The premium rates set by the commissioner must be:
55	55	(1) reasonable as to the public; and
56	56	(2) nonconfiscatory as to the association and member
57	57	insurers.
58	58	Sec. 2210.333. SUBMISSION OF DATA. (a) The association
59	59	shall annually submit to the department a report containing
60	60	information relating to:
61	61	(1) loss experience;
62	62	(2) expense of operation; and
63	63	(3) other matters material to premium rates as
64	64	determined by the department.
65	65	(b) The information must be submitted in the form and manner
66	66	prescribed by the department.
67	67	Sec. 2210.334. HEARING REQUIRED FOR SETTING PREMIUM RATE.
68	68	(a) A premium rate previously set by the commissioner may not be
69	69	changed until after the commissioner holds a public hearing.
70	70	(b) The commissioner shall order a public hearing to
71	71	consider changing a premium rate, including setting a new premium
72	72	rate, in response to a written request by the association. The
73	73	association may not request more than one hearing in a 12-month
74	74	period.
75	75	(c) A public hearing held under Subsection (a) shall be
76	76	conducted by the commissioner as a rulemaking hearing held under
77	77	Subchapter B, Chapter 2001, Government Code.
78	78	(d) The commissioner shall render a decision and issue a
79	79	final order not later than the 120th day after the date the
80	80	commissioner receives a written request under Subsection (b).
81	81	(e) The commissioner shall consider each matter presented
82	82	in a hearing under this section and announce in a public hearing all
83	83	decisions on all matters considered.
84	84	Sec. 2210.335. COURT PETITION. (a) The association may
85	85	petition a district court in Travis County to enter an order
86	86	requiring the commissioner to comply with the deadline described by
87	87	Section 2210.334(d).
88	88	(b) If the commissioner fails to comply with the
89	89	requirements of Section 2210.334(d), the association may petition a
90	90	district court in Travis County to adopt a premium rate based on the
91	91	record made in the hearing before the commissioner under Section
92	92	2210.334.
93	93	(c) If the record made in the hearing before the
94	94	commissioner is not complete before the request for the court to
95	95	adopt a premium rate under Subsection (b), the court shall hold an
96	96	evidentiary hearing to establish a record before adopting the
97	97	premium rate.
98	98	(d) After a petition has been filed under Subsection (b),
99	99	the commissioner may not issue findings or an order related to the
100	100	subject matter of the petition until after the date the court enters
101	101	a final judgment.
102	102	(e) A district court may appoint a magistrate to adopt a
103	103	premium rate under this section.
104	104	Sec. 2210.336. PERIODIC HEARING. The commissioner shall
105	105	hold a public hearing not earlier than July 1 after the fifth
106	106	anniversary of the closing of a hearing held under this subchapter
107	107	and not later than December 31 following that July 1 to consider the
108	108	setting of premium rates for the association under this subchapter.
109	109	Sec. 2210.337. COMMISSIONER AUTHORITY TO HOLD HEARINGS AS
110	110	NECESSARY. At any time, the commissioner may order a public hearing
111	111	to consider adoption of premium rates for the association under
112	112	this subchapter.
113	113	Sec. 2210.338. NOTICE OF CERTAIN HEARINGS. Not later than
114	114	the 60th day before the date of a hearing under Section 2210.334,
115	115	2210.336, or 2210.337, notice of the hearing and of each item to be
116	116	considered at the hearing shall be:
117	117	(1) sent directly to the association; and
118	118	(2) published in the Texas Register and on the
119	119	department's Internet website.
120	120	SECTION 4. Section 2210.351(b), Insurance Code, is amended
121	121	to read as follows:
122	122	(b) The association must file with the department each [A
123	123	filing under this section must indicate the character and the
124	124	extent of the coverage contemplated and must be accompanied by the]
125	125	policy and endorsement form [forms] proposed to be used. The forms
126	126	may be designed specifically for use by the association without
127	127	regard to other forms filed with, approved by, or prescribed by the
128	128	department for use in this state.
129	129	SECTION 5. Section 2210.363(a), Insurance Code, is amended
130	130	to read as follows:
131	131	(a) The commissioner may authorize the association to [may]
132	132	offer a person insured under this chapter an actuarially justified
133	133	premium discount on a policy issued by the association, or an
134	134	actuarially justified credit against a surcharge assessed against
135	135	the person, other than a surcharge assessed under Subchapter M, if:
136	136	(1) the construction, alteration, remodeling,
137	137	enlargement, or repair of, or an addition to, insurable property
138	138	exceeds applicable building code standards set forth in the plan of
139	139	operation; or
140	140	(2) the person elects to purchase a binding
141	141	arbitration endorsement under Section 2210.554.
142	142	SECTION 6. The following provisions of the Insurance Code
143	143	are repealed:
144	144	(1) Section 2210.004(f);
145	145	(2) Sections 2210.351(a), (c), (d), and (e); and
146	146	(3) Sections 2210.3511, 2210.352, 2210.353, 2210.354,
147	147	2210.355, 2210.357, 2210.358, and 2210.359.
148	148	SECTION 7. The rates for Texas Windstorm Insurance
149	149	Association insurance policies on the effective date of this Act
150	150	remain in effect until the commissioner of insurance holds a
151	151	hearing to change the rates under Subchapter H, Chapter 2210,
152	152	Insurance Code, as amended by this Act.
153	153	SECTION 8. This Act takes effect September 1, 2021.