Texas 2021 - 87th Regular

Texas House Bill HB429 Compare Versions

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

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1	1	87R1231 JES-D
2	2	By: King of Hemphill H.B. No. 429
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the coverage of damage from tornadoes and wildfires by
8	8	the Texas Windstorm Insurance Association.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 2210.001, Insurance Code, is amended to
11	11	read as follows:
12	12	Sec. 2210.001. PURPOSE. The primary purpose of the Texas
13	13	Windstorm Insurance Association is the provision of an adequate
14	14	market for windstorm and hail insurance in the seacoast territory
15	15	of this state and tornado insurance and wildfire insurance
16	16	statewide. The legislature finds that the provision of adequate
17	17	windstorm and hail insurance, tornado insurance, and wildfire
18	18	insurance is necessary to the economic welfare of this state, and
19	19	without that insurance, the orderly growth and development of this
20	20	state would be severely impeded. This chapter provides a method by
21	21	which adequate windstorm and hail insurance may be obtained in
22	22	certain designated portions of the seacoast territory of this state
23	23	and tornado insurance and wildfire insurance may be obtained
24	24	statewide. The association is intended to serve as a residual
25	25	insurer of last resort for windstorm and hail insurance in the
26	26	seacoast territory and tornado insurance and wildfire insurance
27	27	statewide. The association shall:
28	28	(1) function in such a manner as to not be a direct
29	29	competitor in the private market; and
30	30	(2) provide windstorm and hail insurance coverage,
31	31	tornado insurance coverage, and wildfire insurance coverage to
32	32	those who are unable to obtain [that] coverage in the private
33	33	market.
34	34	SECTION 2. Section 2210.003, Insurance Code, is amended by
35	35	amending Subdivision (6) and adding Subdivisions (14), (15), and
36	36	(16) to read as follows:
37	37	(6) "Insurance" means:
38	38	(A) Texas windstorm and hail insurance;
39	39	(B) tornado insurance; and
40	40	(C) wildfire insurance.
41	41	(14) "Tornado insurance" means insurance against:
42	42	(A) direct loss to insurable property incurred as
43	43	a result of a tornado, as those terms are defined and limited in
44	44	policies and forms approved by the department; and
45	45	(B) indirect losses resulting from the direct
46	46	loss.
47	47	(15) "Wildfire" means an uncontrolled blaze fueled by
48	48	weather, wind, and dry underbrush, trees, grasses, and other
49	49	flammable material.
50	50	(16) "Wildfire insurance" means insurance against:
51	51	(A) direct loss to insurable property incurred as
52	52	a result of wildfire, as those terms are defined and limited in
53	53	policies and forms approved by the department; and
54	54	(B) indirect losses resulting from the direct
55	55	loss.
56	56	SECTION 3. Sections 2210.004(a), (b), (c), and (d),
57	57	Insurance Code, are amended to read as follows:
58	58	(a) Except as provided by Subsection (h), for purposes of
59	59	this chapter and subject to this section, "insurable property"
60	60	means immovable property at a fixed location in a catastrophe area
61	61	or corporeal movable property located in that immovable property,
62	62	as designated in the plan of operation, that is determined by the
63	63	association according to the criteria specified in the plan of
64	64	operation to be in an insurable condition against windstorm and
65	65	hail, tornado, and wildfire, as determined by normal underwriting
66	66	standards. The term includes property described by Section
67	67	2210.209.
68	68	(b) A structure located in a catastrophe area, construction
69	69	of which began on or after the 30th day after the date of
70	70	publication of the plan of operation, that is not built in
71	71	compliance with building specifications set forth in the plan of
72	72	operation or continued in compliance with those specifications,
73	73	does not constitute an insurable risk for purposes of windstorm and
74	74	hail insurance, tornado insurance, or wildfire insurance except as
75	75	otherwise provided by this chapter.
76	76	(c) A structure, or an addition to a structure, that is
77	77	constructed in conformity with plans and specifications that comply
78	78	with the specifications set forth in the plan of operation at the
79	79	time construction begins may not be declared ineligible for
80	80	windstorm and hail insurance, tornado insurance, or wildfire
81	81	insurance as a result of subsequent changes in the building
82	82	specifications set forth in the plan of operation.
83	83	(d) Except as otherwise provided by this section, if repair
84	84	of damage to a structure involves replacement of items covered in
85	85	the building specifications set forth in the plan of operation, the
86	86	repairs must be completed in a manner that complies with those
87	87	specifications for the structure to continue to be insurable
88	88	property for windstorm and hail insurance, tornado insurance, and
89	89	wildfire insurance.
90	90	SECTION 4. Sections 2210.005(a) and (c), Insurance Code,
91	91	are amended to read as follows:
92	92	(a) After at least 10 days' notice and a hearing, the
93	93	commissioner may designate, with respect to windstorm and hail
94	94	insurance, an area of the seacoast territory of this state as a
95	95	catastrophe area or, with respect to tornado insurance and wildfire
96	96	insurance, any area of this state as a catastrophe area if the
97	97	commissioner determines, unless such a determination results in an
98	98	adverse impact to the exposure of the association, that windstorm
99	99	and hail insurance, tornado insurance, or wildfire insurance is not
100	100	reasonably available to a substantial number of the owners of
101	101	insurable property located in the area [that territory] because the
102	102	area [territory] is subject to unusually frequent and severe damage
103	103	resulting from windstorms, [or] hailstorms, tornadoes, or
104	104	wildfires.
105	105	(c) If the association determines that windstorm and hail
106	106	insurance, tornado insurance, or wildfire insurance is no longer
107	107	reasonably unavailable to a substantial number of owners of
108	108	insurable property in a territory designated as a catastrophe area,
109	109	the association may request in writing that the commissioner revoke
110	110	the designation. After at least 10 days' notice and a hearing, but
111	111	not later than the 30th day after the date of the hearing, the
112	112	commissioner shall:
113	113	(1) approve the request and revoke the designation; or
114	114	(2) reject the request.
115	115	SECTION 5. Section 2210.009(a), Insurance Code, is amended
116	116	to read as follows:
117	117	(a) The department shall maintain a list of all insurers
118	118	that engage in the business of property and casualty insurance in
119	119	the voluntary market in a municipality or county that is or that
120	120	includes a catastrophe area [the seacoast territory].
121	121	SECTION 6. Section 2210.015(a), Insurance Code, is amended
122	122	to read as follows:
123	123	(a) Each biennium, the department shall conduct a study of
124	124	market incentives to promote participation in the voluntary
125	125	windstorm and hail insurance, tornado insurance, and wildfire
126	126	insurance markets [market] in [the seacoast territory of] this
127	127	state. The study must address as possible incentives the mandatory
128	128	or voluntary issuance of windstorm and hail insurance, tornado
129	129	insurance, and wildfire insurance in conjunction with the issuance
130	130	of a homeowners policy [in the seacoast territory].
131	131	SECTION 7. Section 2210.053(b), Insurance Code, is amended
132	132	to read as follows:
133	133	(b) The department may develop programs to improve the
134	134	efficient operation of the association, including a program for
135	135	approving policy forms under Section 2301.010 and a program
136	136	designed to create incentives for insurers to write windstorm and
137	137	hail insurance, tornado insurance, and wildfire insurance
138	138	voluntarily to cover property located in a catastrophe area,
139	139	especially property located on the barrier islands of this state.
140	140	SECTION 8. Section 2210.102(b), Insurance Code, is amended
141	141	to read as follows:
142	142	(b) Three members must be representatives of the insurance
143	143	industry who actively write and renew:
144	144	(1) tornado insurance or wildfire insurance; or
145	145	(2) windstorm and hail insurance in the first tier
146	146	coastal counties.
147	147	SECTION 9. Section 2210.151, Insurance Code, is amended to
148	148	read as follows:
149	149	Sec. 2210.151. ADOPTION OF PLAN OF OPERATION. With the
150	150	advice of the board of directors, the commissioner by rule shall
151	151	adopt the plan of operation to provide Texas windstorm and hail
152	152	insurance, tornado insurance, and wildfire insurance in a
153	153	catastrophe area.
154	154	SECTION 10. Section 2210.152(a), Insurance Code, is amended
155	155	to read as follows:
156	156	(a) The plan of operation must:
157	157	(1) provide for the efficient, economical, fair, and
158	158	nondiscriminatory administration of the association; and
159	159	(2) include:
160	160	(A) a plan for the equitable assessment of the
161	161	members of the association to defray losses and expenses;
162	162	(B) underwriting standards;
163	163	(C) procedures for accepting and ceding
164	164	reinsurance;
165	165	(D) procedures for obtaining and repaying
166	166	amounts under any financial instruments authorized under this
167	167	chapter;
168	168	(E) procedures for determining the amount of
169	169	insurance to be provided to specific risks;
170	170	(F) time limits and procedures for processing
171	171	applications for insurance;
172	172	(G) a requirement that a nonresident agent
173	173	licensed under Section 4056.052 may not offer or sell a Texas
174	174	windstorm and hail insurance policy, tornado insurance policy, or
175	175	wildfire insurance policy under this chapter unless the nonresident
176	176	agent's state of residence authorizes a resident agent licensed in
177	177	this state to act in the nonresident agent's state as an agent for
178	178	that state's residual insurer of last resort for windstorm and hail
179	179	insurance, tornado insurance, or wildfire insurance; and
180	180	(H) other provisions as considered necessary by
181	181	the department to implement the purposes of this chapter.
182	182	SECTION 11. Sections 2210.202(a) and (b), Insurance Code,
183	183	are amended to read as follows:
184	184	(a) A person who has an insurable interest in insurable
185	185	property may apply to the association for insurance coverage
186	186	provided under the plan of operation and an inspection of the
187	187	property, subject to any rules established by the board of
188	188	directors and approved by the commissioner. The association shall
189	189	make insurance available to each applicant in the catastrophe area
190	190	whose property is insurable property but who, after diligent
191	191	efforts, is unable to obtain property insurance through the
192	192	voluntary market, as evidenced by one declination from an insurer
193	193	authorized to engage in the business of, and writing, property
194	194	insurance providing windstorm and hail coverage in the first tier
195	195	coastal counties or tornado insurance or wildfire insurance in this
196	196	state. For purposes of this section, "declination" has the meaning
197	197	assigned by the plan of operation and shall include a refusal to
198	198	offer coverage for the perils of windstorm and hail, tornado, or
199	199	wildfire and the inability to obtain substantially equivalent
200	200	insurance coverage for the perils of windstorm and hail, tornado,
201	201	or wildfire. Notwithstanding Section 2210.203(c), evidence of one
202	202	declination every three calendar years is required before renewal
203	203	of an association policy.
204	204	(b) A property and casualty agent must submit an application
205	205	for initial insurance coverage on behalf of the applicant on forms
206	206	prescribed by the association. An application for initial coverage
207	207	must contain:
208	208	(1) a statement as to whether the applicant has
209	209	submitted or will submit the required premium payment from personal
210	210	funds or, if not, to whom a balance is or will be due; and
211	211	(2) a statement that the agent acting on behalf of the
212	212	applicant possesses proof of the declination described by
213	213	Subsection (a) and, with respect to windstorm and hail insurance,
214	214	proof of flood insurance coverage or unavailability of that
215	215	coverage as described by Section 2210.203(a-1).
216	216	SECTION 12. Section 2210.203(a-1), Insurance Code, is
217	217	amended to read as follows:
218	218	(a-1) This subsection applies only to windstorm and hail
219	219	insurance and a structure constructed, altered, remodeled, or
220	220	enlarged on or after September 1, 2009, and only for insurable
221	221	property located in areas designated by the commissioner.
222	222	Notwithstanding Subsection (a), if all or any part of the property
223	223	to which this subsection applies is located in Zone V or another
224	224	similar zone with an additional hazard associated with storm waves,
225	225	as defined by the National Flood Insurance Program, and if flood
226	226	insurance under that federal program is available, the association
227	227	may not issue an insurance policy for initial or renewal coverage
228	228	unless evidence that the property is covered by a flood insurance
229	229	policy is submitted to the association. An agent offering or
230	230	selling a Texas windstorm and hail insurance policy in any area
231	231	designated by the commissioner under this subsection shall offer
232	232	flood insurance coverage to the prospective insured, if that
233	233	coverage is available.
234	234	SECTION 13. Section 2210.2031(b), Insurance Code, is
235	235	amended to read as follows:
236	236	(b) The process established under Subsection (a) must:
237	237	(1) provide for the association to verify:
238	238	(A) the declination required by Section
239	239	2210.202;
240	240	(B) with respect to windstorm and hail coverage,
241	241	flood insurance coverage required by Section 2210.203; and
242	242	(C) any other information related to
243	243	insurability of a property, including changes to the condition or
244	244	value of the property that would affect the availability of
245	245	coverage or premium cost to insure the property; and
246	246	(2) provide an opportunity for the policyholder to
247	247	elect to cancel the policy before the policy automatically renews.
248	248	SECTION 14. Section 2210.205(a), Insurance Code, is amended
249	249	to read as follows:
250	250	(a) A windstorm and hail insurance policy, tornado
251	251	insurance policy, or wildfire insurance policy issued by the
252	252	association must:
253	253	(1) require an insured to file a claim under the policy
254	254	not later than the first anniversary of the date on which the damage
255	255	to property that is the basis of the claim occurs;
256	256	(2) contain, in boldface type, a conspicuous notice
257	257	concerning the resolution of disputes under the policy, including:
258	258	(A) the processes and deadlines for appraisal
259	259	under Section 2210.574 and alternative dispute resolution under
260	260	Section 2210.575;
261	261	(B) the binding effect of appraisal under Section
262	262	2210.574; and
263	263	(C) the necessity of complying with the
264	264	requirements of Subchapter L-1 to seek relief, including judicial
265	265	relief; and
266	266	(3) contain a conspicuous notice concerning the
267	267	availability of supplemental payments under the policy, including:
268	268	(A) a description of the process for requesting a
269	269	supplemental payment; and
270	270	(B) notice of applicable deadlines related to
271	271	supplemental payments.
272	272	SECTION 15. The heading to Section 2210.207, Insurance
273	273	Code, is amended to read as follows:
274	274	Sec. 2210.207. WINDSTORM AND HAIL INSURANCE, TORNADO
275	275	INSURANCE, AND WILDFIRE INSURANCE: REPLACEMENT COST COVERAGE.
276	276	SECTION 16. Sections 2210.207(b) and (e), Insurance Code,
277	277	are amended to read as follows:
278	278	(b) Subject to any applicable deductibles and the limits for
279	279	the coverage purchased by the insured, a windstorm and hail
280	280	insurance policy, tornado insurance policy, or wildfire insurance
281	281	policy issued by the association may include replacement cost
282	282	coverage for one- and two-family dwellings, including
283	283	outbuildings, as provided under the dwelling extension coverage in
284	284	the policy.
285	285	(e) Notwithstanding this chapter or any other law, the
286	286	commissioner, after notice and hearing, may adopt rules to:
287	287	(1) authorize the association to provide actual cash
288	288	value coverage instead of replacement cost coverage on the roof
289	289	covering of a building insured by the association; and
290	290	(2) establish:
291	291	(A) the conditions under which the association
292	292	may provide that actual cash value coverage;
293	293	(B) the appropriate premium reductions when
294	294	coverage for the roof covering is provided on an actual cash value
295	295	basis; and
296	296	(C) the disclosure that must be provided to the
297	297	policyholder, prominently displayed on the face of the windstorm
298	298	and hail insurance policy, tornado insurance policy, or wildfire
299	299	insurance policy.
300	300	SECTION 17. The heading to Section 2210.208, Insurance
301	301	Code, is amended to read as follows:
302	302	Sec. 2210.208. WINDSTORM AND HAIL INSURANCE, TORNADO
303	303	INSURANCE, AND WILDFIRE INSURANCE: COVERAGE FOR CERTAIN INDIRECT
304	304	LOSSES.
305	305	SECTION 18. Sections 2210.208(a) and (b), Insurance Code,
306	306	are amended to read as follows:
307	307	(a) Except as provided by Subsections (e) and (f), a
308	308	windstorm and hail insurance policy, tornado insurance policy, or
309	309	wildfire insurance policy issued by the association for a dwelling,
310	310	as that term is defined by the department or a successor to the
311	311	department, must include coverage for:
312	312	(1) with respect to a windstorm and hail insurance
313	313	policy, wind-driven rain damage, regardless of whether an opening
314	314	is made by the wind;
315	315	(2) loss of use; and
316	316	(3) consequential losses.
317	317	(b) A windstorm and hail insurance policy, tornado
318	318	insurance policy, or wildfire insurance policy issued by the
319	319	association for tenant contents of a dwelling or other residential
320	320	building must include coverage for loss of use and consequential
321	321	losses.
322	322	SECTION 19. The heading to Subchapter F, Chapter 2210,
323	323	Insurance Code, is amended to read as follows:
324	324	SUBCHAPTER F. PROPERTY INSPECTIONS [FOR WINDSTORM AND HAIL
325	325	INSURANCE]
326	326	SECTION 20. Section 2210.253, Insurance Code, is amended to
327	327	read as follows:
328	328	Sec. 2210.253. INITIAL INSURER ASSESSMENT[: FIRST TIER
329	329	COASTAL COUNTY]. (a) In this section, "property insurance" means a
330	330	commercial or residential insurance policy prescribed or approved
331	331	by the department that provides coverage for windstorm and hail
332	332	damage, including a Texas windstorm and hail insurance policy, or
333	333	loss from tornado or wildfire.
334	334	(b) The department shall assess each insurer that provides
335	335	property insurance in [a first tier coastal county in] accordance
336	336	with this section.
337	337	(c) The total assessment under this section in a state
338	338	fiscal year must be in the amount estimated by the department as
339	339	necessary to cover the administrative costs of the [windstorm]
340	340	inspection program under Section 2210.251 to be incurred in [the
341	341	first tier coastal counties in] that fiscal year.
342	342	(d) The assessment must be based on each insurer's
343	343	proportionate share of the total extended coverage and other allied
344	344	lines premium received by all insurers for property insurance in
345	345	the state [first tier coastal counties] in the calendar year
346	346	preceding the year in which the assessment is made.
347	347	(e) The commissioner shall adopt rules to implement the
348	348	assessment of insurers under this section.
349	349	SECTION 21. Section 2210.2551(b), Insurance Code, is
350	350	amended to read as follows:
351	351	(b) The commissioner by rule shall establish criteria to
352	352	ensure that a person seeking appointment as a qualified inspector
353	353	under this subchapter possesses the knowledge, understanding, and
354	354	professional competence to perform [windstorm] inspections for the
355	355	issuance of a certificate of compliance under Section 2210.2515(d)
356	356	and to comply with other requirements of this chapter.
357	357	SECTION 22. Section 2210.258, Insurance Code, is amended by
358	358	adding Subsection (a-1) to read as follows:
359	359	(a-1) This section applies only to windstorm and hail
360	360	insurance.
361	361	SECTION 23. Section 2210.3511(a), Insurance Code, is
362	362	amended to read as follows:
363	363	(a) The association shall make the association's rate
364	364	adequacy analysis publicly available on its Internet website for at
365	365	least 14 days before the date the board of directors votes on the
366	366	submission of a proposed rate filing based on the analysis to the
367	367	department. The rate adequacy analysis must include:
368	368	(1) all user selected hurricane, tornado, or wildfire
369	369	model input assumptions; and
370	370	(2) output data:
371	371	(A) with the same content and in the same format
372	372	that is customarily provided to:
373	373	(i) the association by hurricane modelers;
374	374	and
375	375	(ii) the department by the association; and
376	376	(B) in a searchable electronic format that allows
377	377	for efficient analysis and is sufficiently detailed to allow the
378	378	historical experience in this state to be compared to results
379	379	produced by the model.
380	380	SECTION 24. Section 2210.355(g), Insurance Code, is amended
381	381	to read as follows:
382	382	(g) A commission paid to an agent for a windstorm and hail
383	383	insurance policy, tornado insurance policy, or wildfire insurance
384	384	policy issued by the association must comply with the commission
385	385	structure approved by the commissioner under Section 2210.203(d)
386	386	and be reasonable, adequate, not unfairly discriminatory, and
387	387	nonconfiscatory.
388	388	SECTION 25. Section 2210.359(a), Insurance Code, is amended
389	389	to read as follows:
390	390	(a) Except as otherwise provided by this subsection, a rate
391	391	approved by the commissioner under this subchapter may not reflect
392	392	an average rate change that is more than 10 percent higher or lower
393	393	than the rate for commercial windstorm and hail insurance,
394	394	commercial tornado insurance, or commercial wildfire insurance or
395	395	10 percent higher or lower than the rate for noncommercial
396	396	windstorm and hail insurance, noncommercial tornado insurance, or
397	397	noncommercial wildfire insurance in effect on the date the filing
398	398	is made. The rate may not reflect a rate change for an individual
399	399	rating class that is 15 percent higher or lower than the rate for
400	400	that individual rating class in effect on the date the filing is
401	401	made. This subsection does not apply to a rate filed under Sections
402	402	2210.351(a)-(d).
403	403	SECTION 26. Section 2210.455(b), Insurance Code, is amended
404	404	to read as follows:
405	405	(b) The catastrophe plan must:
406	406	(1) describe the manner in which the association will,
407	407	during the period covered by the plan, evaluate losses and process
408	408	claims after the following windstorms affecting an area of maximum
409	409	exposure to the association:
410	410	(A) a windstorm with a four percent chance of
411	411	occurring during the period covered by the plan;
412	412	(B) a windstorm with a two percent chance of
413	413	occurring during the period covered by the plan; and
414	414	(C) a windstorm with a one percent chance of
415	415	occurring during the period covered by the plan; [and]
416	416	(2) include, if the association does not purchase
417	417	reinsurance under Section 2210.453 for the period covered by the
418	418	plan, an actuarial plan for paying losses in the event of a
419	419	catastrophe with estimated damages of $2.5 billion or more; and
420	420	(3) describe the manner in which the association will,
421	421	during the period covered by the plan, evaluate losses and process
422	422	claims after tornadoes or wildfires affecting an area of maximum
423	423	exposure to the association.
424	424	SECTION 27. Section 2210.501(a), Insurance Code, is amended
425	425	to read as follows:
426	426	(a) The board of directors shall propose the maximum
427	427	liability limits under a windstorm and hail insurance policy,
428	428	tornado insurance policy, and wildfire insurance policy issued by
429	429	the association under this chapter. The maximum liability limits
430	430	are considered approved by the commissioner unless the commissioner
431	431	disapproves or modifies the liability limits by order issued not
432	432	later than the 30th day after the date of receipt of a filing under
433	433	Section 2210.503.
434	434	SECTION 28. Section 2210.502(b), Insurance Code, is amended
435	435	to read as follows:
436	436	(b) An adjustment to the maximum liability limits that is
437	437	approved by the commissioner applies to each windstorm and hail
438	438	insurance policy, tornado insurance policy, and wildfire insurance
439	439	policy delivered, issued for delivery, or renewed on or after
440	440	January 1 of the year following the date of the approval. The
441	441	indexing of the limits shall adjust for changes occurring on and
442	442	after January 1, 1997.
443	443	SECTION 29. Section 2210.505(a), Insurance Code, is amended
444	444	to read as follows:
445	445	(a) Notwithstanding any other law, the association may
446	446	issue a windstorm and hail insurance policy, tornado insurance
447	447	policy, or wildfire insurance policy that includes coverage for an
448	448	amount in excess of a maximum liability limit established under
449	449	Sections 2210.501-2210.504 if the association first obtains from a
450	450	reinsurer approved by the commissioner reinsurance for the full
451	451	amount of policy exposure above that limit.
452	452	SECTION 30. Section 2210.571(1), Insurance Code, is amended
453	453	to read as follows:
454	454	(1) "Association policy" means a windstorm and hail
455	455	insurance policy, tornado insurance policy, or wildfire insurance
456	456	policy issued by the association.
457	457	SECTION 31. Section 2210.5732(a), Insurance Code, is
458	458	amended to read as follows:
459	459	(a) The association is authorized to provide for
460	460	supplemental payments under a windstorm and hail insurance policy,
461	461	tornado insurance policy, and wildfire insurance policy issued by
462	462	the association.
463	463	SECTION 32. Section 2210.601, Insurance Code, is amended to
464	464	read as follows:
465	465	Sec. 2210.601. PURPOSE. The legislature finds that
466	466	authorizing the issuance of public securities to provide a method
467	467	to raise funds to provide [windstorm and hail insurance] through
468	468	the association windstorm and hail insurance in certain designated
469	469	portions of the state and tornado insurance and wildfire insurance
470	470	statewide is for the benefit of the public and in furtherance of a
471	471	public purpose.
472	472	SECTION 33. Section 2210.6132(c), Insurance Code, is
473	473	amended to read as follows:
474	474	(c) The premium surcharge under this section shall be
475	475	assessed on all policyholders of policies that cover insured
476	476	property that is located in a catastrophe area, including
477	477	automobiles principally garaged in a catastrophe area. The premium
478	478	surcharge shall be assessed on each Texas windstorm and hail
479	479	insurance policy, each tornado insurance policy, and each wildfire
480	480	insurance policy issued by the association and each property and
481	481	casualty policy, including an automobile insurance policy, issued
482	482	for automobiles and other property located in the catastrophe area.
483	483	A premium surcharge under Subsection (b) applies to:
484	484	(1) all policies written under the following lines of
485	485	insurance:
486	486	(A) fire and allied lines;
487	487	(B) farm and ranch owners;
488	488	(C) residential property insurance;
489	489	(D) private passenger automobile liability and
490	490	physical damage insurance; and
491	491	(E) commercial automobile liability and physical
492	492	damage insurance; and
493	493	(2) the property insurance portion of a commercial
494	494	multiple peril insurance policy.
495	495	SECTION 34. Section 2210.652, Insurance Code, is amended to
496	496	read as follows:
497	497	Sec. 2210.652. COMPOSITION OF BOARD. The [windstorm
498	498	insurance legislative oversight] board is composed of eight members
499	499	as follows:
500	500	(1) four members of the senate appointed by the
501	501	lieutenant governor, including the chairperson of the Senate
502	502	Business and Commerce Committee, who shall serve as co-chairperson
503	503	of the board; and
504	504	(2) four members of the house of representatives
505	505	appointed by the speaker of the house of representatives.
506	506	SECTION 35. Section 2210.653(a), Insurance Code, is amended
507	507	to read as follows:
508	508	(a) The board shall:
509	509	(1) receive information about rules proposed by the
510	510	department relating to windstorm and hail insurance, tornado
511	511	insurance, and wildfire insurance, and may submit comments to the
512	512	commissioner on the proposed rules;
513	513	(2) monitor windstorm and hail insurance, tornado
514	514	insurance, and wildfire insurance in this state, including:
515	515	(A) the adequacy of rates;
516	516	(B) the operation of the association; and
517	517	(C) the availability of coverage; and
518	518	(3) review recommendations for legislation proposed
519	519	by the department or the association.
520	520	SECTION 36. Section 2210.654(b), Insurance Code, is amended
521	521	to read as follows:
522	522	(b) The report must include:
523	523	(1) an analysis of any problems identified; and
524	524	(2) recommendations for any legislative action
525	525	necessary to address those problems and to foster stability,
526	526	availability, and competition within the windstorm and hail
527	527	insurance, tornado insurance, and wildfire insurance industries
528	528	[industry].
529	529	SECTION 37. (a) The plan of operation adopted under
530	530	Chapter 2210, Insurance Code, as amended by this Act, must provide
531	531	that the Texas Windstorm Insurance Association issue tornado
532	532	insurance policies and wildfire insurance policies under that
533	533	chapter not later than January 1, 2022.
534	534	(b) The commissioner of insurance shall adopt rules
535	535	necessary to ensure that the Texas Windstorm Insurance Association
536	536	issue insurance policies under Chapter 2210, Insurance Code, as
537	537	amended by this Act, not later than January 1, 2022.
538	538	SECTION 38. This Act takes effect September 1, 2021.