Texas 2025 - 89th Regular

Texas Senate Bill SB2571 Compare Versions

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

Old	New	Differences
1	1	By: Middleton, Creighton, Hinojosa of Nueces S.B. No. 2571
2	2
3	3
4	4
5	5
6	6	A BILL TO BE ENTITLED
7	7	AN ACT
8	8	relating to funding of excess losses and operating expenses of the
9	9	Texas Windstorm Insurance Association; authorizing an assessment.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	ARTICLE 1. FUNDING OF INSURED LOSSES AND OPERATING EXPENSES OF
12	12	TEXAS WINDSTORM INSURANCE ASSOCIATION
13	13	SECTION 1.01. The heading to Subchapter B-1, Chapter 2210,
14	14	Insurance Code, is amended to read as follows:
15	15	SUBCHAPTER B-1. PAYMENT OF LOSSES INCURRED BEFORE JANUARY 1, 2026
16	16	SECTION 1.02. Subchapter B-1, Chapter 2210, Insurance Code,
17	17	is amended by adding Section 2210.070 to read as follows:
18	18	Sec. 2210.070. APPLICABILITY OF SUBCHAPTER. (a) This
19	19	subchapter applies only to the payment of losses and operating
20	20	expenses of the association for a catastrophe year that occurs
21	21	before January 1, 2026, and results in excess losses and operating
22	22	expenses incurred by the association before January 1, 2026.
23	23	(b) Payment of excess losses and operating expenses of the
24	24	association incurred after December 31, 2025, shall be paid as
25	25	provided by Subchapter B-2.
26	26	SECTION 1.03. Section 2210.071(a), Insurance Code, is
27	27	amended to read as follows:
28	28	(a) If, in a catastrophe year before January 1, 2026, an
29	29	occurrence or series of occurrences in a catastrophe area results
30	30	in insured losses and operating expenses of the association in
31	31	excess of premium and other revenue of the association, the excess
32	32	losses and operating expenses shall be paid as provided by this
33	33	subchapter.
34	34	SECTION 1.04. Section 2210.0715(b), Insurance Code, is
35	35	amended to read as follows:
36	36	(b) Proceeds of public securities issued or assessments
37	37	made before January 1, 2026, or as a result of any occurrence or
38	38	series of occurrences in a catastrophe year that occurs before
39	39	January 1, 2026, and results in insured losses before that date may
40	40	not be included in reserves available for a subsequent catastrophe
41	41	year for purposes of this section or Section 2210.082 unless
42	42	approved by the commissioner.
43	43	SECTION 1.05. Chapter 2210, Insurance Code, is amended by
44	44	adding Subchapter B-2 to read as follows:
45	45	SUBCHAPTER B-2. PAYMENT OF EXCESS LOSSES AND OPERATING EXPENSES
46	46	Sec. 2210.080. APPLICABILITY OF SUBCHAPTER. (a) This
47	47	subchapter applies only to the payment of losses and operating
48	48	expenses of the association for a catastrophe year that occurs
49	49	after December 31, 2025, and results in excess losses and operating
50	50	expenses incurred by the association after December 31, 2025.
51	51	(b) This section expires January 1, 2026.
52	52	Sec. 2210.081. PAYMENT OF EXCESS LOSSES. (a) If, in a
53	53	catastrophe year, an occurrence or series of occurrences in a
54	54	catastrophe area results in insured losses and operating expenses
55	55	of the association in excess of premium and other revenue of the
56	56	association, the excess losses and operating expenses shall be paid
57	57	as provided by this subchapter.
58	58	(b) The association may not pay insured losses and operating
59	59	expenses resulting from an occurrence or series of occurrences in a
60	60	catastrophe year with premium and other revenue earned in a
61	61	subsequent year.
62	62	Sec. 2210.082. PAYMENT FROM RESERVES AND TRUST FUND. (a)
63	63	The association shall pay insured losses and operating expenses
64	64	resulting from an occurrence or series of occurrences in a
65	65	catastrophe year in excess of premium and other revenue of the
66	66	association for that catastrophe year from reserves of the
67	67	association available before or accrued during that catastrophe
68	68	year and amounts in the catastrophe reserve trust fund available
69	69	before or accrued during that catastrophe year.
70	70	(b) Proceeds of public securities issued or assessments
71	71	made before or as a result of any occurrence or series of
72	72	occurrences in a catastrophe year that results in insured losses
73	73	may not be included in reserves available for a subsequent
74	74	catastrophe year for purposes of this section.
75	75	Sec. 2210.083. PAYMENT FROM MEMBER ASSESSMENTS. (a)
76	76	Insured losses and operating expenses for a catastrophe year not
77	77	paid under Section 2210.082 shall be paid as provided by this
78	78	section from member assessments not to exceed 33 percent of the
79	79	probable maximum loss for the association for that catastrophe
80	80	year.
81	81	(b) The association shall notify each association member of
82	82	the amount of the member's assessment under this section. The
83	83	proportion of the insured losses and operating expenses allocable
84	84	to each insurer under this section shall be determined in the manner
85	85	used to determine each insurer's participation in the association
86	86	for the year under Section 2210.052.
87	87	(c) An association member may not recoup an assessment paid
88	88	under this section through a premium surcharge or tax credit.
89	89	Sec. 2210.084. PAYMENT FROM CLASS 1 PUBLIC SECURITIES;
90	90	FINANCIAL INSTRUMENTS. (a) Losses not paid under Section 2210.083
91	91	shall be paid as provided by this section from the proceeds from
92	92	public securities issued in accordance with Subchapter M before,
93	93	on, or after the date of any occurrence or series of occurrences
94	94	that results in insured losses. Public securities described by
95	95	this section must be paid within a period not to exceed 14 years,
96	96	and shall be paid sooner if the board of directors determines the
97	97	association has the ability to do so and the commissioner approves.
98	98	(b) Public securities described by Subsection (a) that are
99	99	issued before an occurrence or series of occurrences that results
100	100	in incurred losses:
101	101	(1) may be issued on the request of the board of
102	102	directors with the approval of the commissioner; and
103	103	(2) may not, in the aggregate, exceed 33 percent of the
104	104	probable maximum loss for the association at any one time,
105	105	regardless of the calendar year or years in which the outstanding
106	106	public securities were issued.
107	107	(b-1) Public securities described by Subsection (a):
108	108	(1) shall be issued as necessary in a principal amount
109	109	not to exceed 33 percent of the probable maximum loss for the
110	110	association per catastrophe year, in the aggregate, for securities
111	111	issued during that catastrophe year before the occurrence or series
112	112	of occurrences that results in incurred losses in that year and
113	113	securities issued on or after the date of that occurrence or series
114	114	of occurrences, and regardless of whether for a single occurrence
115	115	or a series of occurrences; and
116	116	(2) subject to the maximum described by Subdivision
117	117	(1), may be issued, in one or more issuances or tranches, during the
118	118	calendar year in which the occurrence or series of occurrences
119	119	occurs or, if the public securities cannot reasonably be issued in
120	120	that year, during the following calendar year.
121	121	(c) If public securities are issued as described by this
122	122	section, the public securities shall be repaid in the manner
123	123	prescribed by Subchapter M.
124	124	(d) The association may borrow from, or enter into other
125	125	financing arrangements with, any market source, under which the
126	126	market source makes interest-bearing loans or other financial
127	127	instruments to the association to enable the association to pay
128	128	losses under this section or to obtain public securities under this
129	129	section. For purposes of this subsection, financial instruments
130	130	includes commercial paper.
131	131	(e) The proceeds of any outstanding public securities
132	132	described by Subsection (a) that are issued before an occurrence or
133	133	series of occurrences, together with the proceeds of any
134	134	outstanding public securities issued on or before June 1, 2025,
135	135	shall be depleted before the proceeds of any securities issued
136	136	after an occurrence or series of occurrences may be used. This
137	137	subsection does not prohibit the association from issuing
138	138	securities after an occurrence or series of occurrences before the
139	139	proceeds of outstanding public securities issued during a previous
140	140	catastrophe year have been depleted.
141	141	(f) If, under Subsection (e), the proceeds of any
142	142	outstanding public securities issued during a previous catastrophe
143	143	year, together with the proceeds of any outstanding public
144	144	securities issued on or before June 1, 2025, must be depleted, those
145	145	proceeds shall count against the limit on public securities
146	146	described by this section in the catastrophe year in which the
147	147	proceeds must be depleted.
148	148	REINSURANCE BY MEMBERS FOR MEMBER ASSESSMENTS. (a) Before
149	149	any occurrence or series of occurrences, an association member may
150	150	purchase reinsurance to cover an assessment for which the member
151	151	would otherwise be liable under this subchapter.
152	152	(b) An association member must notify the board of
153	153	directors, in the manner prescribed by the association, whether the
154	154	member will be purchasing reinsurance. If the member does not
155	155	purchase reinsurance under this section, the member remains liable
156	156	for any assessment imposed under this subchapter.
157	157	SECTION 1.06. Effective September 1, 2026, Subchapter B-1,
158	158	Chapter 2210, Insurance Code, is repealed.
159	159	SECTION 1.17. As soon as practicable after the effective
160	160	date of this Act and not later than December 1, 2025, the
161	161	commissioner of insurance shall adopt rules necessary to implement
162	162	Subchapter B-2, Insurance Code, as added by this Act.
163	163	ARTICLE 2. CONFORMING CHANGES
164	164	SECTION 2.01. (a) Section 2210.056(b), Insurance Code, is
165	165	amended to read as follows:
166	166	(b) The association's assets may not be used for or diverted
167	167	to any purpose other than to:
168	168	(1) satisfy, in whole or in part, the liability of the
169	169	association on claims made on policies written by the association;
170	170	(2) make investments authorized under applicable law;
171	171	(3) pay reasonable and necessary administrative
172	172	expenses incurred in connection with the operation of the
173	173	association and the processing of claims against the association;
174	174	(4) satisfy, in whole or in part, the obligations of
175	175	the association incurred in connection with Subchapters B-1, B-2,
176	176	J, and M, including reinsurance, public securities, and financial
177	177	instruments; or
178	178	(5) make remittance under the laws of this state to be
179	179	used by this state to:
180	180	(A) pay claims made on policies written by the
181	181	association;
182	182	(B) purchase reinsurance covering losses under
183	183	those policies; or
184	184	(C) prepare for or mitigate the effects of
185	185	catastrophic natural events.
186	186	(b) Effective September 1, 2026, Sections 2210.056(b),
187	187	Insurance Code, is amended to read as follows:
188	188	(b) The association's assets may not be used for or diverted
189	189	to any purpose other than to:
190	190	(1) satisfy, in whole or in part, the liability of the
191	191	association on claims made on policies written by the association;
192	192	(2) make investments authorized under applicable law;
193	193	(3) pay reasonable and necessary administrative
194	194	expenses incurred in connection with the operation of the
195	195	association and the processing of claims against the association;
196	196	(4) satisfy, in whole or in part, the obligations of
197	197	the association incurred in connection with Subchapters B-2 [B-1],
198	198	J, and M, including reinsurance, public securities, and financial
199	199	instruments; or
200	200	(5) make remittance under the laws of this state to be
201	201	used by this state to:
202	202	(A) pay claims made on policies written by the
203	203	association;
204	204	(B) purchase reinsurance covering losses under
205	205	those policies; or
206	206	(C) prepare for or mitigate the effects of
207	207	catastrophic natural events.
208	208	SECTION 2.02. (a) Section 2210.1052, Insurance Code, is
209	209	amended to read as follows:
210	210	Sec. 2210.1052. EMERGENCY MEETING. If the ultimate loss
211	211	estimate for an occurrence or series of occurrences made by the
212	212	chief financial officer or chief actuary of the association
213	213	indicates member insurers may be subject to an assessment under
214	214	Subchapter B-1 or B-2, the board of directors shall call an
215	215	emergency meeting to notify the member insurers about the
216	216	assessment.
217	217	(b) Effective September 1, 2026, Section 2210.1052,
218	218	Insurance Code, is amended to read as follows:
219	219	Sec. 2210.1052. EMERGENCY MEETING. If the ultimate loss
220	220	estimate for an occurrence or series of occurrences made by the
221	221	chief financial officer or chief actuary of the association
222	222	indicates member insurers may be subject to an assessment under
223	223	Subchapter B-2 [B-1], the board of directors shall call an
224	224	emergency meeting to notify the member insurers about the
225	225	assessment.
226	226	SECTION 2.03. (a) Sections 2210.452(a) and (d), Insurance
227	227	Code, are amended to read as follows:
228	228	(a) The commissioner shall adopt rules under which the
229	229	association makes payments to the catastrophe reserve trust fund.
230	230	Except as otherwise specifically provided by this section, the
231	231	trust fund may be used only for purposes directly related to funding
232	232	the payment of insured losses, including:
233	233	(1) funding the obligations of the trust fund under
234	234	Subchapters [Subchapter] B-1 and B-2; and
235	235	(2) purchasing reinsurance or using alternative risk
236	236	financing mechanisms under Section 2210.453.
237	237	(d) The commissioner by rule shall establish the procedure
238	238	relating to the disbursement of money from the trust fund to
239	239	policyholders and for association administrative expenses directly
240	240	related to funding the payment of insured losses in the event of an
241	241	occurrence or series of occurrences within a catastrophe area that
242	242	results in a disbursement under Subchapter B-1 or B-2.
243	243	(b) Effective September 1, 2026, Sections 2210.452(a) and
244	244	(d), Insurance Code, are amended to read as follows:
245	245	(a) The commissioner shall adopt rules under which the
246	246	association makes payments to the catastrophe reserve trust fund.
247	247	Except as otherwise specifically provided by this section, the
248	248	trust fund may be used only for purposes directly related to funding
249	249	the payment of insured losses, including:
250	250	(1) funding the obligations of the trust fund under
251	251	Subchapter B-2 [B-1]; and
252	252	(2) purchasing reinsurance or using alternative risk
253	253	financing mechanisms under Section 2210.453.
254	254	(d) The commissioner by rule shall establish the procedure
255	255	relating to the disbursement of money from the trust fund to
256	256	policyholders and for association administrative expenses directly
257	257	related to funding the payment of insured losses in the event of an
258	258	occurrence or series of occurrences within a catastrophe area that
259	259	results in a disbursement under Subchapter B-2 [B-1].
260	260	SECTION 2.04. (a) Section 2210.453(c), Insurance Code, is
261	261	amended to read as follows:
262	262	(c) The attachment point for reinsurance purchased under
263	263	this section may not be less than the aggregate amount of all
264	264	funding available to the association under Subchapters
265	265	[Subchapter] B-1 and B-2.
266	266	(b) Effective September 1, 2026, Section 2210.453(c),
267	267	Insurance Code, is amended to read as follows:
268	268	(c) The attachment point for reinsurance purchased under
269	269	this section may not be less than the aggregate amount of all
270	270	funding available to the association under Subchapter B-2 [B-1].
271	271	SECTION 2.05. Effective January 1, 2026, Section 2210.602,
272	272	Insurance Code, is repealed and replaced with the following:
273	273	Sec. 2210.602. DEFINITIONS. In this subchapter:
274	274	(1) "Authority" means the Texas Public Finance
275	275	Authority.
276	276	(1-a) "Board" means the board of directors of the Texas
277	277	Public Finance Authority.
278	278	(1-b) "Catastrophic event" means an occurrence or a series
279	279	of occurrences that occurs in a catastrophe area during a calendar
280	280	year and that results in insured losses and operating expenses of
281	281	the association in excess of premium and other revenue of the
282	282	association.
283	283	(2) "Class 1 public securities" means public
284	284	securities authorized to be issued by Section 2210.084, including a
285	285	commercial paper program authorized before the occurrence of a
286	286	catastrophic event.
287	287	(2-a) "Class 1 public security trust fund" means the
288	288	dedicated trust fund established by the board and held by the Texas
289	289	Treasury Safekeeping Trust Company into which premium surcharges
290	290	collected under Section 2210.612 for the purpose of paying Class 1
291	291	public securities are deposited.
292	292	(3) "Credit agreement" has the meaning assigned by
293	293	Chapter 1371, Government Code.
294	294	(4) "Public security" means a debt instrument or other
295	295	public security issued by the Texas Public Finance Authority.
296	296	(5) "Public security administrative expenses" means
297	297	expenses incurred to administer public securities issued under this
298	298	subchapter, including fees for credit enhancement, paying agents,
299	299	trustees, and attorneys, and for other professional services.
300	300	(6) "Public security obligations" means the principal
301	301	of a public security and any premium and interest on a public
302	302	security issued under this subchapter, together with any amount
303	303	owed under a related credit agreement.
304	304	(7) "Public security resolution" means the resolution
305	305	or order authorizing public securities to be issued under this
306	306	subchapter.
307	307	SECTION 2.06. Effective January 1, 2026, Section
308	308	2210.604(a), Insurance Code, is amended to read as follows:
309	309	(a) At the request of the association and with the approval
310	310	of the commissioner, the Texas Public Finance Authority shall issue
311	311	Class 1[, Class 2, or Class 3] public securities. The association
312	312	shall submit to the commissioner a cost-benefit analysis of various
313	313	financing methods and funding structures when requesting the
314	314	issuance of public securities under this subsection.
315	315	SECTION 2.07. Effective January 1, 2026, Section
316	316	2210.608(c), Insurance Code, is amended to read as follows:
317	317	(c) Notwithstanding Subsection (a)(2), the proceeds from
318	318	public securities issued under Section 2210.084 [Section 2210.072]
319	319	before an occurrence or series of occurrences that results in
320	320	incurred losses, including investment income, may not be used to
321	321	purchase reinsurance for the association.
322	322	SECTION 2.08. Effective January 1, 2026, Section 2210.609,
323	323	Insurance Code, is amended to read as follows:
324	324	Sec. 2210.609. REPAYMENT OF ASSOCIATION'S PUBLIC SECURITY
325	325	OBLIGATIONS. (a) The board and the association shall enter into an
326	326	agreement under which the association shall provide for the payment
327	327	of all public security obligations from available funds collected
328	328	by the association and deposited as required by this subchapter. If
329	329	the association determines that it is unable to pay the public
330	330	security obligations and public security administrative expenses,
331	331	if any, with available funds, the association shall pay those
332	332	obligations and expenses in accordance with Section 2210.612
333	333	[Sections 2210.612, 2210.613, and 2210.6131] as applicable. Class
334	334	1[, Class 2, or Class 3] public securities may be issued on a parity
335	335	or subordinate lien basis with other Class 1[, Class 2, or Class 3]
336	336	public securities[, respectively].
337	337	(b) If any public securities issued under this chapter are
338	338	outstanding, the authority shall notify the association of the
339	339	amount of the public security obligations and the estimated amount
340	340	of public security administrative expenses, if any, each calendar
341	341	year in a period sufficient, as determined by the association, to
342	342	permit the association to determine the availability of funds and
343	343	assess a premium surcharge if necessary.
344	344	(c) The association shall deposit all revenue collected
345	345	under Section 2210.612 in the Class 1 public security trust fund[,
346	346	all revenue collected under Section 2210.613 in the Class 2 public
347	347	security trust fund, and all revenue collected under Section
348	348	2210.6131 in the Class 3 public security trust fund]. Money
349	349	deposited in a fund may be invested as permitted by general law.
350	350	Money in a fund required to be used to pay public security
351	351	obligations and public security administrative expenses, if any,
352	352	shall be transferred to the appropriate funds in the manner and at
353	353	the time specified in the proceedings authorizing the public
354	354	securities to ensure timely payment of obligations and expenses.
355	355	This may include the board establishing funds and accounts with the
356	356	comptroller that the board determines are necessary to administer
357	357	and repay the public security obligations. If the association has
358	358	not transferred amounts sufficient to pay the public security
359	359	obligations to the board's designated interest and sinking fund in
360	360	a timely manner, the board may direct the Texas Treasury
361	361	Safekeeping Trust Company to transfer from the Class 1 public
362	362	security trust fund[, the Class 2 public security trust fund, or the
363	363	Class 3 public security trust fund] to the appropriate account the
364	364	amount necessary to pay the public security obligation.
365	365	(d) The association shall provide for the payment of the
366	366	public security obligations and the public security administrative
367	367	expenses by irrevocably pledging revenues received from premiums,
368	368	premium surcharges, and amounts on deposit in the Class 1 public
369	369	security trust fund[, the Class 2 public security trust fund, and
370	370	the Class 3 public security trust fund,] together with any public
371	371	security reserve fund, as provided in the proceedings authorizing
372	372	the public securities and related credit agreements.
373	373	(e) An amount owed by the board under a credit agreement
374	374	shall be payable from and secured by a pledge of revenues received
375	375	by the association from the Class 1 public security trust fund[, the
376	376	Class 2 public security trust fund, and the Class 3 public security
377	377	trust fund] to the extent provided in the proceedings authorizing
378	378	the credit agreement.
379	379	SECTION 2.09. Effective January 1, 2026, Section
380	380	2210.610(a), Insurance Code, is amended to read as follows:
381	381	(a) Revenues received from the premium surcharges under
382	382	Section 2210.612 [Sections 2210.612, 2210.613, and 2210.6131] may
383	383	be applied only as provided by this subchapter.
384	384	SECTION 2.10. Effective January 1, 2026, Section 2210.611,
385	385	Insurance Code, is amended to read as follows:
386	386	Sec. 2210.611. EXCESS REVENUE COLLECTIONS AND INVESTMENT
387	387	EARNINGS. Revenue collected in any calendar year from a premium
388	388	surcharge under Section 2210.612 [Sections 2210.612, 2210.613, and
389	389	2210.6131] that exceeds the amount of the public security
390	390	obligations and public security administrative expenses payable in
391	391	that calendar year and interest earned on the funds may, in the
392	392	discretion of the association, be:
393	393	(1) used to pay public security obligations payable in
394	394	the subsequent calendar year, offsetting the amount of the premium
395	395	surcharge that would otherwise be required to be levied for the year
396	396	under this subchapter;
397	397	(2) used to redeem or purchase outstanding public
398	398	securities; or
399	399	(3) deposited in the catastrophe reserve trust fund.
400	400	SECTION 2.11. Effective January 1, 2026, Sections
401	401	2210.612(a) and (e), Insurance Code, are amended to read as
402	402	follows:
403	403	(a) The association shall pay Class 1 public securities
404	404	issued under Section 2210.084 [Section 2210.072] from:
405	405	(1) net premium and other revenue; and
406	406	(2) if net premium and other revenue are not
407	407	sufficient to pay the securities, a catastrophe area premium
408	408	surcharge collected in accordance with this section.
409	409	(e) The association may enter financing arrangements as
410	410	described by Section 2210.084(d) [Section 2210.072(d)] as
411	411	necessary to obtain public securities issued under Section 2210.084
412	412	[Section 2210.072]. Nothing in this subsection shall prevent the
413	413	authorization and creation of one or more programs for the issuance
414	414	of commercial paper before the date of an occurrence or series of
415	415	occurrences that results in insured losses under Section
416	416	2210.084(a) [Section 2210.072(a)].
417	417	SECTION 2.12. Effective January 1, 2026, Section 2210.6132,
418	418	Insurance Code, is amended to read as follows:
419	419	Sec. 2210.6132. CONTINGENT SOURCE OF PAYMENT FOR CLASS 1
420	420	[CLASS 2 AND CLASS 3] PUBLIC SECURITIES. (a) The commissioner may
421	421	determine, in consultation with the board and the authority, that:
422	422	(1) the authority is unable to issue Class 1 [Class 2
423	423	or Class 3] public securities to be payable under Section 2210.612
424	424	[Section 2210.613 or 2210.6131], as applicable; or
425	425	(2) the issuance of Class 1 [Class 2 or Class 3] public
426	426	securities to be payable under Section 2210.612 [Section 2210.613
427	427	or 2210.6131], as applicable, is financially unreasonable for the
428	428	association.
429	429	(b) If the commissioner makes a determination under
430	430	Subsection (a), the commissioner shall order the Class 1 [Class 2 or
431	431	Class 3] public securities, as applicable, to be paid by a premium
432	432	surcharge assessed by each insurer, the association, and the Texas
433	433	FAIR Plan Association on all policyholders of policies that are in
434	434	effect on or after the 180th day after the date the commissioner
435	435	issues the order. The premium surcharge must be set in an amount
436	436	sufficient to pay all debt service not already covered by available
437	437	funds and all related expenses on the public securities.
438	438	(c) The premium surcharge under this section shall be
439	439	assessed on all policyholders of policies that cover insured
440	440	property that is located in a catastrophe area, including
441	441	automobiles principally garaged in a catastrophe area. The premium
442	442	surcharge shall be assessed on each Texas windstorm and hail
443	443	insurance policy and each property and casualty policy, including
444	444	an automobile insurance policy, issued for automobiles and other
445	445	property located in the catastrophe area. A premium surcharge
446	446	under Subsection (b) applies to:
447	447	(1) all policies written under the following lines of
448	448	insurance:
449	449	(A) fire and allied lines;
450	450	(B) farm and ranch owners;
451	451	(C) residential property insurance;
452	452	(D) private passenger automobile liability and
453	453	physical damage insurance; and
454	454	(E) commercial automobile liability and physical
455	455	damage insurance; and
456	456	(2) the property insurance portion of a commercial
457	457	multiple peril insurance policy.
458	458	SECTION 2.13. (a) Effective January 1, 2026, Section
459	459	2210.614, Insurance Code, is amended to read as follows:
460	460	Sec. 2210.614. REFINANCING PUBLIC SECURITIES. The
461	461	association may request the board to refinance any public
462	462	securities issued in accordance with Subchapters B-1 and B-2
463	463	[Subchapter B-1], whether Class 1[, Class 2, or Class 3] public
464	464	securities, with public securities payable from the same sources as
465	465	the original public securities.
466	466	(b) Effective September 1, 2026, Section 2210.614,
467	467	Insurance Code, is amended to read as follows:
468	468	Sec. 2210.614. REFINANCING PUBLIC SECURITIES. The
469	469	association may request the board to refinance any public
470	470	securities issued in accordance with Subchapter B-2 [Subchapter
471	471	B-1], whether Class 1[, Class 2, or Class 3] public securities, with
472	472	public securities payable from the same sources as the original
473	473	public securities.
474	474	SECTION 2.14. Effective January 1, 2026, Sections 2210.613
475	475	and 2210.6131 are repealed.
476	476	ARTICLE 3. TRANSITION AND SAVINGS PROVISIONS
477	477	SECTION 3.01. Notwithstanding the repeal by this Act of
478	478	Subchapter B-1, Chapter 2210, Insurance Code, and other changes in
479	479	law made by this Act effective September 1, 2026:
480	480	(1) the payment of excess losses and operating
481	481	expenses of the Texas Windstorm Insurance Association incurred
482	482	before January 1, 2026, is governed by the law as it existed on the
483	483	effective date of this Act, and that law is continued in effect for
484	484	that purpose;
485	485	(2) the issuance of public securities to pay excess
486	486	losses and operating expenses of the Texas Windstorm Insurance
487	487	Association incurred before January 1, 2026, the use of the
488	488	proceeds of those securities, the repayment or refinancing of those
489	489	securities, and any other rights, obligations, or limitations with
490	490	respect to those securities and proceeds of those securities are
491	491	governed by the law as it existed on the effective date of this Act,
492	492	and that law is continued in effect for that purpose; and
493	493	(3) proceeds of any assessments made under Subchapter
494	494	B-1, Chapter 2210, Insurance Code, may not be included in reserves
495	495	available for a catastrophe year for purposes of Section 2210.082,
496	496	Insurance Code, as added by this Act, unless approved by the
497	497	commissioner of insurance.
498	498	ARTICLE 4. EFFECTIVE DATE
499	499	SECTION 4.01. Except as otherwise provided by this Act,
500	500	this Act takes effect September 1, 2025.