Office of House Bill AnalysisH.B. 1162
By: Eiland


The Texas Windstorm Insurance Association (association) is comprised of all
property insurers authorized to transact property insurance in Texas.
Prior to the 77th Legislature, state law required the association to issue
property insurance covering insurable property in the 14 Texas counties
contiguous with the Gulf of Mexico.  The association writes both commercial
and residential risk plans in these counties.  Rates for commercial
policies are set each year by the commissioner of insurance (commissioner)
at an open meeting and may not be contested.  Residential policy rates,
determined as part of the annual benchmark rate hearing process, were
contestable.  Contesting the residential policy rates was an expensive
process in terms of time consumed as well as the cost.  House Bill 1162
authorizes the commissioner to set rates for residential policies issued by
the association in the same manner in which commercial rates are set.   


It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 


House Bill 1162 amends the Insurance Code to modify provisions regarding
rates and rating plans in the Texas Windstorm Insurance Association Act

The bill provides that each rate established by the commissioner of
insurance (commissioner) in accordance with the Act must be uniform
throughout the first tier of coastal counties (Sec. 8(h)(1), Art. 21.49).
The bill deletes provisions related to the rates of noncommercial windstorm
and hail insurance written by the Texas Windstorm Insurance Association
(association) (Sec. 8(h)(3), Art. 21.49).  Not later than August 15, rather
than August 1, of each year, the association is required to file with the
Texas Department of Insurance (TDI) for approval by the commissioner a
proposed manual rate for all types and classes of risks written by the
association.  The bill removes provisions requiring the rate to be 90
percent of the rate for extended coverage for commercial risks (Sec.
8(h)(2), Art. 21.49).  After conclusion of the open meeting to allow
interested persons to comment on the filing, the commissioner is required
to approve or disapprove or modify the filing in writing on or before
November 15 instead of November 1 of the year in which the filing is made
or the filing is deemed approved.  The association is authorized to file an
amended filing with the commissioner, not later than 30 days instead of 10
days after the date the association receives disapproval from the
commissioner (Sec. 8(h)(6), Art. 21.49).  The bill authorizes the
commissioner to modify an amended filing of the manual rate before
approving it (Sec. 8(h)(7), Art. 21.49).  The bill authorizes the
association to request and the commissioner to approve a different period
of in time in which the association is required to provide additional
supporting information related to a filing or an amended filing (Sec.
8(h)(8), Art. 21.49).  The bill sets forth provisions for the development
of rates and the determination of the catastrophe and non-catastrophe
elements of rates promulgated under the Act (Secs. 8(h)(9, 11, 12, and 13),
Art. 21.49).  The bill requires TDI to value the loss and loss adjustment
expense data to be used for a filing not earlier than March 31 of the year
before the year in which the filing is to be made (Sec. 8(h)(15), Art.
21.49).  Not later than June 1 of each year, TDI is required to provide the
experience data to be used in establishing the rates in that year to the
association and other interested  persons (Sec. 8(h)(16), Art. 21.49). 


September 1, 2001.