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.
Under current law, the association is required 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, are contestable.  Contesting the
residential policy rates is 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 this Act must be uniform
throughout the first tier 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 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).  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
noncatastrophe elements of rates promulgated under this Act (Secs. 8(h)(9,
11, 12, and 14), 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 March 31 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.