Senate Bill 44 filed June 16, 2011 information

[Lee Zapp Jr.]

Here is an outline of the provisions of SB 44, filed June 16, 2011 by Senator Troy Fraser (R- Horseshoe Bay); the bill has 19 Senate co-authors.  Early June 17, 2011, it had not yet been assigned to a committee.

 

SB 44 Analysis:

 

·         The Insurance Commissioner must adopt and implement a transition plan for the cessation of all operations by TWIA, as soon as practicable.

 

·         However, TWIA may remain in existence long enough to repay outstanding public securities and other obligations. During this time, TWIA may continue to issue policies and collect premiums.

 

·         When TWIA ends, any amounts remaining in the Catastrophe Reserve Trust Fund will be transferred to TDI. The funds will be used to improve preparedness, seek ways to reduce future losses, and educate the public.

 

·         New Chapter 2214 is added to the insurance code.

 

o   14 “First Tier” and 14 “Second Tier” counties are identified.

 

o   With limited exceptions (i.e. certain mutual insurance companies), all insurance companies doing business in Texas must agree to issue windstorm  and hail insurance policies in First Tier and Second Tier counties.

 

§  They must do so in order to conduct any other business in Texas.

§  They must do so in an amount such that their share of the market for windstorm/hail in these counties is in proportion to the insurer’s statewide market share “exclusive of” first tier and second tier counties.

§  Rates are determined under Chapter 2251.

 

·         There is no fixed timetable for terminating TWIA or for implementing Chapter 2214.

 

The Senate Business and Commerce is presently expected to hear HB 3 by Chairman John Smithee (R - Amarillo), passed yesterday by the House.

Posted June 17, 2011, by Coastal Windstorm Insurance Coalition, 4800 Seawall Boulevard, Galveston, TX 77551, Lee Otie Zapp, Chair, Ph# 409-744-6655