Bill Text: TX HB3204 | 2015-2016 | 84th Legislature | Introduced
Bill Title: Relating to a depopulation program for the Texas Windstorm Insurance Association.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2015-04-22 - Left pending in committee [HB3204 Detail]
Download: Texas-2015-HB3204-Introduced.html
| 84R9618 SCL-D | ||
| By: Sheets | H.B. No. 3204 | |
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| relating to a depopulation program for the Texas Windstorm | ||
| Insurance Association. | ||
| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
| SECTION 1. Chapter 2210, Insurance Code, is amended by | ||
| adding Subchapter O to read as follows: | ||
| SUBCHAPTER O. DEPOPULATION PROGRAM | ||
| Sec. 2210.701. DEPOPULATION PROGRAM. (a) The association | ||
| shall administer, subject to commissioner approval, a depopulation | ||
| program that encourages the transfer of association policies to | ||
| insurers through the voluntary market or assumption reinsurance. | ||
| (b) An insurer engaged in the business of property and | ||
| casualty insurance in this state may elect to participate in the | ||
| depopulation program. | ||
| (c) An eligible surplus lines insurer may elect to | ||
| participate in the depopulation program if the surplus lines | ||
| insurer has at least a minimum A7 rating from A. M. Best or a | ||
| comparable rating determined by the commissioner. The commissioner | ||
| by rule shall establish the manner in which an eligible surplus | ||
| lines insurer may participate in the depopulation program. The | ||
| rules must address the transmission of information to participating | ||
| surplus lines insurers or surplus lines agents under Section | ||
| 2210.702(a) or 2210.703(a) and the manner in which compliance with | ||
| Section 981.004(a)(1) must be established. | ||
| Sec. 2210.702. VOLUNTARY MARKET DEPOPULATION. (a) The | ||
| association shall notify each insurer who elects to participate in | ||
| the depopulation program of the expiration of an association | ||
| policy. | ||
| (b) In the notice provided under Subsection (a), the | ||
| association shall provide necessary information for the insurer to | ||
| determine whether to issue a policy in the voluntary market to the | ||
| association policyholder. | ||
| (c) If an insurer elects to issue a policy to an association | ||
| policyholder under this section, the insurer is legally and | ||
| contractually responsible for the issued policy regardless of | ||
| whether the association continues to provide some services on the | ||
| policy. Except as specifically provided in an agreement between | ||
| the association and the insurer, the insurer shall administer the | ||
| policy and process, adjust, and pay claims in accordance with the | ||
| policy. | ||
| (d) If an insurer offers a policy to a policyholder under | ||
| this section that contains generally comparable coverage and | ||
| premiums to the association policy as determined by commissioner | ||
| rule, the association may not renew or issue a new association | ||
| policy to the policyholder. The commissioner by rule shall | ||
| establish, as a percentage, a reasonable difference in premium cost | ||
| that qualifies as comparable premiums for purposes of this | ||
| subsection. | ||
| Sec. 2210.703. ASSUMPTION REINSURANCE DEPOPULATION. (a) | ||
| The association shall make available to insurers who elect to | ||
| participate in the depopulation program association policy | ||
| information necessary for the insurers to determine whether to | ||
| reinsure a policy ceded to the insurer by the association. | ||
| (b) If an insurer elects to reinsure a policy under this | ||
| section, the reinsurance must be provided as assumption reinsurance | ||
| and the insurer is legally and contractually responsible for the | ||
| association policy ceded to the insurer on the effective date of the | ||
| reinsurance agreement regardless of whether the association | ||
| continues to provide some services on the policy. Except as | ||
| specifically provided in an agreement between the association and | ||
| the insurer, the insurer shall administer the policy and process, | ||
| adjust, and pay claims in accordance with the policy. | ||
| Sec. 2210.704. CONFIDENTIALITY OF INFORMATION. An insurer | ||
| may use information concerning a specific policy or insured | ||
| provided by the association under Sections 2210.702(a) and | ||
| 2210.703(a) only for the purposes of this subchapter and may not use | ||
| or disclose the information for any other purpose. | ||
| SECTION 2. As soon as practicable after the effective date | ||
| of this Act, the board of directors of the Texas Windstorm Insurance | ||
| Association shall propose amendments to the plan of operation of | ||
| the association and the commissioner of insurance shall adopt rules | ||
| to implement Subchapter O, Chapter 2210, Insurance Code, as added | ||
| by this Act. | ||
| SECTION 3. This Act takes effect September 1, 2015. | ||
