HBA-TYH H.B. 2254 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2254 By: Eiland Insurance 3/24/1999 Introduced BACKGROUND AND PURPOSE Currently, hearings before the Texas Department of Insurance (department) are used to establish rates for windstorm insurance. Models may be cited during these hearings that are used to predict when storms may occur, how severe a storm may be, and how much potential damage a storm could cause. No provision currently exists for explaining any details relating to the design of a model or the interpretation of its results. H.B. 2254 requires a person citing a model during a windstorm insurance rate hearing to present to the department a detailed description of the facts and data sources used to prepare the model, the assumptions made in preparing the model, and each methodology, formula, and scientific analysis used in the design and interpretation of the model. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the commissioner of insurance in SECTION 1 (Section 9B, Article 21.49, Insurance Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Article 21.49, Insurance Code, by adding Section 9B, as follows: Sec. 9B. REQUIREMENTS FOR USE OF MODELS RELATING TO WINDSTORM INSURANCE. (a) Defines, for this section, "model." (b) Provides that a model used in a hearing before the Texas Department of Insurance (department) under this Act relating to windstorm insurance must meet the requirements of this section. (c) Requires each person who proposes to use a model in a hearing before the department regarding windstorm insurance issues to present to the department, in the format prescribed by the department, the enumerated information. (d) Requires the department to make the information provided under Subsection (c) of this section available, on request, to any person living in a catastrophe area who may be affected by the application of the model to the determination of insurance premium rates under this Act. (e) Authorizes the commissioner of insurance to adopt rules as necessary to implement this section. SECTION 2.Effective date: September 1, 1999. SECTION 3.Emergency clause.