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.