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  By: Smithee H.B. No. 2960
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the operation and funding of the Texas Windstorm
  Insurance Association.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 2210.001, Insurance Code, is amended to
  read as follows:
         Sec. 2210.001.  PURPOSE. (a) An adequate market for
  windstorm and[,] hail[, and fire] insurance in the seacoast
  territory is necessary to the economic welfare of this state, and
  without that insurance, the orderly growth and development of this
  state would be severely impeded. This chapter provides a method by
  which adequate windstorm and[,] hail[, and fire] insurance may be
  obtained in certain designated portions of the seacoast territory
  of this state.
         (b)  The purpose of the Texas Windstorm Insurance
  Association is to serve as a residual insurer of last resort for
  windstorm and hail insurance in the seacoast territory. The
  association shall function in such a manner as to not be a direct
  competitor in the private market and shall provide insurance
  coverage to persons who are unable to obtain insurance coverage in
  the private market.
         SECTION 2.  Section 2210.003(6), Insurance Code, is amended
  to read as follows:
               (6)  "Insurance" means Texas [fire and explosion
  insurance and Texas] windstorm and hail insurance.
         SECTION 3.  Sections 2210.004(a) and (g), Insurance Code,
  are amended to read as follows:
         (a)  For purposes of this chapter and subject to this
  section, "insurable property" means immovable property at a fixed
  location in a catastrophe area or corporeal movable property
  located in that immovable property, as designated in the plan of
  operation, that is determined by the association according to the
  criteria specified in the plan of operation to be in an insurable
  condition against windstorm and hail [or fire and explosion, as
  appropriate], as determined by normal underwriting standards.
         (g)  For purposes of this chapter, a residential structure is
  insurable property if:
               (1)  the residential structure is not:
                     (A)  a condominium, apartment, duplex, or other
  multifamily residence; or
                     (B)  a hotel or resort facility; and
               (2)  the residential structure is located within an
  area designated as a unit under the Coastal Barrier Resources Act
  (Pub. L. No. 97-348)[; and
               [(3)     a building permit or plat for the residential
  structure was filed with the municipality, the county, or the
  United States Army Corps of Engineers before January 1, 2004].
         SECTION 4.  Section 2210.005, Insurance Code, is amended to
  read as follows:
         Sec. 2210.005.  DESIGNATION AS CATASTROPHE AREA [OR
  INADEQUATE FIRE INSURANCE AREA]; REVOCATION OF DESIGNATION. (a)  
  After at least 10 days' notice and a hearing, the commissioner may
  designate an area of the seacoast area of this state as a
  catastrophe area if the commissioner determines that windstorm and
  hail insurance is not reasonably available to a substantial number
  of the owners of insurable property located in that territory
  because the territory is subject to unusually frequent and severe
  damage resulting from windstorms or hailstorms.
         (b)  [After at least 10 days' notice and a hearing, the
  commissioner may designate an area of this state as an inadequate
  fire insurance area if the commissioner determines that fire and
  explosion insurance is not reasonably available to a substantial
  number of owners of insurable property located in that area.
         [(c)] The commissioner shall revoke a designation made under
  Subsection (a) [or (b)] if the commissioner determines, after at
  least 10 days' notice and a hearing, that the applicable insurance
  coverage is no longer reasonably unavailable to a substantial
  number of owners of insurable property within the designated
  territory.
         (c) [(d)] If the association determines that windstorm and
  hail insurance [or fire and explosion insurance] is no longer
  reasonably unavailable to a substantial number of owners of
  insurable property in a territory designated as a catastrophe area
  [or inadequate fire insurance area, as applicable], the association
  may request in writing that the commissioner revoke the
  designation. After at least 10 days' notice and a hearing, but not
  later than the 30th day after the date of the hearing, the
  commissioner shall:
               (1)  approve the request and revoke the designation; or
               (2)  reject the request.
         SECTION 5.  Subchapter A, Chapter 2210, Insurance Code, is
  amended by adding Section 2210.009 to read as follows:
         Sec. 2210.009.  LIST OF PRIVATE INSURERS; INCENTIVE PLAN.
  (a) The department shall maintain a list of all insurers that
  engage in the business of property and casualty insurance in the
  voluntary market in the seacoast territory.
         (b)  The department shall develop incentive programs in the
  manner described by Section 2210.053(b) to encourage authorized
  insurers to write insurance on a voluntary basis and to minimize the
  use of the association as a means to obtain insurance.
         SECTION 6.  Sections 2210.052(a), (c), and (d), Insurance
  Code, are amended to read as follows:
         (a)  Each member of the association shall participate in
  insured losses and operating expenses of the association, in excess
  of premium and other revenue [the writings, expenses, profits, and
  losses] of the association, in the proportion that the net direct
  premiums of that member during the preceding calendar year bears to
  the aggregate net direct premiums by all members of the
  association, as determined using the information provided under
  Subsection (b).
         (c)  Each member's participation in the association shall be
  determined annually in the manner provided by the plan of
  operation. For purposes of determining participation in the
  association, two or more members that are subject to common
  ownership or that operate in this state under common management or
  control shall be treated as a single member. [The determination
  shall also include the net direct premiums of an affiliate that is
  under that common management or control, including an affiliate
  that is not authorized to engage in the business of property
  insurance in this state.]
         (d)  Notwithstanding Subsection (a), a member, in accordance
  with the plan of operation, is entitled to receive credit for
  similar insurance voluntarily written in an area designated by the
  commissioner. The member's participation in the insured losses and
  operating expenses of the association in excess of premium and
  other revenue [writings] of the association shall be reduced in
  accordance with the plan of operation.  Incentives adopted under
  the plan of operation must include a minimum level of participation
  for an insurer voluntarily writing coverage in a catastrophe area,
  and may not include a maximum level to cap a member's actual
  statewide writings compared with other members.
         SECTION 7.  Section 2210.058, Insurance Code, is amended to
  read as follows:
         Sec. 2210.058.  PAYMENT OF EXCESS LOSSES[; PREMIUM TAX
  CREDIT]. (a)  If, in any calendar year, an occurrence or series of
  occurrences in a catastrophe area results in insured losses and
  operating expenses of the association in excess of premium and
  other revenue of the association, the excess losses shall be paid as
  provided by this section.
         (b)  The association shall pay excess losses from available
  reserves of the association and available amounts in [follows:
               [(1)     $100 million shall be assessed against the
  members of the association as provided by Subsection (b);
               [(2)     losses in excess of $100 million shall be paid
  from] the catastrophe reserve trust fund established under
  Subchapter J. [and any reinsurance program established by the
  association;]
         (c)  For [(3)  for] losses in excess of those paid under
  Subsection (b), catastrophe area public securities may be issued in
  the manner prescribed by Subchapter M. Catastrophe area public
  securities issued under this subsection may be issued before or on
  or after the occurrence of a catastrophic event in amounts
  necessary to fund not more than 45 percent of the required solvency
  level determined under Subchapter N. All catastrophe area public
  securities obligations shall be paid in the manner prescribed by
  Section 2210.609, if applicable, and Section 2210.611.
         (d)  For [Subdivisions (1) and (2), an additional $200
  million shall be assessed against the members of the association,
  as provided by Subsection (b); and
               [(4)]  losses in excess of those paid under Subsections
  (b) and (c), Class 1 public securities may be issued before or on or
  after the occurrence of a catastrophic event in the manner
  prescribed by Subchapter M. Class 1 post-event public securities
  may be issued only on or after a named storm has caused damage in the
  seacoast territory and the board of directors has determined that
  the combination of association reserves, amounts available in the
  catastrophe reserve trust fund, catastrophe area public
  securities, and Class 1 pre-event public securities, if any, are
  insufficient to pay the losses.  The board of directors may request
  the commissioner to authorize Class 1 public securities in an
  amount sufficient to pay projected losses up to an amount not to
  exceed 50 percent of the required solvency level determined under
  Subchapter N. All Class 1 public securities obligations shall be
  paid in the manner prescribed by Section 2210.609, if applicable,
  and Section 2210.612.
         (e)  For losses in excess of those paid under Subsections
  (b)-(d), the board of directors of the association may request the
  commissioner to authorize member company public securities, in an
  amount not to exceed $500 million, to be issued after a catastrophic
  event in the manner prescribed by Subchapter M. Member company
  public securities obligations shall be paid in the manner
  prescribed by Section 2210.613.
         (f)  For losses in excess of those paid under Subsections
  (b)-(e), the board of directors may request the commissioner to
  authorize Class 2 post-event public securities to be issued under
  this subsection on or after a catastrophic event in the manner
  prescribed by Subchapter M. The commissioner may authorize Class 2
  post-event public securities under this subsection to pay losses
  above the required solvency level determined under Subchapter N, in
  an amount sufficient to pay losses but not to exceed $3 billion.
  All Class 2 post-event public securities obligations shall be paid
  in the manner prescribed by Section 2210.614.
         (g)  Notwithstanding any other provision of this section,
  the association may pay losses in excess of premium and other
  revenue of the association with reinsurance proceeds from
  reinsurance purchased by the association [Subdivisions (1), (2),
  and (3) shall be assessed against members of the association, as
  provided by Subsection (b)].
         [(b)     The proportion of the losses allocable to each insurer
  under Subsections (a)(1), (3), and (4) shall be determined in the
  manner used to determine each insurer's participation in the
  association for the year under Section 2210.052.
         [(c)     An insurer may credit an amount paid in accordance with
  Subsection (a)(4) in a calendar year against the insurer's premium
  tax under Chapter 221. The tax credit authorized under this
  subsection shall be allowed at a rate not to exceed 20 percent per
  year for five or more successive years following the year of payment
  of the claims. The balance of payments made by the insurer and not
  claimed as a premium tax credit may be reflected in the books and
  records of the insurer as an admitted asset of the insurer for all
  purposes, including exhibition in an annual statement under Section
  862.001.]
         SECTION 8.  Section 2210.060(c), Insurance Code, is amended
  to read as follows:
         (c)  Subsection (a) does not authorize the association to
  indemnify a member of the association for participating in the
  assessments made by [writings, expenses, profits, and losses of]
  the association in the manner provided by this chapter.
         SECTION 9.  Subchapter B, Chapter 2210, Insurance Code, is
  amended by adding Section 2210.061 to read as follows:
         Sec. 2210.061.  ELIGIBLE SURPLUS LINES INSURERS. (a) An
  eligible surplus lines insurer may not be a member of the
  association and is not subject to assessment as a member of the
  association.
         (b)  Each surplus lines agent placing property insurance
  through an eligible surplus lines insurer shall collect from the
  policyholder and shall remit to the association a surplus lines
  policy fee on all premiums collected after January 1, 2008, for all
  insurance written by the surplus lines agent for a policy from an
  eligible surplus lines insurer for all risks on real property and
  contents in first tier coastal counties. By procuring or selling
  insurance on property in this state through an eligible surplus
  lines insurer, each surplus lines agent described by this
  subsection agrees to be subject to the provisions of this chapter,
  and to collect and remit the surplus lines policy fee described by
  this section.
         (c)  The surplus lines policy fee shall be five percent of
  the total policy premium, but the fee may not be considered premium
  and is not subject to premium taxes or commissions. Failure to pay
  the surplus lines policy fee shall be treated as a failure to pay
  premium. For purposes of this subsection, "total policy premium"
  includes taxes and commissions.
         (d)  Not later than the 20th day after the last day of each
  calendar quarter, each surplus lines agent placing insurance
  through an eligible surplus lines insurer shall remit directly to
  the association all surplus lines policy fees collected in the
  preceding quarter.
         SECTION 10.  The heading to Subchapter C, Chapter 2210,
  Insurance Code, is amended to read as follows:
  SUBCHAPTER C.  ASSOCIATION BOARD OF DIRECTORS; GENERAL POWERS AND
  DUTIES OF BOARD OF DIRECTORS
         SECTION 11.  Section 2210.101, Insurance Code, is amended to
  read as follows:
         Sec. 2210.101.  ACCOUNTABLE TO GOVERNOR AND COMMISSIONER.
  The board of directors is responsible and accountable to the
  governor and the commissioner.
         SECTION 12.  Section 2210.102, Insurance Code, is amended to
  read as follows:
         Sec. 2210.102.  COMPOSITION.  (a)  The board of directors is
  composed of seven [the following nine] members appointed by the
  governor in accordance with this section.
         (b)  Three members must be employed by or affiliated with,
  other than as agents, [:
               [(1)  five representatives of different] insurers who
  are members of the association.
         (c)  Two members must be [, elected by the members as
  provided by the plan of operation;
               [(2)  two] public representatives, one of whom [who are
  nominated by the office of public insurance counsel and who], as of
  the date of the appointment, resides[:
                     [(A)  reside] in or owns property in the seacoast
  territory, and one of whom, as of the date of the appointment, does
  not reside in or own property in the seacoast territory.
         (d)  At least two members must, but not more than two members
  may, be [a catastrophe area; and
                     [(B)  are policyholders of the association; and
               [(3)  two] general property and casualty agents
  licensed under this code, one of whom, as of the date of the
  appointment, maintains the agent's principal office in the seacoast
  territory, and one of whom, as of the date of the appointment, does
  not maintain the agent's principal office in the seacoast
  territory.
         (e)  All members must have [:
                     [(A)  who have] demonstrated experience in
  insurance, general business, or actuarial principles sufficient to
  make the success of the association probable[; and
                     [(B)     whose principal offices, as of the date of
  the appointment, are located in a catastrophe area].
         [(b)     The persons appointed under Subsections (a)(2) and (3)
  must be from different counties.]
         SECTION 13.  Section 2210.103, Insurance Code, is amended to
  read as follows:
         Sec. 2210.103.  TERMS. (a)  Members of the board of
  directors serve two-year [three-year staggered] terms[, with the
  terms of three members expiring on the third Tuesday of March of
  each year].
         (b)  A person may serve on the board of directors for not more
  than three consecutive full terms[, not to exceed nine years].
         (c)  The governor shall appoint a replacement in the manner
  provided by Section 2210.102 for a member who leaves or is removed
  from the board of directors.
         SECTION 14.  Section 2210.104, Insurance Code, is amended to
  read as follows:
         Sec. 2210.104.  OFFICERS. The board of directors shall
  elect from the board's membership an executive committee consisting
  of a presiding officer, assistant presiding officer, and
  secretary-treasurer. [At least one of the officers must be a member
  appointed under Section 2210.102(a)(2) or (3).]
         SECTION 15.  Subchapter C, Chapter 2210, Insurance Code, is
  amended by adding Section 2210.1051 to read as follows:
         Sec. 2210.1051.  MEETINGS OF BOARD OF DIRECTORS. (a)
  Notwithstanding Chapter 551, Government Code, or any other law,
  members of the board of directors may meet by telephone conference
  call, video conference, or other similar telecommunication method.
  The board may use telephone conference call, video conference, or
  other similar telecommunication method for purposes of
  establishing a quorum or voting or for any other meeting purpose in
  accordance with this subsection and Subsection (b). This
  subsection applies without regard to the subject matter discussed
  or considered by the members of the board at the meeting.
         (b)  A meeting held by telephone conference call, video
  conference, or other similar telecommunication method:
               (1)  is subject to the notice requirements applicable
  to other meetings of the board of directors;
               (2)  may not be held unless notice of the meeting
  specifies the location of the meeting;
               (3)  must be audible to the public at the location
  specified in the notice under Subdivision (2); and
               (4)  must provide two-way audio communication between
  all members of the board attending the meeting during the entire
  meeting, and if the two-way audio communication link with members
  attending the meeting is disrupted so that a quorum of the board is
  no longer participating in the meeting, the meeting may not
  continue until the two-way audio communication link is
  reestablished.
         SECTION 16.  Subchapter C, Chapter 2210, Insurance Code, is
  amended by adding Section 2210.107 to read as follows:
         Sec. 2210.107.  PRIMARY BOARD OBJECTIVES.  The primary
  objectives of the board of directors are to ensure that the
  association:
               (1)  operates in accordance with this chapter and
  commissioner rules;
               (2)  complies with sound insurance principles; and
               (3)  meets the solvency standards imposed under this
  chapter.
         SECTION 17.  Section 2210.151, Insurance Code, is amended to
  read as follows:
         Sec. 2210.151.  ADOPTION OF PLAN OF OPERATION. With the
  advice of the board of directors, the commissioner by rule shall
  adopt the plan of operation to provide[:
               [(1)]  Texas windstorm and hail insurance in a
  catastrophe area[; and
               [(2)     Texas fire and explosion insurance in an
  inadequate fire insurance area].
         SECTION 18.  Section 2210.202(a), Insurance Code, is amended
  to read as follows:
         (a)  A person who has an insurable interest in insurable
  property may apply to the association for insurance coverage
  provided under the plan of operation and an inspection of the
  property, subject to any rules[, including any inspection fee,]
  established by the board of directors and approved by the
  commissioner.  In order to be eligible for insurance through the
  association, an applicant must demonstrate, in the manner
  established in the plan of operation, inability to obtain
  insurance coverage from insurers authorized to engage in the
  business of property and casualty insurance in this state.
         SECTION 19.  Section 2210.203, Insurance Code, is amended by
  adding Subsection (a-1) to read as follows:
         (a-1)  Notwithstanding Subsection (a), if all or any part of
  the property for which an application for new or renewal insurance
  coverage is made is located in Zone V or another similar zone with
  an additional hazard associated with storm waves, as defined by the
  National Flood Insurance Program, and if flood insurance under that
  federal program is available, the association may not issue a new or
  renewal insurance policy unless evidence that the property is
  covered by a flood insurance policy is submitted to the
  association.  If that flood insurance is unavailable in any portion
  of the seacoast territory, an association policy insuring a
  residential structure described by Section 2210.004(g) is subject
  to a premium surcharge for the insurance coverage obtained through
  the association in an amount equal to not less than 10 percent of
  the premium, as set by the commissioner after notice and a hearing.
         SECTION 20.  Subchapter E, Chapter 2210, Insurance Code, is
  amended by adding Section 2210.210 to read as follows:
         Sec. 2210.210.  NOTICE TO APPLICANTS FOR INSURANCE AND
  POLICYHOLDERS; CONSUMER INFORMATION. (a) Each application for
  insurance and each policy issued by the association must include a
  notice as provided by this section. The commissioner by rule may
  prescribe specific requirements for the notice. The notice must be
  substantially as follows:
  IMPORTANT NOTICE TO TEXAS WINDSTORM INSURANCE
  ASSOCIATION POLICYHOLDERS
         Insurance policies issued by the Texas Windstorm Insurance
  Association are not guaranteed by the state or federal government.
  In the event of a major catastrophe, the association may not have
  sufficient funding resources to pay all losses to all policyholders
  suffering damage. In such an event, you may be paid less than the
  full amount of damages that you suffer. You may obtain additional
  information as to the association's potential exposure and its
  available funding resources at www.tdi.state.tx.us.
         (b)  The department shall establish a link on the
  department's Internet website through which applicants for
  insurance coverage through the association and association
  policyholders may obtain information in a format easily understood
  about the association's exposure and available resources.
         SECTION 21.  Sections 2210.251(a) through (f), Insurance
  Code, are amended to read as follows:
         (a)  Except as provided by this section, to be considered
  insurable property eligible for windstorm and hail insurance
  coverage from the association, a structure that is constructed or
  repaired or to which additions are made on or after January 1, 1988,
  must be inspected [or approved] by the association [department] for
  compliance with the plan of operation.
         (b)  After January 1, 2004, for geographic areas specified by
  the commissioner, the board of directors [commissioner by rule]
  shall recognize for the purposes of this chapter [adopt] the 2003
  International Residential Code for one- and two-family dwellings
  published by the International Code Council. For those geographic
  areas, the board of directors [commissioner by rule] may recognize
  [adopt] a subsequent edition of that code and [may adopt] any
  supplements published by the International Code Council and
  amendments to that code.
         (c)  After January 1, 2004, a person must submit a notice of a
  windstorm inspection to the association [unit responsible for
  certification of windstorm inspections at the department] before
  beginning to construct, alter, remodel, enlarge, or repair a
  structure.
         (d)  A structure constructed or repaired or to which
  additions were made before January 1, 1988, that is located in an
  area that was governed at the time of the construction, repair, or
  addition by a building code recognized by the association is
  insurable property eligible for windstorm and hail insurance
  coverage from the association without compliance with the
  inspection [or approval] requirements of this section or the plan
  of operation.
         (e)  A structure constructed or repaired or to which
  additions were made before January 1, 1988, that is located in an
  area not governed by a building code recognized by the association
  is insurable property eligible for windstorm and hail insurance
  coverage from the association without compliance with the
  inspection [or approval] requirements of this section or the plan
  of operation if the structure was previously insured by an insurer
  authorized to engage in the business of insurance in this state and
  the structure is in essentially the same condition as when
  previously insured, except for normal wear and tear, and is without
  any structural change other than a change made according to code.  
  For purposes of this subsection, evidence of previous insurance
  coverage includes:
               (1)  a copy of a previous insurance policy;
               (2)  copies of canceled checks or agent's records that
  show payments for previous policies; and
               (3)  a copy of the title to the structure or mortgage
  company records that show previous policies.
         (f)  The association [department] shall issue a certificate
  of compliance for each structure that qualifies for coverage. The
  certificate is evidence of insurability of the structure by the
  association.
         SECTION 22.  Section 2210.252, Insurance Code, is amended to
  read as follows:
         Sec. 2210.252.  INTERNATIONAL RESIDENTIAL CODE BUILDING
  SPECIFICATIONS. (a)  After January 1, 2004, for geographic areas
  specified by the commissioner, the association [commissioner by
  rule] may supplement the plan of operation building specifications
  with the structural provisions of the International Residential
  Code for one- and two-family dwellings, as published by the
  International Code Council or an analogous entity recognized by the
  board of directors [department].
         (b)  For a geographic area specified under Subsection (a),
  the board of directors [commissioner by rule] may recognize [adopt]
  a subsequent edition of the International Residential Code for
  one- and two-family dwellings and [may adopt] a supplement
  published by the International Code Council or an amendment to that
  code.
         SECTION 23.  Sections 2210.254(a) and (b), Insurance Code,
  are amended to read as follows:
         (a)  For purposes of this chapter, a "qualified inspector"
  includes:
               (1)  a person determined by the board of directors
  [department] to be qualified because of training or experience to
  perform building inspections;
               (2)  a licensed professional engineer who meets the
  requirements specified by the board of directors [commissioner
  rule] for appointment to conduct windstorm inspections; and
               (3)  an inspector who:
                     (A)  is certified by the International Code
  Council, the Building Officials and Code Administrators
  International, Inc., the International Conference of Building
  Officials, or the Southern Building Code Congress International,
  Inc.;
                     (B)  has certifications as a buildings inspector
  and coastal construction inspector; and
                     (C)  complies with other requirements specified
  by the board of directors [commissioner rule].
         (b)  A windstorm inspection may be performed only by a
  qualified inspector who is employed by or under contract with the
  association.
         SECTION 24.  Section 2210.255, Insurance Code, is amended to
  read as follows:
         Sec. 2210.255.  APPOINTMENT OF LICENSED ENGINEER AS
  INSPECTOR. (a)  On request of an engineer licensed by the Texas
  Board of Professional Engineers, the association may [commissioner
  shall] appoint the engineer as an inspector under this subchapter
  on receipt of information satisfactory to the board of directors
  [not later than the 10th day after the date the engineer delivers to
  the commissioner information demonstrating] that the engineer is
  qualified to perform windstorm inspections under this subchapter.
         (b)  The board of directors shall consult with the
  commissioner regarding [shall adopt rules establishing] the
  information to be considered in appointing engineers under this
  section.
         SECTION 25.  Subchapter F, Chapter 2210, Insurance Code, is
  amended by adding Section 2210.258 to read as follows:
         Sec. 2210.258.  SURCHARGE FOR CERTAIN NONCOMPLIANT
  CONSTRUCTION.  (a)  For purposes of this section, property is not in
  compliance with mandatory building codes if:
               (1)  the property has not been inspected for compliance
  with the plan of operation in accordance with Section 2210.251(a);
  or
               (2)  a certificate of compliance has not been issued in
  accordance with Section 2210.251(f).
         (b)  An applicant for coverage from the association or a
  policyholder of the association whose property is determined to not
  be in compliance as provided by Subsection (a) is subject to a
  premium surcharge for insurance coverage obtained through the
  association. The surcharge shall be an amount not less than an
  amount equal to 10 percent of the premium, as determined by the
  commissioner after notice and a hearing.
         SECTION 26.  Sections 2210.351(a), (c), and (d), Insurance
  Code, are amended to read as follows:
         (a)  The association shall [must] file with the department in
  the manner prescribed by Section 2251.101 each manual of
  classifications, rules, rates, including condition charges, and
  each rating plan, and each modification of those items that the
  association proposes to use.
         (c)  After the filing has been made, the association may use
  a filed rate, and a filed rate is subject to disapproval by the
  commissioner in the manner prescribed by Subchapter C, Chapter
  2251. [As soon as reasonably possible after the filing has been
  made, the commissioner in writing shall approve, modify, or
  disapprove the filing.   A filing is considered approved unless
  modified or disapproved on or before the 30th day after the date of
  the filing.]
         (d)  If at any time the commissioner determines that a filing
  in effect [approved] under Subsection (c) no longer meets the
  requirements of this chapter, the commissioner may disapprove [,
  after a hearing held on at least 20 days' notice to the association
  that specifies the matters to be considered at the hearing, issue an
  order withdrawing approval of] the filing in the manner prescribed
  by Section 2251.104 for disapproval of a rate. [The order must
  specify in what respects the commissioner determines that the
  filing no longer meets the requirements of this chapter. An order
  issued under this subsection may not take effect before the 30th day
  after the date of issuance of the order.]
         SECTION 27.  Sections 2210.355(b) and (g), Insurance Code,
  are amended to read as follows:
         (b)  In adopting rates under this chapter, the association
  shall:
               (1)  comply with the rate standards adopted under
  Section 2251.052, to the extent that those standards are determined
  by the commissioner to be applicable to the purposes of the
  association;
               (2)  ensure that the rates are actuarially sound; and
               (3)  include rating factors as necessary to:
                     (A)  fund the catastrophe reserve trust fund;
                     (B)  pay any public securities obligations in
  accordance with Subchapter M; and
                     (C)  pay all losses and expenses of the
  association, regardless of the ultimate source of funding for those
  losses and expenses [following must be considered:
               [(1)     the past and prospective loss experience within
  and outside this state of hazards for which insurance is made
  available through the plan of operation, if any;
               [(2)     expenses of operation, including acquisition
  costs;
               [(3)     a reasonable margin for profit and contingencies;
  and
               [(4)     all other relevant factors, within and outside
  this state].
         (g)  A commission paid to an agent for an association policy 
  must be reasonable, adequate, not unfairly discriminatory, and
  nonconfiscatory and may not exceed 10 percent with refund for any
  unearned portion.
         SECTION 28.  Section 2210.356, Insurance Code, is amended by
  amending Subsection (b) and adding Subsection (b-1) to read as
  follows:
         (b)  The catastrophe element used to develop rates under this
  subchapter [applicable to risks written by the association must be
  uniform throughout the seacoast territory. The catastrophe element
  of the rates] must be developed using industry data, association
  data, and catastrophe models approved by the department for use in
  association filings[:
               [(1)     90 percent of both the monoline extended coverage
  loss experience and related premium income for all insurers, other
  than the association, for covered property located in the seacoast
  territory, using not less than the most recent 30 years of
  experience available; and
               [(2)     100 percent of both the loss experience and
  related premium income for the association for covered property,
  using not less than the most recent 30 years of experience
  available].
         (b-1)  The commissioner shall adopt rules establishing:
               (1)  the procedure for approval by the department of
  catastrophe models used by the association in the development of
  its rates; and
               (2)  the methodology of use for those models.
         SECTION 29.  Subchapter H, Chapter 2210, Insurance Code, is
  amended by adding Section 2210.364 to read as follows:
         Sec. 2210.364.  REVIEW OF RATES. A person who is aggrieved
  by a rate under this subchapter may proceed as provided by Chapter
  2251.
         SECTION 30.  Sections 2210.452(a), (c), and (d), Insurance
  Code, are amended to read as follows:
         (a)  The commissioner shall adopt rules under which the
  association makes [members relinquish their net equity on an annual
  basis as provided by those rules by making] payments to the
  catastrophe reserve trust fund. The trust fund may be used only to
  fund[:
               [(1)]  the obligations of the trust fund under Section
  2210.058 [2210.058(a); and
               [(2)     the mitigation and preparedness plan established
  under Section 2210.454 to reduce the potential for payments by
  association members that give rise to tax credits in the event of
  loss].
         (c)  At the end of each calendar year or policy year, the
  association shall pay the net gain from operations [equity] of the
  association [a member], including all premium and other revenue of
  the association in excess of incurred losses and operating
  expenses, to the trust fund or a reinsurance program approved by the
  commissioner.
         (d)  The commissioner by rule shall establish the procedure
  relating to the disbursement of money from the trust fund to
  policyholders in the event of an occurrence or series of
  occurrences within a catastrophe area that results in a
  disbursement under Section 2210.058 [2210.058(a)].
         SECTION 31.  Section 2210.453, Insurance Code, is amended to
  read as follows:
         Sec. 2210.453.  REINSURANCE PROGRAM. (a) The association may
  [shall]:
               (1)  make payments into the trust fund; and [or]
               (2)  purchase [establish a] reinsurance as part of the
  association's annual operating expenses to the extent [program]
  approved by the commissioner [department].
         (b)  With the approval of the commissioner [department], the
  association may purchase [establish a] reinsurance [program] that
  operates in addition to or in concert with the trust fund and with
  public securities and assessments authorized by this chapter.
         SECTION 32.  Section 2210.454(b), Insurance Code, is amended
  to read as follows:
         (b)  Each state fiscal year, the department may fund the
  mitigation and preparedness plan using available funds [the
  investment income of the trust fund in an amount not less than $1
  million and not more than 10 percent of the investment income of the
  prior fiscal year. From that amount and as part of that plan, the
  department may use in each fiscal year $1 million for the windstorm
  inspection program established under Section 2210.251].
         SECTION 33.  Section 2210.551, Insurance Code, is amended by
  adding Subsection (a-1) and amending Subsections (c) and (d) to
  read as follows:
         (a-1) This section does not apply to a matter subject to
  Section 2210.364.
         (c)  If the association or any interested party is aggrieved
  by the action of the commissioner with respect to a ruling, order,
  or determination of the commissioner, the association or interested
  party may, not later than the 30th day after the date of the action,
  make a written request to the commissioner for a hearing on the
  action.
         (d)  On 10 days' written notice of the time and place of the
  hearing, the commissioner shall conduct a hearing on the
  [association's] request of the association or interested party or
  the appeal from an act, ruling, or decision of the association, not
  later than the 30th day after the date of receipt of the request or
  appeal.
         SECTION 34.  Chapter 2210, Insurance Code, is amended by
  adding Subchapters M and N to read as follows:
  SUBCHAPTER M. PUBLIC SECURITIES PROGRAM
         Sec. 2210.601.  PURPOSE. The legislature finds that issuing
  public securities to provide a method to raise funds to provide
  windstorm and hail insurance through the association in certain
  designated areas of the state is to benefit the public and to
  further a public purpose.
         Sec. 2210.602.  DEFINITIONS. In this subchapter:
               (1)  "Board" means the board of directors of the Texas
  Public Finance Authority.
               (2)  "Catastrophe area public security" means public
  securities authorized to be issued before or on or after the
  occurrence of a catastrophic event by Section 2210.058(c).
               (3)  "Class 1 public securities" means public
  securities authorized to be issued before or on or after the
  occurrence of a catastrophic event by Section 2210.058(d).
               (4)  "Class 2 public securities" means public
  securities authorized to be issued on or after the occurrence of a
  catastrophic event by Section 2210.058(f).
               (5)  "Credit agreement" has the meaning assigned by
  Chapter 1371, Government Code.
               (6)  "Credit agreement obligation" means any premium,
  periodic payment, termination payment, or similar obligation under
  a credit agreement.
               (7)  "Insurer" means each property and casualty insurer
  authorized to engage in the business of property and casualty
  insurance in this state. The term specifically includes a county
  mutual insurance company, a Lloyd's plan, and a reciprocal or
  interinsurance exchange.
               (8)  "Member company public security" means public
  securities authorized to be issued after the occurrence of a
  catastrophic event by Section 2210.058(e).
               (9)  "Public security" means a debt instrument or other
  public security obligation issued by the Texas Public Finance
  Authority for the purposes described by this subchapter and any
  credit agreement.
               (10)  "Public security administrative expenses" means
  expenses incurred in issuing and administering public securities
  issued under this subchapter, including insurance costs and fees
  for paying agents, trustees, and attorneys, and for other
  professional services necessary to ensure compliance with
  applicable state or federal law.
               (11)  "Public security obligations" means the
  principal, any premium, and interest on a public security, periodic
  payments or termination payments, or similar obligations with
  respect to a public security.
               (12)  "Public security obligation revenue fund" means
  the dedicated trust fund established by the association outside the
  state treasury under this subchapter.
               (13)  "Public security resolution" means the
  resolution or order authorizing public securities to be issued
  under this subchapter.
         Sec. 2210.603.  APPLICABILITY OF OTHER LAWS. The board
  shall issue public securities under this subchapter in accordance
  with and subject to the requirements of Chapter 1232, Government
  Code, and other provisions of Title 9, Government Code, that apply
  to issuance of a public security by a state agency.  In the event of
  a conflict, this subchapter controls.
         Sec. 2210.604.  ISSUANCE OF PUBLIC SECURITIES AUTHORIZED.  
  (a) At the request of the board of directors of the association and
  with the approval of the commissioner, the board shall issue public
  securities to:
               (1)  fund the association, including funding necessary
  to:
                     (A)  establish and maintain reserves to pay
  claims;
                     (B)  pay incurred claims;
                     (C)  pay operating expenses; and
                     (D)  purchase reinsurance;
               (2)  provide a reserve fund for the public securities;
               (3)  capitalize interest for the period determined by
  the association, not to exceed two years;
               (4)  pay public security administrative expenses; and
               (5)  pay other costs related to the public securities
  as may be determined by the board.
         (b)  The board may issue, on behalf of the association,
  public securities in an amount sufficient to fund the insured
  losses and operating expenses of the association as determined by
  the association and approved by the commissioner after at least 10
  days' notice and a hearing if a hearing is requested by any person
  within the 10-day notice period.
         Sec. 2210.605.  TERMS OF ISSUANCE. (a)  The board shall
  determine the method of sale, type and form of public security,
  maximum interest rates, and other terms of the public securities
  that, in the board's judgment, best achieve the goals of the
  association and effect the borrowing at the lowest practicable
  cost. The board may enter into a credit agreement in connection
  with the public securities.
         (b)  Public securities must include the name of the
  association.
         Sec. 2210.606.  CONTENTS OF PUBLIC SECURITY RESOLUTION;
  ADMINISTRATION OF ACCOUNTS. (a) In a public security resolution,
  the board may:
               (1)  provide for the flow of funds and the
  establishment, maintenance, and investment of funds and special
  accounts with regard to the public securities; and
               (2)  make additional covenants with respect to the
  public securities and the designated income and receipts of the
  association pledged to the payment of the public securities.
         (b)  The association shall administer the accounts in
  accordance with this subchapter.
         Sec. 2210.607.  PUBLIC SECURITY PROCEEDS. (a) The proceeds
  of public securities may be deposited with a trustee selected by the
  association in consultation with the commissioner or if no trustee
  is selected, held by the comptroller in a dedicated trust fund
  outside the state treasury in the custody of the comptroller.
         (b)  Any excess public security proceeds remaining after the
  purposes for which the public securities were issued are satisfied
  may be used to pay public security obligations or administrative
  expenses or pay, purchase, defease, or redeem outstanding public
  securities. If there are no outstanding public security obligations
  or public security administrative expenses, the excess proceeds
  shall be transferred to the catastrophe reserve trust fund.
         Sec. 2210.608.  SOURCE OF PAYMENT; REVENUE FUND.  (a) Public
  security obligations are payable only from the public security
  obligation revenue fund, into which the following are deposited:
               (1)  the service fees on assessments established under
  Section 2210.611, 2210.612, 2210.613, or 2210.614, as applicable;
  or
               (2)  other amounts that the association is authorized
  to levy, charge, and collect.
         (b)  The board shall notify the association of the estimated
  amount of public security administrative expenses and the amount of
  the public security obligations each year in a period sufficient,
  as determined by the association, to permit the association to
  determine the availability of funds and assess a premium surcharge
  or other assessment if necessary.
         (c)  The association shall deposit all revenue collected
  under Sections 2210.611 through 2210.614 in the public security
  obligation revenue fund. Money deposited in the fund may be
  invested as permitted by general law. Money in the fund required to
  be used to pay public security administrative expenses and public
  security obligations shall be transferred to the appropriate funds
  in the manner and at the time specified in the public security
  resolution to ensure timely payment of obligations and expenses.
         (d)  The association shall provide for the payment of the
  public security administrative expenses and the public security
  obligations by irrevocably pledging revenues received from
  assessments, premiums, premium surcharges, and amounts on deposit
  in the public security obligation revenue fund, together with any
  reserve fund, as provided in the public security resolution and
  amounts realized under related credit agreements.
         (e)  Revenue deposited into the public security obligation
  revenue fund that exceeds the amount of the public security
  obligations payable in that year and interest earned on the public
  security obligation fund may, in the discretion of the association,
  be:
               (1)  used to pay public security obligations payable in
  the subsequent year, offsetting the amount of the premium surcharge
  or assessment that would otherwise be required to be levied for the
  year under this subchapter;
               (2)  used to redeem, purchase, or defease outstanding
  public securities; or
               (3)  deposited in the catastrophe reserve trust fund.
         (f)  The public securities are obligations solely of the
  association and do not create a pledge, gift, or loan of the faith,
  credit, or taxing authority of this state.
         (g)  Each public security must:
               (1)  include a statement that the state is not
  obligated to pay any amount on the security and that the faith,
  credit, and taxing authority of this state are not pledged, given,
  or lent to those payments; and
               (2)  state on the security's face that the security:
                     (A)  is payable solely from the revenue pledged
  for that purpose; and
                     (B)  is not and may not constitute a legal or moral
  obligation of the state.
         Sec. 2210.609.  PAYMENT OF INTEREST; PAYMENT OF PRE-EVENT
  PUBLIC SECURITY OBLIGATIONS.  (a) Except  as provided  by
  Subsection (b), the association shall pay all interest, and may pay  
  principal, on any pre-event public  security issued as described by  
  Section 2210.058(c) or (d) from the existing premiums of the
  association.
         (b)  If the association is unable to pay the public security
  obligations described by Subsection (a) with existing premiums,
  those public security obligations shall be paid from the service
  fees collected in accordance with Sections 2210.611 and 2210.612.
         Sec. 2210.610.  REFINANCING PUBLIC SECURITIES.  The
  association may request the board to refinance any public
  securities issued in accordance with Section 2210.058, whether
  pre-event or post-event public securities, with the refinanced
  public securities payable from the same sources as the original
  public securities.
         Sec. 2210.611.  CATASTROPHE AREA PUBLIC SECURITY SERVICE
  FEE; PREMIUM SURCHARGE AND ASSESSMENT.  (a)  The catastrophe area
  public security obligations and administrative expenses shall be
  serviced as provided by this section.
         (b)  For public securities, the proceeds of which are used to
  fund excess losses under Section 2210.058(c), the public security
  obligations and administrative expenses shall be collected from
  association policyholders each year until all outstanding public
  security obligations and administrative expenses have been
  satisfied and paid.
         (c)  The service fee imposed on association policyholders
  under this section shall be determined and collected as provided by
  this subsection. The association shall determine the amount of a
  service fee imposed under this section at least annually. On
  approval by the commissioner of the amount of a service fee after at
  least 10 days' notice and a hearing, if a hearing is requested by
  any person within the 10-day notice period, the association shall
  charge the service fee to its policyholders. The service fee must
  be set in an amount sufficient to pay all public security
  obligations and administrative expenses. The service fee shall be
  collected in the form of a premium surcharge and shall be remitted
  to the association as required by the commissioner by rule. The
  service fees collected under this subsection are separate charges
  in addition to premiums collected and are not subject to premium
  taxes or commissions. For purposes of policy cancellation, failure
  by a policyholder to pay a premium surcharge imposed under this
  subsection is equivalent to failure to pay premium.
         Sec. 2210.612.  SERVICE FEE: CLASS 1 PUBLIC SECURITIES;
  PREMIUM SURCHARGE. (a) A fee to service Class 1 public securities
  issued by the association in accordance with Section 2210.058(d)
  shall be collected by each insurer, the association, and the FAIR
  Plan Association from policyholders who reside or have operations
  in, or whose insured property is located in, a catastrophe area.
         (b)  The association shall determine the amount of a service
  fee imposed under Subsection (a) at least annually.
         (c)  On approval by the commissioner after at least 10 days'
  notice and a hearing, if a hearing is requested by any person within
  the 10-day notice period, each insurer, the association, and the
  FAIR Plan Association shall charge the service fee to the
  policyholders described by Subsection (a). The service fee must be
  set in an amount sufficient to pay all public security obligations
  and administrative expenses. The service fee shall be collected in
  the form of a premium surcharge and shall be remitted to the
  association as required by the commissioner by rule.
         (d)  The premium surcharge shall apply to all insurance
  policies for all property and casualty lines other than workers'
  compensation, accident and health, and medical malpractice. The
  service fees collected in the form of a premium surcharge under this
  section are separate charges in addition to premiums collected and
  are not subject to premium taxes or commissions.
         (e)  For purposes of policy cancellation, failure by a
  policyholder to pay a premium surcharge imposed under this section
  is equivalent to failure to pay premium.
         Sec. 2210.613.  POST-EVENT ASSESSMENT: MEMBER COMPANY
  PUBLIC SECURITIES.  (a)  An assessment to service member company
  public security obligations and administrative expenses issued by
  the association after a catastrophic event shall be assessed to and
  collected from each member company.
         (b)  The association shall determine the amount of each
  member company assessment at least annually. The assessment must be
  set in an amount sufficient to pay all public security obligations
  and administrative expenses.
         (c)  Each member company shall be assessed with the
  proportion of the loss allocable to each member company determined
  in the same manner as its participation in the association has been
  determined for the year under Section 2210.052.
         Sec. 2210.614.  POST-EVENT SERVICE FEE: CLASS 2 PUBLIC
  SECURITIES; PREMIUM SURCHARGE. (a) A fee to service Class 2 public
  securities issued by the association after a catastrophic event
  shall be collected by each insurer, the association, and the FAIR
  Plan Association from policyholders who reside or have operations
  in, or whose insured property is located in, this state.
         (b)  The association shall determine the amount of a service
  fee imposed under Subsection (a) at least annually.
         (c)  On approval by the commissioner after at least 10 days'
  notice and a hearing, if a hearing is requested by any person within
  the 10-day notice period, each insurer, the association, and the
  FAIR Plan Association shall charge the service fee to the
  policyholders described by Subsection (a). The service fee must be
  set in an amount sufficient to pay all public security obligations
  and administrative expenses. The service fee shall be collected in
  the form of a premium surcharge and shall be remitted to the
  association as required by the commissioner by rule.
         (d)  The premium surcharge shall apply to all insurance
  policies for all property and casualty lines other than workers'
  compensation, accident and health, and medical malpractice.  The
  service fees collected in the form of a premium surcharge under this
  section are separate charges in addition to premiums collected and
  are not subject to premium taxes or commissions.
         (e)  For purposes of policy cancellation, failure by a
  policyholder to pay a premium surcharge imposed under this section
  is equivalent to failure to pay premium.
         Sec. 2210.615.  EXEMPTION FROM TAXATION. Public securities
  issued under this subchapter, any interest from those public
  securities, and all assets pledged to secure the payment of the
  public securities are free from taxation by the state or a political
  subdivision of this state.
         Sec. 2210.616.  AUTHORIZED INVESTMENTS. Public securities
  issued under this subchapter are authorized investments under
  Subchapter B, Chapter 424, and Subchapters C and D, Chapter 425.
         Sec. 2210.617.  STATE PLEDGE REGARDING PUBLIC SECURITY OWNER
  RIGHTS AND REMEDIES. (a) The state pledges to and agrees with the
  owners of public securities issued in accordance with this
  subchapter that the state will not limit or alter the rights vested
  in the association to fulfill the terms of agreements made with the
  owners or in any way impair the rights and remedies of those owners
  until the public security obligations are fully discharged.
         (b)  The board may include the state's pledge and agreement
  under Subsection (a) in a public security resolution.
         Sec. 2210.618.  PAYMENT ENFORCEABLE BY MANDAMUS. A writ of
  mandamus from any Travis County district court and any other legal
  or equitable remedy are available to a party in interest to require
  the association or another party to fulfill an agreement or perform
  a function or duty under:
               (1)  this subchapter;
               (2)  the Texas Constitution; or
               (3)  a public security resolution.
         Sec. 2210.619.  NO PERSONAL LIABILITY. The members of the
  association, association employees, the board, the employees of the
  Texas Public Finance Authority, the commissioner, and department
  employees are not personally liable as a result of exercising the
  rights and responsibilities granted under this subchapter.
  SUBCHAPTER N. ASSOCIATION SOLVENCY REQUIREMENTS
         Sec. 2210.651.  SOLVENCY DUTIES. The board of directors
  shall maintain the required solvency level of the association.
         Sec. 2210.652.  REQUIRED SOLVENCY LEVEL; FUNDING SOURCES.
  (a) For purposes of this chapter, the "required solvency level" is
  the level of available internal association funding necessary to
  pay 100 percent of losses for which the association is liable and
  that result from a probable maximum loss determined by the board of
  directors under Section 2210.654.
         (b)  The board of directors shall maintain the funding of the
  association at a level sufficient to achieve the required solvency
  level.
         (c)  The association shall derive the funding to maintain the
  required solvency level from a combination of:
               (1)  association reserves;
               (2)  available funds in the catastrophe reserve trust
  fund;
               (3)  reinsurance purchased at any level;
               (4)  catastrophe area public securities; and
               (5)  Class 1 pre-event and post-event public
  securities, to be issued only as required in accordance with
  Section 2210.058(d).
         (d)  As prescribed by Section 2210.058(d), Class 1 pre-event
  and post-event public securities may not be used to achieve more
  than 50 percent of the required solvency level.
         Sec. 2210.653.  CERTIFICATION; ANNUAL SOLVENCY REPORT. (a)
  The board of directors shall certify to the governor, the
  lieutenant governor, the speaker of the house of representatives,
  and the commissioner, not later than April 15 of each calendar year,
  that the required solvency level of the association is satisfied
  for that calendar year.
         (b)  The board of directors shall make the certification in
  the manner prescribed by commissioner rule.
         (c)  After calendar year 2008, in any calendar year, the
  association may not issue any new coverage after April 15 if the
  board of directors has not certified the required solvency level in
  the annual solvency report.  This subsection does not apply to
  renewal of a policy issued through the association.
         Sec. 2210.654.  DETERMINATION OF PROBABLE MAXIMUM LOSS. (a)
  Not later than April 1 of each calendar year, to establish the
  required solvency level under Section 2210.652, the board of
  directors shall determine the association's current probable
  maximum loss, based on an average of at least two recognized
  catastrophe models, as follows:
               (1)  for calendar years 2007 and 2008, at not less than
  a one in 50 year occurrence;
               (2)  for calendar year 2009, at not less than a one in
  75 year occurrence; and
               (3)  for each calendar year after calendar year 2009,
  at not less than a one in 100 year occurrence.
         (b)  The board of directors must ensure the ability of the
  association to generate funding sufficient to cover the probable
  maximum loss without reliance on any member company public
  securities or Class 2 post-event public securities.
         SECTION 35.  Section 2251.003, Insurance Code, is amended by
  adding Subsection (a-1) to read as follows:
         (a-1)  Except as otherwise provided by Chapter 2210,
  Subchapters B and C apply to the Texas Windstorm Insurance
  Association.
         SECTION 36.  The following laws are repealed:
               (1)  Sections 2210.003(5) and (12), Insurance Code;
               (2)  Section 2210.059, Insurance Code;
               (3)  Section 2210.351(b), Insurance Code;
               (4)  Sections 2210.352, 2210.353, and 2210.354,
  Insurance Code;
               (5)  Sections 2210.355(c), (d), and (e), Insurance
  Code;
               (6)  Sections 2210.356(a), (c), and (d), Insurance
  Code;
               (7)  Section 2210.359, Insurance Code;
               (8)  Section 2210.360, Insurance Code;
               (9)  Section 2210.502(c), Insurance Code; and
               (10)  Subchapter I, Chapter 2210, Insurance Code.
         SECTION 37.  (a) The board of directors of the Texas
  Windstorm Insurance Association established under Section
  2210.102, Insurance Code, as that section existed before amendment
  by this Act, is abolished effective December 31, 2007.
         (b)  The governor shall appoint the members of the board of
  directors of the Texas Windstorm Insurance Association under
  Section 2210.102, Insurance Code, as amended by this Act, for terms
  beginning on January 1, 2008.
         (c)  The term of a person who is serving as a member of the
  board of directors of the Texas Windstorm Insurance Association
  immediately before the abolition of that board under Subsection (a)
  of this section expires on December 31, 2007. Such a person is
  eligible for appointment by the governor to the new board of
  directors of the Texas Windstorm Insurance Association under
  Section 2210.102, Insurance Code, as amended by this Act.
         SECTION 38.  The commissioner of insurance shall adopt rules
  as required by Section 2210.356(b-1), Insurance Code, as added by
  this Act, not later than the 180th day after the effective date of
  this Act.
         SECTION 39.  An assessment may not be made before the end of
  the 2007-2008 state fiscal biennium under Chapter 2210, Insurance
  Code, as amended by this Act, against any member of the Texas
  Windstorm Insurance Association until the comptroller has
  certified that any tax credits allowable to that member under
  Chapter 2210, Insurance Code, as that chapter existed immediately
  before amendment by this Act, may be taken within available revenue
  that has been certified by the comptroller.
         SECTION 40.  (a) Except as provided by Subsection (b) of
  this section, this Act takes effect immediately if it receives a
  vote of two-thirds of all the members elected to each house, as
  provided by Section 39, Article III, Texas Constitution. If this
  Act does not receive the vote necessary for immediate effect, this
  Act takes effect September 1, 2007.
         (b)  The change in law made by this Act to Sections 2210.251,
  2210.252, 2210.254, and 2210.255, Insurance Code, takes effect
  September 1, 2008.