CHAPTER 2003. PROCEDURES FOR EVALUATING FIRE LOSS RISK
INSURANCE CODE
TITLE 10. PROPERTY AND CASUALTY INSURANCE
SUBTITLE D. FIRE INSURANCE AND ALLIED LINES,
INCLUDING RESIDENTIAL PROPERTY INSURANCE
CHAPTER 2003. PROCEDURES FOR EVALUATING FIRE LOSS RISK
SUBCHAPTER A. EVALUATING FIRE LOSS RISK
Sec. 2003.001. FIRE LOSS INFORMATION. (a) The department shall
ascertain as soon as practicable the annual fire loss in this
state.
(b) The department shall, in a manner that will aid in
determining equitable insurance rates and methods to reduce
annual fire loss and insurance rates of this state or
subdivisions of this state:
(1) obtain, make, and maintain records regarding the annual fire
loss in this state; and
(2) collect data concerning the annual fire loss as necessary to
enable the department to classify:
(A) fire losses in this state;
(B) the causes of those fire losses;
(C) the amount of the premiums collected for fire loss for each
class of risk; and
(D) the amount paid for the fire losses.
(c) The commissioner may designate one or more advisory
organizations or other agencies to gather, audit, and compile the
fire loss experience of insurers. The insurers shall bear the
costs incurred under this subsection.
(d) To implement this section, the department may:
(1) employ clerical personnel, inspectors, experts, and other
assistants; and
(2) incur other necessary expenses.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2003.002. FIRE SUPPRESSION RATINGS FOR BORDER
MUNICIPALITIES. In assigning or evaluating a fire suppression
rating for a municipality at or near the border between this
state and another state or the United Mexican States, the
commissioner shall consider the existence and capabilities of a
fire department or volunteer fire department that:
(1) serves an adjoining or nearby municipality in the other
state or the United Mexican States; and
(2) by agreement or by long-standing practice provides fire
suppression services to the municipality in this state.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2003.003. CREDIT FOR REDUCING FIRE HAZARD. The
commissioner may give a locality, municipality, or other
political subdivision credit for:
(1) each fire hazard that the locality, municipality, or other
political subdivision reduces or removes;
(2) additional fire-fighting equipment, increased police
protection, or any other equipment or improvement that tends to
reduce the fire hazard of the locality, municipality, or other
political subdivision; and
(3) a good fire record made by the locality, municipality, or
other political subdivision.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2003.004. POLICYHOLDER CREDIT FOR REDUCING HAZARD. (a)
The commissioner may require an insurer to give credit to a
policyholder for a hazard that the policyholder reduces or
removes.
(b) For purposes of this section, the following actions
constitute a reduction in hazard by a policyholder:
(1) the installation of a new standard fire hydrant approved by
the department within the required distance of a risk, as
prescribed by the department; or
(2) the use of compressed air foam technology in fire-fighting
equipment.
(c) The insurer shall give credit in the proportion that the
hazard is reduced or removed and shall refund to the policyholder
the proportional part of the unearned premium charged for the
hazard that is reduced or removed.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
SUBCHAPTER B. MUNICIPAL FIRE LOSS LISTS
Sec. 2003.051. ANNUAL LIST OF INSURED FIRE LOSSES BY
MUNICIPALITY. (a) The department shall compile for each
municipality in this state a list for distribution to the
municipality of the insured fire and lightning losses that:
(1) exceed $100; and
(2) are paid in the municipality for the preceding statistical
year under policy forms:
(A) adopted or approved by the commissioner and authorized for
use by Section 2301.052(b); or
(B) filed and in effect as provided by Section 2301.052(a).
(b) Each list must include:
(1) the name of each person recovering a loss under a policy
form described by Subsection (a);
(2) the address or location where the loss occurred; and
(3) the amount paid by the insurer on the loss.
(c) The department shall develop each list from information
obtained from insurer reports of individual losses during the
statistical year.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2003.052. MUNICIPALITY'S REQUEST FOR LIST; RETURN REPORT.
(a) The department shall provide to a municipality a copy of the
list compiled under Section 2003.051 for the municipality on the
request of the municipality or the municipality's authorized
agent or fire marshal.
(b) Each municipality shall investigate the information
contained in the list to determine the losses actually occurring
within the limits of the municipality. The municipality shall
report to the department:
(1) a list of the losses that actually occurred within the
limits of the municipality;
(2) a list of the losses that did not occur within the limits of
the municipality; and
(3) other evidence essential to establishing the losses
occurring in the municipality.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2003.053. LIST CORRECTIONS; USE. The department shall:
(1) make changes that the department considers appropriate to
correct the list compiled under Section 2003.051 for a
municipality; and
(2) use the corrected list to determine the fire record credit
or debit for the municipality for the next year.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2003.054. CHARGE FOR LIST AND FIRE RECORD SYSTEM. The
commissioner shall set and collect a charge for compiling and
providing a list under this subchapter and as the commissioner
considers appropriate for administering the fire record system.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2003.055. DEPARTMENT AUTHORITY TO REQUIRE PROVISION OF FIRE
LOSS INFORMATION. To accumulate statistical information for the
control and prevention of fires, the department may require each
municipality in this state and each insurer engaged in business
in this state to provide to the department a complete and
accurate report that lists all fire and lightning losses
occurring in this state that are reflected in the municipality's
or insurer's records.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2003.056. DISCRETIONARY PROVISION OF LIST. The department
is not required to provide a list compiled under this subchapter
if the fire record system is not in effect.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
SUBCHAPTER C. VOLUNTARY INSPECTION PROGRAM
Sec. 2003.101. DEFINITIONS. In this subchapter:
(1) "Inspection" means a physical inspection of property for
which residential property insurance is sought.
(2) "Inspection certificate" means a certificate issued under
this subchapter by an inspector indicating that the condition of
property meets or exceeds minimum standards.
(3) "Inspector" means a person authorized by the commissioner to
perform inspections under this subchapter.
(4) "Minimum standards" means the standards adopted by the
commissioner by rule regarding the insurability of property under
this subchapter.
(5) "Residential property insurance" means insurance against
loss to real or tangible personal property at a fixed location
that is provided though a homeowners insurance policy, a
residential fire and allied lines insurance policy, or a farm and
ranch owners insurance policy.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2003.102. RIGHT TO VOLUNTARY INSPECTION OF PROPERTY
CONDITION. A person with an insurable interest in real or
tangible personal property at a fixed location who desires to
purchase residential property insurance may obtain an independent
inspection of the condition of the property by an inspector
authorized to perform inspections under this subchapter.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2003.103. PLAN OF OPERATION. (a) The commissioner shall
adopt a plan of operation for the voluntary inspection program.
(b) The plan of operation must include rules and standards for
the voluntary inspection program, including:
(1) the manner and scope of the inspections to be performed;
(2) the contents of the written evaluation report;
(3) the form of the inspection certificate to be issued;
(4) the term during which an inspection certificate is valid;
(5) rules for the certification or licensing of persons
authorized to perform inspections under the program; and
(6) the fee that may be charged a person requesting an
inspection under the program.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2003.104. ELIGIBLE INSPECTORS. Persons who may be
certified or licensed to perform inspections under this
subchapter include:
(1) a person licensed to perform real property inspections under
Chapter 1102, Occupations Code; and
(2) a designated employee or agent of a county or municipality
that chooses to establish a voluntary inspection program to
inspect residential properties within the territorial limits of
the county or municipality.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2003.105. PRESUMPTION OF INSURABILITY. (a) The existence
of an inspection certificate issued under this subchapter creates
a presumption that the condition of the property inspected is
adequate for the issuance of residential property insurance.
(b) If an inspection certificate is used in whole or in part to
determine insurability, an insurer may require as a condition of
issuing a residential property insurance policy that the
applicant for that insurance provide a written statement that
there has not been a material or substantial change to the
property condition since the date of the inspection certificate.
(c) An insurer who receives an inspection certificate may not
use the condition of the property as grounds to refuse to issue
or renew residential property insurance unless the insurer:
(1) reinspects the property; and
(2) specifies the areas of deficiency in the insurer's
declination letter.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2003.106. ENFORCEMENT. The commissioner by rule may
provide for the use of any disciplinary procedure authorized by
this code to:
(1) maintain the integrity of the voluntary inspection program;
or
(2) ensure compliance with this subchapter.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2003.107. RULES. In addition to the plan of operation
adopted under Section 2003.103, the commissioner may adopt rules
that are appropriate to accomplish the purposes of this
subchapter.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.