Part 1.
TEXAS DEPARTMENT OF INSURANCE
Chapter 5.
PROPERTY AND CASUALTY INSURANCE
Subchapter D. FIRE AND ALLIED LINES INSURANCE
8.
UNDERSERVED AREAS FOR RESIDENTIAL PROPERTY INSURANCE
28 TAC §5.3702
The Commissioner of Insurance adopts new §5.3702, concerning
the designation of geographic areas as underserved for residential property
insurance for purposes of the Insurance Code, Article 5.13-2C. The new section
is adopted with changes to the proposed text as published in the March 19,
2004, issue of the
Texas Register
(29 TexReg
2846).
The new section is necessary to designate the areas determined by the Commissioner
of Insurance to be underserved areas for purposes of Article 5.13-2C which
provides exemptions from certain rate filing and approval requirements for
certain insurers. The section identifies the factors and the methodology used
in determining the areas to be underserved. Article 5.35-3, which is referenced
in Article 5.13-2C §2(a)(2), provides that in determining which areas
will be designated as underserved, the Commissioner shall consider whether
residential property insurance is not reasonably available to a substantial
number of owners of insurable residential property in the underserved area
and any other relevant factors as determined by the Commissioner. Upon the
determination of such areas, an insurer authorized to write property or casualty
insurance in this state and writing residential property insurance in this
state, will be evaluated in accordance with the criteria established in Article
5.13-2C as to whether or not it qualifies for an exemption from the rate filing
and approval requirements of Articles 5.142 and 5.13-2. Because there is no
single comprehensive measure to determine whether residential property insurance
is or is not reasonably available to a substantial number of owners of insurable
property either on a statewide basis or in any particular area of the state,
the department has identified characteristics of particular geographic areas
which are likely to be associated with greater difficulty by consumers in
obtaining residential property insurance. In determining whether to designate
an area as underserved, great weight was placed on the potential for residential
property insurance not being reasonably available to a substantial number
of owners of insurable property in that area. The department considered geographic
factors based on two types of weather-related loss exposure underwriting restrictions
used by insurers writing residential property insurance in Texas that limit
the availability of residential property insurance coverages to a greater
extent in some geographic areas than in others. The first type of weather-related
loss exposure concerns the potential for catastrophic hurricanes and other
types of windstorms in the counties that border the Gulf of Mexico and the
inability of residents to obtain windstorm and hail insurance through the
voluntary market in these areas. The Texas Windstorm Insurance Association
(TWIA) was formed by the legislative enactment of Article 21.49 because windstorm
and hail insurance was not reasonably available to a substantial number of
owners of insurable property in the coastal counties. The department believes
that the areas where windstorm and hail insurance is not reasonably available
include both First Tier Coastal Counties (Tier 1) and Second Tier Coastal
Counties (Tier 2) as defined in Article 21.49 §3 (l) and (m). The owners
of insurable property in the Tier 1 and Tier 2 counties have a significantly
greater difficulty in obtaining windstorm and hail insurance in the voluntary
market than those property owners who reside outside of these areas. For these
reasons, the location of a ZIP Code in the geographic areas that comprise
the Tier 1 and Tier 2 coastal counties are considered a factor in determining
whether an area is underserved for purposes of Article 5.13-2C. A second geographic
area that has historically been affected by weather-related loss exposure
underwriting factors is Dallas and Tarrant counties. Due to the frequency
and severity of hail storms and the ensuing large losses in these counties,
insurers have restricted their writing of residential property insurance and
have limited the availability of certain property insurance coverages in these
counties. Based on this lack of availability of residential property insurance
to a substantial number of owners of insurable property in Dallas and Tarrant
counties, the location of a ZIP Code in these counties is considered a factor
in determining whether an area is underserved for purposes of Article 5.13-2C.
ZIP Codes which are located in Tier 1, Tier 2, Dallas, or Tarrant counties
are assigned five points. Additionally, the department utilized census data
compiled for the year 2000 to identify certain demographic factors that have
historically been correlated with the limited availability of residential
property insurance. The factors to be considered are: low median household
income (geographic areas with median household incomes of $36,000 or less),
low median home value (geographic areas with the median value of owner-occupied
dwellings of $75,000 or less), median year the house was constructed (geographic
areas that contain dwellings with a median year built of 1974 or earlier),
and a high percentage of uninsured households for residential property insurance
(geographic areas where the percent of insured households is less than 50%).
If the demographic factor for a specific ZIP Code indicates actual or potential
difficulty for consumers in obtaining residential property insurance, the
ZIP Code is assigned one point. If a ZIP Code does not receive at least one
point it will receive zero points for the specific factor. Additionally, the
department has identified a factor that correlates the market share of a set
of insurer groups with the availability of residential property insurance.
The department examined data reported by insurers pursuant to the Texas Statistical
Plan for Residential Risks and determined the insurer groups that cumulatively
write at least 90% of the residential property insurance policies that are
in force in Texas. The department then analyzed data for each of the individual
geographic ZIP Codes (excluding single point ZIP Codes) and calculated the
percent of policies in force that are being written by the same insurer groups
that write 90% of the policies in force on a state wide basis. If an individual
ZIP Code’s cumulative market share calculation shows that the insurer
groups that write 90% of the policies in force state wide are writing less
than 90% of the policies in force in a particular ZIP Code, then this Zip
Code receives one point. Further, if an individual ZIP Code’s cumulative
market share calculation shows that the insurer groups that write 90% of the
policies in force state wide are writing 90% or more of the policies in force
in a particular ZIP Code, then this Zip Code receives zero points. Geographic
factors based upon the established lack of availability of certain types of
residential property insurance in Tier 1 and Tier 2 counties and in Dallas
and Tarrant counties and demographic factors and a market share factor that
are correlated with the limited availability of residential property insurance
were analyzed by ZIP Code area or county, and points were assigned to each
of the factors. Based on the factors that were found to be present in each
ZIP Code the points assigned to each factor were totaled for each ZIP Code.
Areas with five or more points were identified as underserved or potentially
underserved and designated as underserved areas. Generally, to be underserved
a ZIP Code can meet any one of the geographic based criteria or it must meet
all four of the demographic based criteria and the market share criteria.
The department made changes to the rule based on comments. Subsection (a)
was amended to add new paragraph (3) that lists as a purpose of the rule to
provide a procedure that requires insurers to certify eligibility for the
exemption provided by Article 5.13-2C. The department amended subsection (c),
which lists the Zip Codes that are designated as underserved areas, to add
all of the additional Zip Codes in Harris county that had been inadvertently
omitted. In the proposal, staff had only included the Zip Codes in Harris
county that were in designated catastrophe areas. However, since Harris county
is classified as a Tier 2 county all of the Zip Codes in Harris county have
been included. The department added new subsection (e) that requires insurers
to certify their compliance with the requirements of Article 5.13-2C and their
eligibility for the exemption and provides a form that insurers may use for
this certification. The revisions to the rule based on the comments do not
introduce new subject matter or affect new persons.
Subsection (a) specifies the purpose of the section is to designate the
areas determined by the Commissioner to be underserved areas for purposes
of Article 5.13-2C, identify the factors and methodology used in determining
the underserved areas, and provide a procedure that requires insurers to certify
eligibility for the exemption provided by Article 5.13-2C. Subsection (b)
defines terms used in the section. Subsection (c) lists the ZIP Codes that
are designated as underserved areas for purposes of Article 5.13-2C. Subsection
(d) outlines the factors and methodology that are used in determining which
areas should be designated as underserved. These factors include geographic
factors based on two types of weather-related loss exposure underwriting restrictions
including being located in Tier 1 or Tier 2 coastal counties or being located
in Dallas or Tarrant counties; demographic factors including low median household
income (geographic areas with median household incomes of $36,000 or less),
low median home value (geographic areas with the median value of owner-occupied
dwellings of $75,000 or less), median year the house was constructed (geographic
areas that contain dwellings with a median year built of 1974 or earlier),
and high percentage of uninsured households for residential property insurance
(geographic areas where the percent of insured households is less than 50%);
and a factor that correlates the market share of a set of insurer groups with
the availability of residential property insurance. New subsection (e) outlines
a procedure and provides a form for an insurer to certify that it meets the
standards and requirements set forth in Article 5.13-2C, and is thereby exempt
from any rate filing and approvals that would be otherwise required by either
Article 5.142 or Article 5.13-2 of the Insurance Code.
Comment: One commenter stated that the list of Zip Codes in subsection
(c) did not contain all of the Zip Codes in Harris county which is a Tier
2 county and that some Zip Codes in Dallas and Tarrant counties were not included.
Agency response: With respect to Harris county, the department has amended
subsection (c), which lists the Zip Codes that are designated as underserved
areas, to add all of the additional Zip Codes in Harris county that had been
inadvertently omitted. In the proposal, staff had only included the Zip Codes
in Harris county that were in designated catastrophe areas. However, since
Harris county is designated in Article 21.49 §3(m) as a Tier 2 county
all of the Zip Codes in Harris county have been included. With respect to
Dallas and Tarrant counties, the Zip Codes that the commenter alleged to be
omitted were found to be "mailing Zip Codes." The rule utilizes geographic
Zip Codes since the Census Bureau only reports demographic data for geographic
ZIP Codes. A geographic ZIP Code is a statistical geographic entity that approximates
the delivery area for a U.S. Postal Service five-digit ZIP Code and is an
aggregation of census blocks that have the same predominant ZIP Code associated
with the residential mailing addresses in the Census Bureau's master address
file for census data compiled for the year 2000. The data that is reported
for a mailing Zip Code is included in the data for the geographic Zip Code
in which the mailing Zip Code is located. Therefore, the mailing Zip Codes
have not been included in the rule since the data for such Zip Codes has already
been included in the geographic Zip Code data.
Comment: One commenter believes that the rule should provide a mechanism
by which those insurers that qualify for the exemption may demonstrate to
the department their qualification and entitlement to the exemption. The commenter
proposed an amendment to the rule that would require an annual certification
by an exempt insurer to the department demonstrating that it meets the standards
and requirements set forth in Article 5.13-2C. The commenter further believes
that the department should promulgate a certification form for insurers to
file this information with the department on an annual basis if they desire
to apply for an exemption from rate filing and approvals.
Agency response: The department agrees that a mechanism should be provided
to insurers to demonstrate their entitlement to the exemption and has added
new subsection (e)(A) which requires the insurer to certify to its eligibility
for the exemption when a rate filing would otherwise be required. The Department
will review insurers' certifications in accordance with the provisions of
Article 5.13-2C. Additionally, in new subsection (e)(B) the department has
provided a form for use by insurers to certify their compliance with the requirements
of Article 5.13-2C and their entitlement to the exemption but insurers may
submit their own forms provided the insurer’s form contains all of the
required information.
Comment: One commenter believes that each of the demographic factors should
not have equal weight but believes that it would be more appropriate to give
greater weight to the market share factor and percent of insured households
factor since these measures appear to more directly reflect the underlying
availability of insurance in an area than the other demographic factors.
Agency response: At the present time no objective data has been presented
to the department to indicate that the market share factor or the percent
of insured households factor should be given more weight than the other demographic
factors. The department is open to reevaluating the weight given to the various
demographic factors in the future if new data is presented that indicates
the weighting of the factors should be adjusted.
Comment: One commenter expresses concern that the rule as proposed could
encourage small insurers to "over-write" in the high risk coastal areas in
their attempt to attain the rate filing exemption. The commenter believes
that if a large storm hits the coast, the over exposure in the coastal areas
could lead to the insolvency of the smaller insurers and a dissipation of
the guaranty fund. Additionally, the commenter believes that the anticipated
overexposure of small insurers which the commenter contends might lead to
insolvencies outweighs the intended benefit of the rate filing exemption which
is to stimulate the writing of residential property insurance policies in
the underserved areas. The commenter further recommends removing the geographic
factors based on weather-related loss exposure underwriting restrictions;
however, if the geographic factors are retained, then the commenter recommends
that reinsurance and surplus requirements be included in the rule to address
the risk of insolvency.
Agency response: Staff believes that the small insurers would not "over-write"
in the coastal areas because they would not have any greater incentive to
write in the coastal Zip Codes than in the Zip Codes which are designated
as underserved due to demographic or market share factors; hence, there is
no reason to eliminate the geographic factors. Furthermore, recent trends
in the coastal areas show that insurers in general are reducing their book
of business in the coastal areas and requiring Texas Windstorm Insurance Association
(TWIA) to insure the risks that are being non-renewed. The statistical data
reported by TWIA shows that during the last two and a half years the liability
exposure of TWIA has increased an average of 17% per year which indicates
that the trend for all insurers including Lloyd’s insurers is to reduce
their writing of business in the high risk coastal areas. Additionally, Lloyd’s
insurers have not had to make rate filings until the recent requirements for
rate filings were imposed in 2003 under SB 14 and Lloyd’s insurers had
not exhibited any tendency during this long period of rate deregulation to
"over-write" in the high risk coastal areas. The department does not believe
that reinsurance and surplus requirements are needed in the rule because there
are currently adequate mechanisms in place to monitor the financial condition
of insurers including financial examinations and early warning indicators
that the department will utilize to attempt to prevent insolvencies from occurring.
Comment: One commenter believes that designating the coastal and Dallas/Tarrant
county areas as underserved will not create more capacity in these areas and
will not address anything MAP, FAIR, and TWIA are not already addressing.
Additionally, the commenter believes that the department’s experience
with the small number of applicants in the residential property MAP program
indicates that the underlying reason for the existence of underserved areas
is not the lack of availability of insurance in these areas. The commenter
further believes that the department’s experience with the FAIR Plan
and the rapid increase in the number of policyholders in the FAIR Plan indicates
that the underlying reason for the existence of underserved areas is the lack
of affordability.
Agency response: The purpose of the rule is to designate areas as underserved
to encourage more small insurers to write residential property policies for
property valued at less than $100,000 in these underserved areas thereby reducing
the growth in the residual insurance markets.
Comment: One commenter believes that the demographic factors are more appropriate
than the geographic factors for determining the underserved areas and requests
that data be provided so that the insurers and public can determine whether
the measurements are fair.
Agency response: The data for median household income, median home values,
and median year built are all available from the Census Bureau in the data
compiled for the year 2000. The percent of households insured can be computed
by combining the census data for the number of households in a ZIP Code with
the data from the Texas Statistical Plan for Residential Risks.
Comment: One commenter expresses concern that there is no provision for
reassessing the qualification by an insurer for the exemption or for reassessing
whether a ZIP Code continues to qualify as an underserved area and believes
that this could lead to abuse by an insurer manipulating its book of business
to qualify for the exemption and then to stop writing in the underserved areas
or the types of home specified in Article 5.13-2C.
Agency response: The department has added new subsection (e)(A) which requires
insurers to certify their eligibility for the exemption whenever a rate filing
would otherwise be required. The department will review insurers' certifications
in accordance with the provisions of Article 5.13-2C. Although the exemption
does relieve insurers from the requirement of making rate filings, it does
not exempt insurers from complying with the rate standards set out in Article
1.02. Based on a periodic review, any changes in designations of ZIP Codes
as underserved areas may be adopted at any time by amending the section pursuant
to the Government Code §§2001.004-2001.038 (Administrative Procedure
Act).
Comment: One commenter recommends adding a provision that limits the rate
filing exemption to only those rates used for the underserved areas.
Agency response: The statutory exemption in Article 5.13-2C states "an
insurer…is exempt from the rate filing and approval requirements of Article
5.142 and Article 5.13-2 of this code." The department does not believe that
the statutory exemption makes a distinction that allows an exemption from
rate filings pertaining only to the underserved areas. If an insurer qualifies
for an exemption under Article 5.13-2C then it would be exempt from rate filings
with respect to the entire state.
Comment: Commenter recommends that a provision be added to clarify that
despite the exemption from rate filing other laws including rate standards,
credit scoring restrictions, territorial restrictions, and discrimination
provisions still apply.
Agency response: The department does not believe that such a provision
would be necessary because Article 5.13-2C only provides an exemption from
rate filing and approval requirements of Article 5.142 and Article 5.13-2
and it is clear that insurers could not claim an exemption from other statutory
requirements.
NAMES OF THOSE COMMENTING FOR AND AGAINST THE SECTION.
For with changes: National Lloyds Insurance Company, Insurance Council
of Texas, and Office of Public Insurance Counsel.
The new section is adopted pursuant to the Insurance Code, Articles
5.13-2C, 5.35-3 and §36.001. The Insurance Code Article 5.13-2C provides
that an insurer may be exempt from the rate filing and approval requirements
of Articles 5.142 and 5.13-2 if the total amount of premium collected for
residential property insurance by an insurer is less than 2% of the total
premium for the state and if more than 50% of the policies issued in the state
are valued at less than $100,000 and are located in an underserved area for
residential property insurance under Article 5.35-3. Article 5.35-3, §1(a)
provides that by rule the Commissioner may determine and designate areas as
underserved areas for residential property insurance. Section 36.001 of the
Insurance Code provides that the Commissioner of Insurance may adopt any rules
necessary and appropriate to implement the powers and duties of the Texas
Department of Insurance under the Insurance Code and other laws of this state.
§5.3702.Designation of Underserved Areas for Residential Property Insurance for Purposes of the Insurance Code Article 5.13-2C
(a)
Purpose. The purpose of this section is to:
(1)
designate the areas determined by the Commissioner of Insurance
to be underserved areas for purposes of residential property insurance pursuant
to the Insurance Code Article 5.13-2C;
(2)
identify the factors and methodology used in determining
such underserved areas, and
(3)
provide a procedure that requires insurers to certify their
eligibility for the exemption provided by Article 5.13-2C.
(b)
Definitions. The following words and terms when used in
this section shall have the following meanings unless the context clearly
indicates otherwise.
(1)
Underserved area--An area determined and designated in
this section as an underserved area by the Commissioner of Insurance for purposes
of an exemption from rate filings and approval requirements for certain insurers
pursuant to the Insurance Code Article 5.13-2C.
(2)
Commissioner--Commissioner of Insurance.
(3) Department--Texas Department of Insurance.
(4) Market share--the number of residential property insurance
policies that an individual insurer has in force expressed as a percentage
of the total number of residential property insurance policies in force in
a defined geographic area (i.e. state wide or in a specific ZIP Code).
(c) Underserved areas. The ZIP Codes in Figure 28 TAC §5.3702(c)
are designated as underserved areas pursuant to the Insurance Code Article
5.13-2C, effective May 13, 2004:
(d) Factors and methodology. In determining the areas designated
as underserved, the Commissioner shall consider whether residential property
insurance is not reasonably available to a substantial number of owners of
insurable residential property in a specific geographic area and any other
relevant factors as determined by the Commissioner. The determination of the
areas to be designated as underserved is based on the factors and methodology
outlined in this subsection.
(1)
There is no single comprehensive measure of whether residential
property insurance is or is not reasonably available or is or is not potentially
reasonably available to a substantial number of owners of insurable property
either on a statewide basis or in any particular area of the state. The Commissioner
has identified characteristics of particular geographic areas which are likely
to be associated with greater difficulty by consumers in obtaining residential
property insurance.
(2)
Geographic factors based on weather-related loss exposure
and the resulting underwriting restrictions used by insurers writing residential
property insurance in Texas that would limit the availability of residential
property insurance coverages to a greater extent in some geographic areas
than in others are as follows:
(A)
Tier 1 and Tier 2 coastal counties. One type of weather-related
loss exposure concerns the potential for catastrophic hurricanes and other
types of windstorms in the First Tier Coastal Counties (Tier 1) and Second
Tier Coastal Counties (Tier 2), as defined in Article 21.49 §3 (l) and
(m), and the inability of residents to obtain windstorm and hail insurance
through the voluntary market in these areas. The Commissioner has determined
that the location of a ZIP Code in the geographic areas that comprise the
Tier 1 and Tier 2 coastal counties is a factor to be used in determining whether
an area is an underserved area for purposes of Article 5.13-2C. ZIP Codes
located along the coast, Tiers 1 and 2, are assigned five points.
(B)
Dallas and Tarrant Counties. A second geographic area that
has historically been affected by weather-related loss exposure underwriting
factors is Dallas and Tarrant counties. Due to the frequency and severity
of hail storms and the ensuing claims in these counties, insurers have restricted
their writing of residential property insurance and have limited the availability
of certain property insurance coverages in these counties. Based on this lack
of availability of residential property insurance to a substantial number
of owners of insurable property in Dallas and Tarrant counties, the Commissioner
has determined that the location of a ZIP Code in these counties be considered
a factor in determining whether an area is underserved for purposes of Article
5.13-2C. ZIP Codes located in Dallas or Tarrant counties, are assigned five
points.
(3)
The specific demographic factors and the points assigned
are as follows:
(A)
ZIP Codes with median household incomes of $36,000 or less
are assigned one point.
(B)
ZIP Codes with median value of owner-occupied dwellings
of $75,000 or less are assigned one point.
(C)
ZIP Codes with a median year built of 1974 or earlier are
assigned one point.
(D)
ZIP Codes with percentages of insured households of less
than 50% are assigned one point.
(4)
Market share of a set of insurer groups is a factor that
correlates with the availability of residential property insurance. The department
examined data reported by insurers pursuant to the Texas Statistical Plan
for Residential Risks and determined the insurer groups that account for at
least 90% of the cumulative market share of residential property insurance
policies written on a state wide basis. The department then analyzed data
for each of the geographic ZIP Codes in Texas (excluding single point ZIP
Codes) and calculated the cumulative market share written by the same insurer
groups for each of the individual ZIP Codes. The cumulative market share for
each individual ZIP Code was then compared to the state wide cumulative market
share of 90%. If the cumulative market share for an individual ZIP Code is
less than 90%, then this ZIP Code will receive one point.
(5)
Based on the factors and points specified in paragraphs
(2), (3), and (4) of this subsection, the number of points assigned were totaled
by ZIP Code. Areas with five or more points were identified as underserved
or potentially underserved and generally designated as underserved areas in
subsection (c) of this section. To be underserved a ZIP Code can meet any
one of the geographic based criteria or it must meet all four of the demographic
based criteria and the market share criteria.
(e)
Required certification of exemption to the Department.
(1)
An insurer that may be entitled to the exemption from the
insurance rate filing and approval requirements of Article 5.142 or Article
5.13-2 of the Insurance Code, pursuant to the provisions of Article 5.13-2C
of the Insurance Code, shall file with the Department a Certification of Article
5.13-2C Exemption Compliance (EC-1) form at least ten days preceding the date
an insurance rate filing would be otherwise required by the insurer under
Article 5.142 or Article 5.13-2.
(2)
The Certification of Article 5.13-2C Exemption Compliance
(EC-1) form is provided by the Department for use by insurers seeking an exemption
from rate filing and approval requirements pursuant to Article 5.13-2C. This
form may be obtained from the Texas Department of Insurance website http:/www.tdi.state.tx.us
or by requesting such form from the Property and Casualty Actuarial Division,
Mail Code 105-5, P.O. Box 149104, Austin, TX 78714-9104. For purposes of this
section, in lieu of submitting a form provided by the department, an insurer
may submit to the department the insurer’s own form if the form contains
the same information that is required and contained in the form provided by
the department. All Application for Article 5.13-2 Exemption forms must be
submitted to the Texas Department of Insurance, Property and Casualty Intake
Unit, Mail Code 104-3B, P.O. Box 149104, Austin, TX 78714-9104.
This agency hereby certifies that the adoption has been
reviewed by legal counsel and found to be a valid exercise of the agency's
legal authority.
Filed with the Office of
the Secretary of State on May 14, 2004.
TRD-200403290
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: June 3, 2004
Proposal publication date: March 19, 2004
For further information, please call: (512) 463-6327
The Commissioner of Insurance adopts amendments to §§34.506,
34.515 and 34.516 concerning the licensing and qualifying tests for Type A,
Type B and Type PL licenses; §§34.606 and 34.613 - 34.615 concerning
the licensing and qualifying tests for fire alarm technicians, fire alarm
monitoring technicians, residential fire alarm superintendent single stations,
fire alarm planning superintendent and residential fire alarm superintendents; §§34.706
and 34.713 - 34.715 concerning the licensing and qualifying tests for responsible
managing employees; and §§34.808, 34.811, 34.813, and 34.814 concerning
the licensing and qualifying tests for pyrotechnic operators, pyrotechnic
special effects operators and flame effects operators. Sections 34.614 and
34.713 are adopted with one typographical change and a clarification that
renewal fees must accompany renewal applications, respectively, to the proposed
text as published in the April 2, 2004 issue of the
Texas Register
(29 TexReg 3407). Sections 34.506, 34.515, 34.516, 34.606,
34.613, 34.615, 34.706, 34.714, 34.715, 34.808, 34.811, 34.813 and 34.814
are adopted without changes and will not be republished.
The adoption is designed to implement legislation enacted by the 78th Legislature
in House Bill (HB) 472. HB 472 amends Articles 5.43-1, 5.43-2 and 5.43-3,
Insurance Code, by allowing the state fire marshal to increase the initial
fee for certain licenses and to provide for the testing of certain license
applicants by an external testing service, pursuant to a written agreement
between the State Fire Marshal’s Office (SFMO) and the testing service.
HB 472 also amends Chapter 2154, Occupations Code, by requiring the state
fire marshal to establish the scope and type of the qualifying tests for pyrotechnic
operator and pyrotechnic special effects operator licenses and to permit the
testing to be administered directly or by agreement with an external testing
service. The amendments are necessary to establish the outsourcing of testing
for certain licenses and clarify certain portions of the rules.
The adopted amendments replace "examination" with "test" throughout the
sections to more clearly explain the licensing process and capitalizes "State
Fire Marshal’s Office" for consistency.
The adopted amendments add a definition for outsource testing service to §§34.506,
34.606, 34.706, and 34.808, a definition for department to §§34.706
and 34.808 and re-letter the remaining definitions of all the above cited
sections as appropriate. The amendments to §§34.515, 34.614, 34.714,
and 34.814 increase the fees for initial licenses and late fees, provide for
the payment of fees to an outsource testing service, and replace all fee schedule
graphics with text. The amendments to §§34.614 and 34.714 make these
sections consistent with other provisions by providing that only overpayments
resulting from mistakes of law or fact will be refunded. The amendments to §34.516
state that the SFMO shall designate the outsource testing service, clarify
that one test may be given per license, the test consists of specific topics,
and place a limit on the number of times a test may be scheduled during a
twelve-month period.
The amendments to §34.613 change the wording of certain paragraphs
indicating that the SFMO designates the qualifying tests and clarify that
an applicant has 180 days from the department’s receipt of the initial
application to complete the application, which includes the submission of
the appropriate fees and all required information. The amendments to §34.614
clarify the qualifying test fees if administered by the SFMO. The amendments
to §34.615 provide that the qualifying test for the various fire alarm
licenses can be given by an outsource testing service.
The amendments to §34.713 provide that the qualifying test for a responsible
managing employee for dwelling and underground fire main licenses can be given
by an outsource testing service and a copy of the confirmation letter from
the testing service must accompany the application as evidence of technical
qualifications for the license. Additionally, the amendments clarify that
an applicant has 180 days from the department’s receipt of the initial
application to complete the application, which includes the submission of
the appropriate fees and all required information. The amendments to §34.714
clarify the qualifying test fees if administered by the SFMO. The amendment
to §34.715 sets out the number of times an applicant may schedule a test.
The amendments to §34.811 clarify the licensing process and set out
the number of times a test may be scheduled. The amendments to §34.813
clarify that an applicant has 180 days from the department’s receipt
of the initial application to complete the application, which includes the
submission of the appropriate fees and all required information. The amendments
to §34.814 provide that the qualifying test for pyrotechnic operator,
pyrotechnic special effects operator and flame effects operator licenses can
be given by an outsource testing service. Additionally, the amendments to §34.814
set forth the payment amount for the various pyrotechnic and flame effects
licenses as well as the qualifying test fees if administered by the SFMO.
No comments were received.
Subchapter E. FIRE EXTINGUISHER RULES
28 TAC §§34.506, 34.515, 34.516
The amended sections are adopted pursuant to the Insurance
Code Articles 5.43-1, 5.43-2 and 5.43-3, Occupations Code §2154.052 and
the Insurance Code §36.001. Insurance Code Articles 5.43-1, 5.43-2 and
5.43-3 mandate the adoption of rules necessary to implement the requirements
of these articles. Occupations Code §2154.052 allows the commissioner
to adopt and the fire marshal to administer rules that the commissioner considers
necessary for the protection, safety, and preservation of life and property,
including rules regulating the issuance of licenses and permits. Section 36.001
provides that the Commissioner of Insurance may adopt any rules necessary
and appropriate to implement the powers and duties of the Texas Department
of Insurance under the Insurance Code and other laws of this state.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on May 14, 2004.
TRD-200403286
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: June 3, 2004
Proposal publication date: April 2, 2004
For further information, please call: (512) 463-6327
28 TAC §§34.606, 34.613 - 34.615
The amended sections are adopted pursuant to the Insurance
Code Articles 5.43-1, 5.43-2 and 5.43-3, Occupations Code §2154.052 and
the Insurance Code §36.001. Insurance Code Articles 5.43-1, 5.43-2 and
5.43-3 mandate the adoption of rules necessary to implement the requirements
of these articles. Occupations Code §2154.052 allows the commissioner
to adopt and the fire marshal to administer rules that the commissioner considers
necessary for the protection, safety, and preservation of life and property,
including rules regulating the issuance of licenses and permits. Section 36.001
provides that the Commissioner of Insurance may adopt any rules necessary
and appropriate to implement the powers and duties of the Texas Department
of Insurance under the Insurance Code and other laws of this state.
§34.614.Fees.
(a)
Every fee payable to the department and required in accordance
with the provisions of the Insurance Code, Article 5.43-2, and this subchapter
must be paid by cash, money order, or check. Money orders and checks must
be made payable to the Texas Department of Insurance. Except for overpayments
resulting from mistakes of law or fact, all fees are non-refundable.
(b)
Fees payable to the department must be paid at the Office
of the State Fire Marshal in Austin, Texas, or mailed to an addressed specified
by the state fire marshal.
(c)
Fees for tests administered by an outsource testing service
are payable to the testing service in the amount and manner required by the
testing service.
(d)
Fees are as follows:
(1)
Certificates of registration:
(A)
initial fee--$500;
(B)
renewal fee (for two years)--$1,000;
(C)
renewal late fee (expired 1 day to 90 days)--$125;
(D)
renewal late fee (expired 91 days to two years)--$500;
(E)
branch office initial fee--$150;
(F)
branch office renewal fee (for two years)--$300;
(G)
branch office late fee (expired 1 day to 90 days)--$37.50;
(H)
branch office late fee (expired 91 days to two years)--$150;
(2)
Certificates of registration--Single Station:
(A)
initial fee--$250;
(B)
renewal fee (for two years)--$500;
(C)
renewal late fee (expired 1 day to 90 days)--$62.50;
(D)
renewal late fee (expired 91 days to two years)--$250;
(E)
branch office initial fee--None;
(F)
branch office renewal fee (for two years)--None;
(3)
Fire alarm licenses (Fire alarm technician license, Fire
alarm monitoring technician license, Residential fire alarm superintendent
(single station) license, Residential fire alarm superintendent license, Fire
alarm planning superintendent license):
(A)
initial fee--$120;
(B)
renewal fee (for two years)--$200;
(C)
renewal late fee (expired 1 day to 90 days)--$30;
(D)
renewal late fee (expired 91 days to two years)--$120;
(4)
Duplicate or revised certificate or license or other requested
changes to certificates, or licenses--$20;
(5)
Initial test fee (if administered by the State Fire Marshal’s
Office)--$20;
(6)
Retest fee (if administered by the State Fire Marshal’s
Office)--$20.
(e)
All fees are forfeited if the applicant does not appear
for the scheduled test.
(f)
Late fees are required of all certificate or license holders
who fail to submit complete renewal applications before the expiration of
the certificate or license except as provided in the Insurance Code, Article
5.43-2, §5C(c).
(g)
Fees for certificates and licenses which have been expired
for less than two years include both renewal and late fees.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed
with the Office of the Secretary of State on May 14, 2004.
TRD-200403287
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: June 3, 2004
Proposal publication date: April 2, 2004
For further information, please call: (512) 463-6327
Chapter 34.
STATE FIRE MARSHAL
Subchapter F. FIRE ALARM RULES
Subchapter G. FIRE SPRINKLER RULES