28 TAC §5.4607
The Department of Insurance proposes new §5.4607 concerning
procedures for the appointment by the Commissioner, based on demonstrated
need, of temporary qualified inspectors to conduct windstorm inspections in
designated catastrophe areas pursuant to Insurance Code Article 21.49 §6A.
Under the proposal, after notice and a public hearing pursuant to Article
21.49 §5A, the Commissioner may determine that qualified inspectors are
not reasonably available in the first tier coastal counties specified in Article
21.49 and/or in designated catastrophe areas as defined by Article 21.49 §3(h).
If the Commissioner makes such a determination, the Commissioner may appoint
temporary qualified inspectors as needed and for a limited period. The temporary
appointees will be authorized to perform inspections of structures for purposes
of determining insurability for windstorm and hail coverage through the Texas
Windstorm Insurance Association (TWIA) as provided in Article 21.49. As a
result of Hurricane Rita in 2005, the Department found that in the aftermath
of a hurricane or other catastrophe, residents and business owners in the
affected catastrophe areas can face delays in the building or repair of structures
because of the overwhelming demand for windstorm inspections and the lack
of qualified inspectors to meet this demand. The delay in rebuilding and repair
of structures creates a negative influence in the economic stability of the
affected area. To assist in meeting this demand for inspectors in the past,
the Department has used various measures to increase the number of windstorm
inspectors. Following Hurricane Rita, the Department temporarily assigned
its inspectors from other areas of the coast to the affected areas, provided
by rule for the temporary appointment of inspectors in the most needed areas,
and worked with the TWIA, which provided additional inspection assistance
through independent contract inspectors. While these efforts have been effective,
the delay in implementing measures to meet the demand for inspections may
have contributed to an erosion of economic stability. There is a need for
the Department to act earlier and more quickly following any future catastrophe
to address the overwhelming demand for windstorm inspections and the lack
of qualified inspectors to meet this demand and to lessen the negative economic
impact. This expedited action by the Department is necessary to ensure that
residents and business owners in the affected catastrophe areas have access
to enough qualified windstorm inspectors to prevent any unnecessary delays
in the inspection process when re-building or repairing their structures.
Therefore, the Department is proposing procedures, qualifications and requirements
for the appointment of temporary qualified windstorm inspectors on an as-needed
basis. This proposal will enable the Commissioner to make appointments without
having to adopt separate rules for each designated catastrophe area that requires
additional inspectors following a catastrophe. Under the proposal, the Commissioner
may make such appointments if the Commissioner, following notice and a public
hearing, determines that the appointment of additional inspectors is necessary
to alleviate or prevent long delays for inspections of windstorm damaged structures
and that qualified inspectors are not reasonably available. The Department
in this proposal is seeking to prevent potential adverse impact to residents
and business owners who are trying to build, rebuild, add to, or repair their
properties to meet the windstorm building code requirements.
Proposed §5.4607(a) specifies the purposes of the section for the
appointment of temporary qualified inspectors for a limited period on an as-needed
basis and the conditions under which such appointments can be made. Proposed
subsection (b) provides that temporary inspector appointments may be made
only upon a determination by the Commissioner, after notice and a hearing,
and further provides that an order by the Commissioner shall specify the reasons
for the temporary appointments, the designated catastrophe areas in which
the temporary inspector appointments are authorized, the types of inspections
the temporary inspectors are authorized to perform, the period of time for
which the appointments are effective, and any other requirements necessary
to properly ensure the availability of qualified inspectors as needed in the
designated catastrophe areas. Proposed subsection (c) specifies the qualifications,
including necessary experience and training, of persons eligible to apply
for a temporary appointment. It also specifies the necessary forms, affidavits
and other documents needed for application. Proposed subsection (d) defines
terms used throughout the section. Proposed subsection (e) outlines the application
process for an appointment. Proposed subsection (f) specifies the training
an appointee must undergo. Proposed subsection (g) specifies prohibited financial
interests for applicants and temporary appointees. Proposed subsection (h)
requires that temporary appointees comply and utilize certain specified windstorm
inspection forms. Proposed subsection (i) provides that temporary appointees
will be subject to the provisions of the Department's current §5.4604
relating to the appointment of engineers as qualified inspectors, including
oversight by the Department. Proposed subsection (j) prohibits temporary appointees
from delegating any duties that are part of the authorization of their temporary
appointment. Proposed subsection (k) provides that the issuance of a temporary
appointment to a qualified inspector only authorizes the appointee to inspect
structures for the purposes of determining whether windstorm and hail insurance
may be provided by the Association and provides that no other types of inspections
by temporary appointees will be valid for purposes of the Insurance Code Article
21.49. It further provides that a temporary appointment issued under this
section shall be valid only for the areas and period of time specified by
the Commissioner in the order of temporary appointment; at the end of such
period or upon action by the Department, the appointment will expire. Proposed
subsection (l) provides that temporary appointees will be subject to the provisions
of the Department's current rule §5.4604 relating to the appointment
of engineers as qualified inspectors, including oversight by the Department,
and will also be subject to the emergency cease and desist provisions of the
Insurance Code Chapter 83. This is necessary to ensure that improper inspections
are halted as quickly as possible to prevent and deter approval of faulty
or inadequate building, re-building, adding to, or repairing of structures,
which could result in certification of structures that do not meet windstorm
building code requirements and also to prevent additional harm to the property
of residents and business owners. Proposed subsection (m) contains a severability
clause which provides for the continuation of non-affected provisions of the
rules if any provisions are declared invalid.
Alexis Dick, Deputy Commissioner, Inspections Division, has determined
that, for each year of the first five years the proposed new section is in
effect, there will be no fiscal impact on state or local government as a result
of enforcing or administering the section. Ms. Dick has also determined that
there will be no measurable effect on local employment or the local economy.
Ms. Dick has further determined that for each year of the first five years
the proposed new section is in effect, the public benefit anticipated as a
result of administering and enforcing the section will be to ensure that qualified
inspectors are available to respond to residents and business owners in catastrophe
areas as defined by Article 21.49 most in need of building, rebuilding, adding
to, or repairing of structures after a catastrophe. The Department anticipates
that these temporary appointments will result in the relatively prompt availability
of persons who are willing and qualified to perform windstorm inspections
on structures to be considered insurable property for windstorm and hail insurance.
Texans benefit from a strong and prompt recovery from devastating natural
events like hurricanes and other catastrophes and from an efficient inspection
system that provides prompt response to those in need. There is no mandatory
cost because the appointees are selected from voluntary applicants. There
are no persons who are required to comply with the proposed new section. The
anticipated costs to persons who choose to apply for a temporary appointment
will be the time to complete the application, obtain the required documents
to submit with the application, and to attend the mandatory Department-sponsored
two-hour orientation and training session. Because of the uncertainty of which
persons who are eligible will actually participate in this voluntary temporary
appointment process, it is not possible to estimate exact costs. However,
eligible persons who are interested in voluntarily participating will be able
to estimate their individual costs. There are no application or other fees
required under the proposed new section. The Department expects no differential
impact between small, large, and micro-businesses that decide to participate
in this temporary appointment process. The cost per hour of labor for the
application process should not vary between small, large, and micro-businesses
of the same type. Further, the Department has considered the purpose of the
statute, which requires windstorm inspections to be performed by qualified
inspectors who must be approved and appointed or employed by the Department
to perform building inspections, and has determined that it is neither legal
nor feasible to exempt small or micro-businesses or to waive compliance for
small or micro-businesses.
To be considered, written comments on the proposal must be submitted no
later than 5:00 p.m. on July 3, 2006, to Gene C. Jarmon, General Counsel and
Chief Clerk, Mail Code 113-2A, Texas Department of Insurance, P.O. Box 149104,
Austin, Texas 78714-9104. An additional copy of the comments must be submitted
simultaneously to Alexis Dick, Deputy Commissioner, Inspections Division,
Mail Code 103-1A, Texas Department of Insurance, P.O. Box 149104, Austin,
Texas 78714-9104.
The Commissioner will consider the adoption of proposed new §5.4607
in a public hearing under Docket Number 2642, scheduled for 10:00 a.m. on
June 21, 2006; in Room 100 of the William P. Hobby, Jr. State Office Building,
333 Guadalupe Street, Austin, Texas.
The new section is proposed pursuant to the Insurance Code Article
21.49 §6A and §36.001. Article 21.49 §6A provides that a windstorm
inspection may only be performed by a qualified inspector who must be approved
and appointed or employed by the Department to perform building inspections.
Section 6A also provides that a qualified inspector includes a person determined
by the Department to be qualified to perform building inspections because
of training or experience and an inspector who 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. (now known as the International
Code Council) who has certifications as a buildings inspector and coastal
construction inspector and who also complies with other requirements specified
by rule by the Commissioner. Article 21.49 §5A provides that the Commissioner,
after notice and hearing, may issue any orders which the Commissioner considers
necessary to carry out the purposes of the Texas Windstorm Insurance Association
Act. 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.
The following statute is affected by this proposal: Insurance Code Article
21.49
§5.4607.Requirements for the Appointment of Temporary Qualified Windstorm Inspectors for a Limited Period on an As-needed Basis.
(a)
Purpose. The purpose of this section is to specify the
procedures for the Commissioner of Insurance to appoint temporary qualified
inspectors for a specified limited period to conduct inspections for windstorm
and hail insurance pursuant to the Insurance Code Article 21.49 §6A and
to specify qualifications, requirements, and procedures pursuant to the Insurance
Code Article 21.49 §6A(d) for the appointment of persons to perform such
inspections.
(b)
Public Hearing. The Commissioner may make the temporary
inspector appointments only upon a determination by the Commissioner after
notice and a public hearing pursuant to the Insurance Code Article 21.49 §5A
that qualified inspectors are not reasonably available in the first tier coastal
counties specified in Article 21.49 and/or in designated catastrophe areas
as defined by Article 21.49 §3(h). If the Commissioner makes such a determination,
the Commissioner shall issue an order specifying the reasons for the determination,
the designated catastrophe areas in which the temporary inspector appointments
are authorized, the types of inspections temporary appointees are authorized
to perform, the period of time for which the appointments are effective, and
any other requirements necessary to properly ensure the availability of qualified
inspectors as needed in the designated catastrophe areas.
(c)
Qualifications.
(1)
Persons appointed under this section must meet the qualifications
for appointment under this section and shall perform inspections in accordance
with the provisions of this section, §§5.4001 - 5.4010 of this title
(relating to the Texas Windstorm Insurance Association plan of operation), §§5.4601
- 5.4605 of this title (relating to inspections for windstorm and hail insurance),
the Insurance Code Article 21.49 §6A, and the order issued by the Commissioner
pursuant to subsection (b) of this section. The following persons are eligible
to apply for an appointment as a temporary qualified inspector:
(A)
a person who is certified as a coastal construction inspector
by the International Code Council and who has at least two years of construction,
design or inspection experience on buildings or structures located in high
wind areas; this may include a person employed full-time by a municipality
of this state who meets the qualifications as stated in this paragraph; or
(B)
a Texas registered architect with construction, design
or inspection experience on buildings or structures located in high wind areas;
or
(C)
any person with experience, education, or training in programs
at an accredited university which shall include at a minimum successful completion
of at least two years of technical or university training in the field of
civil or architectural engineering, the field of architecture, or the field
of construction technology or construction science and at least two years
of construction, design or inspection experience on buildings or structures
located in high wind areas.
(2)
Persons applying under the requirements of paragraph (1)(A)
of this subsection must affirm to the Commissioner through a sworn statement
the current, active, and good-standing status of their certification and/or
shall also provide a Certification of Employment affidavit from the municipality
as applicable.
(3)
Persons applying under the requirements of paragraph (1)(B)
of this subsection must affirm to the Commissioner through a sworn statement
the current, active, and good-standing status of the architect's registration
through the Texas Board of Architectural Examiners.
(4)
Persons applying under the requirements of paragraph (1)(C)
of this subsection must provide a certified copy of a completed degree, if
any; certificate; or transcript.
(d)
Definitions. For the purposes of this section, the following
words and terms shall have the following meanings:
(1)
Appointee--A person who has been issued a temporary appointment
as a qualified inspector under this section.
(2)
Commissioner--Commissioner of Insurance of the State of
Texas.
(3)
Department--Texas Department of Insurance.
(4)
Person--An individual and includes a resident or non-resident
of this state.
(e)
Application. A person applying for a temporary inspector
appointment under this section must complete and file an application on a
form prepared, maintained, and obtainable from the Department.
(f)
Training. An appointee must attend within 30 days of the
person's appointment a two-hour orientation and training session provided
by the Department at one of its field offices or in Austin, Texas.
(g)
Financial interest prohibitions. An appointee must not
have a financial interest either directly or indirectly in or be employed
by a business that is financially interested either directly or indirectly
in the furnishing of labor, material, or appliances for the construction,
alteration, or maintenance of any building, nor have current employment or
accept compensation or accept other employment or compensation during the
period of appointment which could reasonably be expected to impair the appointee's
independence of judgment in the performance of inspections pursuant to this
section.
(h)
Inspection forms. An appointee shall comply with and utilize
all windstorm inspection forms required by §5.4604 of this title (relating
to appointment of engineers as qualified inspectors), with such forms modified
to substitute "appointed temporary inspector" for "engineer" as applicable.
(i)
Department oversight. Except as otherwise provided in this
section, an appointee is subject to all provisions of §5.4604 of this
title including oversight by the Department as specified in subsection (h)
of §5.4604. If there is a conflict between the provisions of this section
and the provisions of §5.4604 of this title, this section controls.
(j)
Delegation prohibition. An appointee is prohibited from
delegating the duties under this section to any other person. The delegation/assistance
provision of subsection (g)(5) of §5.4604 of this title shall not apply
to an appointee,
(k)
Limited authorization.
(1)
An appointee is only authorized to perform inspections
of structures for insurability for windstorm and hail insurance as provided
in the Commissioner's order issued pursuant to subsection (b) of this section.
No other types of inspections by the temporary inspector appointees will be
considered valid for purposes of the Insurance Code Article 21.49.
(2)
An appointment made under this section is valid only for
the designated catastrophe areas and period of time specified by the Commissioner
in the Commissioner's order issued pursuant to subsection (b) of this section;
at the end of such period or upon action by the Department, the appointment
will expire.
(l)
Administrative remedies. In addition to any other remedy
available under the Insurance Code Article 21.49 §6A, and Chapters 82
and 84, and §5.4604 of this title (relating to appointment of engineers
as qualified inspectors), the Department may issue an emergency cease and
desist order pursuant to the Insurance Code Chapter 83 to any person who violates
any provision of this subchapter or any other rule or statute relating to
inspections of structures to be considered insurable property for windstorm
and hail insurance.
(m)
Severability clause. If a court of competent jurisdiction
holds that any provision of this section is inconsistent with any statutes
of this state, is unconstitutional, or is invalid for any reason, the remaining
provisions of this section shall remain in effect.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on May 26, 2006.
TRD-200602934
Gene Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Earliest possible date of adoption: July 9, 2006
For further information, please call: (512) 463-6327