SUBCHAPTER E. TEXAS WINDSTORM INSURANCE ASSOCIATION

Division 1.

Plan of Operation

§§5.4008 - 5.4009

Division 7.

Inspections for Windstorm and Hail Insurance

The Texas Department of Insurance proposes amendments to §5.4008 and new §5.4009, concerning building code specifications in the plan of operation of the Texas Windstorm Insurance Association (Association or TWIA) and further proposes amendments to §5.4603 which adopts by reference the forms to be used for windstorm inspections to determine compliance with applicable building code requirements in the plan of operation of the Association. Insurance Code Article 21.49, §6A as amended by the 77th Legislature in Senate Bill (SB) 365, provides in pertinent part, that "After January 1, 2002, in geographic areas specified by the commissioner, the commissioner by rule may supplement the building specifications in the plan of operation with the structural provisions of the International Residential Code." SB 365 also amended the Local Government Code to adopt the International Residential Code (IRC) as a municipal residential building code in this state and the National Electrical Code as the municipal residential electrical construction code in this state. The proposal to adopt the IRC has been recommended by the Advisory Committee on Building Code Specifications and Maintenance pursuant to Insurance Code Article 21.49, §6C based on a determination by the Advisory Committee that the structural provisions of the IRC do not weaken the integrity or diminish the effectiveness of an existing building specification. The Advisory Committee also recommended adoption of the International Building Code (IBC) regarding structures that fall beyond the scope of the IRC. The department is seeking input regarding components such as internal pressure and windborne debris requirements, roof and exterior wall coverings, exterior openings, fastener requirements, and anchorage of mechanical for all new construction, alterations, repairs, and/or additions for possible incorporation/retention into the building specifications in the plan of operation. Proposed §5.4009 adopts by reference the 200 0 International Residential Code and the 2000 International Building Code for structures located in the designated catastrophe areas specified in §5.4008, and which are applicable to structures constructed, repaired, or to which additions are made on and after February 1, 2003. The codes are published by the International Code Council, 5203 Leesburg Pike, Suite 600, Falls Church, Virginia, 22041, and are available for review at the Office of the Chief Clerk, Texas Department of Insurance, 333 Guadalupe Street, Austin, Texas, 78714-9104. The specific jurisdictional information regarding wind speeds, as called for in the design criteria table of the 2000 International Residential Code, is delineated for the purposes of identification of the areas to which they apply and as permitted by the 2000 International Building Code, and the exemption for historical structures is noted. The proposed amendments to §5.4008 conform the time periods of applicability for structures constructed or repaired, or to which additions are made on and after September 1, 1998, and before February 1, 2003, and specify May 31, 2003, as the date through which applications for inspection under this section will be accepted. The proposed amendments to §5.4603 delete the current Form WPI-2, Building Construction Compliance and propose a new Form WPI-2, Building Inspection, to implement the international codes; propose a new Form WPI-2A, Building Construction Compliance, to refer to the application process under §§5.4007 and 5.4008; and amend, rename, and conform the current Form WPI-2D, to implement the international codes. Copies of these proposed forms can be obtained from the Office of the Chief Clerk, Texas Department of Insurance, 333 Guadalupe Street, Austin, Texas, 78714-9104. To request copies, please contact Sylvia Gutierrez at 512/463-6327. These forms are used by qualified inspectors to indicate compliance of building construction and building design for use by the TWIA in determining whether to issue a policy of windstorm and hail insurance.

The department will consider the adoption of the proposed §5.4009 and amendments to §§5.4008 and 5.4603 in a public hearing under Docket Number 2539, scheduled for 9:30 o´clock, a.m. on January 2, 2003, in Room 100 of the William P. Hobby, Jr. State Office Building, 333 Guadalupe Street, Austin, Texas.

Alexis Dick, deputy commissioner, Inspections Division, has determined that for each year of the first five years the proposed section and amended sections will be in effect, there will be no fiscal impact to state and local governments as a result of the enforcement or administration of the rules. There will be no measurable effect on local employment or the local economy as a result of the proposal that is separate from any impact of legislation.

Ms. Dick has determined that for each year of the first five years the sections are in effect, the public benefits anticipated as a result of the proposed sections will be better coordination between the building specifications in the TWIA plan of operation and the building code requirements enforced by the coastal municipalities so as to achieve consistent standards for wind resistant construction in similarly located catastrophe areas. Ms. Dick anticipates that adoption of the 2000 International Residential Code and the 2000 International Building Code may increase construction costs due to the design requirements associated with the wind speed contour maps in the IRC and IBC. The wind speed contour maps in the IRC and IBC indicate increased wind speeds to be used in the design of structures along the Texas coast. The increased wind speeds will result in higher wind pressure requirements which may increase construction costs; however, the proposal imposes no uncompensated regulatory costs on companies or individuals that decide to participate in this building compliance process. The department anticipates no differential impact between small, large, and micro-businesses. The cost per hour of labor should not vary between small, large, and micro-businesses. Further, it is neither legal or feasible to exempt small or micro-businesses or waive compliance considering the purpose of the statute under which the sections are to be adopted, that being the Association providing windstorm and hail insurance coverage to residents in designated catastrophe areas in which such coverage is not reasonably available to a substantial number of owners of insurable property.

To be considered, written comments on the proposal must be submitted no later than 5:00 p.m. on January 6, 2003, to Gene C. Jarmon, Acting 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 comment must be simultaneously submitted to Alexis Dick, Deputy Commissioner, Inspections Division, MC 103-1A, Texas Department of Insurance, P. O. Box 149104, Austin, Texas 78714-9104.

The new and amended sections are proposed under the Insurance Code Article 21.49 and §36.001. Article 21.49, §6A specifies building code requirements and approval or inspection procedures for windstorm and hail insurance through the Association. Article 21.49, §6C requires the Commissioner to appoint a Building Code Advisory Committee to advise and make recommendations to the Commissioner on building specifications in the Association's plan of operation for structures to be eligible for windstorm and hail insurance through the Association. Article 21.49, §5(c) provides that the Commissioner of Insurance by rule shall adopt the Association's plan of operation with the advice of the Association's board of directors. Section 36.001 provides that the Commissioner of Insurance may adopt rules to execute the duties and functions of the Texas Department of Insurance as authorized by statute.

The following article is affected by this proposal: Insurance Code Article 21.49

§5.4008. Applicable Building Code Standards in Designated Catastrophe Areas for Structures Constructed, Repaired or to Which Additions Are Made On and After September 1, 1998 , and before February 1, 2003.

(a) Areas Seaward of the Intracoastal Canal. To be eligible for catastrophe property insurance, structures located in designated catastrophe areas which are seaward of the Intracoastal Canal and constructed, repaired, or to which additions are made on and after September 1, 1998 , and before February 1, 2003, shall comply with the Building Code for Windstorm Resistant Construction. The Texas Department of Insurance adopts by reference the Building Code for Windstorm Resistant Construction, effective September 1, 1998. Amendments to the Building Code for Windstorm Resistant Construction are adopted by reference to be effective June 1, 2002. Any Application for Windstorm Building Inspection, Form WPI-1, submitted pursuant to this subsection will be accepted through May 31, 2003.

(b) Areas Inland of the Intracoastal Canal and Within Approximately 25 Miles of the Texas Coastline and east of the Specified Boundary Line and Certain Areas in Harris County.

(1) To be eligible for catastrophe property insurance, structures located in designated catastrophe areas specified in paragraphs (2)(A) and (2)(B) of this subsection and constructed, repaired, or to which additions are made on and after September 1, 1998 , and before February 1, 2003, shall comply with the Building Code for Windstorm Resistant Construction which is adopted by reference in subsection (a) of this section and any applicable amendments adopted by reference to be effective June 1, 2002. Any Application for Windstorm Building Inspection, Form WPI-1, submitted pursuant to this subsection will be accepted through May 31, 2003.

(2) (No change.)

(c) Areas Inland and West of the Specified Boundary Line. To be eligible for catastrophe property insurance, structures located in designated catastrophe areas which are west of the boundary line specified in subsection (b)(2)(A) of this section and constructed, repaired, or to which additions are made on and after September 1, 1998 , and before February 1, 2003; and structures located inside the city limits of cities and towns divided by the boundary line specified in subsection (b)(2)(A) of this section, and constructed, repaired, or to which additions are made on and after September 1, 1998 , and before February 1, 2003, shall comply with the Standard Building Code, as amended May 8, 1973, and with the Windstorm Resistant Construction Guide [ Code], which is adopted by reference in §5.4007(b) of this title (relating to Applicable Building Code Standards in Designated Catastrophe Areas for Structures Constructed, Repaired, or to which Additions are Made Prior to September 1, 1998). These areas include, but are not limited to, the areas inside the city limits of the cities of Harlingen, Raymondville, Kingsville, Robstown, Sinton, Refugio, Bay City, Friendswood, Alvin, and Beaumont. Any Application for Windstorm Building Inspection, Form WPI-1, submitted pursuant to this subsection will be accepted through May 31, 2003.

(d) (No change.)

§5.4009. Applicable Building Code Standards in Designated Catastrophe Areas for Structures Constructed, Repaired or to Which Additions Are Made On and After February 1, 2003.

(a) To be eligible for catastrophe property insurance, structures located in the designated catastrophe areas specified in §5.4008 of this chapter (relating to Applicable Building Code Standards in Designated Catastrophe Areas for Structures Constructed, Repaired or to Which Additions Are Made On and After September 1, 1998, and before February 1, 2003) and which are constructed, repaired, or to which additions are made on and after February 1, 2003, shall comply with the 2000 International Residential Code or the 2000 International Building Code, both of which are adopted by reference to be effective February 1, 2003. The codes are published by and available from the International Code Council, 5203 Leesburg Pike, Suite 600, Falls Church, Virginia, 22041. The following wind speed requirements shall apply:

(1) Areas Seaward of the Intracoastal Canal. To be eligible for catastrophe property insurance, structures located in designated catastrophe areas which are seaward of the Intracoastal Canal and constructed, repaired, or to which additions are made on or after February 1, 2003, shall be designed and constructed to resist a 3-second gust of 130 miles per hour.

(2) Areas Inland of the Intracoastal Canal and Within Approximately 25 Miles of the Texas Coastline and east of the Specified Boundary Line and Certain Areas in Harris County. To be eligible for catastrophe property insurance, structures located in designated catastrophe areas specified in subsections (b)(2)(A) and (b)(2)(B) of §5.4008 of this chapter and constructed, repaired, or to which additions are made on or after February 1, 2003, shall be designed and constructed to resist a 3-second gust of 120 miles per hour.

(3) Areas Inland and West of the Specified Boundary Line. To be eligible for catastrophe property insurance, structures located in designated catastrophe areas specified in subsection (c) of §5.4008 of this chapter and constructed, repaired, or to which additions are made on or after February 1, 2003, shall be designed and constructed to resist a 3-second gust of 110 miles per hour.

(b) Repairs, alterations and additions necessary for the preservation, restoration, rehabilitation or continued use of a historic structure may be made without conformance to the requirements of subsection (a) of this section. In order for a historic structure to be exempted, at least one of the following conditions shall apply to the structure:

(1) The structure is listed or is eligible for listing on the National Register of Historic places.

(2) The structure is a Recorded Texas Historic Landmark (RTHL).

(3) The structure has been specifically designated by official action of a legally constituted municipal or county authority as having special historical or architectural significance, is at least 50 years old and is subject to the municipal or county requirements relative to construction, alteration, or repair of the structure, in order to maintain its historical designation.

§5.4603. Forms for Windstorm Inspections.

(a) The Texas Department of Insurance adopts by reference the following forms for use in windstorm inspection:

(1) (no change.)

(2) Building Inspection, Form WPI-2, effective February 1, 2003 [ Building Construction Compliance, Form WPI-2, as amended October 1, 1998];

(3) Building Design [ Compliance], Form WPI-2D, as amended February 1, 2003 [ effective October 1, 1998];

(4) ­ (8) (no change.)

(9) Building Construction Compliance, Form WPI-2A, effective February 1, 2003.

(b) (no change.)