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You are here: Home . rules . 2006 . 0301b-059

SUBCHAPTER E. TEXAS WINDSTORM INSURANCE ASSOCIATION Division 7. Inspections for Windstorm and Hail Insurance

28 TAC §5.4606

1. INTRODUCTION. The Commissioner of Insurance adopts §5.4606, concerning the temporary appointment of qualified inspectors to conduct inspections of residential structure re-roofing in Jefferson and Chambers counties, pursuant to Insurance Code Article 21.49 §6A, for purposes of insurability for windstorm and hail insurance from the Texas Windstorm Insurance Association (TWIA). The new section is adopted without change to the proposed text published in the January 20, 2006 issue of the Texas Register (31 TexReg 372). The new section was considered in a public hearing on February 15, 2006 under Docket Number 2634.

2. Reasoned Justification. The purpose of TWIA is to provide windstorm and hail insurance coverage to residents and businesses in the designated catastrophe areas along the Texas coast that are unable to obtain such coverage in the voluntary market. As a result of the destruction caused by Hurricane Rita along the Texas coast, certain counties, and in particular Jefferson and Chambers counties, are facing massive rebuilding and repair of residential and commercial structures. Both Jefferson and Chambers counties are first tier coastal counties for purposes of Insurance Code Article 21.49, and are therefore subject to significant windstorm and hail damage from any hurricane hitting in that area of the Texas coast. In the Beaumont area alone (Jefferson County), approximately 90% of the residential structures received some type of damage, and as a result of the tremendous volume of repairs being performed on structures after the storm, there is an overwhelming demand for windstorm inspections and certifications. Under the Insurance Code Article 21.49 §6A, the inspections and certifications are necessary for the structures to be considered insurable property for windstorm and hail insurance from the TWIA. Repair work in these counties will be a long-term process. To assist with the enormous workload of windstorm inspections, the Texas Department of Insurance (Department) has temporarily reassigned its inspectors from other areas on the coast, including Corpus Christi, Angleton, and Bay City, and the TWIA is also providing additional inspection assistance through independent contract inspectors. Even though the number of inspections performed by engineers appointed as qualified inspectors has risen in comparison to the first few months after the storm, and despite the re-assignment of the Department's inspectors and the TWIA contract with independent inspectors, additional qualified inspectors continue to be needed on a temporary basis to meet the increasing demand of requests for inspections by contractors, roofers and homeowners for certification of structures. New §5.4606 is necessary to provide for the qualifications, requirements, and procedures for the appointment of the needed additional qualified inspectors on a temporary basis to conduct re-roof inspections of residential structures during the construction process in Jefferson and Chambers counties, the two counties most affected and most in need. Any inspectors appointed pursuant to new §5.4606 will be able to inspect residential re-roofing in these counties to confirm compliance with windstorm building code standards which will aid in reducing future damage and losses from wind and hail. This will benefit the homeowners, TWIA, insurers, and the state of Texas. The inspection authority granted to the temporary appointees will be limited to inspections of residential re-roofing during the construction process. To ensure that the inspections are conducted properly and in accordance with statutory and regulatory requirements, it is necessary that the temporary appointees be subject to oversight by the Department and the other provisions of the Department's current rule §5.4604 relating to the appointment of engineers as qualified inspectors. In addition to any other remedy available under the Insurance Code Article 21.49 §6A and Chapters 82 and 84, the temporary appointees 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 deter approval of faulty or inadequate re-roofing of residential structures, which could result in certification of structures that do not meet windstorm building code requirements. This is also necessary to prevent additional harm in the damaged areas in Jefferson and Chambers counties.

3. how the section will function. New §5.4606(a) specifies the qualifications, including necessary experience and training, of persons eligible to apply for a temporary appointment. Subsection (b) defines terms used throughout the section. Subsections (c) - (f) outline the application process for a temporary appointment and specify the necessary forms, affidavits, and other documents needed for application. Subsection (g) specifies financial interest prohibitions for applicants and temporary appointees. Subsection (h) requires that temporary appointees comply and utilize certain specified windstorm inspection forms. 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. Subsection (j) prohibits temporary appointees from delegating any duties that are part of the authorization of their temporary appointment. Subsection (k) provides that the issuance of a temporary appointment to a qualified inspector only authorizes re-roof inspections of residential structures in Jefferson and/or Chambers counties during the construction process and provides that no other types of inspections by temporary appointees will be valid for purposes of windstorm and hail insurance under the Insurance Code Article 21.49. Subsection (l) provides that the expiration date for a temporary appointment is December 31, 2006, unless extended by the Department based on demonstrated need in Jefferson or Chambers counties. Subsection (m) 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. Subsection (n) contains a severability clause which provides for the continuation of non-affected provisions of the rules if any provisions are declared invalid.

4. summary of comments and agency response to comments.

Comment: One commenter stated support for the rule.

Agency Response: The Department appreciates the commenter's support for the rule.

5. NAMES OF THOSE COMMENTING FOR AND AGAINST THE SECTION.

For: Office of Public Insurance Counsel.

6. STATUTORY AUTHORITY. The new section is adopted 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. (all 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. 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.

7. TEXT.

§5.4606. Requirements for Temporary Appointment of Qualified Inspectors.

(a) The purpose of this section is to specify qualifications, requirements, and procedures pursuant to the Insurance Code Article 21.49 §6A(d) for the appointment for a temporary period of persons to perform windstorm re-roof inspections of residential structures in Jefferson and/or Chambers counties of Texas. 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, and the Insurance Code Article 21.49 §6A. The following persons are eligible to apply for a Temporary Appointment as a Qualified Inspector:

(1) 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

(2) A Texas registered architect with construction, design or inspection experience on buildings or structures located in high wind areas; or

(3) 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.

(b) For the purposes of this section, the following words and terms shall have the following meanings:

(1) Commissioner - Commissioner of Insurance of the State of Texas.

(2) Department - Texas Department of Insurance.

(3) Person - An individual and includes a resident or non-resident of this state.

(4) Re-roof - The process of recovering or replacing an existing roof covering and includes the following terms:

(A) Roof covering - The covering applied to a roof deck for weather resistance, fire classification or appearance.

(B) Roof deck - The flat or sloped surface not including its supporting members or vertical supports.

(C) Roof recover - The process of installing an additional roof covering over a prepared roof covering without removing the existing roof covering.

(D) Roof replacement - The process of removing the existing roof covering, repairing any damaged substrate and installing a new roof covering.

(5) Temporary appointee - A person who has been issued a Temporary Appointment as a Qualified Inspector under this section.

(c) A person applying for a temporary appointment under this section must complete and file an application for Temporary Appointment as a Qualified Inspector on a form prepared, maintained, and obtainable from the department.

(d) Persons applying under the requirements of paragraph (1) of subsection (a) of this section shall also 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.

(e) Persons applying under the requirements of paragraph (2) of subsection (a) of this section shall also 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.

(f) Persons applying under the requirements of paragraph (3) of subsection (a) of this section shall also provide a certified copy of a completed degree, if any, certificate, or transcript.

(g) A temporary appointee shall 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 temporary appointee's independence of judgment in the performance of inspections pursuant to this section.

(h) A temporary 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 "qualified inspector" for "engineer" as applicable.

(i) Except as otherwise provided in this section, a temporary appointee shall be 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 shall control.

(j) A temporary 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 a temporary appointee.

(k) A temporary appointee is only authorized to perform in Jefferson and Chambers counties re-roof inspections of residential structures during the construction process on risks that could be considered insurable property for windstorm and hail insurance. No other types of inspections by temporary appointees will be considered valid for purposes of the Insurance Code Article 21.49.

(l) A Temporary Appointment as a Qualified Inspector issued under this section shall be valid until December 31, 2006, unless extended by the department based on demonstrated need in Jefferson or Chambers counties.

(m) In addition to any other remedy available under 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 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.

(n) 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.



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