28 TAC §5.4607
1. INTRODUCTION. The Commissioner of Insurance adopts new §5.4607, concerning the 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 the Insurance Code Article 21.49 §6A. The section is adopted without change to the proposed text published in the June 9, 2006 issue of the Texas Register (31 TexReg 4696).
2. REASONED JUSTIFICATION. The purpose of the Texas Windstorm Insurance Association (Association) 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. In order to obtain or maintain windstorm and hail insurance through the Association after an insured's property has been damaged by a windstorm, a property owner must ensure that the rebuilding or repair of the property is done in conformance with the applicable windstorm building code. The purpose of the windstorm building code standards is to minimize windstorm damage to structures and to thereby minimize loss of life, property and economic losses caused by catastrophic windstorms.
This new section is necessary to establish procedures for the appointment of temporary qualified windstorm inspectors in the designated catastrophe areas, following a natural disaster that results in major windstorm and/or hail damage, to inspect damaged structures as soon as possible in order that the repairs or rebuilding may be completed in a timely manner. The Department in adopting this rule is seeking to prevent potential adverse impact to residents and business owners who are trying to rebuild or to repair their properties to meet the windstorm building code requirements following a catastrophe and to minimize negative economic consequences to the affected catastrophe areas. The rule will assist in ensuring that an adequate number of temporary qualified inspectors are available in designated catastrophe areas for windstorm inspections when the need arises. This rule will enable the Commissioner to make these inspector appointments in an expedited manner without having to adopt separate rules for each designated catastrophe area that requires additional inspectors following a major catastrophe.
To determine if repairs or rebuilding of damaged structures are in compliance with the applicable building code, a windstorm inspection is conducted before the final work is completed so that the inspector is able to observe the contractor's adherence to the applicable building code. A certificate of compliance that is evidence of insurability by the Association is issued if the rebuilding or repair is determined to be in compliance with the applicable building code; this certificate of compliance enables the building owner to obtain or retain insurance through the Association. It is necessary to have enough inspectors available in the catastrophe areas so that all damaged structures can be inspected and repaired or rebuilt as quickly as possible. Insurance Code 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.
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 faced delays in the completion of the rebuilding 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 completion of the rebuilding and repair of structures had a negative influence in the economic stability of the affected area. 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 in cooperation with the Association, provided additional inspection assistance through independent contract inspectors. Even with these measures, the Department discovered that the time required to complete the procedures to appoint temporary inspectors imposed negative influences in the catastrophe areas. 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. The adopted rule provides for procedures, qualifications, and requirements for the appointment of temporary qualified windstorm inspectors on an as-needed basis. Under the rule, the Commissioner may make appointments of temporary inspectors 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 rule 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. The rule 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.
The proposed new section was considered in a public hearing on June 21, 2006 under Docket Number 2642. No comments on the proposal were submitted either during the comment period or at the hearing.
3. HOW THE SECTION WILL FUNCTION. New §5.4607(a) specifies that the purpose of the section is the establishment of the procedures for the appointment of temporary inspectors for a limited period on an as-needed basis, the qualifications of temporary inspectors, and the requirements for the appointment of persons to perform such inspections. Subsection (b) provides that temporary inspector appointments may be made only upon a determination by the Commissioner after notice and a hearing that qualified inspectors are not reasonably available in the first tier coastal counties specified in the Insurance Code Article 21.49 and/or in designated catastrophe areas as defined by Article 21.49 §3(h), 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. Subsection (c) specifies the qualifications, including necessary experience and training, of persons eligible to apply for a temporary appointment. It provides that the following persons are eligible to apply for an appointment as a temporary qualified inspector: a certified coastal inspector who has at least two years of construction, design or inspection experience on building or structures located in high wind areas; a Texas registered architect with construction, design or inspection experience on buildings or structures located in high wind areas; and 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. Subsection (c) also specifies the necessary forms, affidavits and other documents needed for application. Subsection (d) defines terms used throughout the section. Subsection (e) outlines the application process for an appointment. Subsection (f) specifies the training an appointee must undergo, which is a two-hour orientation and training session provided by the Department at one of its field offices or in Austin, Texas. Subsection (g) specifies prohibited financial interests 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 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. 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. Subsection (m) 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. The Department did not receive any comments on the published proposal.
5. STATUTORY AUTHORITY. The new section is adopted pursuant to the Insurance Code Article 21.49 §6A and §36.001. Article 21.49 §6A(d) 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(d) 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/or 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.
6. TEXT.
§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.
CERTIFICATION. 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.
IT IS THEREFORE THE ORDER of the Commissioner of Insurance that §5.4607 specified herein, concerning the procedures for the appointment of temporary qualified windstorm inspectors, based on demonstrated need, to conduct windstorm inspections in designated catastrophe areas pursuant to the Insurance Code Article 21.49 §6A, is adopted.