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Study the practices related to the repair and salvage of motor
vehicles under automobile insurance policies.
In 1991, the Texas Legislature adopted a statute entitled "Disclosure
of Consumer Information." This law prohibits an insurer from
preventing the beneficiary of a policy, directly or indirectly,
from selecting the facility of the insured's choice to repair
motor vehicle damage, or from specifying the brand, type, kind,
age, or condition of parts or products that may be used to repair
a motor vehicle covered under the policy. The Department of Insurance
has received complaints that some insurance companies employ practices
which effectively deny policy holders the right to decide who
will perform needed repairs to their vehicles. Another issue
which has arisen is that when a vehicle is adjusted as a "total
loss," the insurer generally pays the insured the book value
of the vehicle rather than the cost of the repairs.
Study the long-term financial stability and solvency of the Texas
catastrophic property insurance association.
The Catastrophic Property Insurance Pool Act (CATPOOL) was authorized
by the 62nd Legislature in 1971, designated 14 coastal counties
as catastrophe areas. Since then, other areas have likewise been
designated, and as of December 31, 1995, CATPOOL had 68,903 policies
in effect with a total liability exposure of $8,828,138,313.
CATPOOL rates have generally been based on the extended coverage
rates applicable to the entire seacoast area, subject to varying
surcharges or percentage modifications of those rates. In 1993,
the legislature placed a cap on residential rates of 90 percent
of the "modified extended coverage rates."
Review proposals to change building specifications in the plan
of operation for the Texas Catastrophic Property Insurance Association.
The authorizing legislation for the Texas Catastrophic Insurance
Association establishes a plan of operation, which includes a
requirement that the commissioner of insurance adopt building
specifications. These building specifications refer to certain
minimum material and construction standards which a structure
must meet before it can be insured under the CATPOOL. The present
set of building specifications dates back to the 1970s.