Texas Administrative Code › Title 28 - INSURANCE › Part 1 - TEXAS DEPARTMENT OF INSURANCE › Chapter 5 - PROPERTY AND CASUALTY INSURANCE › Subchapter T - FAIR PLAN › Division 1 - PLAN OF OPERATION › Section 5.9923 - Assessments, Recoupments, Member Insolvency and Withdrawal

Current through Reg. 49, No. 28; July 12, 2024
(a) Should a deficit occur in the
					 Association, the Association shall assess member insurers to cover such
					 deficit. The Association shall determine annually any deficit or surplus for
					 each calendar year period that the Association is operational or has
					 outstanding liabilities.
(b) In
					 addition to the start-up assessment authority provided by §
											5.9922(c)
					 of this subchapter (relating to Relationship with Member Insurers), the
					 Governing Committee may at any time levy an interim assessment against member
					 insurers to provide necessary operating funds.
(c) Each member insurer may recoup
					 assessments levied against it under subsections (a), (b) and (d) of this
					 section and §
											5.9922
					 of this subchapter by adding a premium surcharge on every property insurance
					 policy issued or renewed for a three year period beginning ninety days after
					 the date of the assessment by the Association. The amount of the surcharge
					 shall be calculated on the basis of a uniform percentage of the premium on such
					 policies equal to one-third of the ratio of the amount of an insurer's
					 assessment to the amount of its direct earned premiums as reported on Statutory
					 Page 14 in its annual financial statement to the department for the calendar
					 year immediately preceding the year in which the assessment is made, such that
					 over the period of three years the aggregate of all such surcharges by an
					 insurer shall be equal to the amount of the assessment of such insurer. The
					 minimum surcharges on a policy may be $1; all surcharges may be rounded to the
					 nearest dollar (50 cents and higher rounded up to next dollar and 49 cents or
					 less rounded down). A surcharge is not subject to premium tax unless so
					 determined by the Comptroller of Public Accounts.
(d) If any member insurer fails to pay the
					 assessment for its proportionate part of any loss or expense because the member
					 insurer is insolvent, and the Governing Committee determines that the
					 assessment cannot be collected within a reasonable period of time, the unpaid
					 assessment shall be paid by the remaining member insurers, each contributing in
					 the manner provided by Insurance Code Article 21.49A, sec.3 (e) (2), but
					 without regard to the premium writings of the insolvent member insurer. The
					 insolvent member insurer shall remain liable to the Association for the full
					 amount of the assessment. If the insolvent member insurer later pays any or all
					 of its assessment, the Association shall credit or reimburse the remaining
					 members insurers in the same proportion as used in calculating each member
					 insurer's contribution toward the unpaid assessment.
(e) No refund which would otherwise be paid
					 under the plan of operation shall be paid to a member if it is no longer a
					 member because it withdrew from writing residential property insurance in
					 Texas, or to the liquidator, receiver, conservator, or statutory successor of a
					 member insurer until the assessment of the member insurer has been paid in
					 full. Any refund shall be first applied as a set-off against any assessment or
					 other monies owed to the Association. Any balance remaining after the set-off
					 shall be paid to the member insurer or its liquidator, receiver, conservator,
					 or statutory successor of the member insurer.
(f) If a member ceases writing residential
					 property insurance in Texas, it shall remain liable for any assessments that
					 have already been made, and it shall be liable for any assessment that will be
					 made covering the calendar year in which it had any direct earned premium for
					 residential property insurance in Texas and/or any prior calendar years.
					 Assessments will be based on the last year the company had written premiums. It
					 shall not be liable for any assessments covering the calendar year next
					 following the calendar year that it last had direct earned premium for
					 residential property insurance in Texas.
(g) Each insurer shall remit to the
					 Association payment in full of its assessed amount within 30 days of the
					 receipt of notice of assessment. If an insurer fails to remit its assessed
					 amount after the 40th day the Association shall report the failure to the
					 Commissioner who shall immediately take action to suspend or revoke such
					 insurer's certificate of authority to transact the business of insurance in the
					 State of Texas until such time as the Association certifies to the Commissioner
					 that such assessment has been paid in full. Suspension of an insurer's
					 certificate of authority to transact business in the State of Texas shall not
					 affect the right of the Association to proceed against such insurer in any
					 court for any remedy provided by law or contract to the Association, including,
					 the right to collect such insurer's assessment. In addition to any other
					 remedy, the Governing Committee may offset assessments due from an insurer
					 against any amounts in any account of such delinquent insurer. A member by
					 mailing payment of its allocated amount of assessment, as provided herein,
					 shall not waive any right it may have to contest the computation of its
					 allocated amount of assessment. Such contest shall not, however, toll the time
					 within which assessments shall be paid or the report to be made to the
					 Commissioner or the action to be taken by the Commissioner upon receipt of such
					 report.