Texas Administrative Code › Title 28 - INSURANCE › Part 1 - TEXAS DEPARTMENT OF INSURANCE › Chapter 5 - PROPERTY AND CASUALTY INSURANCE › Subchapter E - TEXAS WINDSTORM INSURANCE ASSOCIATION › Division 3 - LOSS FUNDING, INCLUDING CATASTROPHE RESERVE TRUST FUND, FINANCING ARRANGEMENTS, AND PUBLIC SECURITIES › Section 5.4126 - Determination of the Association Surcharge Percentage

Current through Reg. 49, No. 28; July 12, 2024
(a) If, at any time, the association, after
					 consultation with TPFA, determines that net premium and other revenue are not
					 sufficient to pay class 1, class 2, or class 3 public securities payable under
					 Insurance Code §§
											2210.612,
					 2210.613,
					 and
					 2210.6131,
					 respectively, the association must promptly submit a request to the
					 commissioner to approve an association surcharge. While the public securities
					 are outstanding, at least quarterly, the association must determine if its net
					 premium and other revenue is sufficient to pay for securities payable under
					 Insurance Code §§
											2210.612,
					 2210.613,
					 and
					 2210.6131.
(b) A request described by subsection (a) of
					 this section must include the following information for each class of public
					 securities for which an association surcharge is required:
(1) the proposed association surcharge
					 percentage;
(2) the amount the
					 association has determined, after consultation with TPFA, is the debt service
					 and all related expenses on the public securities for the applicable
					 period;
(3) the amount that the
					 association has determined is the debt service not already covered by available
					 funds and all related expenses on the public securities for the applicable
					 period;
(4) for policies that
					 comply with the requirements of §
												5.4912
					 of Division 10 of this subchapter (relating to Filing and Issuance of Policy
					 Forms Relating to Premium Surcharges under Insurance Code §§
												2210.612,
					 2210.613,
					 and
					 2210.6131),
					 the association's best estimate of its anticipated gross premium for policies
					 in effect on the date described by paragraph (8) of this subsection;
(5) for policies that do not yet comply with
					 the requirements of §
												5.4912
					 of Division 10 of this subchapter, the association's best estimate of its
					 anticipated gross premium for the period described by paragraphs (9) and (10)
					 of this subsection;
(6) all
					 relevant data the association relied upon when determining the amounts in
					 paragraphs (2) - (5) of this subsection;
(7) an explanation of the methodology,
					 including all material assumptions, the association used to determine the
					 amounts in paragraphs (2) - (5) of this subsection;
(8) the date, which must be no more than 90
					 days after the date the request is received by the commissioner, on which the
					 association surcharge applies to policies that are in force and compliant with
					 §
												5.4912
					 of Division 10 of this subchapter;
(9) he date on which the association
					 surcharge begins to apply to policies not compliant with §
												5.4912
					 of Division 10 of this subchapter, which must be the same date as the date in
					 paragraph (8) of this subsection; and
(10) the date on which the association
					 surcharge ceases to apply to policies not compliant with §
												5.4912
					 of Division 10 of this subchapter, which must be the day after the date the
					 last noncompliant policy expires.