Texas Register, Volume 28, Number 14, Pages 2821-2988, April 4, 2003 Page: 2,876
2821-2988 p. ; 28 cm.View a full description of this periodical.
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(h) If an inspection report shows that a property has unrepaired
damages or is in violation of any building, housing, air pollution, san-
itation, health, fire or safety code, ordinance or rule, or if an applicant
otherwise has received written notice of any violation of a code, ordi-
nance or rule, the applicant shall submit to the Association a detailed
plan that indicates the manner and estimated period of time in which
the violation will be corrected or the damage repaired. The Associ-
ation shall not provide coverage unless the necessary corrections are
completed to the satisfaction of the Association
(i) The Association may, for cause upon information or well-
founded belief, without notice to the insured at any time during the
policy term, inspect an insured property for the purpose of determining
whether the property meets the underwriting rules. The Association
need not afford an insured the opportunity to be present during a rein-
spection nor furnish the insured with a copy of a reinspection report,
unless requested. Reinspections may also occur:
(1) upon change in type of occupancy, or
(2) upon a reasonable periodic schedule.
0) The Association may cancel or refuse to renew a policy
upon the basis of the reinspection report in accordance with policy
terms and this plan of operation.
5.9916. Application Forms, Underwriting Rules, Rates, Policy
Forms and Endorsements.
(a) The Association shall adopt application forms. The forms
shall be designed to obtain all of the information necessary for under-
writing and rating the risk. Such forms may also elicit additional in-
formation that the Association may use to revise its rates, underwriting
rules, policy forms and endorsements. An application is considered
complete when every question on the application form is answered fully
and is signed by a proposed named insured and submitted by the agent.
The Association may independently verify the information in an ap-
plication or request additional information from the applicant or other
sources.
(b) The Association shall file with the Commissioner for ap-
proval the underwriting rules for Association policies prior to use. Such
underwriting rules shall determine whether a residential property is an
insurable risk eligible for Association coverage, and if eligible, what
coverages, policy forms and endorsements can be offered for that risk.
The underwriting rules shall be subject to the underwriting standards
set forth in 5.9914, 5.9915 and 5.9917 of this subchapter (relating
to Maximum Limits of Liability and Limitations, Inspections, and Ap-
plication, Binder, Policy Issuance, Renewal and Cancellation) and any
other requirements set forth in the underwriting rules. Such rules shall
include under what circumstances the Association may grant an agent
permission to bind coverage.
(c) The Association shall file with the Commissioner for ap-
proval the proposed rates and supplemental rate information, including
a manual of rating rules, to be used in connection with the issuance
of Association policies or endorsements. No policies or endorsements
shall be issued unless the Commissioner has approved the rates to be
applied to the policy or endorsement:
(1) The Association rates must be set in an amount suffi-
cient to carry all claims to maturity and to meet all expenses incurred
in the writing and servicing of the business.
(2) The rate filing shall additionally provide for:
(A) premium installment payment plans including a
servicing fee for those policyholders electing to use such a plan; and(B) deductible options such as different dollar amounts,
different percentages of property coverage limits, that may vary by cov-
erage or peril insured against.
(d) The Association shall file with the Commissioner for ap-
proval policy forms and endorsements prior to use. The policy forms
and endorsements that the Association will offer to applicants will be
governed by its underwriting rules. The Association may offer its pol-
icy forms on either an actual cash value or a replacement cost value
basis, based on its underwriting rules. Association policies shall not
cover businesses or commercial risks even if they are operated in or
from a residence. Association policies shall not cover motor vehicles.
5.9917. Application, Binder Policy Issuance, Renewal and Cancel-
lation.
(a) An agent shall maintain and submit, at the request of the
Association, written documentation that indicates that:
(1) At least two insurance companies, not in the same hold-
ing company as defined in Insurance Code Article 21.49-1, licensed to
write and actually writing residential property insurance in Texas have
declined to provide residential property insurance (the names of the two
insurance companies shall be identified), and the applicant has not re-
ceived a valid offer of comparable residential property insurance from
an insurance company licensed in Texas, not including any surplus lines
insurers; and
(2) There are no outstanding taxes, assessments, penalties
or charges with respect to the property to be insured, except those cov-
ered under a properly filed deferral affidavit in compliance with 33.06
of the Property Tax Code; and
(3) The applicant has not received written notice from an
authorized public entity stating that the property is in violation of any
building, housing, air pollution, sanitation, health, fire or safety code,
ordinance or rule.
(b) The Association may specify what documentation would
fulfill the requirements of subsection (a)(1)-(3) of this section.
(c) The Association is under no obligation to issue residential
property insurance unless the property would constitute an insurable
risk in accordance with the Association's underwriting rules. The As-
sociation, in determining whether the property is insurable, shall give
no consideration to the condition of surrounding property or properties,
where such condition is not within the control of the applicant.
(d) The Association shall deliver a policy or binder to the agent
upon acceptance of the risk. The Association shall pay the authorized
commission to the agent.
(e) The effective date of coverage shall be no earlier than the
date and time that the Association both accepts and binds the risk. The
policy shall be issued in the name of the Association, as insurer.
(f) The Association may suspend the taking of applications in
the state when issuance of binders and/or policies has been suspended
by the Texas Windstorm Insurance Association. The Association may
also suspend the taking of applications when and in the part of the state
it finds that an ongoing event threatens to create an imminent danger
of catastrophic losses.
(g) The policy shall be issued for a term of one year.
(h) If the property is found to be an insurable risk but the in-
spection reveals that there are one or more physical deficiencies, sur-
charges will be imposed in conformity with the rates and underwriting
rules. If the physical deficiencies are corrected and verified, the sur-
charges shall be revised.28 TexReg 2876 April 4, 2003 Texas Register
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Texas. Secretary of State. Texas Register, Volume 28, Number 14, Pages 2821-2988, April 4, 2003, periodical, April 4, 2003; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth101027/m1/55/: accessed May 26, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.