Texas Register, Volume 28, Number 14, Pages 2821-2988, April 4, 2003 Page: 2,879
2821-2988 p. ; 28 cm.View a full description of this periodical.
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start-up assessment request after timely paying the start-up assessment
request under protest. Payment of the disputed amount is a required
predicate to challenging the accuracy of the start-up calculation. Any
subsequent adjustments made to start-up assessment payments under
protest shall be paid by (or remitted to) the challenging member com-
pany within 30 days after the agreement or final order that establishes
the correct start-up assessment request amount. The Association may
issue more than one start-up assessment request using the initial assess-
ment percentages until new percentages can be calculated based on data
for the year ended December 31, 2002 and thereafter. Time frames and
procedures for payment of assessments other than a start-up assessment
are governed by other provisions of this plan of operation.
(d) There shall be an annual meeting of the Association and its
member insurers at a time and place fixed by the Governing Committee.
(e) A special meeting of the Association and its member insur-
ers may be called by the Governing Committee at such time and place
designated by the Governing Committee.
(f) Ten days notice of an annual or special meeting with mem-
ber insurers shall be given in writing by the Governing Committee to
member insurers. Notice of any meeting shall be accompanied by an
agenda for the meeting.
5.9923. Assessments, Recoupments, Member Insolvency and With-
drawal.
(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 Mem-
ber Insurers), the Governing Committee may at any time levy an in-
terim assessment against member insurers to provide necessary oper-
ating 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 assess-
ment cannot be collected within a reasonable period of time, the unpaid
assessment shall be paid by the remaining member insurers, each con-
tributing in the manner provided by Insurance Code Article 21.49A,
sec. 3 (e) (2), but without regard to the premium writings of the in-
solvent 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, theAssociation 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 assess-
ment. 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 cer-
tificate 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 delin-
quent 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.
5.9924. Reinsurance and Other Financing.
(a) The Association may cede or purchase reinsurance in the
name of the Association or on behalf of member insurers on eligible
risks written through the Association.
(b) The Association may not assume reinsurance without the
prior consent of the Commissioner.
(c) The Association is authorized to arrange for and consum-
mate a taxable or tax-exempt borrowing or borrowings of money or
lines of credit for the Association to meet its anticipated financial obli-
gations, including, the funding of Association claims in the event of a
catastrophe.
5.9925. Statistics.
(a) Every insurance policy issued by the Association shall be
separately coded for statistical purposes.
(b) The Association shall comply with any reporting require-
ments of the Commissioner concerning its underwriting operations and
experience. The reports shall be made at least annually in such form
and detail as may be required by the Commissioner.PROPOSED RULES April 4, 2003 28 TexReg 2879
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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/m1/58/: accessed May 26, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.