28 Tex. Admin. Code § 5.4160 - Member Assessments to Pay for Reinsurance in Excess of the Association's Statutory Minimum Funding Level
(a) The
association, with the Commissioner's approval, must assess members as provided
by Insurance Code §
2210.453(d)
to pay for the cost of any reinsurance coverage or alternative risk transfer
mechanisms it purchases in excess of the statutory minimum funding level. If,
in a calendar year, the association must assess its members under Insurance
Code §
2210.453(d),
(1) then the association must request the
Commissioner's approval within a reasonable time after it knows its total
reinsurance costs for that calendar year; and
(2) must issue the assessment by the later of
either:
(A) 120 days after the date the
association receives the data that TDI provides under §
5.4162(f) of
this title for that year; or
(B)
December 1 of that year.
(b) At the first regular board meeting in
each calendar year, but before April 1, the association must discuss with the
board its methodology for determining its one-in-100-year probable maximum loss
for the calendar year. In discussing its methodology, the association must
provide the information described in subsection (d) of this section and make
that information available to its members and the public.
(c) After the board meeting described in
subsection (b) of this section, but not later than April 1 of each year, the
association must disclose to the Commissioner its one-in-100-year probable
maximum loss for the calendar year and the association's method for determining
that probable maximum loss.
(d) In
disclosing its method for determining its one-in-100-year probable maximum
loss, the association must include:
(1) the
hurricane model or models it relied on, including the model vendors, the model
names, and the versions of each model;
(2) the in-force date and the total amount of
direct exposures in force for the policy data used as the input for each
hurricane model the association relied on;
(3) all user-selected hurricane model input
assumptions used with each hurricane model the association relied on;
(4) the one-in-100-year probable maximum loss
model output produced by each hurricane model the association relied
on;
(5) if the association relied
on more than one hurricane model, the methodology the association used to blend
or average the hurricane model outputs, including all weighting factors used;
and
(6) any adjustments the
association or another party made to the one-in-100-year probable maximum loss
model outputs or the blended or averaged output, including any adjustments to
include loss adjustment expenses.
(e) The department will post the information
disclosed under subsections (c) and (d) of this section on its
website.
(f) If, in a year, the
association elects to purchase coverage for reinsurance or alternative risk
transfer mechanisms in excess of the one-in-100-year probable maximum loss,
then the association must also obtain a quote for coverage that provides
funding equal to the one in 100-year probable maximum loss. The premium quote
must assume the minimum required attachment point described in Insurance Code §
2210.453(c).
(g) No later than the second regular board
meeting of the calendar year, the association must provide each of the
following to its board and make this information available to its members and
the public:
(1) the reinsurance or
alternative risk transfer mechanism premium quote required under subsection (f)
of this section; and
(2) the total
deposit premiums for all reinsurance or alternative risk transfer mechanism
coverage for the year.
(h) If, at the time of the second regular
board meeting of the calendar year, deposit premiums described in subsection
(g) of this section are not known, then the association must provide its best
estimate of those premiums to the board and make the estimate available to its
members. As soon as the association knows the deposit premiums described in
subsection (g) of this section, the association must provide them to the board
and make them available to its members.
(i) In its request to the Commissioner to
approve an assessment under Insurance Code §
2210.453(d),
the association must submit the following information:
(1) the portion of the association's
reinsurance premium that provides coverage for losses or loss adjustment
expenses above the association's one-in-100-year probable maximum loss;
and
(2) the methodology the
association used to calculate the amount described in paragraph (1) of this
subsection.
(j) This
section and §§
5.4161-
5.4167 of this title (relating to
Member Assessments Other than for Reinsurance in Excess of the Association's
Statutory Minimum Funding Level; Amount of Assessment; Notice of Assessment;
Payment of Assessment; Failure to Pay Assessment; Contest After Payment of
Assessment; and Inability to Pay Assessment by Reason of Insolvency,
respectively) are a part of the association's plan of operation and will
control over any conflicting provision in §
5.4001 of this title (relating to
Plan of Operation).
Notes
State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.
No prior version found.