28 Tex. Admin. Code § 5.4162 - Amount of Assessment
(a) The
association must determine which members of the association must participate in
any assessment under §
5.4160 and §
5.4161 of this title (relating to
Member Assessments to Pay for Reinsurance In Excess of the Association's
Statutory Minimum Funding Level and Member Assessments Other than Assessments
for Reinsurance in Excess of the Association's Statutory Minimum Funding
Level).
(1) The association may not include
in the assessment an insurer that became a member of the association after
September 1, 2009, and that had not previously been a member of the
association, until after the second anniversary of the date on which the
insurer first becomes a member of the association.
(2) The association must include in the
assessment an insurer described under paragraph (1) of this subsection after
the second anniversary of the date on which the insurer first becomes a member
of the association without regard as to whether the catastrophic event that
gave rise to the assessments occurred prior to the second anniversary of the
date on which the insurer first became a member of the association.
(3) The association may not include in the
assessment formula the net direct premium of an affiliate insurer engaged in
the business of surplus lines insurance as described in the Insurance Code §
2210.052(c)
that a federal agency or court of competent jurisdiction determines to be
exempt from the assessment formula under Insurance Code Chapter 2210.
(b) Each member company's
percentage of participation must be computed on a calendar year basis for the
year in which the assessment is made. The percentage of participation is not
based on the year in which the catastrophic event occurred, except for an
assessment made during that year. Net direct premiums must be determined as
provided under §
5.4001(a)(2)(N)
of this title (relating to Plan of Operation).
(c) The participating members of the
association must participate in insured losses and operating expenses of the
association, in excess of premium and other revenue, in the proportions
required by Insurance Code §
2210.052 and as
depicted in subsection (e) of this section. A participating member is entitled
to receive credit for insurance voluntarily written in the catastrophe area, as
provided in Insurance Code §
2210.052.
(d) If at the time of an assessment the
department has not furnished to the association information necessary to
compute a member's participation during the preceding calendar year, then each
member's participation must be based upon information furnished to the
association from the last calendar year for which such information is
available. When the association receives the necessary information from the
department, the association must reassess or refund to each participating
member the amounts necessary to properly reflect the member's
participation.
(e) The Figure: 28
TAC §
5.4162(e)
graphically depicts the Texas Windstorm Insurance Association Procedure For
Calculating Member Assessment Percentages Including Credit For Voluntary
Writings. All premiums are for the most recent preceding calendar year ending
December 31, as furnished by the department.
(1) Column 1(a): Statewide net direct
premiums for extended coverage and other allied lines. Column 1(b): Statewide
net direct premiums for extended coverage and other allied lines portion of the
multiple peril line. Column 1(c): Statewide net direct premiums for homeowners
and farm and ranch owners.
(2)
Column 2: The sum of the statewide net direct premiums at 90% of the extended
coverage and other allied lines, and 50% of the homeowners and farm and ranch
owner's, or such percentage as may be determined in accordance with §
5.4001(a)(2)(N)(i)(III)
of this chapter (90% of Column 1(a) plus 90%
of Column 1(b) plus 50% of Column 1(c)).
(3) Column 3: Each company's percentage of
the net direct premiums as described in Column 2, which is the basis for
indicating normal required participation in the association prior to credits
for voluntary writings in the designated areas.
(4) Column 4: Total windstorm and hail
premiums in the designated areas (association premiums plus voluntary
premiums).
(5) Column 5: Normal
company quota of total windstorm and hail premiums (Column 3 x Column
4).
(6) Column 6: Each company's
voluntary writings in the designated areas multiplied by the same percentages
as shown in Column 2. Note: Maximum credit must be limited to company's normal
quota.
(7) Column 7: Each company's
maximum possible allocation after applying credits for voluntary writings
(Column 5 minus Column 6). Negative allocation to be shown as zero.
(8) Column 8: Percentage participation of
each member company in the association, prior to application of offset. Note:
The offset figure measures the excess premiums developed by the maximum credit
in Column 6.
(9) Column 9:
Percentage participation of each member company in the association.
(f) The department will furnish to
the association the amount of net direct premiums of each member company
written on property in this state and the aggregate net direct premiums written
on property in this state by all member companies during the preceding calendar
year as reported by member companies to the department.
(g) Within a reasonable time after receiving
the information described in subsection (f) of this section from the
department, the association must notify each member company, in writing, by
certified mail, of the following:
(1) the
amount of net direct premiums the member company wrote on property in this
state during the preceding calendar year;
(2) the amount of net direct premiums of
similar insurance the member company voluntarily wrote in the catastrophe area
during the preceding calendar year; and
(3) that the notice and contents are an act,
ruling, or decision of the association and that the member company to whom the
notice is given is entitled to appeal it not later than the 30th day after the
date shown on the notice in accordance with Insurance Code §
2210.551.
(h) Within a reasonable period of
time after sending the notice described in subsection (g) of this section, the
association must determine the percentage of participation for each member
company in the manner provided in this section and must notify each member
company of its percentage of participation, in writing, by certified mail. The
notice must state that the notice and contents are an act, ruling, or decision
of the association insofar as the mathematical determination of the percentage
of participation is concerned and that the member company to whom the notice is
given is entitled to appeal not later than the 30th day after the date shown on
the notice in accordance with Insurance Code §
2210.551.
(i) In the notices required under subsections
(g) and (h) of this section, the association must disclose to its members that
the resulting participation percentages will be used for any assessments for
reinsurance in excess of the association's statutory minimum funding level for
the calendar year that may be required under Insurance Code §
2210.453(d).
Notes
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