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Texas Insurance Code - Not Codified - Article 21.49-18. Texas Child-Care Facility Liability Pool
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Art. 21.49-18. TEXAS CHILD-CARE FACILITY LIABILITY POOL.
Article repealed effective April 1, 2007
Definitions
Sec. 1. In this article:
(1) "Board" means the board of trustees of the pool.
(2) "Child-care facility" has the meaning assigned to that
term by Section 42.002, Human Resources Code.
(3) "Fund" means the Texas child-care facility liability
fund.
(4) "Pool" means the Texas child-care facility liability
pool.
Creation of pool
Sec. 2. The Texas Child-Care Facility Liability Pool is
created when the governing bodies of at least 10 child-care
facilities have entered into a written agreement for participation
in the pool.
Scope of coverage
Sec. 3. (a) The pool shall insure a child-care facility and
its officers and employees against liability for acts and omissions
under the laws of this state in their official or employment
capacities and shall provide primary and excess liability coverage
to child-care facilities that qualify under this article and under
the pool's plan of operation.
(b) The pool may provide primary liability coverage to a
child-care facility in an amount not to exceed $300,000. The pool
may provide excess liability coverage to a child-care facility only
in an amount determined by the board to be actuarially sound. The
pool is liable on any claim only to the limit provided by the
coverage of the child-care facility against which the claim is
made.
(c) The pool may participate in the evaluation, settlement,
and defense of a claim against a child-care facility insured by the
pool.
Participation in pool
Sec. 4. A child-care facility is entitled to coverage from
the pool if it:
(1) submits a complete application;
(2) provides other information required by the pool;
(3) meets the underwriting standards established by the
pool; and
(4) pays the premiums required for the coverage.
Plan of operation
Sec. 5. (a) The governing bodies of the child-care facilities
that create the pool under Section 2 of this article shall, when the
agreement is executed, appoint nine persons to serve as a temporary
board to draft the plan of operation of the pool.
(b) Not later than the 30th day after the selection of the
last member of the temporary board, the temporary board shall meet
to prepare a plan of operation for the pool.
(c) The plan of operation may include any matters relating
to the organization and operation of the pool and the pool's
finances. The plan must include:
(1) the organizational structure of the pool, including the
method of selection of the board, the methods of procedure and
operation of the board, and a summary of the methods of management
and operation of the pool;
(2) a description of the contributions and other financial
arrangements necessary to cover the initial expenses of the pool
and estimates supported by statistical information of the amounts
of those contributions or other financial arrangements;
(3) underwriting standards and procedures for the
evaluation of risks;
(4) a requirement that each participant in the pool receive
continuing training in methods of controlling liability losses;
(5) procedures for the purchase of reinsurance;
(6) procedures and guidelines for establishing premium
rates and maximum limits of excess liability coverage available
from the pool;
(7) procedures and guidelines for negotiation and payment
of settlements, defense of claims, and payments of judgments;
(8) procedures for the processing and payment of claims;
(9) procedures for defraying any losses or expenses of the
pool;
(10) procedures and guidelines for the management and
investment of the fund;
(11) guidelines for nonrenewal of coverage;
(12) minimum limits of capital and surplus to be maintained
by the pool; and
(13) minimum standards for reserve requirements for the
pool.
(d) The temporary board shall complete and adopt the plan of
operation not later than the 90th day after the date of the
appointment of the last member of the temporary board.
(e) On completion of the plan of operation, the temporary
board shall submit the plan to the State Board of Insurance for
examination, suggested changes, and final approval. The State
Board of Insurance shall approve the plan of operation on the
determination that the pool has and will continue to have the
ability to pay valid claims made against it.
(f) The plan of operation may be amended by the board with
the approval of the State Board of Insurance. The amended plan must
maintain the requirement that each participant receive continuing
training in methods of controlling liability losses.
(g) The first board shall be selected as provided by the
plan of operation not later than the 15th day after the date on
which the plan of operation is approved by the State Board of
Insurance. The members of the first board shall take office not
later than the 30th day after the date of the adoption of the plan of
operation.
Board of trustees
Sec. 6. (a) The pool is governed by a nine-member board of
trustees. The trustees shall be selected as provided by the plan of
operation.
(b) Members of the board serve for two-year terms, with the
terms expiring as provided by the plan of operation.
(c) A vacancy on the board shall be filled as provided by the
plan of operation.
(d) Each member of the board shall execute a bond payable to
the pool and conditioned on the faithful performance of the
member's duties. The bond shall be executed in the amount required
by the plan of operation. The pool shall pay the cost of the bond.
(e) A member of the board is not entitled to compensation
for the member's service on the board.
(f) The board shall elect a presiding officer and other
officers from its membership as provided by the plan of operation.
Each officer shall serve a one-year term that expires as provided by
the plan of operation.
(g) The board shall meet at the call of the presiding
officer and at times established by its rules.
(h) A member of the board is not liable with respect to any
claim of judgment for which coverage is provided by the pool, or for
a claim or judgment against a child-care facility covered by the
pool against which a claim is made.
Board powers and duties
Sec. 7. (a) The board shall:
(1) approve contracts, other than liability insurance
contracts issued to child-care facilities by the pool;
(2) adopt policy forms and premium rate schedules for the
pool; and
(3) supervise the activities of the pool manager.
(b) The board may:
(1) adopt rules as necessary for the operation of the pool;
(2) delegate specific responsibilities to the pool manager;
and
(3) amend the plan of operation as necessary to assure the
orderly management and operation of the pool.
Pool manager
Sec. 8. (a) The board shall appoint a pool manager who serves
at the pleasure of the board. The pool manager shall direct the
general operation of the pool and shall perform other duties as
directed by the board.
(b) The pool manager shall execute a bond in the amount
determined by the board, payable to the pool, and conditioned on the
faithful performance of the manager's duties.
(c) The pool manager shall:
(1) receive and approve applications received from
child-care facilities for liability coverage from the pool;
(2) negotiate contracts for the pool;
(3) prepare premium rate schedules and proposed policy
forms for board approval; and
(4) collect and compile statistical information relating to
the liability coverage provided by the pool, including relevant
loss, expense, and premium information, and make the information
available to the board and the public.
(d) The pool manager may refuse to renew the coverage of any
child-care facility insured by the pool that fails to meet the
guidelines provided by the plan of operation.
Pool employees; contracts
Sec. 9. (a) The pool manager may employ or contract with
persons as necessary to assist the board and pool manager in
implementing the powers and duties of the pool.
(b) The board must approve compensation paid to pool
employees and contracts made with other persons.
(c) The board may require any employee or person with whom
it contracts under this section to execute a bond in an amount
determined by the board, payable to the board, and conditioned on
the faithful performance of the employee's or person's duties to the
pool.
(d) An employee or person with whom the pool has contracted
is not liable with respect to any claim or judgment against a
child-care facility covered by the pool against whom a claim is
made.
Office
Sec. 10. (a) The pool shall maintain its principal office in
Austin, Texas.
(b) The records and other information relating to the
operation of the pool shall be maintained in the pool's principal
office.
Pool powers and duties
Sec. 11. (a) The pool shall:
(1) issue primary and excess liability coverage to each
child-care facility entitled to coverage under this article;
(2) collect premiums for coverage issued or renewed by the
pool;
(3) process and pay valid claims;
(4) maintain detailed information regarding the pool; and
(5) establish a plan to conduct loss control training or
contract with an outside entity to establish continuing training
and inspections programs designed to reduce the potential liability
losses of participants in the pool.
(b) The pool may:
(1) contract;
(2) purchase reinsurance;
(3) cancel or refuse to renew coverage; and
(4) perform other acts necessary to implement this article,
the plan of operation, and the rules adopted by the board.
Texas child-care facility liability fund
Sec. 12. (a) The Texas child-care facility liability fund is
created on the creation of the pool.
(b) The fund is composed of:
(1) premiums paid by child-care facilities for coverage by
the pool;
(2) contributions and other money received by the pool to
cover the initial expenses of the fund;
(3) investments and money earned from investments of the
fund; and
(4) any other money received by the pool.
(c) The pool manager shall manage the fund under the general
supervision of the board.
(d) Administrative expenses of the pool may be paid from the
fund. Payments for administrative expenses in any fiscal year may
not exceed 10 percent of the total amount of money in the fund
during that fiscal year.
(e) The fund may not be used to pay punitive damages, fines
or penalties for violation of a civil or criminal statute, or fines
or penalties imposed for the violation of a rule of a state agency
or an ordinance or order of a local government.
(f) A claim or judgment may not be paid from the fund under
excess liability insurance coverage unless and until all benefits
payable under any other underlying liability insurance policy
covering that claim or judgment are exhausted.
(g) The board may select one or more banks to serve as
depository for the fund. Before the deposit of fund money in a
depository bank in an amount that exceeds the maximum secured by the
Federal Deposit Insurance Corporation, the bank must provide
security in an amount sufficient to secure from loss the fund money
that exceeds the amount secured by the Federal Deposit Insurance
Corporation.
(h) The board shall require an annual audit of the capital,
surplus, and reserves of the pool to be conducted by an actuary who
is a member of the American Academy of Actuaries or a similar
national organization of actuaries recognized by the board.
Investments
Sec. 13. (a) The pool manager shall manage and invest the fund
in the manner provided by the plan of operation.
(b) Money earned by the investment of the fund shall be
deposited in the fund or reinvested for the fund.
Initial contributions
Sec. 14. From information provided in the plan of operation,
the board shall determine the amount of contributions necessary to
meet the initial expenses of the pool.
Premium rates; limits of coverage
Sec. 15. (a) The board shall determine the premium rates
charged and the maximum limits of coverages provided to assure that
the pool is actuarially sound.
(b) The pool manager shall prepare statistical information
and other necessary information, proposed rate schedules, and
maximum limits of coverage for consideration by the board.
(c) The board shall reexamine periodically the rate
schedules and the maximum limits of coverage.
Coverage period
Sec. 16. (a) On accepting coverage from the pool, a
child-care facility shall maintain the coverage for not less than
24 consecutive months after the date that the coverage is issued.
(b) A child-care facility that voluntarily discontinues
coverage in the pool is ineligible to obtain coverage from the pool
for at least 12 months after the date on which the coverage was
discontinued.
Coverage
Sec. 17. Liability insurance coverage provided by the pool
may be provided on a claims-made basis or on an occurrence basis.
Nonrenewal
Sec. 18. (a) Except as provided by Subsection (b) of this
section, the pool may refuse to renew the coverage of any child-care
facility that fails to comply with the pool's underwriting
standards.
(b) If a participant in the pool maintains underwriting
standards established by the plan of operation, the pool may not
refuse to renew the coverage of a child-care facility for the first
24 months after the date on which the facility was first insured by
the pool.
Shortage of available money
Sec. 19. (a) If money in the fund will be exhausted by payment
of all final and settled claims and final judgments during a fiscal
year, the amount paid by the pool to each person who has a claim or
judgment shall be prorated, with each person receiving an amount
equal to the percentage that the amount owed to that person bears to
the total amount owed, outstanding, and payable by the pool.
(b) The balance of the amount due and unpaid to a person who
receives prorated payment under Subsection (a) of this section
shall be paid in the subsequent fiscal year.
Jurisdiction of insurance board; application of code
Sec. 20. (a) Except as provided by Subsection (c) of this
section, the pool is not engaged in the business of insurance under
this code and other state laws, and this code and other state
insurance laws do not apply to the pool.
(b) In addition to this article, the pool is subject to:
(1) the requirements under this code and State Board of
Insurance rules relating to the reporting of liability claims
information;
(2) the requirements of Subchapter B, Chapter 5 of this code
relating to the making, filing, and approval of rates; and
(3) continuing supervision by the State Board of Insurance
relating to the pool's solvency.
(c) The State Board of Insurance may set minimum
requirements to assure the capability of the pool to satisfy its
obligations.
Added by Acts 1991, 72nd Leg., ch. 684, Sec. 1, eff. Aug. 26, 1991.
Article: 21.49-11 21.49-13 21.49-14 21.49-15 21.49-15A 21.49-16 21.49-17 21.49-18 21.49-20 21.49A. FAIR PLAN (FAIR ACCESS TO INSURANCE
REQUIREMENTS) ACT.
Article repealed effective April 1, 2007
Authority; Purpose
Sec. 1. (a) If the commissioner determines, after a public
hearing, that in all or any part of the state residential property
insurance is not reasonably available in the voluntary market to a
substantial number of insurable risks or that at least 25 percent of
the applicants to the residential property market assistance
program who are qualified under the plan of operation have not been
placed with an insurer in the previous six-month period, the
commissioner may establish a FAIR (Fair Access to Insurance
Requirements) Plan to deliver residential property insurance to
citizens of this state in underserved areas, which shall be
determined and designated by the commissioner by rule.
(a-1) Expired.
(b) Except as provided by this subsection, each insurer, as
defined herein, as a condition of its authority to transact
residential property insurance in this state, shall participate in
the FAIR Plan Association in accordance with this Act. The Texas
Windstorm Insurance Association established by Article 21.49 of
this code may not participate in the FAIR Plan Association for any
purpose.
(c) The FAIR Plan may not provide windstorm and hail
insurance coverage for a risk eligible for that coverage under
Article 21.49 of this code.
Definitions
Sec. 2. (1) "FAIR Plan Association" or "association" means a
nonprofit association established pursuant to this Act to develop
and administer a program to provide residential property insurance
in designated underserved areas in this state.
(2) "Insurer" means any licensed insurer writing property
and casualty insurance in this state, including:
(A) a Lloyd's plan company; and
(B) a reciprocal or interinsurance exchange.
(3) "Residential property insurance" means the coverage
against loss to real or tangible personal property at a fixed
location provided in a homeowners policy, residential fire and
allied lines policy, or farm and ranch owners policy.
(4) "Inspection bureau" means the organization or
organizations designated by the FAIR Plan Association with the
approval of the commissioner to make inspections to determine the
condition of the properties for which residential property
insurance is sought and to perform such other duties as may be
authorized by the FAIR Plan Association or the commissioner. The
manner and scope of the inspection and evaluation report for
residential property shall be prescribed by the association
pursuant to the plan of operation.
(5) "Net direct premiums" means gross direct written
premiums less return premiums upon canceled contracts
(irrespective of reinsurance assumed or ceded) written on
residential property pursuant to this Act.
(6) "Underserved area(s)" means area(s) designated as
underserved by the commissioner by rule. In determining which
areas will be designated as underserved, the commissioner shall
consider the factors specified in Section 1, Article 5.35-3, of
this code.
Governing Committee; Plan of Operation
Sec. 3. (a) The FAIR Plan shall be administered by the
governing committee of the association pursuant to a plan of
operation. Subject to the approval of the commissioner, the
governing committee shall develop the plan of operation and propose
amendments thereto. The plan of operation and any amendments
thereto shall be adopted by the commissioner by rule. The governing
committee may on its own initiative or at the request of the
commissioner amend the plan of operation.
(b) The governing committee shall be composed of 11 members
appointed by the commissioner as follows:
(1) five members who represent the interests of insurers;
(2) four public members who reside in this state; and
(3) two members who are licensed general property and
casualty agents.
(c) The commissioner or the commissioner's designated
representative from within the Texas Department of Insurance shall
serve as an ex officio member.
(d) To be eligible to serve on the governing committee as a
representative of insurers, a person must be a full-time employee
of an authorized insurer that is a member of the association. A
member of the governing committee may be removed by the
commissioner without cause and replaced in accordance with
Subsection (b) of this section.
(e) The plan of operation shall provide:
(1) for establishment of a FAIR Plan Association for the
issuing of residential property insurance pursuant to this Act and
the distribution of the losses and the expenses in the writing of
such insurance in this state;
(2) that all insurers licensed to write property insurance
and writing residential property insurance shall participate in the
assessments of the association, in the proportion that the net
direct premiums, of each participating insurer, written in this
state during the preceding calendar year, bear to the aggregate net
direct premium written in this state by all participating insurers;
such information shall be determined in accordance with the
residential property statistical plan adopted by the commissioner;
(3) that a participating insurer is entitled to receive
credit for similar insurance voluntarily written in a designated
underserved area and its participation in the assessments of the
association shall be reduced in accordance with the provisions of
the plan of operation;
(4) for the immediate binding of eligible risks; for the
use of premium installment payment plans, adequate marketing, and
service facilities; and for the establishment of reasonable
service standards;
(5) procedures for efficient, economical, fair, and
nondiscriminatory administration of the FAIR Plan Association;
(6) procedures for determining the net level of
participation required for each insurer in the FAIR Plan
Association;
(7) for the use of deductibles and other underwriting
devices and for assessment of all members in amounts sufficient to
operate the association; and establish maximum limits of liability
to be placed through the program; and commissions to be paid to the
licensed agents submitting applications;
(8) that the association issue policies in its own name;
(9) reasonable underwriting standards for determining
insurability of the risk;
(10) procedures for the assumption and ceding of
reinsurance by the association; and
(11) any other procedures or operational matters deemed
necessary by the governing committee or the commissioner.
(f) Notwithstanding Chapter 551, Government Code, or any
other law, members of the governing committee may meet by telephone
conference call, video conference, or other similar
telecommunication method. The governing committee may use
telephone conference call, video conference, or other similar
telecommunication method for purposes of establishing a quorum or
voting or for any other meeting purpose in accordance with this
subsection and Subsection (g) of this section. This subsection
applies without regard to the subject matter discussed or
considered by the members of the governing committee at the
meeting.
(g) A meeting held by telephone conference call, video
conference, or other similar telecommunication method:
(1) is subject to the notice requirements applicable to
other meetings of the governing committee;
(2) may not be held unless notice of the meeting specifies
the location of the meeting at which at least one member of the
governing committee is physically present;
(3) must be audible to the public at the location specified
in the notice under Subdivision (2) of this subsection; and
(4) must provide two-way audio communication between all
members of the governing committee attending the meeting during the
entire meeting, and if the two-way audio communication link with
members attending the meeting is disrupted so that a quorum of the
governing committee is no longer participating in the meeting, the
meeting may not continue until the two-way audio communication link
is reestablished.
FAIR Plan Association
Sec. 4. Pursuant to procedures and requirements set forth in
the plan of operation, the FAIR Plan Association (association)
shall develop and administer a program for participation by all
insurers licensed to write property insurance in this state and
writing residential property insurance in this state. The
association shall make residential property insurance available to
applicants in underserved areas whose property is insurable in
accordance with reasonable underwriting standards but who, after
diligent efforts, are unable to procure such insurance through the
voluntary market, as evidenced by two declinations from insurers
licensed to write and actually writing residential property
insurance in the state.
Powers of the Association; Centralized Operations Authorized
Sec. 5. (a) The association is authorized, for FAIR Plan
purposes only, to issue policies of insurance and endorsements
thereto in its own name or a trade name duly adopted for that
purpose, and to act on behalf of all participating insurers in
connection with said policies and otherwise in any manner necessary
to accomplish the purposes of this Act, including but not limited to
issuance of policies, collection of premiums, issuance of
cancellations, and payment of commissions, losses, judgments, and
expenses.
(b) The participating insurers shall be liable to the
association as provided in this Act and the plan of operation for
the expenses and liabilities so incurred by the association, and
the association shall make assessments against the participating
insurers as required to meet such expenses and liabilities. In
connection with any policy issued by the association:
(1) service of any notice, proof of loss, legal process, or
other communication with respect to the policy shall be made upon
the association; and
(2) any action by the insured constituting a claim under the
policy shall be brought only against the association, and the
association shall be the proper party for all purposes in any action
brought under or in connection with any such policy. The foregoing
requirements shall be set forth in any policy issued by the
association and the form and content of any such policy shall be
subject to the approval of the commissioner.
(c) The association is authorized to assume and cede
reinsurance in conformity with the plan of operation.
(d) Each insurer must participate in the assessments of the
association in the proportion that its net direct premiums written
bear to the aggregate net direct premiums written by all insurers.
Coverage for Windstorm and Hail Insurance; Coverage for Certain
Property Located Over Water
Sec. 5A. (a) A policy issued by the association may include
coverage against loss or damage by windstorm or hail for:
(1) a building or other structure that is built wholly or
partially over water; and
(2) the corporeal movable property contained in a building
or structure described by Subdivision (1) of this subsection.
(b) The association may impose appropriate limits of
coverage and deductibles for coverage described by Subsection (a)
of this section.
(c) The governing committee of the association shall submit
any proposed changes to the plan of operation necessary to
implement Subsections (a) and (b) of this section to the
commissioner for the approval of the commissioner in the manner
provided by Section 3(a) of this article.
(d) The commissioner shall adopt rules as necessary to
implement this section, including any rules necessary to implement
changes in the plan of operation proposed under Subsections (a) and
(b) of this section.
Property Inspection; FAIR Plan Procedure
Sec. 6. (a) Any person having an insurable interest in real or
tangible personal property at a fixed location in an underserved
area who, after diligent effort has been unable to obtain
residential property insurance, as evidenced by two current
declinations from insurers licensed to write property insurance and
actually writing residential property insurance in the state, is
entitled upon application to the association to an inspection and
evaluation of the property by representatives of the inspection
bureau.
(b) Applications may be made on behalf of the applicant by a
licensed general lines property and casualty agent and shall be
submitted on forms prescribed by the association.
(c) Promptly after the request for inspection is received,
an inspection must be made and an inspection report filed with the
association and made available to the applicant upon request.
(d) If the inspection bureau finds that the residential
property meets the reasonable underwriting standards established
in the plan of operation, the applicant shall be so informed in
writing and a policy or binder shall be issued by the association.
If the residential property does not meet the criteria, the
applicant shall be informed, in writing, of the reasons for the
failure of the residential property to meet the criteria.
(e) If, at any time, the applicant makes improvements in the
residential property or its condition which the applicant believes
are sufficient to make the residential property meet the criteria,
a representative of the inspection bureau shall reinspect the
residential property upon request. In any case, the applicant for
residential property insurance shall be eligible for one
reinspection any time within 60 days after the initial FAIR Plan
inspection. If upon reinspection the residential property meets
the reasonable underwriting standards established in the plan of
operation, the applicant shall be so informed in writing and a
policy or binder shall be issued by the association.
Approval of Rates
Sec. 7. The association shall file with the commissioner for
approval the proposed rates and supplemental rate information to be
used in connection with the issuance of policies or endorsements.
Rates shall be set in an amount sufficient to carry all claims to
maturity and to meet the expenses incurred in the writing and
servicing of the business. Within 60 days of the filing of the
proposed rates, the commissioner shall enter an order either
approving or disapproving, in whole or in part, the proposed rates.
The commissioner may, upon notice to the association, extend the
period for entering an order under this section an additional 30
days. No such policies or endorsements shall be issued until such
time as the commissioner approves the rates to be applied to the
policy or endorsement. An order disapproving a rate shall state the
grounds for the disapproval and the findings in support thereof.
Appeals; Judicial Review
Sec. 8. (a) Any applicant or affected insurer has the right of
appeal to the association. A decision of the association may be
appealed to the commissioner within 30 days after such decision.
(b) All orders or decisions of the commissioner made
pursuant to this Act are subject to judicial review in accordance
with Subchapter D, Chapter 36, of this code.
Immunity from Liability
Sec. 9. There is no liability on the part of, and no cause of
action against insurers, the inspection bureau, the association,
the governing committee, their agents or employees, or the
commissioner or the commissioner's authorized representatives,
with respect to any inspections required to be undertaken by this
Act or for any acts or omissions in connection therewith, or for any
statements made in any report and communication concerning the
insurability of the property, or in the findings required by the
provisions of this Act, or at the hearings conducted in connection
with such inspections.
Insolvency
Sec. 10. In the event any participating insurer fails, by
reason of insolvency, to pay any assessment, the association shall
cause the reimbursement ratios to be immediately recalculated,
excluding therefrom the amount of the insolvent insurer's
assessment determined by the commissioner to be uncollectible, so
that such uncollectible amount is, in effect, assumed and
redistributed among the remaining participating insurers.
Assessments and Premium Surcharges
Sec. 11. Should a deficit occur in the association, the
association, at the direction of the commissioner, shall either
request the issuance of public securities as authorized by Article
21.49A-1 of this code or assess participating insurers in
accordance with this section. As reimbursement for assessments
paid under this section or service fees paid under Article 21.49A-1
of this code, each insurer may charge a premium surcharge on every
property insurance policy issued by it insuring property in this
state, the effective date of which policy is within the three-year
period commencing 90 days after the date of assessment by the
association under this section or commencing 90 days after payment
of a service fee under Article 21.49A-1 of this code. 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 or service fee
payment to the amount of its direct earned premiums as reported in
its 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 at least equal to the amount of
the assessment or service fee payment of such insurer. The amount
of any assessment paid and surcharged under this section may be
carried by the member insurer as an admitted asset of the insurer
for all purposes, including exhibition in annual statements under
Section 862.001 of this code, until collected. The commissioner
shall adopt rules and procedures as necessary to implement this
section.
Sanctions
Sec. 12. If the association, inspection bureau, or
participating insurer is found to be in violation of or in failure
to comply with this Act, each entity shall be subject to the
sanctions authorized in Chapter 82 of this code and administrative
penalties authorized under Chapter 84 of this code. The
commissioner may also utilize any other disciplinary procedures
authorized by this code, including the cease and desist procedures
authorized by Chapter 83 of this code.
Annual Report
Sec. 13. The association shall compile a calendar year annual
operating report and submit such annual report to the commissioner
on or before March 31 of the following calendar year. This annual
report shall be a matter of public record.
Powers of the Commissioner
Sec. 14. (a) In addition to any powers conferred upon the
commissioner by this or any other law, the commissioner is charged
with the authority to supervise the association and the inspection
bureau. In addition, the commissioner has the power:
(1) to examine the operation of the association and the
inspection bureau through free access to all the books, records,
files, papers, and documents relating to their operation and may
summon, qualify, and examine as witnesses all persons having
knowledge of such operations, including the governing committee,
officers, or employees thereof;
(2) to do all things necessary to enable the State of Texas
and the association to fully participate in any federal program of
reinsurance which may be enacted for purposes similar to the
purposes of this Act;
(3) to require such reports from the association concerning
risks insured by the association pursuant to this Act as may be
deemed necessary; and
(4) to adopt policy forms, endorsements, rates, and rating
and rule manuals for use by the association.
Retention of Profits
Sec. 15. The association shall retain any profits of the
association to be used for the purposes of the association. The
profits of the association shall be used to mitigate losses,
including the purchase of reinsurance and the offset of future
assessments, and may not be distributed to insurers.
Assets of Association
Sec. 16. On dissolution of the association, all assets of the
association shall be deposited in the general revenue fund.
Added by Acts 1995, 74th Leg., ch. 415, Sec. 6, eff. Aug 21.49A-1 21.49B 21.49C 21.50 21.52B
Last modified: August 11, 2007
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