Tex.
Ins. Code Section 2210.0715
Payment from Reserves and Trust Fund
(a)
The association shall pay losses resulting from an occurrence or series of occurrences in a catastrophe year in excess of premium and other revenue of the association for that catastrophe year from reserves of the association available before or accrued during that catastrophe year and amounts in the catastrophe reserve trust fund available before or accrued during that catastrophe year.(b)
Proceeds of public securities issued or assessments made before or as a result of any occurrence or series of occurrences in a catastrophe year that results in insured losses may not be included in reserves available for a subsequent catastrophe year for purposes of this section.(b)
Public securities described by Subsection (a) that are issued before an occurrence or series of occurrences that results in incurred losses:(1)
may be issued on the request of the board of directors with the approval of the commissioner; and(2)
may not, in the aggregate, exceed $500 million at any one time, regardless of the calendar year or years in which the outstanding public securities were issued.(b-1)
Public securities described by Subsection (a):(1)
shall be issued as necessary in a principal amount not to exceed $500 million per catastrophe year, in the aggregate, for securities issued during that catastrophe year before the occurrence or series of occurrences that results in incurred losses in that year and securities issued on or after the date of that occurrence or series of occurrences, and regardless of whether for a single occurrence or a series of occurrences; and(2)
subject to the maximum described by Subdivision (1), may be issued, in one or more issuances or tranches, during the calendar year in which the occurrence or series of occurrences occurs or, if the public securities cannot reasonably be issued in that year, during the following calendar year.(c)
If public securities are issued as described by this section, the public securities shall be repaid in the manner prescribed by Subchapter M.(d)
The association may borrow from, or enter into other financing arrangements with, any market source, under which the market source makes interest-bearing loans or other financial instruments to the association to enable the association to pay losses under this section or to obtain public securities under this section. For purposes of this subsection, financial instruments includes commercial paper.(e)
The proceeds of any outstanding public securities described by Subsection (a) that are issued before an occurrence or series of occurrences, together with the proceeds of any outstanding Class 1 public securities issued on or before June 1, 2015, shall be depleted before the proceeds of any securities issued after an occurrence or series of occurrences may be used. This subsection does not prohibit the association from issuing securities after an occurrence or series of occurrences before the proceeds of outstanding public securities issued during a previous catastrophe year have been depleted.(f)
If, under Subsection (e), the proceeds of any outstanding public securities issued during a previous catastrophe year, together with the proceeds of any outstanding Class 1 public securities issued on or before June 1, 2015, must be depleted, those proceeds shall count against the limit on public securities described by this section in the catastrophe year in which the proceeds must be depleted.(b)
The association, with the approval of the commissioner, shall notify each member of the amount of the member’s assessment under this section. The proportion of the losses allocable to each insurer under this section shall be determined in the manner used to determine each insurer’s participation in the association for the year under Section 2210.052 (Member Participation in Association).(c)
A member of the association may not recoup an assessment paid under this section through a premium surcharge or tax credit.(b)
Public securities described by Subsection (a):(1)
shall be issued as necessary in a principal amount not to exceed $250 million per catastrophe year, in the aggregate, whether for a single occurrence or a series of occurrences; and(2)
subject to the maximum described by Subdivision (1), may be issued, in one or more issuances or tranches, during the calendar year in which the occurrence or series of occurrences occurs or, if the public securities cannot reasonably be issued in that year, during the following calendar year.(c)
If the losses are paid with public securities described by this section, the public securities shall be paid in the manner prescribed by Subchapter M.(b)
The association, with the approval of the commissioner, shall notify each member of the amount of the member’s assessment under this section. The proportion of the losses allocable to each insurer under this section shall be determined in the manner used to determine each insurer’s participation in the association for the year under Section 2210.052 (Member Participation in Association).(c)
A member of the association may not recoup an assessment paid under this section through a premium surcharge or tax credit.(b)
Public securities described by Subsection (a):(1)
shall be issued as necessary in a principal amount not to exceed $250 million per catastrophe year, in the aggregate, whether for a single occurrence or a series of occurrences; and(2)
subject to the maximum described by Subdivision (1), may be issued, in one or more issuances or tranches, during the calendar year in which the occurrence or series of occurrences occurs or, if the public securities cannot reasonably be issued in that year, during the following calendar year.(c)
If the losses are paid with public securities described by this section, the public securities shall be paid in the manner prescribed by Subchapter M.(b)
The association, with the approval of the commissioner, shall notify each member of the amount of the member’s assessment under this section. The proportion of the losses allocable to each insurer under this section shall be determined in the manner used to determine each insurer’s participation in the association for the year under Section 2210.052 (Member Participation in Association).(c)
A member of the association may not recoup an assessment paid under this section through a premium surcharge or tax credit.
Source:
Section 2210.0715 — Payment from Reserves and Trust Fund, https://statutes.capitol.texas.gov/Docs/IN/htm/IN.2210.htm#2210.0715 (accessed Apr. 29, 2024).
