Section 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. Attached Graphic
(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).28 Tex. Admin. Code § 5.4162
The provisions of this §5.4162 adopted to be effective February 16, 2011, 36 TexReg 784; Amended by Texas Register, Volume 46, Number 01, January 1, 2021, TexReg 0162, eff. 1/6/2021