| (a) An insurer and the association must submit to the
department the written assumption reinsurance program, including the
assumption reinsurance agreement and all necessary documents, including
notices and policy forms evidencing generally comparable coverage
and premiums, to allow the department to determine that policyholders
and the policyholders' agents have the necessary protections.
(b) The assumption reinsurance program and assumption
reinsurance agreement must comply with Insurance Code Chapter 2210,
Subchapter O. The assumption reinsurance agreement must include:
(1) the opportunity for the policyholder to opt out
of the assumption reinsurance agreement not more than 60 days after
the policyholder receives notice of the reinsurance agreement;
(2) a transfer of the earned premium on a reinsured
policy to a trust account to be held until the expiration of the policyholder
opt-out period when the earned premium for the final reinsured policy
will be transferred to the insurer;
(3) a period of not less than 60 days for the agent
of record to accept an appointment or other written agreement with
the insurer; and
(4) the effective date of the assumption.
(c) The insurer and the association must not proceed
with the assumption reinsurance program, and it is not effective unless
the Commissioner approves the assumption reinsurance program in writing.
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