| (B) advise the agent or applicant that the applicant
does not meet the underwriting standards of the association, in which
case the association must indicate the reasons the applicant does
not meet the underwriting standards.
(c) Cancellation, nonrenewal, and notice.
(1) Cancellation by the association. The association
may not cancel an insurance policy except for:
(A) nonpayment of premium;
(B) nonpayment of the applicable stabilization reserve
fund charge;
(C) nonpayment of assessment;
(D) evidence of fraud or material misrepresentation;
(E) cause that would have been grounds for nonacceptance
of the risk under this subchapter had the cause been known to the
association at the time the policy was issued;
(F) any cause arising after the policy is issued that
would have been grounds for nonacceptance of the risk under this subchapter
had the cause existed at the time of acceptance; or
(G) noncompliance with reasonable loss control or risk
management recommendations under subsection (b)(4)(A)(vii) of this
section. On cancellation of an insurance policy by the association,
the association must refund to the insured the unearned portion of
any paid premium and, if canceled within the 90th day of coverage,
the unearned portion of the paid fund charges under Insurance Code
Chapter 2203, Subchapter G on a pro rata basis, provided that all
assessments and fund charges earned under Insurance Code Chapter 2203,
Subchapter G have been fully paid; otherwise, only that portion of
unearned premium over any unpaid assessment and fund charges under
Insurance Code Chapter 2203, Subchapter G will be refunded. Policyholder
assessments and fund charges under Insurance Code Chapter 2203, Subchapter
G are fully earned on payment; therefore, except as provided in Insurance
Code Chapter 2203 or §5.2003(c)(2) of this title (relating to
Members and Policyholders Participation in the Texas Medical Liability
Insurance Underwriting Association), no portion is refundable.
(2) Cancellation by the insured. An insurance policy
may be canceled at any time:
(A) by the insured, on written request for cancellation
of the policy; or
(B) by an insurance premium finance company in accordance
with Insurance Code Chapter 651.
(3) Refund of unearned portion of paid premium. The
association must refund the unearned portion of any paid premium and,
if canceled within the 90th day of coverage, the unearned portion
of the paid fund charges under Insurance Code Chapter 2203, Subchapter
G according to the approved short-rate table, provided all assessments
and fund charges under Insurance Code Chapter 2203, Subchapter G earned
have been fully paid; otherwise, only that portion of the unearned
premium over any unpaid assessment and fund charges under Insurance
Code Chapter 2203, Subchapter G will be refunded. Policyholder assessments
and fund charges under Insurance Code Chapter 2203, Subchapter G are
fully earned on payment; therefore, except as provided in Insurance
Code Chapter 2203 or §5.2003(c)(2) of this title, no portion
is refundable.
(4) Exhausted policy limits. If there is an outstanding
claim or claims under any insurance policy on which a reserve or reserves
have been established, which in the aggregate or when combined with
losses previously paid under the policy equal or exceed the aggregate
limits of coverage under the policy, the association must notify the
insured. At the insured's option, the policy may be canceled. If the
policy is canceled, the premium must be considered fully earned and
the insured may apply for a new policy to be effective concurrently
with the termination date of the canceled policy.
(5) Notice of cancellation, nonrenewal, or premium
increase.
(A) The association may cancel a medical liability
insurance policy and general liability insurance policy, or decline
to renew a policy for any reason listed in paragraph (1) of this subsection
at any time within the first 90 days from the effective date of the
policy by sending 90 days written notice to the insured.
(B) The association may cancel a medical liability
insurance policy and general liability insurance policy or decline
to renew a policy for nonpayment of premium, assessments, or fund
charges under Insurance Code Chapter 2203, Subchapter G, or for loss
of license, charter, certification, or accreditation at any time during
the policy period by sending 10 days' written notice to the insured.
(C) Notice of cancellation or nonrenewal under subparagraphs
(A) and (B) of this paragraph must contain a statement of the reason
for the cancellation or nonrenewal and a statement that the insured
has the right to appeal under Insurance Code Chapter 2203, Subchapter
I.
(D) The association must give at least 90 days' written
notice to an insured before increasing the premium by reason of a
rate increase on the insured's medical liability insurance policy.
The notice must state the amount of the increase.
(6) General liability insurance. A general liability
insurance policy issued by the association under Insurance Code §2203.151(b)
automatically terminates on the same effective date and time as the
termination of the medical liability insurance policy.
(d) Suspension of policy. The association must, on
written request from a policyholder subject to the Servicemembers
Civil Relief Act of 2003 (50 United States Code App. §§501,
et seq.), suspend the policy issued by the association, in accordance
with the Servicemembers Civil Relief Act of 2003.
(e) Removal of risks. Any member, or self-insurance
trust established under Insurance Code Chapter 2212, at any time,
on written consent from the insured filed with the association, may
write the risk as regular business, in which event the association
must cancel its policy pro rata as of a date and time specified by
the manager of the association. The association will require written
confirmation that the member or self-insurance trust is taking the
risk out of the association before allowing pro rata cancellation.
(f) Payment of claims.
(1) Report of loss. All losses must be reported to
the association in the manner prescribed by the board of directors.
(2) Adjustment of loss. All losses must be adjusted
in the manner designated by the board of directors subject to the
provisions of this plan of operation and the insurance laws of Texas.
|
| Source Note: The provisions of this §5.2004 adopted to be effective January 1, 1976; amended to be effective October 31, 1984, 9 TexReg 5426; amended to be effective January 19, 1988, 13 TexReg 124; amended to be effective March 18, 1993, 18 TexReg 1411; amended to be effective April 7, 1997, 22 TexReg 3039; amended to be effective January 23, 2005, 30 TexReg 76; amended to be effective August 27, 2017, 42 TexReg 4139; amended to be effective September 16, 2020, 45 TexReg 6363 |
