(a) The association's board of directors may request
that TPFA issue class 1 public securities before a catastrophic event,
if the association's board of directors determines that class 1 public
security proceeds may become necessary and the commissioner approves
the request.
(b) The association must submit its board of directors'
written request under subsection (a) of this section to the commissioner.
The request must include the following information:
(1) the reason why the requested class 1 public securities
may become necessary;
(2) the amount of premium and other revenue that the
association expects will be available to pay loss claims in the current
calendar year;
(3) reinsurance coverage that the association expects
will be available to pay claims in the current calendar year;
(4) the amount in the CRTF that the association expects
will be available to pay loss claims in the current calendar year;
(5) the principal amount of class 1 public securities
that are authorized and available to be issued before a catastrophic
event, and that are requested;
(6) the estimated amount of debt service for the public
securities, including any contractual coverage amount and public security
administrative expenses;
(7) the structure and terms of the public securities,
including any terms that may change as a result of a catastrophic
event or the use of any proceeds of class 1 public securities issued
before a catastrophic event;
(8) market conditions and requirements necessary to
sell marketable public securities;
(9) a cost-benefit analysis as described in §5.4135
of this division (relating to Marketable Public Securities; the Amount
of Class 1 Public Securities that Cannot be Issued; Market Conditions
and Requirements; and Cost-Benefit Analysis);
(10) a three-year pro forma financial statement consisting
of a balance sheet, income statement, and a statement of cash flow,
reflecting the financial impact of issuing class 1 public securities
before a catastrophic event that assumes the proceeds will be used
in the event of a catastrophe; and
(11) any other relevant information requested by the
commissioner.
(c) The association may make one or more requests under
this section.
(d) The association may request class 1 public securities
up to an aggregate principal amount not to exceed $500 million outstanding
at any one time, regardless of the calendar year or years in which
the securities are issued, except that class 1 public securities that
are issued before a catastrophic event, including the proceeds of
any outstanding class 1 public securities issued on or before June
1, 2015, and that have been depleted to pay for the association program
will not continue to count against the combined $500 million aggregate
limit described in this subsection. This section does not authorize
the association to request class 1 public securities in an amount
in excess of the catastrophe year limit prescribed in §5.4125(c)
of this division (relating to Issuance of Public Securities after
a Catastrophic Event).
(e) For the purposes of determining the authorized
amount of class 1 public securities, public security proceeds used
to pay for public security issuance costs, establish a public security
reserve fund, capitalize interest, or provide for contractual coverage
amounts, are considered depleted in the same catastrophe year as,
and in proportion to, the public security proceeds used to pay for
losses or operating expenses, or used to pay principal on the public
securities.
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