The following words and terms when used in this division will
have the following meanings unless the context clearly indicates otherwise:
(1) Association--Texas Windstorm Insurance Association.
(2) Association program--The funding of any or all
of the purposes authorized to be funded with the public securities
under Insurance Code Chapter 2210, Subchapter M.
(3) Association surcharge--Premium surcharges on policyholders
of association policies under Insurance Code §§2210.612,
2210.613, or 2210.6131.
(4) Association surcharge percentage--The percentage
amount determined by the Commissioner under §5.4126(c) or (d)
of this title (relating to Determination of the Association Surcharge
Percentage).
(5) Authorized representative of the department--Any
officer or employee of the department empowered to execute instructions
and take other necessary actions on behalf of the department as designated
in writing by the Commissioner.
(6) Authorized representative of the trust company--Any
officer or employee of the comptroller or the trust company who is
designated in writing by the comptroller as an authorized representative.
(7) Budgeted operating expenses--All operating expenses
as budgeted for and approved by the association's board of directors,
excluding expenses related to catastrophic losses.
(8) Catastrophe area--A municipality, a part of a municipality,
a county, or a part of a county designated by the Commissioner under
Insurance Code §2210.005.
(9) CRTF--Catastrophe Reserve Trust Fund. A statutorily
created trust fund established with the trust company under Insurance
Code Chapter 2210, Subchapter J.
(10) Catastrophic event--An occurrence or a series
of occurrences in a catastrophe area during a calendar year resulting
in insured losses and operating expenses of the association in excess
of premium and other revenue of the association.
(11) Catastrophic losses--Losses resulting from a catastrophic
event.
(12) Class 1 payment obligation--The contractual amount
of net premium and other revenue and association surcharges that the
association must deposit in the class 1 public security trust fund
at specified periods for the payment of class 1 public security obligations,
public security administrative expenses, and contractual coverage
amount as required by class 1 public security agreements.
(13) Class 2 payment obligation--The contractual amount
of net premium and other revenue and either association surcharges
or contingent surcharges that the association must deposit in the
class 2 public security trust fund, or in the case of contingent surcharges,
the premium surcharge trust fund, at specified periods for the payment
of class 2 public security obligations, public security administrative
expenses, and contractual coverage amount as required by class 2 public
security agreements.
(14) Class 3 payment obligation--The contractual amount
of net premium and other revenue and either association surcharges
or contingent surcharges that the association must deposit in the
class 3 public security trust fund, or in the case of contingent surcharges,
the premium surcharge trust fund, at specified periods for the payment
of class 3 public security obligations, public security administrative
expenses, and contractual coverage amount as required by class 3 public
security agreements.
(15) Class 1 public securities--A debt instrument or
other public security that TPFA may issue as authorized under Insurance
Code §2210.072 and Insurance Code Chapter 2210, Subchapter M.
(16) Class 2 public securities--A debt instrument or
other public security that TPFA may issue as authorized under Insurance
Code §2210.073 and Insurance Code Chapter 2210, Subchapter M.
(17) Class 3 public securities--A debt instrument or
other public security that TPFA may issue as authorized under Insurance
Code §2210.0741 and Insurance Code Chapter 2210, Subchapter M.
(18) Commercial paper notes--A debt instrument that
the association may issue as a financing arrangement or that TPFA
may issue as any class of public security.
(19) Commissioner--The Commissioner of Insurance.
(20) Comptroller--The Comptroller of the State of Texas.
(21) Contingent surcharge--Premium surcharges on policyholders
of policies that cover insured property that is located in a catastrophe
area and that may be necessary as provided under Insurance Code §2210.6132.
(22) Contractual coverage amount--Minimum amount over
scheduled debt service that the association is required to deposit
in the applicable public security trust fund or premium surcharge
trust fund, as security for the payment of debt service on the public
securities, administrative expenses on public securities, or other
payments the association must pay in connection with public securities.
(23) Credit agreement--An agreement described by Government
Code Chapter 1371 that TPFA may enter into as authorized under Insurance
Code Chapter 2210, Subchapter M.
(24) Department--The Texas Department of Insurance.
(25) Earned premium--That portion of gross premium
that the association has earned because of the portion of time during
which the insurance policy has been in effect.
(26) Financing arrangement--An agreement between the
association and any market source under which the market source makes
interest-bearing loans or provides other financial instruments to
the association to enable the association to pay losses or obtain
public securities under Insurance Code §2210.072.
(27) Gross premium--The amount of premium the association
receives, less premium returned to policyholders for canceled or reduced
policies.
(28) Insured property--Real property, or tangible or
intangible personal property including automobiles, covered under
an insurance policy issued by an insurer. Insured property includes
motorcycles, recreational vehicles, and all other vehicles eligible
for coverage under a private passenger automobile or commercial automobile
policy.
(29) Investment income--Income from the investment
of funds.
(30) Letter of instruction--The Commissioner's or authorized
department representative's signed written authorization and direction
to an authorized representative of the trust company.
(31) Losses--Amounts paid or expected to be paid on
association insurance policy claims, including adjustment expenses,
litigation expenses, other claims expenses, and other amounts that
are incurred in resolving a claim for indemnification under an association
insurance policy.
(32) Net gain from operations--Net income reported
during a calendar year equal to the amount of all earned premium,
other revenue of the association, and distributions of excess net
premium and other revenue from the class 1, class 2, and class 3 public
security trust funds that are in excess of: current catastrophe year
incurred losses; operating expenses; reinsurance premium not paid
or payable from member assessments; current year financial arrangement
obligations; current year net premium payment obligations; and current
year public security administrative expenses.
(33) Net investment income--Investment income less
associated fees and expenses charged by the trust company, or others,
for managing or investing the assets.
(34) Net premium--Gross premium less unearned premium.
(35) Net premium payment obligations--Public security
obligations that are paid in whole or in part from net premium and
other revenue for public securities repayable under Insurance Code §§2210.612,
2210.613, and 2210.6131. The term does not include public security
obligations or the portion of public security obligations that are
paid from association surcharges.
(36) Net revenues--Net premium plus other revenue,
less scheduled policy claims, less budgeted operating expenses, less
net premium payment obligations for that calendar year, less amounts
necessary to fund or replenish any reserve fund required by a public
security agreement.
(37) One-in-100-year probable maximum loss--The minimum
funding level required by Insurance Code §2210.453(b).
(38) Operating reserve fund--Association or trust company
held fund for the payment of budgeted scheduled policy claims and
budgeted operating expenses.
(39) Other revenue--Revenue of the association from
any source other than premium. Other revenue includes net investment
income on association assets. Other revenue does not include premium
surcharges collected under Insurance Code §§2210.259, 2210.612,
2210.613, 2210.6131, or 2210.6132 or member assessments collected
under Insurance Code §§2210.0725, 2210.074, 2210.0742, or
2210.453 and interest income on those amounts. For the purpose of
Insurance Code Section 2210.071, other revenue does not include investment
income on any trust company Cont'd... |
