| (a) If, at any time the association, after consultation
with TPFA, determines that net premium and other revenue are not sufficient
to pay class 1, class 2, or class 3 public securities payable under
Insurance Code §§2210.612, 2210.613, and 2210.6131, respectively,
the association must promptly submit a request to the commissioner
to approve an association surcharge. While the public securities are
outstanding, at least quarterly, the association must determine if
its net premium and other revenue is sufficient to pay for securities
payable under Insurance Code §§2210.612, 2210.613, and 2210.6131.
(b) A request described by subsection (a) of this section
must include the following information for each class of public securities
for which an association surcharge is required:
(1) the proposed association surcharge percentage;
(2) the amount the association has determined, after
consultation with TPFA, is the debt service and all related expenses
on the public securities for the applicable period;
(3) the amount that the association has determined
is the debt service not already covered by available funds and all
related expenses on the public securities for the applicable period;
(4) for policies that comply with the requirements
of §5.4912 of Division 10 of this subchapter (relating to Filing
and Issuance of Policy Forms Relating to Premium Surcharges under
Insurance Code §§2210.612, 2210.613, and 2210.6131), the
association's best estimate of its anticipated gross premium for policies
in effect on the date described by paragraph (8) of this subsection;
(5) for policies that do not yet comply with the requirements
of §5.4912 of Division 10 of this subchapter, the association's
best estimate of its anticipated gross premium for the period described
by paragraphs (9) and (10) of this subsection;
(6) all relevant data the association relied upon when
determining the amounts in paragraphs (2) - (5) of this subsection;
(7) an explanation of the methodology, including all
material assumptions, the association used to determine the amounts
in paragraphs (2) - (5) of this subsection;
(8) the date, which must be no more than 90 days after
the date the request is received by the commissioner, on which the
association surcharge applies to policies that are in force and compliant
with §5.4912 of Division 10 of this subchapter;
(9) the date on which the association surcharge begins
to apply to policies not compliant with §5.4912 of Division 10
of this subchapter, which must be the same date as the date in paragraph
(8) of this subsection; and
(10) the date on which the association surcharge ceases
to apply to policies not compliant with §5.4912 of Division 10
of this subchapter, which must be the day after the date the last
noncompliant policy expires.
(c) The commissioner will, within 10 business days
of receipt of the request in subsection (b), notify the association
and TPFA of the commissioner's determination on the sufficiency of
the association surcharge percentage requested. The association must
implement the surcharge percentage the commissioner determines is
sufficient.
(d) If the commissioner independently determines that
net premium and other revenue are not sufficient to pay for securities
payable under Insurance Code §§2210.612, 2210.613, and 2210.6131,
the commissioner may order the association to assess an association
surcharge. The order must specify the date on which the surcharge
applies. The surcharge may not apply earlier than the 20th day following
the date of the order.
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