| (a) The association, with the Commissioner's approval,
must assess members as provided by Insurance Code §2210.453(d)
to pay for the cost of any reinsurance coverage or alternative risk
transfer mechanisms it purchases in excess of the statutory minimum
funding level. If, in a calendar year, the association must assess
its members under Insurance Code §2210.453(d),
(1) then the association must request the Commissioner's
approval within a reasonable time after it knows its total reinsurance
costs for that calendar year; and
(2) must issue the assessment by the later of either:
(A) 120 days after the date the association receives
the data that TDI provides under §5.4162(f) of this title for
that year; or
(B) December 1 of that year.
(b) At the first regular board meeting in each calendar
year, but before April 1, the association must discuss with the board
its methodology for determining its one-in-100-year probable maximum
loss for the calendar year. In discussing its methodology, the association
must provide the information described in subsection (d) of this section
and make that information available to its members and the public.
(c) After the board meeting described in subsection
(b) of this section, but not later than April 1 of each year, the
association must disclose to the Commissioner its one-in-100-year
probable maximum loss for the calendar year and the association's
method for determining that probable maximum loss.
(d) In disclosing its method for determining its one-in-100-year
probable maximum loss, the association must include:
(1) the hurricane model or models it relied on, including
the model vendors, the model names, and the versions of each model;
(2) the in-force date and the total amount of direct
exposures in force for the policy data used as the input for each
hurricane model the association relied on;
(3) all user-selected hurricane model input assumptions
used with each hurricane model the association relied on;
(4) the one-in-100-year probable maximum loss model
output produced by each hurricane model the association relied on;
(5) if the association relied on more than one hurricane
model, the methodology the association used to blend or average the
hurricane model outputs, including all weighting factors used; and
(6) any adjustments the association or another party
made to the one-in-100-year probable maximum loss model outputs or
the blended or averaged output, including any adjustments to include
loss adjustment expenses.
(e) The department will post the information disclosed
under subsections (c) and (d) of this section on its website.
(f) If, in a year, the association elects to purchase
coverage for reinsurance or alternative risk transfer mechanisms in
excess of the one-in-100-year probable maximum loss, then the association
must also obtain a quote for coverage that provides funding equal
to the one in 100-year probable maximum loss. The premium quote must
assume the minimum required attachment point described in Insurance
Code §2210.453(c).
(g) No later than the second regular board meeting
of the calendar year, the association must provide each of the following
to its board and make this information available to its members and
the public:
(1) the reinsurance or alternative risk transfer mechanism
premium quote required under subsection (f) of this section; and
(2) the total deposit premiums for all reinsurance
or alternative risk transfer mechanism coverage for the year.
(h) If, at the time of the second regular board meeting
of the calendar year, deposit premiums described in subsection (g)
of this section are not known, then the association must provide its
best estimate of those premiums to the board and make the estimate
available to its members. As soon as the association knows the deposit
premiums described in subsection (g) of this section, the association
must provide them to the board and make them available to its members.
(i) In its request to the Commissioner to approve an
assessment under Insurance Code §2210.453(d), the association
must submit the following information:
(1) the portion of the association's reinsurance premium
that provides coverage for losses or loss adjustment expenses above
the association's one-in-100-year probable maximum loss; and
(2) the methodology the association used to calculate
the amount described in paragraph (1) of this subsection.
(j) This section and §§5.4161 - 5.4167 of
this title (relating to Member Assessments Other than for Reinsurance
in Excess of the Association's Statutory Minimum Funding Level; Amount
of Assessment; Notice of Assessment; Payment of Assessment; Failure
to Pay Assessment; Contest After Payment of Assessment; and Inability
to Pay Assessment by Reason of Insolvency, respectively) are a part
of the association's plan of operation and will control over any conflicting
provision in §5.4001 of this title (relating to Plan of Operation).
(k) Sections 5.4162 - 5.4167 of this title apply both
to member assessments under this section and under §5.4161 of
this title.
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