| (a) Insurers must provide written notice to policyholders
receiving a contingent surcharge that their policy contains a surcharge
and the dollar amount of the surcharge. The notice must read: "Texas
Insurance Code Section 2210.6132 authorizes a premium surcharge to
be added to certain property and casualty insurance policies providing
coverage in the catastrophe area to pay the debt service on public
securities issued to pay Texas Windstorm Insurance Association claims
resulting from a catastrophic event. A premium surcharge {in the amount
of $_____} has been added to your premium. Should your policy be canceled
by you or the insurer prior to its expiration date, a proportionate
amount of the premium surcharge will be refunded to you."
(b) The association must provide written notice to
policyholders receiving an association surcharge that their policy
contains a surcharge and the dollar amount of the surcharge. The notice
must read: "Texas Insurance Code Sections 2210.612, 2210.613, and
2210.6131 require a premium surcharge be added to Texas Windstorm
Insurance Association policies to pay the debt service on public securities
issued to pay association claims resulting from a catastrophic event.
A premium surcharge {in the amount of $_____} has been added to your
premium. Should your policy be canceled by you or the association
prior to its expiration date, the premium surcharge will not be refunded
to you. Failure to pay the surcharge is grounds for cancellation of
your policy."
(c) Except as provided in subsection (e) of this section,
notices required under subsection (a) of this section must:
(1) be provided at the time the policy is issued, in
the case of new business;
(2) be provided with the renewal notice, in the case
of renewal business;
(3) be provided within 20 days of the date of the transaction
for any midterm change in the premium surcharge; and
(4) use at least 12-point font and either be contained
on a separate page or shown in a conspicuous location on the declarations
page.
(d) Notices required under subsection (b) of this section
must:
(1) no later than 14 days after the date described
in §5.4126(b)(8) of this division (relating to Determination
of the Association Surcharge Percentage), be provided to policyholders
whose policies comply, as of the date described in §5.4126(b)(8),
with §5.4912(a) 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);
(2) be provided with the renewal notice to policyholders
whose policies will renew during the period described by paragraphs
(8) and (9) of §5.4126(b);
(3) be provided at the time a new policy is issued,
for new policies that go into effect during the period described by
paragraphs (8) and (9) of §5.4126(b); and
(4) use at least 12-point font and either be contained
on a separate page or shown in a conspicuous location on the declarations
page.
(e) An affiliated surplus lines insurer, or surplus
lines agent allowed to provide notices on its behalf, must provide
the notice required under subsection (c)(3) of this section to the
policyholder not later than the last day of the month following the
month in which the transaction for any midterm change in the premium
surcharge became effective.
(f) An affiliated surplus lines insurer that allows
an agent to provide notices required under this section may be held
liable by the department for the failure of its agent to comply with
this section.
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| Source Note: The provisions of this §5.4189 adopted to be effective February 16, 2011, 36 TexReg 784; amended to be effective June 12, 2014, 39 TexReg 4463; amended to be effective March 9, 2016, 41 TexReg 1697 |
