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TITLE 28INSURANCE
PART 1TEXAS DEPARTMENT OF INSURANCE
CHAPTER 5PROPERTY AND CASUALTY INSURANCE
SUBCHAPTER ETEXAS WINDSTORM INSURANCE ASSOCIATION
DIVISION 3LOSS FUNDING, INCLUDING CATASTROPHE RESERVE TRUST FUND, FINANCING ARRANGEMENTS, AND PUBLIC SECURITIES
RULE §5.4121Financing Arrangements

(a) The association may enter into financing arrangements. The financing arrangement must:

  (1) enable the association to:

    (A) pay losses under Insurance Code §2210.072, or

    (B) obtain public securities under Insurance Code §2210.072; and

  (2) be approved by the association's board of directors before the association enters into the financing arrangement.

(b) The association may pay a financing arrangement with any or all:

  (1) net premium and other revenue of the association that is not required for payment of class 1 payment obligations or premium surcharge and member assessment repayment obligations;

  (2) reinsurance proceeds;

  (3) the proceeds of any financing arrangement;

  (4) the proceeds of any class of public security issued under Insurance Code Chapter 2210; or

  (5) any other association asset.

(c) As collateral security for such financial arrangements, including interest bearing loans or other financial instruments, the association may grant in favor of the applicable market source a collateral assignment and security interest in and to all or any portion of the association's assets, including without limitation, all or any portion of the association's right, title, and interest in and to all proceeds of any class of public security issued under Insurance Code Chapter 2210.


Source Note: The provisions of this §5.4121 adopted to be effective February 3, 2011, 36 TexReg 551; amended to be effective June 12, 2014, 39 TexReg 4435

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