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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 §5.4183Allocation Method for Other Lines of Insurance

For all other applicable lines of insurance not specified in §5.4182 of this division (relating to Allocation Method for Specified Lines of Insurance) the surcharge shall be determined as follows:

  (1) For lines of insurance where, as part of its normal underwriting, rating, or data collection processes, the insurer has sufficient information to determine the premium or exposure for each location, or can otherwise reasonably allocate premium to the catastrophe area, the insurer shall use the direct allocation methods set forth in §5.4182 of this division and determine the premium surcharge amount by applying the premium surcharge percentage to the premium attributable to the catastrophe area.

  (2) For other lines and types of insurance not included in paragraph (1) of this section, and where the insurer, including an affiliate, provides insurance to the named insured covering real property and/or tangible personal property under a commercial property policy or a commercial multi-peril policy, regardless whether such coverage is provided on a monoline or multi-peril basis, the premium surcharge shall be determine as follows:

    (A) The insurer shall determine the catastrophe area allocation percentage as the proportion of premium attributable to the catastrophe area for property insured under the commercial property or commercial multi-peril policy.

    (B) The premium surcharge shall be determined by multiplying the total Texas premium by the catastrophe area allocation percentage and the premium surcharge percentage.

  (3) For other lines, and types of insurance not included in subsection (a) of this section, and where neither the insurer nor an affiliate of the insurer provides insurance to the named insured covering real property and/or tangible personal property under a commercial property policy or a commercial multi-peril policy, the premium surcharge shall be determined as follows:

    (A) Prior to the effective date of each new policy, and at the renewal of each renewal policy, the insurer shall determine from the insured the catastrophe area allocation percentage. The catastrophe area allocation percentage is determined as the proportion of premium attributable to the catastrophe area for property insured under the commercial property or commercial multi-peril (property) policy or the percentage of self-insured premium attributable to property located in the catastrophe area in the case where the insured is self-insured.

    (B) The premium surcharge shall be determined by multiplying the total Texas premium by the catastrophe area allocation percentage and the premium surcharge percentage.

    (C) Information required to be collected by insurers under subparagraph (A) of this paragraph shall be collected regardless whether or not a premium surcharge is in effect on the effective date, in the case of new policies, or the renewal date, in the case of renewal policies.

    (D) Insurers are not required to verify or otherwise determine the reasonableness of information provided to them under subparagraph (A) of this paragraph.


Source Note: The provisions of this §5.4183 adopted to be effective February 16, 2011, 36 TexReg 784

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