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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 §5.4136Association Rate Filings

While there are outstanding class 1 public securities, or there are repayment obligations under §5.4127(b) of this division (relating to Payment of Class 2 Public Securities Issued Under §5.4126 and Repayment of Premium Surcharges and Member Assessments), the association:

  (1) must consider its obligations for the payment of class 1 public securities and the repayment of class 2 public securities, including the additional amount of any debt service coverage that the association determines is required for the issuance of marketable public securities in developing its rates;

  (2) must include in a rate filing submitted to the department an analysis that demonstrates that the filed rates produce premium sufficient to provide for at least:

    (A) the expected operating costs of the association, including expected nonhurricane wind and hail losses and loss adjustment expenses; and

    (B) the expected payment of class 1 public security obligations and the expected repayment of class 2 public securities, including any contractual coverage amount the association determines is required for the issuance of marketable public securities, during the period in which the rates will be in effect; and

  (3) must include a cost component in the rates sufficient to at least provide for the expected payment of class 1 payment obligations and the expected repayment of premium surcharge and member assessment repayment obligations during the period in which the rates will be in effect.


Source Note: The provisions of this §5.4136 adopted to be effective June 12, 2014, 39 TexReg 4435

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