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Texas Statutes (Last Updated: January 4, 2014) |
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INSURANCE CODE |
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Title 10. PROPERTY AND CASUALTY INSURANCE |
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Subtitle G. POOLS, GROUPS, PLANS, AND SELF-INSURANCE |
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Chapter 2210. TEXAS WINDSTORM INSURANCE ASSOCIATION |
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Subchapter J. CATASTROPHE RESERVE TRUST FUND AND REINSURANCE PROGRAM |
Sec. 2210.453. REINSURANCE
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(a) The association may:
(1) make payments into the trust fund; and
(2) purchase reinsurance.
(b) The association may purchase reinsurance that operates in addition to or in concert with the trust fund, public securities, financial instruments, and assessments authorized by this chapter.
(c) If the association does not purchase reinsurance as authorized by this section, the board, not later than June 1 of each year, shall submit to the commissioner, the legislative oversight board established under Subchapter N, the governor, the lieutenant governor, and the speaker of the house of representatives a report containing an actuarial plan for paying losses in the event of a catastrophe with estimated damages of $2.5 billion or more. The report required by this subsection must:
(1) document and denominate the association's resources available to pay claims, including cash or other highly liquid assets, assessments that the association is projected to impose, pre-event and post-event bonding capacity, and private-sector recognized risk-transfer mechanisms, including catastrophe bonds and reinsurance;
(2) include an independent, third-party appraisal of the likelihood of an assessment, the maximum potential size of the assessment, and an estimate of the probability that the assessment would not be adequate to meet the association's needs; and
(3) include an analysis of financing alternatives to assessments that includes the costs of borrowing and the consequences that additional purchase of reinsurance, catastrophe bonds, or other private-sector recognized risk-transfer instruments would have in reducing the size or potential of assessments.
(d) A person who prepares a report required by Subsection (c) may not contract to provide any other service to the association, except for the preparation of similar reports, before the third anniversary of the date the last report prepared by the person under that subsection is submitted.
(e) The report submitted under this section is for informational purposes only and does not bind the association to a particular course of action.