28 TAC §§5.9901 - 5.9906
The Commissioner of Insurance adopts new §§5.9901-
5.9906 concerning the Catastrophe Reserve Trust Fund. These sections are adopted
without changes to the proposed text as published in the June 9, 2000, issue
of the
Texas Register
(25 TexReg 5554) and
will not be republished.
The new sections are necessary to implement House Bill 2253 as passed by
the 76th Texas Legislature, which amended Article 21.49 of the Texas Insurance
Code, concerning the Catastrophe Reserve Trust Fund (trust fund). The trust
fund is part of the statutory plan to address catastrophic losses in the event
of a major storm affecting the Texas coast. HB 2253 directed the Commissioner
of Insurance to adopt rules to establish the procedures relating to relinquishments
of net equity of the members of the Texas Windstorm Insurance Association
to the trust fund and the disbursement of money from the trust fund in the
event of an occurrence or series of occurrences within a defined catastrophe
area. As required by this legislation, these new sections set forth the procedures
for payments to, disbursements from, and the maintenance of the trust fund.
The new sections set forth the procedures relating to payments of relinquished
amounts to the trust fund and the disbursement of money from the trust fund
in the event of a defined catastrophe that requires disbursement from the
trust fund. Section 5.9901 sets forth the purpose and scope of the subchapter.
Section 5.9902 defines the various words and terms used in the subchapter.
Section 5.9903 provides for the operation of the trust fund. This section
provides that the Comptroller shall administer the trust fund in accordance
with Article 21.49, Texas Insurance Code and Subchapter S. The Texas Treasury
Safekeeping Trust Company, a special purpose trust company managed by the
Comptroller, shall receive, disburse, invest, hold and manage all monies deposited
in the trust fund. This section further requires the association to relinquish
net equity of its association members to the trust fund, and sets forth procedures
for disbursements from the trust fund upon direction of the Commissioner and
provides for maintenance of the trust fund by the Comptroller. Section 5.9904
relates to termination of the trust fund. The trust fund may be terminated
only by law and on termination, all assets of the trust fund revert to the
state. Section 5.9905 relates to the investments of monies in the trust fund.
Section 5.9906 sets out the duties and responsibilities of the association
and the Commissioner in the event a loss triggers a disbursement from the
fund.
No comments were received regarding the adoption of the new sections.
The new sections are adopted under the Insurance Code Article
21.49 and §36.001. Article 21.49, Section 8(i)(1), provides that the
Commissioner of Insurance shall adopt rules that address the process for payments
to and disbursements from the trust fund. Section 36.001 provides that the
Commissioner of Insurance may adopt rules to execute the duties and functions
of the Texas Department of Insurance.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on August 1, 2000.
TRD-200005366
Lynda Nesenholtz
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: August 21, 2000
Proposal publication date: June 9, 2000
For further information, please call: (512) 463-6327