SECTION 5.4133. Public Security Proceeds

(a) As necessary, the association must make written requests to TPFA for the disbursement of public security proceeds for the association program, including

(1) for the payment of incurred claims and operating expenses of the association, or

(2) other amounts as authorized in Insurance Code §2210.608.

(b) The association's written request must specify:

(1) the amount of the request; and

(2) the purpose of the request.

(c) To facilitate timely payment of losses, the association may request funds to be disbursed to the association before the settlement of incurred claims.

(d) The association must account for the receipt and use of public security proceeds separately from all other sources of funds. The association may hold public security proceeds in the manner authorized by the association's plan of operation or as required by agreement with TPFA.

(e) The proceeds of public securities issued after a catastrophic event may be used:

(1) for any purpose authorized in Insurance Code §2210.608(a), during the catastrophe year for which the public securities were issued;

(2) only to pay for losses and expenses resulting from the catastrophe year for which the public securities were issued, during subsequent years; and

(3) after all losses and expenses resulting from the catastrophe year for which the public securities were issued are paid, only in accordance with Insurance Code §2210.608(b) and §5.4134 of this title (relating to Excess Public Security Proceeds).

(f) The proceeds of public securities issued before a catastrophic event may be used:

(1) for any purpose authorized in Insurance Code §2210.608(a) and (c), during the catastrophe year for which the proceeds were disbursed;

(2) only to pay for losses and expenses resulting from the catastrophe year for which the proceeds were disbursed, during subsequent years; and

(3) after all losses and expenses resulting from the catastrophe year for which the proceeds were disbursed are paid, only in accordance with Insurance Code §2210.608(b) and §5.4134 of this title.

Source Note: The provisions of this §5.4133 adopted to be effective February 3, 2011, 36 TexReg 551; amended to be effective June 12, 2014, 39 TexReg 4435; amended to be effective January 6, 2021, 46 TexReg 162