SECTION 5.4182. Method for Determining the Premium Surcharges

(a) The methods addressed in this section relating to contingent surcharges will apply to all:

(1) policies written and reported under the following annual statement lines of business: fire; allied lines; farm and ranch owners; homeowners; commercial multiple peril (nonliability portion); private passenger auto no fault (personal injury protection (PIP)), other private passenger auto liability, and private passenger auto physical damage; and commercial auto no fault (PIP), other commercial auto liability, and commercial auto physical damage; and

(2) personal and commercial risks assigned by TAIPA under Insurance Code Chapter 2151.

(b) The methods addressed in this section relating to association surcharges will apply to all association policies.

(c) The association surcharge will be determined by applying the association surcharge percentage to the policy premium determined in §5.4181 of this division (relating to Premiums to be Surcharged), attributable to association-insured property located in the catastrophe area.

(d) The contingent surcharge will be determined by applying the contingent surcharge percentage to the policy premium determined in §5.4181 of this division, attributable to insured property located in the catastrophe area, including automobiles principally garaged in the catastrophe area.

(e) In cases where the policy is composite rated and the premium attributable to insured property located in the catastrophe area cannot be reasonably determined, the insurer must determine the contingent surcharge based on the insured address. If the insured address is within a designated catastrophe area, then the insurer must determine the contingent surcharge by applying the contingent surcharge percentage to the full policy premium determined in §5.4181 of this division. If the insured address is not within a designated catastrophe area, then no premium surcharge applies to the policy.

Source Note: The provisions of this §5.4182 adopted to be effective February 16, 2011, 36 TexReg 784; amended to be effective June 12, 2014, 39 TexReg 4463; amended to be effective March 9, 2016, 41 TexReg 1697