SECTION 5.4185. Mandatory Premium Surcharge Collection

(a) Insurers may not pay the surcharges instead of surcharging their policyholders; however, an insurer may remit a surcharge prior to collecting the surcharge from its policyholder.

(b) Insurers must collect the contingent surcharges proportionately as the insurer collects the premium.

(c) The association must collect the association surcharge in full when due for policies compliant with §5.4912 (relating to Filing and Issuance of Policy Forms Relating to Premium Surcharges under Insurance Code §§2210.612, 2210.613, and 2210.6131) of Division 10 of this subchapter. For policies not yet compliant with §5.4912, the association must collect association surcharges in full no later than the effective date of the policy.

(d) Under Insurance Code §§2210.612(d), 2210.613(d), and 2210.6131(d), the failure of a policyholder to pay the association surcharge constitutes failure to pay premium for the purposes of policy cancellation.

(e) Before insurers may apply funds in a given payment to premiums, they must either:

(1) apply funds in the payment to any contingent surcharges due in that payment; or

(2) apply funds in the payment to any contingent surcharges due in that payment in proportion to the amount of contingent surcharges due in that payment.

Source Note: The provisions of this §5.4185 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