SECTION 5.4189. Notification Requirements

(a) Insurers must provide written notice to policyholders receiving a contingent surcharge that their policy contains a surcharge and the dollar amount of the surcharge. The notice must read: "Texas Insurance Code Section 2210.6132 authorizes a premium surcharge to be added to certain property and casualty insurance policies providing coverage in the catastrophe area to pay the debt service on public securities issued to pay Texas Windstorm Insurance Association claims resulting from a catastrophic event. A premium surcharge {in the amount of $_____} has been added to your premium. Should your policy be canceled by you or the insurer prior to its expiration date, a proportionate amount of the premium surcharge will be refunded to you."

(b) The association must provide written notice to policyholders receiving an association surcharge that their policy contains a surcharge and the dollar amount of the surcharge. The notice must read: "Texas Insurance Code Sections 2210.612, 2210.613, and 2210.6131 require a premium surcharge be added to Texas Windstorm Insurance Association policies to pay the debt service on public securities issued to pay association claims resulting from a catastrophic event. A premium surcharge {in the amount of $_____} has been added to your premium. Should your policy be canceled by you or the association prior to its expiration date, the premium surcharge will not be refunded to you. Failure to pay the surcharge is grounds for cancellation of your policy."

(c) Except as provided in subsection (e) of this section, notices required under subsection (a) of this section must:

(1) be provided at the time the policy is issued, in the case of new business;

(2) be provided with the renewal notice, in the case of renewal business;

(3) be provided within 20 days of the date of the transaction for any midterm change in the premium surcharge; and

(4) use at least 12-point font and either be contained on a separate page or shown in a conspicuous location on the declarations page.

(d) Notices required under subsection (b) of this section must:

(1) no later than 14 days after the date described in §5.4126(b)(8) of this division (relating to Determination of the Association Surcharge Percentage), be provided to policyholders whose policies comply, as of the date described in §5.4126(b)(8), with §5.4912(a) of Division 10 of this subchapter (relating to Filing and Issuance of Policy Forms Relating to Premium Surcharges under Insurance Code §§2210.612, 2210.613, and 2210.6131);

(2) be provided with the renewal notice to policyholders whose policies will renew during the period described by paragraphs (8) and (9) of §5.4126(b);

(3) be provided at the time a new policy is issued, for new policies that go into effect during the period described by paragraphs (8) and (9) of §5.4126(b); and

(4) use at least 12-point font and either be contained on a separate page or shown in a conspicuous location on the declarations page.

(e) An affiliated surplus lines insurer, or surplus lines agent allowed to provide notices on its behalf, must provide the notice required under subsection (c)(3) of this section to the policyholder not later than the last day of the month following the month in which the transaction for any midterm change in the premium surcharge became effective.

(f) An affiliated surplus lines insurer that allows an agent to provide notices required under this section may be held liable by the department for the failure of its agent to comply with this section.

Source Note: The provisions of this §5.4189 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