SECTION 5.4902. Additional Requirements

(a) This section, §§5.4903 - 5.4908, and §5.4911 of this division (relating to Declination of Coverage; Flood Insurance; Minimum Retained Premium; Certificate of Compliance Approval Program; Certificate of Compliance Transition Program; Alter and Alteration; and Insurance Policy Forms, Endorsements, Manual Rules, Application Forms, and Underwriting Guidelines, respectively) shall be considered to be a part of the Texas Windstorm Insurance Association's plan of operation. These sections shall control over any conflicting provision in §5.4001 of this subchapter (relating to Plan of Operation).

(b) In addition to the requirements set forth in §5.4001 of this subchapter, including §5.4001(d)(2)(E) of this subchapter, prior to the issuance of an Association policy on insurable property, the Association must have received an application for a new or renewal Association policy that contains a statement that the agent possesses proof of:

(1) a declination of coverage from an authorized insurer writing windstorm and hail insurance as provided in §5.4903 of this division; and

(2) if applicable, flood insurance that was obtained for the property to be insured as provided for in §5.4904 of this division or the unavailability of flood insurance for such property.

(c) The following words and terms when used in this division shall have the following meanings unless the context clearly indicates otherwise:

(1) Association--The Texas Windstorm Insurance Association.

(2) Commissioner--The Texas Commissioner of Insurance.

(3) Department--The Texas Department of Insurance.

(d) The Association shall implement an agent audit procedure to verify that agents possess and maintain proof of the declination and flood insurance as required under §5.4903 of this division and, if applicable, §5.4904 of this division.

(e) In addition to the requirement in subsection (d) of this section, the Association shall on or before June 1, 2010, submit to the commissioner for approval a proposal to ensure compliance with the requirements set forth in §5.4903 and §5.4904 of this division.

(f) The Association on or before June 1, 2010, shall submit to the commissioner a proposal to amend the plan of operation to establish a procedure for suspending the acceptance of new or renewal insurance applications from an agent if the Association determines that the agent failed to comply with this section and §5.4903 and §5.4904 of this division. The proposal must also include a procedure for an agent to obtain a review of the suspension.

Source Note: The provisions of this §5.4902 adopted to be effective February 24, 2010, 35 TexReg 2160