SECTION 5.9918. Servicing of Policies

(a) In accordance with the provisions of §5.9912(e) of this subchapter (relating to Governing Committee) the Association shall have the following options for servicing Association policies:

(1) Contract with one or more member insurers to service some or all of the policies.

(2) Contract with one or more non-member insurers to service some or all of the policies;

(3) Contract with one or more private non-insurers to provide some or all of the servicing of Association policies;

(4) Contract with one or more insurance pools for property and/or casualty insurance established by Texas law to provide some or all of the servicing of Association policies; and

(5) Service some or all of the Association policies itself.

(b) No entity, be it a member insurer, non-member insurer, private non-insurer, or insurance pool, can be compelled to contract with the Association to service some or all Association policies.

(c) The servicing contracts under subsection (a)(1)-(4) of this section shall establish servicing standards and provide for compensation to be paid to contractors.

(d) The Association may divide the servicing of an Association policy between two or more persons. For example, the Association may underwrite an Association policy itself, use a non-insurer contractor for premium billing and collection, and use insurer contractors to service policy claims.

(e) In establishing servicing standards for Association policies, the Association shall consider:

(1) the accessibility of the servicing entity for submission of applications by agents;

(2) the ability of the servicing entity to provide inspections;

(3) the accessibility of the servicing entity for policyholder inquiries about underwriting, premium billing, collection, and claims;

(4) the ability of the servicing entity to service claims; and

(5) the ability of the servicing entity to provide catastrophe claim services.

(f) The Association may contract with any insurer admitted to do business in Texas or any other entity holding the license required to perform such services.

(g) Regardless of the option used by the Association to service its policies, all policies shall be issued in the name of the Association.

Source Note: The provisions of this §5.9918 adopted to be effective May 28, 2003, 28 TexReg 4153