Division 1. Plan of Operation
28 TAC §5.9926
The Texas Department of Insurance proposes the repeal of §5.9926, concerning treatment of excess funds under the Fair Access to Insurance Requirements (FAIR) Plan Association Plan of Operation (Plan of Operation). Pursuant to Insurance Code Article 21.49A § 3(a), the FAIR Plan Governing Committee has submitted for the Commissioner´s approval a proposal to amend §5.9926 of the Plan of Operation by deleting subsection (b) of §5.9926. The Governing Committee reasons that subsection (b) should be deleted because it is inconsistent with new § 15, Insurance Code Article 21.49A, enacted by the 78 th Legislature Regular Session in Senate Bill 14 . Subsection (b) of § 5.9926 provides that any excess Association funds shall be distributed to the Association members. New § 15 provides that the Association shall retain any profits of the Association to be used for the purposes of the Association. Furthermore, new § 15 provides that the profits of the Association shall be used to mitigate losses, including the purchase of reinsurance and the offset of future assessments, and may not be distributed to insurers.
The department agrees that subsection (b) of §5.9926 is inconsistent with new § 15 and is unnecessary. O n further consideration, the department recognizes that the entire §5.9926 is not in complete accord with new § 15, which specifies in sufficient detail how profits of the Association shall be used and thus removes the necessity of maintaining subsection (a). For this reason, the department proposes a repeal of §5.9926. The proposed repeal of § 5. 9926 is reasonable and necessary to conform to Insurance Code Article 21.49A § 15.
Marilyn Hamilton, associate commissioner, Property and Casualty Program, has determined that for each year of the first five years the repeal will be in effect, there will be no fiscal impact to state and local governments as a result of the enforcement or administration of the rule. There will be no measurable effect on local employment or the local economy as a result of the repeal.
Ms. Hamilton has also determined that for each year of the first five years the proposed repeal is in effect, the public benefits anticipated as a result of the repealed section will be a Plan of Operation that conforms to statute. There is no probable economic cost to persons required to comply with the repeal as proposed. There is no anticipated adverse effect on small or micro businesses.
To be considered, written comments on the proposed repeal must be submitted no later than 5:00 p.m. on August 16, 2004 to Gene C. Jarmon, General Counsel and Chief Clerk, Mail Code 113-2A, Texas Department of Insurance, P. O. Box 149104 , Austin , Texas 78714-9104 . An additional copy of the comment must be simultaneously submitted to Marilyn Hamilton, Associate Commissioner, Property and Casualty Program, Mail Code 104-PC, Texas Department of Insurance, P.O. Box 149104 , Austin , Texas 78714-9104 . A request for a public hearing should be submitted separately to the Office of the Chief Clerk.
The repeal is proposed under Insurance Code Article 21.49A and §36.001. Article 21.49A §3(a) authorizes the FAIR Plan Governing Committee to propose amendments to the plan of operation and submit it to the Commissioner of Insurance for his approval. Article 21.49A charges the Commissioner with the authority to supervise the Association and to approve and adopt by rule the plan of operation or amendments to the plan of operation. Section 36.001 provides that the Commissioner of Insurance may adopt any rules necessary and appropriate to implement the powers and duties of the Texas Department of Insurance under the Insurance Code and other laws of this state.
The following article is affected by this repeal: Insurance Code Article 21.49A
§5.9926. Excess Funds.