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You are here: Home . rules . 2004 . 0903-059
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Subchapter T. Fair Plan

Division 1. Plan of Operation

28 TAC §5.9926

The Commissioner of Insurance adopts the repeal of §5.9926, concerning treatment of excess funds under the Fair Access to Insurance Requirements (FAIR) Plan Association Plan of Operation. The repeal is adopted without changes to the proposal as published in the July 16, 2004 issue of the Texas Register (29 TexReg 6879).

The repeal is reasonable and necessary to conform to Insurance Code Article 21.49A § 15, enacted by the 78 th Legislature Regular Session in Senate Bill 14. New Article 21.49A § 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.

Subsection (b) of §5.9926, which provides that any excess Association funds shall be distributed to the Association members, is inconsistent with new § 15 and unnecessary. Further, 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 for maintaining subsection (a).

The repeal will result in the elimination of a section that is no longer necessary due to the enactment of Insurance Code Article 21.49A §1 5, enacted by the 78 th Legislature Regular Session in Senate Bill 14.

No comments were received regarding adoption of the repeal.

Repeal of §5.9926 is adopted under the Insurance Code Article 21.49A and §36.001. 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.

§5.9926. Excess Funds.



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