(a) An owner or operator may satisfy the requirements of financial assurance by obtaining insurance that conforms to the requirements of this subchapter and submitting an originally signed certificate to the executive director.
(b) At a minimum, the insurer must be licensed to transact the business of insurance, or eligible to provide insurance as an excess or surplus lines insurer, in Texas.
(c) The wording of the certificate of insurance must be identical to the wording specified in §37.9220 of this title (relating to Certificate of Insurance Wording).
(d) The insurance policy must be issued for a face amount at least equal to the current cost estimate for reclamation or restoration, except when a combination of mechanisms are used in accordance with §37.41 and §37.9170 of this title (relating to Use of Multiple Financial Assurance Mechanisms and Financial Assurance Requirements for Reclamation and Restoration). Actual payments by the insurer shall not change the face amount, although the insurer's future liability shall be lowered by the amount of the payments.
(e) The insurance policy must guarantee that funds shall be available to provide for reclamation at the quarry or restoration related to the quarry. The policy shall also guarantee that once reclamation at the quarry or restoration related to the quarry begins, the issuer shall be responsible for paying out funds, up to an amount equal to the face amount of the policy, upon the direction of the executive director, to such party or parties as the executive director specifies.
(f) An owner or operator or any other person authorized to perform reclamation or restoration may request reimbursement for expenditures for reclamation at the quarry or restoration related to the quarry by submitting itemized bills to the executive director. The request shall include an explanation of the expenses and all applicable itemized bills. The owner or operator may request reimbursement for partial reclamation at the quarry or restoration related to the quarry only if the remaining value of the policy is sufficient to cover the maximum remaining costs of reclamation at the quarry or restoration related to the quarry. Within 60 days after receiving bills for reclamation at the quarry or restoration related to the quarry, the executive director shall determine whether the reclamation or restoration expenditures are in accordance with the approved reclamation or restoration activities or are otherwise justified, and if so, shall instruct the insurer to make reimbursement in such amounts as the executive director specifies in writing. If the executive director has reason to believe that the maximum cost of reclamation or restoration will be greater than the face amount of the policy, the executive director may withhold reimbursement of such amounts as deemed prudent until the executive director determines, in accordance with this subchapter, that the owner or operator is no longer required to maintain financial assurance requirements for reclamation at the quarry or restoration related to the quarry of the facility. If the executive director does not instruct the insurer to make such reimbursements, the executive director shall provide the owner or operator with a detailed written statement of reasons.
(g) The owner or operator shall maintain the policy in full force and effect until the executive director consents to termination of the policy. Failure to pay the premium, without substitution of alternate financial assurance as specified in this subchapter, shall constitute a violation of these regulations, warranting such remedy as the executive director deems necessary. Such violation shall be deemed to begin upon receipt by the executive director of a notice of future cancellation, termination, or failure to renew due to nonpayment of the premium, rather than upon the date of expiration of the policy.
(h) The policy must provide that the insurer may not cancel, terminate, or fail to renew the policy except for failure to pay the premium. The automatic renewal of the policy shall, at a minimum, provide the insured with the option of renewal at the face amount of the expiring policy. If there is a failure to pay the premium, the insurer may elect to cancel, terminate, or fail to renew the policy by sending notice by certified mail to the owner or operator and the executive director. Cancellation, termination, or failure to renew may not occur, however, during 120 days beginning with the date of receipt of the notice by both the executive director and the owner or operator, as evidenced by the return receipts.
(i) Cancellation, termination, or failure to renew may not occur and the policy shall remain in full force and effect in the event that on or before the date of expiration:
  (1) the executive director deems the quarry abandoned;
  (2) the permit expires, is terminated, is revoked, or a new or renewal permit is denied;
  (3) reclamation or restoration is ordered by the executive director of the commission or by a United States district court or other court of competent jurisdiction;
  (4) the owner or operator is named as debtor in a voluntary or involuntary proceeding under Title 11 (Bankruptcy), United States Code; or
  (5) the premium due is paid.
(j) Each policy must contain a provision allowing assignment of the policy to a successor owner or operator. Such assignment may be conditional upon consent of the insurer, provided such consent is not unreasonably refused.

Source Note: The provisions of this §37.9215 adopted to be effective August 3, 2006, 31 TexReg 5971