(a) The association's board of directors may request that TPFA issue class 1 public securities before a catastrophic event, if the association's board of directors determines that class 1 public security proceeds may become necessary and the commissioner approves the request.     
      (b) The association must submit its board of directors' written request under subsection (a) of this section to the commissioner. The request must include the following information:      
        (1) the reason why the requested class 1 public securities may become necessary;       
        (2) the amount of premium and other revenue that the association expects will be available to pay loss claims in the current calendar year;       
        (3) reinsurance coverage that the association expects will be available to pay claims in the current calendar year;       
        (4) the amount in the CRTF that the association expects will be available to pay loss claims in the current calendar year;       
        (5) the principal amount of class 1 public securities that are authorized and available to be issued before a catastrophic event, and that are requested;       
        (6) the estimated amount of debt service for the public securities, including any contractual coverage amount and public security administrative expenses;       
        (7) the structure and terms of the public securities, including any terms that may change as a result of a catastrophic event or the use of any proceeds of class 1 public securities issued before a catastrophic event;       
        (8) market conditions and requirements necessary to sell marketable public securities;       
        (9) a cost-benefit analysis as described in §5.4135 of this division (relating to Marketable Public Securities; the Amount of Class 1 Public Securities that Cannot be Issued; Market Conditions and Requirements; and Cost-Benefit Analysis);       
        (10) a three-year pro forma financial statement consisting of a balance sheet, income statement, and a statement of cash flow, reflecting the financial impact of issuing class 1 public securities before a catastrophic event that assumes the proceeds will be used in the event of a catastrophe; and       
        (11) any other relevant information requested by the commissioner.       
      (c) The association may make one or more requests under this section.     
      (d) The association may request class 1 public securities up to an aggregate principal amount not to exceed $500 million outstanding at any one time, regardless of the calendar year or years in which the securities are issued, except that class 1 public securities that are issued before a catastrophic event, including the proceeds of any outstanding class 1 public securities issued on or before June 1, 2015, and that have been depleted to pay for the association program will not continue to count against the combined $500 million aggregate limit described in this subsection. This section does not authorize the association to request class 1 public securities in an amount in excess of the catastrophe year limit prescribed in §5.4125(c) of this division (relating to Issuance of Public Securities after a Catastrophic Event).     
      (e) For the purposes of determining the authorized amount of class 1 public securities, public security proceeds used to pay for public security issuance costs, establish a public security reserve fund, capitalize interest, or provide for contractual coverage amounts, are considered depleted in the same catastrophe year as, and in proportion to, the public security proceeds used to pay for losses or operating expenses, or used to pay principal on the public securities.     
     Source Note:        The provisions of this §5.4124 adopted to be effective June 12, 2014, 39 TexReg 4435; amended to be effective March 9, 2016, 41 TexReg 1697