(a) The association, with the Commissioner's approval, must assess members as provided by Insurance Code §2210.453(d) to pay for the cost of any reinsurance coverage or alternative risk transfer mechanisms it purchases in excess of the statutory minimum funding level. If, in a calendar year, the association must assess its members under Insurance Code §2210.453(d),
  (1) then the association must request the Commissioner's approval within a reasonable time after it knows its total reinsurance costs for that calendar year; and
  (2) must issue the assessment by the later of either:
    (A) 120 days after the date the association receives the data that TDI provides under §5.4162(f) of this title for that year; or
    (B) December 1 of that year.
(b) At the first regular board meeting in each calendar year, but before April 1, the association must discuss with the board its methodology for determining its one-in-100-year probable maximum loss for the calendar year. In discussing its methodology, the association must provide the information described in subsection (d) of this section and make that information available to its members and the public.
(c) After the board meeting described in subsection (b) of this section, but not later than April 1 of each year, the association must disclose to the Commissioner its one-in-100-year probable maximum loss for the calendar year and the association's method for determining that probable maximum loss.
(d) In disclosing its method for determining its one-in-100-year probable maximum loss, the association must include:
  (1) the hurricane model or models it relied on, including the model vendors, the model names, and the versions of each model;
  (2) the in-force date and the total amount of direct exposures in force for the policy data used as the input for each hurricane model the association relied on;
  (3) all user-selected hurricane model input assumptions used with each hurricane model the association relied on;
  (4) the one-in-100-year probable maximum loss model output produced by each hurricane model the association relied on;
  (5) if the association relied on more than one hurricane model, the methodology the association used to blend or average the hurricane model outputs, including all weighting factors used; and
  (6) any adjustments the association or another party made to the one-in-100-year probable maximum loss model outputs or the blended or averaged output, including any adjustments to include loss adjustment expenses.
(e) The department will post the information disclosed under subsections (c) and (d) of this section on its website.
(f) If, in a year, the association elects to purchase coverage for reinsurance or alternative risk transfer mechanisms in excess of the one-in-100-year probable maximum loss, then the association must also obtain a quote for coverage that provides funding equal to the one in 100-year probable maximum loss. The premium quote must assume the minimum required attachment point described in Insurance Code §2210.453(c).
(g) No later than the second regular board meeting of the calendar year, the association must provide each of the following to its board and make this information available to its members and the public:
  (1) the reinsurance or alternative risk transfer mechanism premium quote required under subsection (f) of this section; and
  (2) the total deposit premiums for all reinsurance or alternative risk transfer mechanism coverage for the year.
(h) If, at the time of the second regular board meeting of the calendar year, deposit premiums described in subsection (g) of this section are not known, then the association must provide its best estimate of those premiums to the board and make the estimate available to its members. As soon as the association knows the deposit premiums described in subsection (g) of this section, the association must provide them to the board and make them available to its members.
(i) In its request to the Commissioner to approve an assessment under Insurance Code §2210.453(d), the association must submit the following information:
  (1) the portion of the association's reinsurance premium that provides coverage for losses or loss adjustment expenses above the association's one-in-100-year probable maximum loss; and
  (2) the methodology the association used to calculate the amount described in paragraph (1) of this subsection.
(j) This section and §§5.4161 - 5.4167 of this title (relating to Member Assessments Other than for Reinsurance in Excess of the Association's Statutory Minimum Funding Level; Amount of Assessment; Notice of Assessment; Payment of Assessment; Failure to Pay Assessment; Contest After Payment of Assessment; and Inability to Pay Assessment by Reason of Insolvency, respectively) are a part of the association's plan of operation and will control over any conflicting provision in §5.4001 of this title (relating to Plan of Operation).
(k) Sections 5.4162 - 5.4167 of this title apply both to member assessments under this section and under §5.4161 of this title.

Source Note: The provisions of this §5.4160 adopted to be effective January 6, 2021, 46 TexReg 162