2013 Mississippi Code
Title 83 - INSURANCE
Chapter 34 - WINDSTORM UNDERWRITING ASSOCIATION
§ 83-34-33 - Surcharge for excess hurricane losses on all property and casualty premiums; exempted premiums; purpose of certain surcharges to be designated and specifically identified; licensed insurers and agents to collect and remit surcharges; setting and adjustment of surcharge percentage; cessation of surcharge


MS Code § 83-34-33 (2013) What's This?

(1) When the association knows or has reason to believe that (a) it has or will incur losses from a hurricane that exceed reinsurance and other reasonably available assets of the association, such that one or more bond issues or other financing, or both, will be necessary to pay claims losses and other related expenses, or (b) the association has a deficit that cannot be reasonably resolved by income available to the association, then the association shall immediately give notice to the commissioner and request that the commissioner implement by an excess hurricane loss surcharge on all property and casualty insurance premiums for insurance for property and operations in this state designed to recover to the association the amount of all such bonds and other indebtedness resulting from the hurricane, or other deficit.

(2) At such time as the commissioner can reasonably estimate the amount of bonds or indebtedness, or both, necessitated by a hurricane event, and in no event more than ninety (90) days from the notice given by the association, the commissioner shall have the duty and the power to implement an excess hurricane loss surcharge on all property and casualty insurance premiums for insurance for property and activities in this state. "Premiums" includes premiums for policies issued by or for the association and by or for the Mississippi Residential Property Insurance Underwriting Association. "Premiums" shall not include premiums for workers' compensation coverage, premiums for medical malpractice liability coverage including medical malpractice liability coverage issued by companies created under Section 83-47-1 et seq., nor any premiums for coverage by insurance pools or plans administered by or through the State of Mississippi.

(3) If the surcharge is designed to repay bonds, it shall be designated as such and all funds recovered from the surcharge shall be used for repayment of the bonds for which it was implemented, until such time as the bonds have been paid or redeemed.

(4) If the surcharge is designed to repay a specific indebtedness incurred for losses from a specific hurricane, it shall be designated as such and all funds recovered from the surcharge shall be used for repayment of the indebtedness for which it was implemented, until such time as the indebtedness has been paid or redeemed.

(5) Such surcharge shall be specifically identified on either the premium statements or the policy declarations pages or other appropriate policy forms as relating to the specific hurricane losses or bonds or indebtedness for which it was implemented. The commissioner shall name each such surcharge so that it can be uniformly identified by insurers and agents.

(6) The surcharge shall be a percentage of the total policy premium but the surcharge shall not be considered premium and is not subject to premium taxes or commissions. However, failure to pay the surcharge shall be treated the same as failure to pay premium. "Total policy premium" includes taxes and commissions.

(7) The commissioner shall implement an appropriate surcharge percentage sufficient to recover the amount necessary for repayment of bonds and indebtedness necessitated by a hurricane, or the resolution of other deficit, as applicable. If at any time such surcharge shall be insufficient, the commissioner shall increase the surcharge as necessary and appropriate. The commissioner shall cease surcharges as he determines appropriate funds have been collected. However, the commissioner shall endeavor to apply surcharges on a one-year basis in order to promote consistency, nondiscrimination and fairness among policyholders purchasing or renewing insurance during that year. Any collections in excess of the amounts needed shall be assets of the association for investment and other uses.

(8) Each licensed insurer issuing insurance for property and casualty risks in the state and each agent placing insurance through nonadmitted insurers, shall collect the surcharges established by the commissioner under the authority of this section. Funds collected by such licensed insurers and agents placing insurance through nonadmitted insurers as surcharges authorized by this section shall be collected and held in trust and shall be fully remitted to the association on a quarterly basis with forms providing appropriate information as designed by the association. Insurers and agents shall remit such funds to the association within twenty (20) days after the end of each quarter. At such time the insurers and agents shall further remit to the association all interest earned on the surcharge funds.

(9) The association and the commissioner are both specifically given the power to audit licensed insurers and agents placing insurance through nonadmitted insurers to confirm the accuracy of remittances of surcharges at the expense of the licensed insurers and agents.

(10) The commissioner has the duty and power to adjust the percentage of any surcharge previously established as he finds appropriate taking into consideration any relevant factors, including, but not limited to, consolidation or replacement of bonds, any additional indebtedness resulting from a hurricane, the rate of recovery, anticipated length of total recovery, and impact of other hurricanes; however, the commissioner shall not reduce the amount of assessments implemented and designated to pay or redeem bonds, or other indebtedness below the amount necessary to timely pay or redeem such bonds, or other indebtedness.

(11) When the association knows or has reason to believe that surcharges authorized by this section previously established by the commissioner will be insufficient to timely pay or redeem bonds or indebtedness, the association shall immediately give notice to the commissioner. The commissioner shall alter such surcharge as necessary to timely pay or redeem bonds or pay other indebtedness.

(12) The association shall report quarterly to the commissioner providing all financial information for each surcharge authorized by this section, including:

(a) The original and current outstanding indebtedness of all bonds and loans;

(b) Total surcharge funds recovered to date; and

(c) Any information requested by the commissioner.

(13) The commissioner may request, and the association shall provide, on an immediate basis to the commissioner any financial information or other information concerning any surcharge. This section shall not limit the reporting requirements provided by Section 83-34-25.

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