The bill creates a nonprofit unincorporated legal entity, the fair
access to insurance requirements plan association (association), to help persons who are unable to find coverage in the voluntary market obtain property insurance coverage for their real property.
The association must: •
Establish, offer, and maintain a property insurance policy that satisfies the requirements specified in the bill;
•
Establish a reinsurance association; and
•
Assess and share among member insurers all expenses, income, and losses based on each member insurer's written premium in the state.
The association is managed by a board of directors consisting of
9 members appointed by the governor. The board is required to administer the fair access to insurance requirements plan (FAIR plan).
The FAIR plan must include rates that: •
Are not excessive, inadequate, or unfairly discriminatory;
•
Are actuarially sound so that revenue generated from premiums is adequate to pay for expected losses, expenses, and taxes and the cost of reinsurance; and
•
Reflect the investment income of the FAIR plan.
The plan of operation for the FAIR plan may include provisions
establishing maximum limits of liability, reasonable underwriting standards for determining the insurability of a risk, and commissions to be paid to the licensed producers that offer the FAIR plan.
The commissioner of insurance may suspend or revoke the
certificate of authority to transact insurance business in this state of any member insurer that fails to timely pay a fee or to comply with the plan of operation for the FAIR plan.
