Amendment_Report_for

SECTION 1. Section 83-34-1, Mississippi Code of 1972, is amended as follows:

83-34-1. In this chapter, unless the context otherwise requires:

(a) "Essential property insurance" means insurance against direct loss to property from the risk of windstorm and hail in the manner as defined and limited in the standard real property and contents insurance forms approved by the commissioner. Essential property insurance * * * ~~shall not~~ may include coverage for * * * ~~any loss other than~~ either the actual cash value or replacement cost value of the structure and contents. Essential property insurance includes builders risks coverage. The extent of risk covered, the insuring language and the exclusions are all subject to approval by the commissioner. Policies, rules and rates shall be filed with the commissioner in the manner provided for insurance companies.

(b) "Association" means the Mississippi Windstorm Underwriting Association established pursuant to the provisions of this chapter.

(c) "Plan of operation" means the plan of operation of the association approved or promulgated by the commissioner pursuant to the provisions of this chapter.

(d) "Insurable property" means real property, and contents therein when requested, at fixed locations in the coast area, which property is determined by the association to be in an insurable condition and otherwise meets the underwriting requirements of the association. Any one- or two-family dwelling built, rebuilt, altered or remodeled in compliance with the applicable building codes, including design-wind requirements, that is not otherwise rendered uninsurable by reason of use, occupancy or state of repair, shall be an insurable risk. Neighborhood area, location and environmental hazards beyond the control of the applicant or owner of the property shall not be considered in determining insurable condition. "Insurable property" shall not include insurance on motor vehicles or creditor placed insurance on mobile homes. "Insurable property" includes mobile homes, modular homes or manufactured housing that are installed in compliance with applicable codes.

(e) "Commissioner" means the Insurance Commissioner of the State of Mississippi.

(f) "Coast area" means Hancock, Harrison, Jackson, Pearl River, Stone and George Counties.

(g) (i) "Net direct premiums," for purposes of calculating percentages of participation for assessable insurers for the year 2007, means gross direct premiums, excluding reinsurance assumed and ceded, written on property in this state for the risk of windstorm and hail less return premiums upon cancelled contracts, dividends paid or credited to policyholders, or the unused or unabsorbed portion of premium deposits. "Net direct premiums" includes the premium charge component for the risk of windstorm and hail to property in all policies, including multiperil and other policies that package or combine coverage for other risks. The plan of operation shall prescribe the portion of premium allocated for the risk of windstorm and hail in multiperil and other policies that package or combine coverage for other risks. "Net direct premiums" shall not include farm property. "Net direct premiums" shall not include the property components of motor vehicles and other mobile property, but includes premiums for the risks of windstorm and hail for mobile homes, modular homes or manufactured housing.

(ii) "Net direct premiums," for purposes of calculating percentages of participation for assessable insurers after the year 2007, means those premiums reported by the assessable insurers in their annual statements to the Department of Insurance that were charged for insurance for any and all risks on real property and contents in the state. The department shall determine which lines of real property and contents insurance shall be included in the calculation of net direct premiums. The included real property and contents insurance lines may be changed from time to time in the discretion of the commissioner. "Net direct premiums" shall not include premiums for insuring farm property that are reported timely to the association as provided in the plan of operation.

(iii) The commissioner is authorized and directed to provide to the association annual statements, other reports and any statistics necessary to provide the information herein required and which the commissioner is hereby authorized and empowered to obtain from any assessable insurer.

(h) "Farm property" means property used for farming purposes; however, it shall not include any property used for dwelling purposes or any outbuildings used in connection therewith.

(i) "Losses" includes expenses for the adjustment and resolution of claims and operational and other general expenses.

(j) "Bonds, loans, lines of credit and indebtedness" include interest, finance charges, and any and all other costs associated with the financing.

(k) "Percentage of participation" for an assessable insurer means the percentage determined by dividing the assessable insurers net direct premiums written in this state in the previous year by the aggregate net direct premiums written in this state by all assessable insurers of the association in the previous year. The percentage of participation may be modified as provided in Sections 83-34-9(3) and 83-34-13(2).

(l) "Nonadmitted insurers" means those insurance companies defined in Section 83-21-17, and any other companies and persons selling insurance on risks in Mississippi that are not licensed to do business in the State of Mississippi.

(m) "Agents placing insurance through nonadmitted insurers" means those agents defined in Section 83-21-19 and any other agents placing insurance through a nonadmitted insurer.

(n) "Assessable insurer" means each and every insurer authorized to write, and engaged in writing, property insurance within this state on a direct basis.

(o) "Minimum reserve" means an amount set forth in the plan of operation which is maintained by the association for the payment of salaries and other expenses necessary for the continuous and ongoing operation of the association.

(p) "Recoupable assessment" means any assessment, in whole or in part, that is levied on and payable by assessable insurers to the association which is directly recoverable from policyholders for any covered event occurring during the calendar year 2019 and approved by the commissioner. Any assessment levied due to a covered event occurring during the calendar year 2019 shall be a recoupable assessment.

(q) "Nonrecoupable assessment" means any assessment levied on and payable by assessable insurers to the association which is not directly recoverable from policyholders.

(r) "Excess deficit" means a deficit that exceeds available surplus, reinsurance, recoupable and nonrecoupable assessments and other reasonably available assets of the association. The minimum reserve, as set forth in the plan of operation, shall not be considered reasonably available assets of the association when determining whether an excess deficit has occurred.

(s) "Covered event" means an event, such as a hurricane, other windstorm or hailstorm, which causes losses covered by the policies issued by the association to its policyholders.

SECTION 2. Section 83-34-3, Mississippi Code of 1972, is amended as follows:

83-34-3. (1) From and after March 22, 2007, the Mississippi Windstorm Underwriting Association, as created by Chapter 459, Laws of 1987, shall be a separate and independent entity as provided for herein. At its option, the association may incorporate. All assets belonging to the association on or before March 22, 2007, shall hereinafter belong to and remain with the association. There shall be no distribution of income or assets other than for the benefit of the association, which shall have the right to invest and reinvest assets.

(2) From and after March 22, 2007, the association shall no longer have members. Former "members" of the association shall be "assessable insurers" and shall have no rights to the assets and profits of the association, but shall have the obligation for regular assessments as provided herein. Former members shall continue to have the obligations provided in this chapter before March 22, 2007, for all policyholder claims, costs, damages of any kind and expenses in any manner resulting from losses that occurred before March 22, 2007, for which the association may assess as needed the former members in the manner provided in this chapter before March 22, 2007. As a condition of its authority to continue to transact the business of insurance in this state and by transacting business in this state, each licensed insurer agrees to be bound by the provisions of this statute and the plan of operation as approved by the commissioner, and all amendments and revisions thereto.

(3) Any licensed insurer first authorized to write insurance after March 22, 2007, shall become an assessable insurer on the first day of January immediately following such authorization. The determination of such insurer's participation in the association shall be made based upon writings in the prior year in the same manner as for all other assessable insurers of the association.

(4) Except as provided for in Section 83-34-4(6), the premiums, recoupable and nonrecoupable assessments, fees, investment income and other revenue of the association are funds received for the sole purpose of providing insurance coverage, paying claims for Mississippi citizens insured by the association, securing and repaying debt obligations issued by the association, and conducting all other activities of the association, all as required or permitted by this chapter. Such revenue shall not be considered taxes, fees, licenses or charges for services imposed by the State of Mississippi on individuals, businesses, or agencies, and shall not be used for other purposes.

(5) It is the intent of the Legislature that the association be and act as a nonprofit entity. The association shall be free from taxation of every kind by the state and any political subdivision or other instrumentality thereof. It is the intent of the Legislature that the association be tax exempt from all taxes, including federal taxes, and the association is granted the authority to take those steps necessary to obtain federal tax exempt status.

(6) Any debt obligations issued by the association, their transfer, and the income therefrom, including any profit made on the sale thereof, shall at all times be free from taxation of every kind by the state and any political subdivision or other instrumentality thereof.

(7) In the event of the termination of the association by act of the Legislature, or other means, the assets of the association shall be applied first to pay all debts, liabilities and obligations of the association, including the establishment of reasonable reserves for any contingent liabilities or obligations, and all remaining assets of the association shall become property of the state.

(8) The association shall operate as a private enterprise and shall not be subject to the procurement provisions of Section 31-7-13, and policies and decisions of the association, including, but not limited to, decisions relating to incurring debt, levying of recoupable and nonrecoupable assessments, the issuance and sale of bonds, claims decisions under association policies, hiring and firing of employees, and all services relating to the operation of the association shall not be subject to the provisions of Section 25-9-101 et seq. The association shall not be required to obtain or to hold a license or certificate of authority issued by the commissioner or any other office. The association shall not be required to participate as a member insurer of the Mississippi Insurance Guaranty Association.

SECTION 3. Section 83-34-4, Mississippi Code of 1972, is reenacted and amended as follows:

83-34-4. (1) Nonadmitted insurers shall not be assessable insurers of the association. All surplus lines insurance producers placing insurance through nonadmitted insurers shall collect from the insured and remit to the association a nonadmitted policy fee on all premiums for all insurance written by such surplus lines insurance producer for a policy from a nonadmitted insurer for any and all risks in this state, except that policies or portions thereof that cover residential earthquake risks or residential flood risks that are not written through the National Flood Insurance Program shall be exempt from the nonadmitted policy fee. By procuring or selling insurance on property in this state from a nonadmitted insurer, each surplus lines insurance producer placing insurance through a nonadmitted insurer agrees to be bound by the provisions of this chapter and to collect and remit the nonadmitted policy fee provided for herein.

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

(3) The nonadmitted policy fee percentage shall be three percent (3%).

(4) Within twenty (20) days of the end of the quarter, surplus lines insurance producers placing insurance through nonadmitted insurers shall remit directly to the association all nonadmitted policy fees collected in the preceding quarter. In addition to the nonadmitted policy fee provided for herein, surplus lines insurance producers placing insurance through nonadmitted insurers shall collect and remit excess deficit surcharges as provided by this chapter. Surplus lines insurance producers placing insurance through nonadmitted insurers may designate another surplus lines insurance producer that actually procured the insurance from the nonadmitted carrier to collect and remit the nonadmitted policy fees.

(5) Each insured in this state who directly procures or renews insurance with a nonadmitted insurer on properties, risks or exposures located or to be performed, in whole or in part, in this state, other than insurance procured through a surplus lines licensee, shall be subject to the nonadmitted policy fee which shall be paid by the insured according to the procedures provided for premium taxes in Section 83-21-17(5).

(6) Monies derived from the nonadmitted policy fee collected under this section may be used by the association, in addition to any uses provided for in Section 83-34-3(4), for education, public outreach, training of building officials and other programs targeted to reduce the number of policies within the association; however, beginning on July 1, 2018, and ending on June 30, 2019, before any fees are remitted to the association, One Million Five Hundred Thousand Dollars ($1,500,000.00) shall be diverted and deposited into the Capital Expense Fund, and Four Million Five Hundred Thousand Dollars ($4,500,000.00) shall be diverted and deposited into the Rural Fire Truck Fund or Supplementary Rural Fire Truck Fund. Further, beginning July 1, 2019, and ending on June 30, 2020, before any fees are remitted to the association, Three Million Five Hundred Thousand Dollars ($3,500,000.00) shall be diverted and deposited into the Rural Fire Truck Fund or Supplementary Rural Fire Truck Fund, and Two Hundred Thousand Dollars ($200.000.00) shall be diverted for use by the State Fire Marshal's Office for fire prevention and education.

(7) This section shall stand repealed from and after July 1, * * * ~~2019~~ 2022.

SECTION 4. Section 83-34-5, Mississippi Code of 1972, is amended as follows:

83-34-5. The association shall, pursuant to the provisions of this chapter and the plan of operation, and with respect to essential property insurance on insurable property, have the power:

(a) To issue policies of essential property insurance on insurable property to applicants;

(b) At its option, and with consent of the commissioner, to issue policies of related essential property insurance on insurable property to applicants;

(d) To levy and collect * * * ~~regular~~ recoupable and nonrecoupable assessments from assessable insurers;

(e) To issue bonds or incur other forms of indebtedness, including, but not limited to, loans, lines of credit or letters of credit;

(f) To establish underwriting criteria consistent with the provisions of this chapter and as approved by the commissioner;

(g) To invest and reinvest income and assets subject to the oversight of the commissioner;

(h) To enter into contractual agreements with third parties, including the Mississippi Windstorm Mitigation Coordinating Council, for the purposes of developing and implementing windstorm mitigation programs; and

(i) All other powers necessary to carry out the provisions and intent of this chapter.

SECTION 5. Section 83-34-7, Mississippi Code of 1972, is amended as follows:

83-34-7. (1) The Board of Directors of the Mississippi Insurance Underwriting Association as presently constituted shall serve as the temporary board of directors of the association. Such temporary board of directors shall prepare and submit a plan of operation in accordance with Section 83-34-13 and shall serve until the permanent board of directors shall take office in accordance with the plan of operation. The permanent board shall consist of five (5) representatives of the members to be appointed by the temporary board of directors subject to the approval of the commissioner and three (3) agents from the coast area to be appointed by the commissioner. The terms of the members of the board of directors in place before March 22, 2007, shall expire on March 22, 2007, and such persons shall cease to serve on the board and shall relinquish all power and control of the association.

(2) (a) From and after * * * ~~March 22, 2007~~ July 1, 2019, the board of directors of the association shall consist of the following:

(i) The State Treasurer, who shall serve as an ex officio, nonvoting member;

(ii) * * * ~~Five (5)~~ Six (6) of the assessable insurer companies, * * * ~~three (3)~~ four (4) to be appointed by the commissioner, one (1) to be appointed by the Governor, and one (1) to be appointed by the Lieutenant Governor; each such assessable insurer appointed shall designate a representative knowledgeable in the matters of the association and authorize such representative to act and vote on its behalf;

(iii) Three (3) agents with no less than ten (10) years' experience in the property and casualty industry, two (2) of whom are residents in the coast area, and one (1) of whom is not a resident of the coast area; one (1) such coast area agent to be appointed by the Governor, one (1) such coast area agent to be appointed by the Lieutenant Governor, and the noncoast area agent to be appointed by the commissioner; and

(iv) Two (2) business leaders who are residents of the coast area and have * * * no less than ten (10) years' experience in management of a business, one (1) to be appointed by the Governor, and one (1) to be appointed by the Lieutenant Governor.

(b) * * * ~~Except for the State Treasurer, the~~ Board members shall serve three-year terms with each term beginning on January 1, and the initial terms shall be staggered in the following manner:

(i) The initial term for three (3) of the assessable insurers shall begin on March 22, 2007, and expire on December 31, 2010, thereafter to be appointed for three-year terms;

(ii) The initial term for one (1) of the assessable insurers shall begin on March 22, 2007, and expire on December 31, 2009, thereafter to be appointed for three-year terms;

(iii) The initial term for one (1) of the assessable insurers shall begin on March 22, 2007, and expire on December 31, 2008, thereafter to be appointed for three-year terms;

(iv) The initial term for one (1) of the agents shall begin on March 22, 2007, and expire on December 31, 2010, thereafter to be appointed for three-year terms;

(v) The initial term for one (1) of the agents shall begin on March 22, 2007, and expire on December 31, 2009, thereafter to be appointed for three-year terms;

(vi) The initial term for one (1) of the agents shall begin on March 22, 2007, and expire on December 31, 2008, thereafter to be appointed for three-year terms;

(vii) The initial term for one (1) of the business leaders shall begin on March 22, 2007, and expire on December 31, 2010, thereafter to be appointed for three-year terms;

(viii) The initial term for one (1) of the business leaders shall begin on March 22, 2007, and expire on December 31, 2008, thereafter to be appointed for three-year terms * * *.; and

(ix) The initial term for one (1) of the assessable insurers shall begin on July 1, 2019, and expire on December 31, 2019, and thereafter to be appointed for three-year terms.

(3) On or before March 22, 2007, the appropriate public official shall make such appointments and request such resignations from the existing board as are appropriate to comply with this section.

(4) The board shall be staffed by as many employees as it deems necessary.

(5) The board of directors has the power to act and make binding decisions on behalf of the association on all issues.

SECTION 6. Section 83-34-9, Mississippi Code of 1972, is amended as follows:

83-34-9. (1) All assessable insurers of the association shall participate in * * * ~~regular~~ recoupable and nonrecoupable assessments levied by the association based upon their percentage of participation. The association may allow affiliated insurers to combine their annual net direct premiums and other data, including data that supports any incentives that may be allowed by the association, to the extent that such grouping promotes the voluntary writing of essential property insurance in the coast area. Any provisions for credits and grouping of data shall be prescribed in the plan of operation.

(2) All profits of the association shall remain as assets of the association.

(3) The plan of operation shall provide financial incentives or financial penalties, or both, to ensure that assessable insurers write essential property insurance in the coast area. The incentives and penalties may include, but are not limited to, a reduction in * * * ~~recovery of regular~~ recoupable and nonrecoupable assessments, * * * adjustments in the percentage of participation, and other incentives and penalties as provided in the plan of operation. The commissioner shall approve the plan of operation as provided in Section 83-34-13.

SECTION 7. Section 83-34-10, Mississippi Code of 1972, is amended as follows:

83-34-10. (1) In the event of a * * * ~~storm~~ covered event that may produce losses in excess of funds that may be immediately available to the association, or in the event that the association determines that it will otherwise have a claim deficit or any other deficit, then the association, with consent of the commissioner, shall have the power to levy * * * ~~regular~~ recoupable and nonrecoupable assessments against assessable insurers based upon their percentage of participation. * * *

The minimum reserve, as set forth in the plan of operation, shall not be considered as funds available to the association in determining whether to levy a recoupable or nonrecoupable assessment.

(2) A nonrecoupable assessment levied under this section shall not exceed six percent (6%) of the association's year-end total limits in force for the preceding calendar year, or Two Hundred Fifty Million Dollars ($250,000,000.00), whichever is less. Further, in any calendar year, the annual total of all nonrecoupable assessment funds collected shall not exceed, in the aggregate, Two Hundred Fifty Million Dollars ($250,000,000.00).

SECTION 8. Section 83-34-12, Mississippi Code of 1972, is amended as follows:

83-34-12. The * * * ~~regular~~ recoupable or nonrecoupable assessment of an assessable insurer may, after hearing, be ordered deferred, in whole or in part, upon application by the insurer if, in the opinion of the commissioner, payment of the recoupable or nonrecoupable assessment would render the insurer insolvent or in danger of insolvency, or would otherwise leave the insurer in such a condition that further transaction of the insurer's business would be hazardous to its policyholders, creditors, assessable insurers, subscribers, stockholders or the public. If that payment of * * * an a recoupable or nonrecoupable assessment against an assessable insurer is deferred by order of the commissioner, in whole or in part, the amount by which the recoupable or nonrecoupable assessment is deferred shall be assessed against other assessable insurers in the same manner as provided in Section 83-34-9.

SECTION 9. Section 83-34-13, Mississippi Code of 1972, is amended as follows:

83-34-13. (1) Within forty-five (45) days after March 22, 2007, the directors of the association shall submit to the commissioner for review and approval a proposed plan of operation revised to be consistent with the provisions of Chapter 425, Laws of 2007. The association shall maintain a plan of operation. The plan shall provide for the efficient, economical, fair and nondiscriminatory administration of the association. The plan may include the establishment of a minimum reserve, methods for the nonrecoupable assessment of all assessable insurers for deficits and expenses, the establishment of necessary facilities, management of the association, underwriting standards, procedures for determining the amounts of insurance to be provided to specific risks, time limits and procedures for processing applications for insurance, and for such other provisions as may be deemed necessary by the board to carry out the purposes of this chapter. The plan of operation shall include in the plan of operation a mechanism for recoupment of recoupable assessments.

(2) The plan of operation shall provide financial incentives or financial penalties, or both, to ensure that assessable insurers write essential property insurance in the coast area. The incentives and penalties may include, but are not limited to, a reduction in * * * ~~recovery of regular~~ nonrecoupable assessments, * * * adjustments in the percentage of participation, and other incentives and penalties as provided in the plan of operation.

(3) The plan of operation shall provide (a) that the association shall offer a two percent (2%) deductible for loss from named storms; and (b) that the association shall also offer options for other deductibles for loss from named storms with appropriate rate reductions that shall include at least a twenty percent (20%) deductible for loss from named storms.

(4) The plan of operation shall provide that the association use actuarially appropriate geographical zones for rating and for the use of credits and penalties to encourage voluntary writing in the coast area.

(5) The commissioner shall approve the plan of operation and all amendments before they become effective. It is the obligation of the commissioner to confirm that such plan fulfills the purposes of this chapter. If the commissioner approves a proposed plan or amendment, he shall certify the approval to the directors, and the plan, or amendment thereto, shall become effective ten (10) days after such certification. If the commissioner disapproves all or any part of the proposed plan of operation, or amendment thereto, he shall return the same to the directors with a written statement giving the reasons for disapproval and any recommendations the commissioner may wish to make. Within ten (10) days thereafter, the directors may alter the plan or amendment in accordance with the commissioner's recommendation or may return a new plan to the commissioner. The commissioner shall consider the proposals and shall then promulgate and place into effect a plan of operation certifying the same to the directors of the association after approval by the board of directors. Any such plan promulgated by the commissioner shall take effect ten (10) days after certification to the directors.

(6) The commissioner may review the plan of operation at any time he deems expedient or prudent. After review of the plan, the commissioner may amend the plan after consultation with the directors of the association and upon certification to the directors of the amendment.

SECTION 10. Section 83-34-23, Mississippi Code of 1972, is amended as follows:

83-34-23. There shall be no liability on the part of the insurance commissioner or any of his staff and representatives for any action taken under and pursuant to the provisions of this chapter. There shall be no liability on the part of the association, its agents, representatives or employees, the members of the board, or any assessable insurer of the association, except for the * * * ~~contractual~~ specific obligations * * * of stated in any contract of insurance and the duty to pay assessments as provided in this chapter.

SECTION 11. Section 83-34-31, Mississippi Code of 1972, is amended as follows:

83-34-31. (1) The board of directors, subject to the approval of the commissioner, shall have the power and authority to issue bonds, and the power and authority to enter into loans, letters of credit, lines of credit, and other forms of indebtedness, as needed for operations, the purchase of reinsurance, claim losses, and incurred but not reported claims.

* * *

( * * *32) * * * The bonds must be in a form approved by the commissioner. With approval of the commissioner, the association may issue bonds or incur other indebtedness to retire or consolidate bonds as appropriate. Bonds and other debt obligations issued by or on behalf of the association are not to be considered "state bonds" and shall not be an obligation of the state.

( * * *43) The state hereby covenants with holders of bonds issued pursuant to this * * * ~~section~~ chapter that the state will not limit, alter or deny the duties and obligations of this chapter, and of the association and the commissioner as established by this chapter, necessary to fulfill the terms of any agreements with bondholders, or in any way impair the rights and remedies of such bondholders as long as any such bonds remain outstanding unless adequate provision has been made for the payment of such bonds pursuant to the documents authorizing the issuance of such bonds.

SECTION 12. Section 83-34-33, Mississippi Code of 1972, is amended as follows:

83-34-33. (1) When the association knows or has reason to believe that (a) it has or will incur losses from a * * * ~~hurricane~~ covered event that exceeds available surplus, reinsurance, recoupable or nonrecoupable assessments 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 an excess deficit that cannot be reasonably resolved by income available to the association above the minimum reserve, then the association shall immediately give notice to the commissioner and request that the commissioner implement * * * by an excess * * * ~~hurricane loss~~ deficit 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~~ covered event, or other deficit.

(2) All such bonds and loans are secured by the power and duty of the commissioner to implement surcharges against all property and casualty insurance premiums for insurance for property and activities in this state sufficient to repay the bonds or loans, or both.

(3) If any of the bonds remain unsold sixty (60) days after issuance, the commissioner shall require all assessable insurers to purchase the bonds, which purchased bonds shall be treated as admitted assets; each assessable insurer shall be required to purchase that percentage of the unsold portion of the bond issue that equals the assessable insurer's current percentage of participation. An assessable insurer shall not be required to purchase the bonds to the extent that the commissioner determines that the purchase would endanger or impair the solvency of the insurer. The bonds must be in a form approved by the commissioner. With approval of the commissioner, the association may issue bonds or incur other indebtedness to retire or consolidate bonds as appropriate. Bonds and other debt obligations issued by or on behalf of the association are not to be considered "state bonds" and shall not be an obligation of the state.

( * * *24) At such time as the commissioner can reasonably estimate the amount of bonds or indebtedness, or both, necessitated by a * * * ~~hurricane~~ covered 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~~ deficit 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.

( * * *35) If the excess deficit surcharge is designed to repay bonds, it shall be designated as such and all funds recovered from the excess deficit 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.

( * * *46) If the excess deficit surcharge is designed to repay a specific indebtedness incurred for losses from a specific * * * ~~hurricane~~ covered event, it shall be designated as such and all funds recovered from the excess deficit 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.

( * * *57) Such excess deficit 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~~ covered event losses or bonds or indebtedness for which it was implemented. The commissioner shall name each such excess deficit surcharge so that it can be uniformly identified by insurers and agents.

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

( * * *79) The commissioner shall implement an appropriate excess deficit surcharge percentage sufficient to recover the amount necessary for repayment of bonds and indebtedness necessitated by a * * * ~~hurricane~~ covered event, or the resolution of other deficit, as applicable. If at any time such surcharge shall be insufficient, the commissioner shall increase the excess deficit surcharge as necessary and appropriate. The commissioner shall cease excess deficit surcharges as he determines appropriate funds have been collected. However, the commissioner shall endeavor to apply excess deficit 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.

( * * *810) Each licensed insurer issuing insurance for property and casualty risks in the state and each agent placing insurance through nonadmitted insurers, shall collect the excess deficit 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 excess deficit 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 excess deficit surcharge funds.

( * * *911) 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 excess deficit surcharges at the expense of the licensed insurers and agents.

( * * *1012) The commissioner has the duty and power to adjust the percentage of any excess deficit 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~~ covered event, the rate of recovery, anticipated length of total recovery, and impact of other * * * ~~hurricanes~~ covered events; however, the commissioner shall not reduce the amount of * * * ~~assessments~~ excess deficit surcharges 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.

( * * *1113) When the association knows or has reason to believe that excess deficit 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 excess deficit surcharge as necessary to timely pay or redeem bonds or pay other indebtedness.

( * * *1214) The association shall report quarterly to the commissioner providing all financial information for each excess deficit surcharge authorized by this section, including:

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

(b) Total excess deficit surcharge funds recovered to date; and

( * * *1315) The commissioner may request, and the association shall provide, on an immediate basis to the commissioner any financial information or other information concerning any excess deficit surcharge. This section shall not limit the reporting requirements provided by Section 83-34-25.

SECTION 13. Section 83-34-35, Mississippi Code of 1972, is amended as follows:

83-34-35. In order to avoid or lessen the possibility and amount of excess deficit surcharges authorized by this chapter, the commissioner shall approve rates for policies issued by the association at least adequate to fund annual reinsurance above a self-insured retention of One Hundred Million Dollars ($100,000,000.00) that, combined with any readily available reserves of the association, is sufficient to cover at least the probable maximum losses from a storm expected to occur once every one hundred (100) years as predicted by a model or method approved by the commissioner for the properties insured by the association at the time the reinsurance was negotiated. The amount of reinsurance in the foregoing rate adequacy requirement shall increase every two (2) years by increasing the probable maximum loss by five (5) years, until such time as the probable maximum loss insured is for a storm expected to occur every one hundred fifty (150) years. The commissioner may approve rates in excess of the minimums required by this section as consistent with his duties and the insurance laws of the State of Mississippi. Any self-insured retention related to the purchase of reinsurance shall be subject to the prior approval of the commissioner.

SECTION 14. Section 83-34-11, Mississippi Code of 1972, which implements a surcharge on all property and casualty insurance premiums in this state, is hereby repealed.

SECTION 15. Section 17-23-1, Mississippi Code of 1972, is brought forward as follows:

17-23-1. (1) There is established the Rural Fire Truck Acquisition Assistance Program to be administered by the Department of Insurance for the purpose of assisting counties and municipalities in the acquisition of fire trucks.

(2) There is created in the State Treasury a special fund to be designated as the "Rural Fire Truck Fund." The Legislature may appropriate that amount necessary to fulfill the obligations created under this section by the Department of Insurance, from the State General Fund to such special fund, which sum shall be added to the remainder of the money transferred on July 1, 1995, and during the 1996 Regular Session to the Rural Fire Truck Fund. Unexpended amounts remaining in the fund at the end of a fiscal year shall not lapse into the State General Fund, and any interest earned on amounts in the fund shall be deposited to the credit of the fund. Unobligated amounts remaining in the Rural Fire Truck Fund, Fund No. 3507, or in any fund created for funds appropriated or otherwise made available for this program, may be used as matching funds by any county with remaining eligibility as provided herein. It is the intent of the Legislature that the Department of Insurance continue to accept applications from the counties for fire trucks as provided in subsection (3) of this section.

(3) (a) A county that meets the requirements provided herein may receive an amount not to exceed Seven Hundred Forty Thousand Dollars ($740,000.00) as provided in subparagraphs (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi) and (xii) of this paragraph, and such amount shall be divided as follows: an amount of not more than Fifty Thousand Dollars ($50,000.00) per fire truck for the first six (6) trucks and not more than Seventy Thousand Dollars ($70,000.00) per fire truck for the seventh, eighth, ninth, tenth and eleventh trucks, and not more than Ninety Thousand Dollars ($90,000.00) per fire truck for the twelfth truck. Monies distributed under this chapter shall be expended only for the purchase of new fire trucks and such trucks must meet the National Fire Protection Association (NFPA) standards in the 1900 series.

(i) Any county that has not applied for a fire truck under this section is eligible to submit applications for twelve (12) fire trucks as follows: six (6) fire trucks at not more than Fifty Thousand Dollars ($50,000.00) per truck and five (5) fire trucks at not more than Seventy Thousand Dollars ($70,000.00) per truck, and one (1) fire truck at not more than Ninety Thousand Dollars ($90,000.00) or a total of Seven Hundred Forty Thousand Dollars ($740,000.00).

(ii) Any county that has received one (1) fire truck under this section is eligible to submit applications for eleven (11) fire trucks as follows: five (5) fire trucks at not more than Fifty Thousand Dollars ($50,000.00) per truck and five (5) fire trucks at not more than Seventy Thousand Dollars ($70,000.00) per truck, and one (1) fire truck at not more than Ninety Thousand Dollars ($90,000.00) or a total of Six Hundred Ninety Thousand Dollars ($690,000.00).

(iii) Any county that has received two (2) fire trucks under this section is eligible to submit an application for ten (10) fire trucks as follows: four (4) fire trucks at not more than Fifty Thousand Dollars ($50,000.00) per truck and five (5) fire trucks at not more than Seventy Thousand Dollars ($70,000.00) per truck, and one (1) fire truck at not more than Ninety Thousand Dollars ($90,000.00) or a total of not more than Six Hundred Forty Thousand Dollars ($640,000.00).

(iv) Any county that has received three (3) fire trucks under this section is eligible to submit an application for nine (9) fire trucks as follows: three (3) fire trucks at not more than Fifty Thousand Dollars ($50,000.00) per truck and five (5) fire trucks at not more than Seventy Thousand Dollars ($70,000.00) per truck, and one (1) fire truck at not more than Ninety Thousand Dollars ($90,000.00) or a total of not more than Five Hundred Ninety Thousand Dollars ($590,000.00).

(v) Any county that has received four (4) fire trucks under this section is eligible to submit an application for eight (8) fire trucks as follows: two (2) fire trucks at not more than Fifty Thousand Dollars ($50,000.00) per truck and five (5) fire trucks at not more than Seventy Thousand Dollars ($70,000.00) per truck, and one (1) fire truck at not more than Ninety Thousand Dollars ($90,000.00) or a total of not more than Five Hundred Forty Thousand Dollars ($540,000.00).

(vi) Any county that has received five (5) fire trucks under this section is eligible to submit an application for seven (7) fire trucks as follows: one (1) fire truck at not more than Fifty Thousand Dollars ($50,000.00) per truck and five (5) fire trucks at not more than Seventy Thousand Dollars ($70,000.00) per truck, and one (1) fire truck at not more than Ninety Thousand Dollars ($90,000.00) or a total of not more than Four Hundred Ninety Thousand Dollars ($490,000.00).

(vii) Any county that has received six (6) fire trucks under this section is eligible to submit an application for six (6) fire trucks as follows: five (5) fire trucks at not more than Seventy Thousand Dollars ($70,000.00) per truck, and one (1) fire truck at not more than Ninety Thousand Dollars ($90,000.00) or a total of not more than Four Hundred Forty Thousand Dollars ($440,000.00).

(viii) Any county that has received seven (7) fire trucks under this section is eligible to submit an application for five (5) fire trucks as follows: four (4) fire trucks at not more than Seventy Thousand Dollars ($70,000.00) per truck, and one (1) fire truck at not more than Ninety Thousand Dollars ($90,000.00) or a total of not more than Three Hundred Seventy Thousand Dollars ($370,000.00).

(ix) Any county that has received eight (8) fire trucks under this section is eligible to submit an application for four (4) fire trucks as follows: three (3) fire trucks at not more than Seventy Thousand Dollars ($70,000.00) per truck, and one (1) fire truck at not more than Ninety Thousand Dollars ($90,000.00) or a total of not more than Three Hundred Thousand Dollars ($300,000.00).

(x) Any county that has received nine (9) fire trucks under this section is eligible to submit an application for three (3) fire trucks as follows: two (2) fire truck at not more than Seventy Thousand Dollars ($70,000.00) per truck, and one (1) fire truck at not more than Ninety Thousand Dollars ($90,000.00) or a total of not more than Two Hundred Thirty Thousand Dollars ($230,000.00).

(xi) Any county that has received ten (10) fire trucks under this section is eligible to submit an application for two (2) fire trucks as follows: one (1) fire truck at not more than Seventy Thousand Dollars ($70,000.00) per truck, and one (1) fire truck at not more than Ninety Thousand Dollars ($90,000.00) or a total of not more than One Hundred Sixty Thousand Dollars ($160,000.00).

(xii) Any county that has received eleven (11) fire trucks under this section is eligible to submit an application for one (1) fire truck at not more than Ninety Thousand Dollars ($90,000.00).

(xiii) Any county may apply for one (1) fire truck at not more than Ninety Thousand Dollars ($90,000.00) as provided in subparagraph (xii), provided that the county agrees to forego any previous fire truck for which the county has not previously applied, and that the county has received approval from the Rural Fire Truck Acquisition Assistance Program Committee to apply for and receive a truck under subparagraph (xii).

(b) The board of supervisors of the county shall submit its request for the receipt of monies to the Department of Insurance. A committee composed of the Commissioner of Insurance, the State Fire Coordinator, the Director of the Rating Bureau and the Director of the State Fire Academy shall review the requests by the boards of supervisors and shall determine whether the county or municipality for which the board of supervisors has requested a truck meets the requirements of eligibility under this chapter.

(i) A county or municipality must pledge to set aside or dedicate each year as matching funds, for a period not to extend over ten (10) years, local funds in an amount equal to or not less than one-tenth (1/10) of the amount of monies for which it is requesting distribution from the Rural Fire Truck Fund, which pledged monies may be derived from local ad valorem tax authorized by law or from any other funds available to the county or municipality, except for those funds received by municipalities or counties from the Municipal Fire Protection Fund or the County Volunteer Fire Department Fund, as defined in Sections 83-1-37 and 83-1-39.

(ii) A municipality must provide adequate documentation of its contract with the county that requires the municipality to provide fire protection in rural areas. The term "rural areas" means any area within the county located outside the boundaries of an incorporated municipality or any incorporated municipality with a population of two thousand five hundred (2,500) or less.

(d) The Department of Insurance shall maintain an accurate record of all monies distributed to counties and municipalities and the number of fire trucks purchased and the cost for each fire truck, such records to be kept separate from other records of the Department of Insurance; notify counties and municipalities of the Rural Fire Truck Acquisition Assistance Program and the requirements for them to become eligible to participate; adopt and promulgate such rules and regulations as may be necessary and desirable to implement the provisions of this chapter; and file with the Legislature a report detailing how monies made available under this chapter were distributed and spent during the preceding portion of the fiscal year in each county and municipality, the number of fire trucks purchased, the counties and municipalities making such purchases, and the cost of each fire truck purchased.

SECTION 16. This act shall take effect and be in force from and after July 1, 2019, and shall stand repealed on June 30, 2019.