Sec. 525.1. Centralized Operations Authorized.
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Sec. 525.1. Centralized Operations Authorized.)
(1)The Industry Placement Facility is authorized, for FAIR Plan purposes only, to issue policies of insurance and endorsements thereto in its own name or a trade name duly adopted for that purpose, and to act on behalf of all participating insurers in connection with said policies and otherwise in any manner necessary to accomplish the purposes of this Article, including but not limited to collection of premiums, issuance of cancellations, and payment of commissions, losses, judgments and expenses.
(2)The participating insurers shall be liable to the Facility as provided in this Article, the Program and any related Articles of Agreement for the expenses and liabilities so incurred by the Facility, and the Governing Committee shall make assessments against the participating insurers as required to meet such expenses and liabilities. In connection with any policy issued by the Facility:
(a)the name and percentage participation of each participating insurer shall be made available to the insured upon request to the Facility;
(b)service of any notice, proof of loss, legal process or other communication with respect to the policy may and shall be made upon the Facility; and
(c)any action by the insured constituting a claim under the policy shall be brought only against the Facility, and the Facility shall be the proper party for all purposes in any action brought under or in connection with any such policy. The foregoing requirements shall be set forth in any policy issued by the Facility and the form and content of any such policy shall be subject to the approval of the Director of Insurance.
(3)The Facility is authorized to assume and cede reinsurance in conformity with the Program.
(a)Each insurer must participate in the writings, expenses, profits and losses of the Facility in the proportion that its premiums written, with respect to each fund, bear to the aggregate premiums written by all insurers, with respect to each said fund, excluding that portion of the premiums written attributable to the operation of the Facility except as otherwise provided in this Section.
(b)The Director of Insurance shall by rule establish procedures for determining the net level of participation required of each insurer, which shall include the following elements:
(i)The designation of one or more contiguous ZIP CODE areas within this State wherein the insurers writing new policies upon risks which they do not insure prior to the effective date of this amendatory Act may receive credit against their obligation for FAIR Plan risks;
(ii)The minimum level of participation required of all insurers regardless of the amount of credit allowed but which in no case shall be less than 50% of that level of participation that would be required as defined in paragraph
(a)above;
(iii)A designation of the type of risks for which credit may be allowed, provided that credit shall not apply to commercial risks where the annual premium for the policy exceeds $2,000 for each fixed location;
(iv)The maximum level of participation required of all insurers regardless of the amount of credit allowed.
(c)The procedures for determining levels of participation and all designations, formulas, minima and maxima required by this Section shall be reasonably designed to effect the intent of this Article without exempting any insurer from the participation requirement.
(5)Voting on administrative questions of the Facility shall be weighted in accordance with each insurers' premium written during the second preceding calendar year as disclosed in the reports filed by the insurer with the Director.
(6)The Facility may on its own initiative or at the request of the Director, amend its rules or Program, subject to approval by the Director.