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Texas Insurance Code - INS § 2210.634. Use of Proceeds

Current as of January 01, 2024 | Updated by Findlaw Staff

(a) The proceeds of a financing arrangement, including investment income, shall be held in trust for the exclusive use and benefit of the association.  The association may use the proceeds to:

(1) pay incurred claims and operating expenses of the association;

(2) pay the costs of issuing a financing arrangement and any financing arrangement administrative expenses;

(3) provide for debt service reserve funds;

(4) pay capitalized interest and principal on a financing arrangement for a period determined necessary by the association;

(5) pay private financial arrangements entered into by the association as temporary sources of payment of losses and operating expenses of the association;  and

(6) reimburse the association for any cost described by this subsection paid to the association before issuance of the financing arrangement.

(b) The association may use excess proceeds of a financing arrangement entered into under Section 2210.632 remaining after the purposes for which the financing arrangement was entered into are satisfied to repay any financing arrangement obligations or financing arrangement administrative expenses.  If all outstanding financing arrangement obligations or financing arrangement administrative expenses are satisfied, the excess proceeds shall be transferred to the catastrophe reserve trust fund.

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Cite this article: FindLaw.com - Texas Insurance Code - INS § 2210.634. Use of Proceeds - last updated January 01, 2024 | https://codes.findlaw.com/tx/insurance-code/ins-sect-2210-634/

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