MISSISSIPPI WINDSTORM UNDERWRITING ASSOCIATION

Plan of Operation

Part I

The Mississippi Windstorm Underwriting Association was established by HB 274, 1987 session of the Mississippi Legislature to provide a method whereby an adequate market for Windstorm and Hail Insurance may be provided in the Coast Area of Mississippi.

SECTION I - PURPOSE OF THE MISSISSIPPI WINDSTORM UNDERWRITING ASSOCIATION

  1. To provide an adequate market for windstorm and hail coverage which is necessary to the economic welfare of the Coast area in order to insure its orderly growth and development.

  2. To provide adequate insurance upon property in the Coast area which is necessary to enable homeowners and commercial owners to obtain financing for the purchase and improvement of their property.

  3. To provide an equitable method whereby every licensed insurer writing Windstorm and Hail coverage in Mississippi is required to meet its public responsibility.

  4. To provide a mandatory Plan to assure an adequate market for Windstorm and Hail Coverage in the Coast area of Mississippi and to fulfill the Purposes provided by the Mississippi Legislature.

SECTION II - DEFINITIONS OF TERMS

    1. "Essential Property Insurance" means insurance against direct loss to property as defined and limited in the standard Windstorm and Hail endorsement thereon, as approved by the Commissioner.
    2. "Association" means the Mississippi Windstorm Underwriting Association established by HB 274, 1987 session of the Mississippi Legislature.
    3. "Plan of Operation" means the Plan of Operation of the Association approved or promulgated by the Commissioner pursuant to HB 274, 1987 session of the Mississippi Legislature.
    4. "Insurable Property" means builder's risk and real property at fixed locations in Coast area or the contents located therein, (but shall not include insurance on motor vehicles) which property is determined by the Association, after inspection and pursuant to the criteria specified in the Plan of Operation to be an insurable condition.
    5. "Commissioner" means the Insurance Commissioner of the State of Mississippi.
    6. "Coast Area" means all of that area of the State of Mississippi located in Hancock, Harrison, Jackson, Pearl River, Stone and George Counties.
    7. "Net Direct Premiums" means gross direct premiums excluding reinsurance assumed and ceded, written on property in this State for the windstorm and hail causes of loss or equivalent causes of loss components of property insurance policies, including the windstorm and hail causes of loss or equivalent causes of loss components of approved residential package policies and commercial multiple peril policies, less return premiums upon canceled contracts, dividends paid or credited to policyholders or the unused or unabsorbed portion of premium deposits and excluding premiums on farm property.
    8. "Insurer" means any licensed insurance company or other organizations authorized to write and engaged in writing property insurance, including the property insurance components of Multiple Peril Policies, on a direct basis in this State.
    9. "Servicing Insurer" means an insurer who enters into an agreement with the Association to provide and service policies on risks referred to it by the Association.
    10. "Inspection Bureau" means the Mississippi State Rating Bureau or other organizations designated by the Association with the approval of the Commissioner to make inspections as required under this Plan of Operation and to perform such other duties as may be authorized by the Association.

      11.

SECTION III - INSPECTIONS AND REPORTS

    1. Any person having an insurable interest in insurable property eligible for coverage in the Mississippi Windstorm Underwriting Association may be entitled to apply to the Association for such coverage and for an inspection of the property by the Inspection Bureau. Such applications shall be submitted on forms prescribed by the Association and shall be made on behalf of the applicant by a licensed Mississippi resident agent or broker authorized by him, and shall contain a statement by the applicant as to whether or not there are any unpaid premiums due from the applicant for insurance on the property. The term "insurable interest" shall be deemed to include any lawful and substantial economic interest in the safety or preservation of property from loss, destruction or pecuniary damage.
    2. The manner and scope of the inspection shall be prescribed by the Association with the approval of the Commissioner.
    3. The Inspection Bureau must be provided full access to the building, but the presence of the owner of a building may not be required for a tenant seeking insurance.
    4. An inspection report shall be made for each property inspected. The report shall cover pertinent structural and occupancy features as well as the general condition of the building. Representative photographs of the property may be taken during the inspection.
    5. After the inspection, a copy of the completed inspection report and any photograph(s) indicating the pertinent features of the building, construction, maintenance and occupancy, shall be sent within fifteen days (15) to the Association.
    6. All reports of inspections performed by or on behalf of the Association shall be made available to members of the Association, applicants, agent or broker and the Commissioner upon request.

SECTION IV - PROCEDURE AFTER INSPECTION

  • The Association shall, within a reasonable time after receipt of the inspection report and application, advise the agent or applicant that:

  •  the risk is acceptable and coverage will be bound upon receipt by the Association of the applicable     premium; or

  •  the risk is not accepted but will be acceptable if improvements noted in the action report are made by the applicant and confirmed by reinspection; or

  •  the risk is not acceptable for the reasons stated in the action report.

  • In the event a risk is declined because it fails to meet reasonable underwriting standards, the Association shall notify the applicant or his designated representative. Reasonable underwriting standards shall include, but not be limited to, the following:

  •  the amount of insurance requested, together with other insurance, is within reasonable relationship to the actual cash value of the property involved;

  •  physical condition of the property, such as its construction, evidence of previous damage or general deterioration;

  •  its present use or housekeeping, such as vacancy, overcrowding, storage of rubbish or flammable materials;

  •  violation of law, public policy, morals, and the character or integrity of the property owner or occupant.

  •  property insurance, if any, other than Windstorm and Hail insurance written through the Association, shall be provided by insurers who are member companies in the Association.

  • Any one (1) or two (2) family dwelling built in substantial accordance with the standard building code, including the design-wind requirements, which is not otherwise rendered uninsurable by reason of use, occupancy or state of repair shall be an insurable risk within the meaning of the Plan. Further, any structure commenced on or after June 1, 1987, located in an area that has not adopted the standard building code, the owner or applicant shall furnish with the application proof in the form of a certificate from a local building inspector, contractor, engineer or architect that the structure is built in substantial accordance with the standard building code.
  • A risk shall not be declined for neighborhood, area, location or environmental hazards beyond the control of the applicant.
  • In any case where a risk, not accepted because the property does not meet reasonable underwriting standards, can be improved to meet such standards, the Association shall promptly advise the applicant what improvements, noted in the action report, should be made to the property to make it acceptable. Upon notice to the Association of completion of such improvements, the Association shall promptly arrange to have the property reinspected and if, after such reinspection, the property is found insurable, the Association shall, upon receipt of the applicable required premium, designate a Servicing Insurer to provide and service a policy.
  • Rate surcharges may be made applicable as approved by the Commissioner.
  • If the risk is declined, or if the applicant is notified that coverage will be written if stated improvements are made, the Association shall advise the property owner of his right to appeal and the procedure therefor. A copy of the report of inspection shall be made available to the applicant upon request.

SECTION V - PLACEMENT OF INSURANCE

    1. Upon approval by the Association of an application for insurance and upon receipt by the Association of the applicable required premium by check, or money order, the Association shall issue a binding receipt and instruct a Servicing Insurer to provide and service a policy of insurance.
    2. Any Insurer, upon application and approval of the Board of Directors, may elect to act as a Servicing Insurer by entering into an agreement with the Association to act in such capacity.
    3. On property located in the "Coast Area", the Association shall undertake through a Servicing Insurer(s), to place insurance up to the reasonable insurable value of the property, subject to a maximum at any one location for all insured interests of: $1,000,000. on dwellings not exceeding four (4) families and $250,000 on dwelling contents contained therein; $1,000,000. on all other eligible property including manufacturing or processing plants. Location means real and personal property consisting of and contained in a single building, or consisting of or contained in contiguous buildings when rated as one (1) risk by the Mississippi State Rating Bureau. In the case of manufacturing or processing plants, a multi-location or a commercial risk written blanket with multi-locations, the maximum coverage shall apply to the total location or locations when written blanket. A location is applicable when it is not broken by a public thoroughfare, property of others or railroads. When the maximum value is limited to $1,000,000.00 per building, location or multi-locations, when written blanket, and Rule (3) of Sub-Item 6. A., Rates, Section II of the Manual of Rules and Procedures applies, the coinsurance rule is eliminated.
    4. Where the above limits are not adequate for both owner(s) and tenant(s), an additional amount may be set by the Commissioner. Before an additional amount of insurance may be set by the Commissioner, a hearing shall be conducted in the office of the Commissioner, with at least ten (10) days notice to all concerned parties, in order to determine all aspects of insurance needs and sources of insurance availability on the open insurance market. The owner of the property in question, or his authorized representative, together with his licensed Mississippi Resident Agent or Broker and representatives of the Mississippi Windstorm Underwriting Association Board of Directors, shall appear at the hearing. Information in writing shall be provided the Commissioner prior to the hearing which outlines all facts relative to the unavailability of property insurance for the property in question.
    5. An endorsement allowing policies written in the "Coast Area" to act as primary coverage may be written when maximum limits are written in the Association (Section IV, Item 2.e. does not apply to this procedure).

SECTION VI - STANDARD POLICY COVERAGE

    1. All policies issued shall be the Essential Property Insurance on Standard policy forms from Windstorm and Hail as approved by the Commissioner, and such policies shall be issued for a term of one year.
    2. Any policy issued pursuant to the provisions of this Plan shall be renewed if upon application therefor the property meets the definition of "Insurable Property" and reasonable underwriting standards and if the applicant has an "insurable interest" therein.
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SECTION VII - CANCELLATION

  • No policy issued under this Plan of Operation shall be canceled by a Servicing Insurer without prior approval of the Association. Grounds for such cancellation shall be limited to:

  •  non-payment of premium; or

  •  default in payment under a premium payment arrangement; or

  •  evidence of incendiarism; or

  •  misrepresentation or concealment of any material fact either before or after loss; or

  •  cause which would have been grounds for non-acceptance of the risk under the Plan of Operation had such cause been known at the time of acceptance; or

  •  cause arising subsequent to the inspection which would have been grounds for non-acceptance of the risk under the Plan of Operation had such cause existed at the time of acceptance.

  • Notice of cancellation, together with a statement of the reason therefor, shall be sent to the insured and a copy sent to the agent or broker and Association. Such notice shall be accompanied by a statement explaining that the insured has a right of appeal as hereinafter provided.

  • When a policy is canceled under this Section, such policy shall not be reinstated. Continued coverage, if desired, shall be based on a new application subject to all requirements of the Plan of Operation.

SECTION VIII - APPEALS

    1. Any applicant for insurance and any person insured under the Plan of Operation or any affected insurer may appeal to the Board of Directors within fifteen (15) days after final ruling, action or decision of the Association, the Inspection Bureau or a Servicing Insurer. The Board or an Appeals Committee designated by the Board shall hear and determine such appeal within fifteen (15) days after the same is filed. Such determination may be appealed to the Commissioner within thirty (30) days as provided by Statute.
    2. Orders of the Commissioner shall be subject to judicial review as provided by Statute.
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SECTION IX - UNDERWRITING ASSOCIATION

1. The Underwriting Association shall be authorized to assume reinsurance and to cede reinsurance of eligible risks written by Servicing Insurers under the Plan. It is also authorized to purchase reinsurance on behalf of its members, provided such reinsurance is authorized by a majority of the Directors. The reinsurance so assumed by the Association on behalf of all insureds shall be one hundred percent (100%) cessions. Servicing Insurers shall cede to the Association one hundred percent (100%) of each risk accepted.

  • Each member of the Association shall participate in the writings, expenses, profits and losses in the proportion that the net direct premiums of such member written in the State during the preceding calendar year bear to the aggregate net direct premiums written in the State by all members of the Association. The Commissioner shall certify to the Association, after review of annual statements, other reports, and any other statistics he shall deem necessary, the aggregate net direct premiums written by all members. However, a member shall annually receive credit for Essential Property Insurance voluntarily written and its participation in the writings of the Association shall be reduced accordingly, except all members shall participate in the first ten percent (10%) of losses. Its participation in the expenses of the Association shall not be reduced thereby. Each members participation in the Association shall be determined annually in the manner provided in the Plan of Operation.
  • Any insurer authorized to write and engaged in writing Essential Property Insurance after the effective date of this Plan, shall become a member of the Association on January 1, immediately following such authorization and the determination of such insurer's participation in the Association, shall be made as of the date of such membership in the same manner as for other members of the Association.
  • The Board of Directors, acting on behalf of the Association, is authorized to make a preliminary assessment upon all insurers and such further assessments as may be deemed necessary.
  • The assessment of a member 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 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, members, subscribers, stockholders or the public. In the event that payment of an assessment against a member insurer is deferred by order of the Commissioner in whole or in part, the amount by which such assessment is deferred must be assessed against other member insurers in the same manner as provided in Section 6 of this act.

In its order of deferral, or in such subsequent orders as may be necessary, the Commissioner shall prescribe a plan by which the assessment so deferred must be repaid to the Association by the impaired insurer with interest at the six-month treasury bill rate adjusted semi-annually. Any profits, dividends or other funds of the Association to which the insurer is otherwise entitled may not be distributed to the impaired insurer but must be applied toward repayment of any assessment until the obligation has been satisfied. The Association shall distribute the repayments, including any interest thereon, to the other member companies on the basis at which assessments were made.

SECTION X - COMMISSION

  1.  Commission to the licensed agent or broker designated by the applicant shall be as determined by the Board of Directors and approved by the Commissioner in accordance with HB 274, 1987 session of the Legislature.
  2. In the event of cancellation of a policy, or if an endorsement is issued which requires premium to be returned to the insured, the producer shall refund rateably to the Insured, commissions on the unearned portion of canceled liability and on reductions in premiums at the same rate at which such commissions were originally paid.

SECTION XI - ADMINISTRATION

  •  This Plan shall be administered by a Board of Directors (hereinafter referred to as the Board) of the Mississippi Windstorm Underwriting Association, subject to the review of the Commissioner.
  • The permanent Board shall consist of eight members, five (5) to be 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 member representatives on the Board shall be appointed annually by the Commissioner of Insurance. Voting may be in person or by proxy. Not more than one insurer in a group under the same management or ownership shall serve on the Board at the same time. The Board shall also include three (3) licensed Mississippi Resident Local Agents from the Coast Area who shall be appointed annually by the Commissioner.

SECTION XII - ANNUAL AND SPECIAL MEETINGS

  • The annual meeting of the insurers to conduct business as may be necessary shall be held at a time and place to be determined by the Board each year. At any regular or special meeting at which the vote of the insurers is or may be required on any proposal, voting may be in person or by proxy. A proposal shall become effective when approved by the majority of the votes cast.
  • As soon as practicable after appointment to membership on the Board, and thereafter from time to time as it may elect, an insurer may designate a qualified representative and an alternate of such representative to serve for it and shall immediately notify in writing the Manager of the Association and the Commissioner of Insurance.
  • Officers - The Board shall elect a Chairman, Vice-Chairman, Secretary-Treasurer and Manager.

  •  The Chairman shall preside over all meetings of the Board and at all meetings of the insurers. He shall discharge such other duties as may be incidental to his office or as shall be required of him by these rules or by the Board.

  •  The Vice-Chairman shall preside at any meeting of the Board in the absence of the Chairman. In the event of death or incapacity or disability of the Chairman, the Vice-Chairman shall perform duties of the Chairman until such office has been filled by the Board.

  •  The Secretary-Treasurer shall issue all notices of meetings, record minutes of all meetings, keep the records of the Board and discharge such other duties as may be incidental to his office or as shall be required of him by these rules or by the Board.

  •  The Manager shall discharge such duties as may be incidental to his office or as shall be required of him by these rules or by the Board.

  • Special Meetings - Special Meetings of the Board or of the insurers may be held upon the call of the Chairman or in the event of his resignation, death or incapacity, upon the call of the Vice-Chairman. Any five (5) members of the Board may request the Chairman to call a meeting of the Board or of the insurers at such time and place and for such purposes as may be set out in writing in such request. Should the Chairman decline to call such meetings, the same may be called by the five (5) members making the request. Such special meetings may be held at the principal office of the Association or at such other place as may be designated in the call.

  • Notices of Meetings - Notice of all meetings shall be given by the Secretary-Treasurer to the members of the Board, and in the case of meetings of the insurers, to the insurers, and shall state the time and place and the principal purposes therefor, except that no notice of the annual meeting shall be given to newly-elected insurers in order to legally constitute the meeting, provided a majority of the designated representatives of the insurers shall be present at such meeting. Such notices may be given by telegram or by mail, direct to the attention of the designated representatives of the insurers and shall be sent or mailed at least ten (10) days in advance of the meeting. Any insurer or the designated representative of any insurer may waive notice of any meeting, and the presence of such representative at any meeting shall constitute a waiver of notice as to such insurer.

  •  Advance Agenda - The Secretary, after consultation with the Chairman, shall prepare in advance of each meeting of the Board and each meeting of the insurers an agenda which, with such supporting data and information as may be conveniently assembled, shall be forwarded to the members of the Board or their designated representatives or to the insurers, as the case may be, in advance of any such meeting.

  • Committees - Subject to the Articles of Agreement, the Chairman of the Board may appoint or the Board may elect such standing committees or such temporary or special committees as may be deemed necessary for the transaction of its business.

  • Ex-Officio Members - The Chairman and Vice-Chairman of the Board shall be ex-officio members of all standing or special committees with the right to vote.
  • Subject to approval of the Commissioner, a majority of the Insurers at any regular or special meeting may amend The Articles of Agreement.
  • The Commissioner shall have a member of his staff to serve on the Board without vote.
  • This Plan shall continue in force and effect until such time as modified, suspended or repealed by action of the Commissioner of Insurance. On the first anniversary of adoption of this Plan, it shall be subject to review by the Commissioner of Insurance or his staff for such action as may be appropriate.

SECTION XIII - DUTIES OF THE BOARD

  •  The Board shall meet as often as may be required to perform the general duties of the administration of the Plan or on the call of the Commissioner. Five (5) members of the Board shall constitute a quorum.
  • The Board shall be empowered to contract with Servicing Insurers and provide reimbursement for all costs and expenses incurred by such Servicing Insurers; to appoint or otherwise contract for the services of a Manager and an Attorney; to approve expenses; levy assessments including preliminary, assessments; disburse funds and perform all other duties provided herein or necessary or incidental to the administration of the Plan. Assessments upon each insurer shall be levied on the basis of its net direct premiums written.
  • The Board shall furnish to the Commissioner a written report of operation for the preceding fiscal year ending December 31st annually on or before March 1st in such form and detail as the Commissioner may determine. A copy of such report shall be furnished to all insurers.
  • The Board of Directors of the Association may, subject to the approval of the Commissioner, amend the Plan of Operation at any time.


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MISSISSIPPI WINDSTORM UNDERWRITING ASSOCIATION

Articles of Agreement

Part II

The purpose of these Articles of Agreement is to evidence agreement by the Mississippi Windstorm Underwriting Association to administer the Plan of Operation in compliance with the provisions of House Bill 274, Laws of 1987, and as amended.

ARTICLE I

Name

This organization shall be known as the Mississippi Windstorm Underwriting Association (hereinafter referred to as the Association), an unincorporated association.

ARTICLE II

The Program

Annexed hereto and made a part thereof is the Mississippi Essential Property Insurance Plan of Operation (hereinafter referred to as the Plan) as approved by the Commissioner.

ARTICLE III

Object

The objects of the Association shall be: (1) the administration of the Plan and (2) the assumption and cession of reinsurance on behalf of member insurers in accordance with the provisions of the Plan.

ARTICLE IV

Membership

  • Membership. Every Insurer, licensed to write and engaged in writing Essential Property Insurance, as defined in Section II (8) of the Plan, is a member of the Association and shall be referred to herein as a Member.
  • Termination of Membership. Membership of any Member shall terminate when such Member is no longer licensed to write Essential Property Insurance in Mississippi. Any Member whose membership in the Association has been terminated shall, nevertheless, continue to be governed by these Articles of Agreement in order to complete its obligation with regard to any assessments, losses, expenses, contracts or undertakings under the Plan.


ARTICLE V

Office

The principal office of the Association shall be in the State of Mississippi.

ARTICLE VI

Administration

This Plan shall be administered by a Board of Directors (hereinafter referred to as the Board) of the Association in accordance with the Plan.

ARTICLE VII

Indemnification

    • The Association shall indemnify:

  •  each member of a governing committee (or other board empowered to act in the capacity of a board of directors), each member of any other committee or any subcommittee, officer and employee of the Association, and the estate, executor, administrator, heirs, legatees and devises of any such person; and

  •  every insurer member of the Association, both as a member and by reason of such insurer having one or more of its personal representatives or employees serving in any of the capacities or positions specified in clause (a) herein above; and

  •  every officer and employee of the Industry Placement Facility, and the estate, executor, administrator, heirs, legatees or devisees of such person; against all judgements including interest, fines, amounts paid or agreed upon settlement, reasonable costs and expenses including attorneys fees, and any other liability that may be incurred as a result of any claim, action, suit, or proceeding, whether civil, criminal, administrative, or other, prosecuted or threatened to be prosecuted, for or on account of any act performed or omitted or obligation entered into, or done or omitted in good faith without intent to defraud and within what he reasonably believed to be the scope of his employment or authority and for a purpose which he reasonably believed to be in the best interest of and in connection with the administration, management, conduct or affairs of the Association, committee, or Industry Placement Facility, and with respect to any criminal actions or proceedings, in addition, had no reasonable cause to believe that his or its conduct was unlawful. Provided, however, that if any such claim, action, suit or proceeding is compromised or settled, it must be done so with the prior and express approval of the governing committee of the Association.

    • Such indemnification shall not depend upon whether or not such insurer is a member of the Association, or such person is a member of the Governing Committee, Industry, Placement Facility or any committee, at the time such claim, action, suit or proceeding is begun, prosecuted or threatened; nor on whether or not the liability to be indemnified was incurred or the act or omission occurred prior to the adoption of this action.

    • The right of indemnification hereunder shall not be exclusive of other rights such person or insurer may have as a matter of law or otherwise.

    • In each instance in which a question of indemnification hereunder arises, determination in the first instance of the right to indemnification hereunder, and of the time, manner and amount of payment thereof, shall be made by the Governing Committee. In the event that a majority of the members of the Governing Committee are seeking indemnification hereunder as a result of the same occurrence, such determination in the first instance shall be made by vote of the membership of the Association taken on a weighted basis as provided in the plan of operations or the enabling legislation. Nothing in this paragraph is intended to make an adverse determination finally binding upon the person or insurer seeking indemnity under this Section, or to preclude any such person or insurer from appealing an adverse determination against him or it, or from instituting legal proceedings to enforce a right of indemnification under this Section.

    • The indemnification provided for in this Section shall be deemed to be an expense of the Association to which all of the members of the Association shall contribute in the proportion that each member participate according to law in the writings, expenses, profits and losses of the Association.

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ARTICLE VIII

Insolvency

In the event any Member fails, by reason of insolvency, to pay its proportion of any expense or of any loss as an assuming reinsurer incurred by the Association under the Plan, such unpaid loss or expense shall be paid by the remaining Members, each contributing in the manner provided for by the distribution of expenses and losses under Section IX (2) of the Plan, deleting therefrom the proportion of the defaulting Member. The Association shall be subrogated to the rights of the remaining Members in any liquidation proceeding and shall have full authority on their behalf to exercise such rights in any action or proceeding. In the event of the insolvency of a Member Servicing Insurer this reinsurance shall be payable directly to such Member or to its liquidator, receiver, conservator or statutory successor on the basis of the liability of such Member without diminution because of the insolvency of such Member or because the liquidator, receiver, conservator or statutory successor of such Member has failed to pay all or a portion of any claim, except (a) where the contract specifically provides another payee of such reinsurance in the event of the insolvency of the ceding insurer and (b) where the assuming insurer with the consent of the direct insured or insureds has assumed such policy obligations of the ceding insurer as direct obligations of the assuming insurer to the payees under such policies and in substitution for the obligations of the ceding insurer to such payees.

The liquidator, receiver, conservator or statutory successor of such Member shall give written notice to the Association of the pendency of a claim against the Member indicating the policy reinsured which claim would involve a possible liability on the part of the Association within a reasonable time after such claim is filed in the conservation of liquidation proceeding or in the receivership, and that during the pendency of such Claim, the Association may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated any defense or defenses that it may deem available to the Member or its liquidator, receiver, conservator or statutory successor. The expense thus incurred by the Association shall be chargeable, subject to the approval of the court, against the insolvent Member as part of the expense of conservation of liquidation to the extent of a pro-rata share of the benefit which may accrue to such Member solely as a result of the defense undertaken by the Association.

ARTICLE IX

Amendments

These Articles of Agreement may be amended by the membership with the approval of the Commissioner. Procedure for Amendment shall be prescribed in Section XII of the Plan.

ARTICLE X

Effective Date

These Articles of Agreement are subject to approval by the Commissioner and shall become effective on the date established by Commissioner.

ARTICLE XI

Citation of Commissioner

Failure of any Member to comply with these Articles of Agreement or with any rules prescribed thereunder by the Board of Directors or to pay any assessment levied within thirty (30) days of notice thereof, shall be grounds for citation of such Member to the Commissioner.

ARTICLE XII

Appeal to Commissioner

Any applicant or Member aggrieved by any ruling, order, decision, action or refusal to act on the part of the Association may appeal to the Commissioner as provided in Section VIII of the Plan.

ARTICLE XIII

Acceptance of Articles of Agreement by Members

The undersigned by causing its corporate name to be hereunto subscribed by its President or a Vice-President, and its corporate seal to be hereto affixed, attested by its Secretary or Assistant Secretary does hereby ratify the foregoing Articles of Agreement and declares its unqualified authorization to the Board of Directors to levy such assessments as are deemed necessary, by the Board to carry out the purposes of the Plan as described and to act as its agent in assuming and ceding, reinsurance on behalf of the Member as authorized by the Plan, which reinsurance shall have the same effective date as the ceding Member's liability. The Member hereby agrees to participate in the Plan and the Association, including any gains, losses, expenses, obligation or contracts thereof, and to be bound by decisions of the Board of Directors with respect thereto.