The association must operate pursuant to a plan of operation which shall set forth the number, qualifications, terms of office, and manner of election of the members of the board of directors and shall provide for the efficient, economical, fair, and nondiscriminatory administration of the association and for the prompt and efficient provision of essential property insurance in the coastal areas of the State so as to promote orderly community development in those areas and to provide means for the adequate maintenance and improvement of the property in such areas. The plan may include the establishment of necessary facilities, management of the association, plan for the assessment of members to defray losses and expenses, reasonable underwriting standards, commissions to be paid to agents or brokers, procedures for the acceptance and cession of reinsurance, procedures for determining the amounts of insurance to be provided to specific risks, time limits and procedures for processing applications for insurance, and for any other provisions considered necessary by the director or his designee to carry out the purposes of this article.

Insurance effected pursuant to this article shall have limits of liability provided in the plan of operation. The director or his designee shall approve the limits. Excess insurance is not permitted until the maximum available under the plan has been purchased. Thereafter, excess insurance may be purchased and must be included for the purpose of meeting any coinsurance requirement.

The directors of the association may, subject to the approval of the director or his designee, amend the plan of operation at any time. The director or his designee shall review the plan of operation, including the rate structure and loss experience, not less than once in each calendar year. After review of the plan the director or his designee may amend the plan upon approval of the directors of the association.