1. (a) An owner or operator may satisfy the requirements of financial assurance for liability as specified in Subchapter E of this chapter (relating to Financial Assurance Requirements for Liability Coverage) by obtaining insurance which conforms to the requirements of this section, in addition to the requirements specified in Subchapter A of this chapter (relating to General Financial Assurance Requirements), and submitting a signed duplicate original of the endorsement or certificate of insurance to the executive director.
2. (b) At a minimum, the insurer must be licensed to transact the business of insurance, or eligible to provide insurance as an excess or surplus lines insurer, in one or more states.
3. (c) The wording of the certificate of insurance must be identical to the wording specified in §37.631 of this title (relating to Certificate of Insurance for Liability); or the wording of the endorsement must be identical to the wording specified in §37.641 of this title (relating to Endorsement for Liability).
4. (d) The insurance policy shall be amended by attachment of the Liability Endorsement or evidenced by a Certificate of Liability Insurance. If requested by the executive director, the owner or operator shall provide a signed duplicate original of the insurance policy.
5. (e) The insurance policy must be issued for a face amount at least sufficient to satisfy the requirements for which financial assurance for liability is required, or when a combination of mechanisms are used in accordance with §37.41 of this title (relating to Use of Multiple Financial Assurance Mechanisms), the face amount plus the amount of the combined mechanism(s) must be at least equal to the required liability coverage.
6. (f) The insurance policy must guarantee that funds shall be available whenever needed to fulfill obligations of the insured under this chapter. Under the terms of the policy, the insurer shall become liable on the insurance obligation when the owner or operator fails to satisfy a third party liability claim as guaranteed by the policy. The policy shall also guarantee that when the third party claimant provides a valid certificate of claim for payment, the insurer shall be responsible for paying out funds, up to an amount equal to the face amount of the policy, upon the direction of the executive director, to such party or parties as the executive director specifies.
7. (g) The owner or operator must maintain the policy in full force and effect until the executive director consents to termination of the policy by the owner or operator as specified in Subchapter A of this chapter. Failure to pay the premium, without substitution of alternate financial assurance as specified in this subchapter, shall constitute a violation of these regulations, warranting such remedy as the executive director deems necessary. Such violation shall be deemed to begin upon receipt by the executive director of a notice of cancellation, termination, or failure to renew due to nonpayment of the premium, rather than upon the date of expiration of the policy.
8. (h) The policy must provide that the insurer may not cancel, terminate, or fail to renew the policy except for failure to pay the premium. The automatic renewal of the policy shall, at a minimum, provide the insured with the mechanism of renewal at the face amount of the expiring policy. If there is a failure to pay the premium, the insurer may elect to cancel, terminate, or fail to renew the policy by sending notice by certified mail to the owner or operator and the executive director. Cancellation, termination, or failure to renew may not occur, however, during 120 days beginning with date of receipt of the notice by both the executive director and the owner or operator, as evidenced by the return of receipts.

9. (i) Cancellation, termination, or failure to renew may not occur and the policy shall remain in full force and effect in the event that on or before the date of expiration:

   1. (1) the executive director deems the facility abandoned; or
   2. (2) the registration or permit expires, is terminated, or revoked or a new or renewal registration or permit is denied; or
   3. (3) closure is ordered by the executive director of the commission or by a United States district court or other court of competent jurisdiction; or
   4. (4) the owner or operator is named as debtor in a voluntary or involuntary proceeding under Title 11 (Bankruptcy), United States Code; or
   5. (5) the premium due is paid.

Source Note:The provisions of this §37.531 adopted to be effective December 30, 1996, 21 TexReg 12297.