Okla. Admin. Code § 200:10-7-2

Current through Vol. 42, No. 3, October 15, 2024

Section 200:10-7-2 - Premiums

The Fund will charge a monetary premium to the ODFA for the utilization of the benefits provided by the Insurance and the risk assumed by the Fund. The ODFA will pass this cost through to the users of the proceeds of its revenue bonds or other financial obligations.

(1)Factors considered in determining premium. The amount of the premium charged by the Fund will vary according to various factors involved including:

(A) The perceived relative risk category of various purposes or types of ODFA financings based upon the relative risk categories used in the private credit enhancement industry.

(B) The credit evaluation performed by the Credit Officer in connection with the Insurance Commitment.

(C) The secured collateral position of the Insurance Commitment.

(D) The perceived relative risk of the industry in which a private sector Person conducts its operations.

(E) Whether the Credit Officer qualitatively judges the risk to be low, moderate, or high compared to other similar Insurance Commitments.

(F) The length of time that an Insurance Commitment will be outstanding.

(G) The perceived exposure of the Fund considering whether the Insurance is pro-rata, leveraged, or co- insured.

(H) Such other factors, whether quantitative or qualitative, that the Credit Officer or the Board deem relevant.

(2)Amount and method of calculation of premium. The range of premiums charged according to the risk evaluation determined for the utilization of the Fund will be from one- fourth of one percent (0.25%) per year to three percent (3%) per year of the Insured principal amount outstanding.

(A) In the sole discretion of the Administrator, the premium may be charged as a one time or single premium charge; provided however, that in such event the amount to be due over the time period of the Insurance Commitment will be discounted to a present value at an interest rate discount factor determined at that time by the Administrator and generally applied to applicants to the Fund. The single premium charged may be paid from the proceeds of the revenue bonds or other financial obligations issued for such applicant.

(B) The Fund will be entitled to the full amount of the premium over the term of the Insurance. If the underlying loan is repaid or Insurance is terminated without claim, loss or payment by the Fund before the end of the underlying loan term, the Administrator will waive the balance of premiums claimed or, if the full premium was paid in advance, the Administrator will refund the balance of the unearned premium.

Okla. Admin. Code § 200:10-7-2