(1) Within forty-five (45) days after March 22, 2007, the directors of the association shall submit to the commissioner for review and approval a proposed plan of operation revised to be consistent with the provisions of Chapter 425, Laws of 2007. The association shall maintain a plan of operation. The plan shall provide for the efficient, economical, fair and nondiscriminatory administration of the association. The plan may include the establishment of a minimum reserve, methods for the nonrecoupable assessment of all assessable insurers for deficits and expenses, the establishment of necessary facilities, management of the association, underwriting standards, procedures for determining the amounts of insurance to be provided to specific risks, time limits and procedures for processing applications for insurance, and for such other provisions as may be deemed necessary by the board to carry out the purposes of this chapter. The plan of operation shall include in the plan of operation a mechanism for recoupment of recoupable assessments.

(2) The plan of operation shall provide financial incentives or financial penalties, or both, to ensure that assessable insurers write essential property insurance in the coast area. The incentives and penalties may include, but are not limited to, a reduction in nonrecoupable assessments, adjustments in the percentage of participation, and other incentives and penalties as provided in the plan of operation.

(3) The plan of operation shall provide (a) that the association shall offer a two percent (2%) deductible for loss from named storms; and (b) that the association shall also offer options for other deductibles for loss from named storms with appropriate rate reductions that shall include at least a twenty percent (20%) deductible for loss from named storms.

(4) The plan of operation shall provide that the association use actuarially appropriate geographical zones for rating and for the use of credits and penalties to encourage voluntary writing in the coast area.

(5) The commissioner shall approve the plan of operation and all amendments before they become effective. It is the obligation of the commissioner to confirm that such plan fulfills the purposes of this chapter. If the commissioner approves a proposed plan or amendment, he shall certify the approval to the directors, and the plan, or amendment thereto, shall become effective ten (10) days after such certification. If the commissioner disapproves all or any part of the proposed plan of operation, or amendment thereto, he shall return the same to the directors with a written statement giving the reasons for disapproval and any recommendations the commissioner may wish to make. Within ten (10) days thereafter, the directors may alter the plan or amendment in accordance with the commissioner’s recommendation or may return a new plan to the commissioner. The commissioner shall consider the proposals and shall then promulgate and place into effect a plan of operation certifying the same to the directors of the association after approval by the board of directors. Any such plan promulgated by the commissioner shall take effect ten (10) days after certification to the directors.

(6) The commissioner may review the plan of operation at any time he deems expedient or prudent. After review of the plan, the commissioner may amend the plan after consultation with the directors of the association and upon certification to the directors of the amendment.