CHAPTER 441. SUPERVISION AND CONSERVATORSHIP
INSURANCE CODE
TITLE 4. REGULATION OF SOLVENCY
SUBTITLE C. DELINQUENT INSURERS
CHAPTER 441. SUPERVISION AND CONSERVATORSHIP
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 441.001. FINDINGS AND PURPOSE. (a) An insurer
delinquency, or the state's inability to properly proceed in a
threatened delinquency, directly or indirectly affects other
insurers by creating a lack of public confidence in insurance and
insurers. Insurer delinquencies destroy public confidence in the
state's ability to regulate insurers. The harmful results of
insurer delinquencies, including those described by this
subsection, are properly minimized by laws designed to protect
and assist insureds, creditors, and owners.
(b) Placing an insurer in receivership often destroys or
diminishes, or is likely to destroy or diminish, the value of the
insurer's assets, including:
(1) the insurer's insurance account or in-force business;
(2) the insurer as a going concern; and
(3) the insurer's agency force.
(c) The value of the assets described by Subsection (b) should
be preserved if the circumstances of the insurer's financial
condition warrant an attempt to rehabilitate or conserve the
insurer and the rehabilitation or conservation is otherwise
feasible.
(d) It is a proper concern of this state and proper policy to
attempt to correct or remedy insurer misconduct, ineptness, or
misfortune.
(e) The purpose of this chapter is to:
(1) provide for the rehabilitation and conservation of insurers
by authorizing and requiring supervision and conservatorship by
the commissioner;
(2) authorize action to determine whether an attempt should be
made to rehabilitate and conserve an insurer;
(3) avoid, if possible and feasible, the necessity of placing an
insurer under temporary or permanent receivership;
(4) provide for the protection of an insurer's assets pending
determination of whether the insurer may be successfully
rehabilitated; and
(5) alleviate concerns regarding insurance and insurers.
(f) Rehabilitation of an insurer might not be accomplished in
every case, but this chapter facilitates and directs an attempt
to rehabilitate an insurer without immediate resort to the
harsher remedy of receivership. If receivership becomes
necessary, the preliminary supervision and conservatorship may
prevent a dissipation of assets, which will benefit
policyholders, creditors, and owners.
(g) For the reasons stated by this section, the substance and
procedures of this chapter are the public policy of this state
and are necessary to the public welfare. That policy and welfare
require the availability of this chapter and the application of
this chapter if circumstances warrant.
(h) This chapter provides, in conjunction with other law, a
generally ordered sequence, and provides for review at each step,
of supervision, concurrent conservatorship and rehabilitation,
including reinsurance, and cessation of the conservatorship by
rehabilitation or by receivership and liquidation if at any time
that cessation is indicated or determined to be appropriate.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.002. DEFINITION. In this chapter, unless the purposes
of this chapter clearly require or the context clearly indicates
another meaning, "insurer" means a person, organization, or
company, regardless of whether the person or entity is authorized
or admitted, that engages in the business of insurance or that
acts as a principal or agent of a person, organization, or
company engaged in the business of insurance. The term includes
a stock insurance company, reciprocal or interinsurance exchange,
Lloyd's plan, fraternal benefit society, stipulated premium
company, title insurance company, and mutual insurance company of
any kind, including a statewide mutual assessment company, local
mutual aid association, burial association, county mutual
insurance company, and farm mutual insurance company.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.003. APPLICABILITY OF AND COMPLIANCE WITH CHAPTER.
Compliance with this chapter is a condition of engaging in the
business of insurance in this state. This chapter applies to,
and is a consequence of, any other transaction with respect to an
insurer or insurance.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.004. ACTIONS OF COMMISSIONER. (a) In the event of an
insurer's delinquency or suspected delinquency, the commissioner,
in the commissioner's administrative discretion, may act under
this chapter, another applicable law, or a combination of this
chapter and another applicable law.
(b) If the commissioner determines to act under this chapter or
is directed by a court to act under this chapter, the
commissioner shall comply with the requirements of this chapter.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.005. RULES; AUTHORITY FOR ADMINISTRATIVE ACTION. (a)
The commissioner may:
(1) adopt reasonable rules as necessary to implement and
supplement this chapter and the purposes of this chapter; and
(2) take any administrative action required by the findings of
Section 441.001.
(b) The authority granted by this section may be inferred from
the context of this chapter.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.006. RULES AND PROCEDURES FOR MERGER OF INSURERS. (a)
The commissioner shall adopt rules that encourage the merger of
insurers in weak financial condition with insurers in strong
financial condition in cases in which rehabilitation or
conservation of an insurer would be inefficient or impracticable.
(b) The rules and procedures for conservatorship may not be used
unless the rules and procedures adopted to promote the merger of
insurers in weak financial condition are followed.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.007. CONFLICT WITH OTHER LAWS. If this chapter
conflicts with any other law, this chapter prevails.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.008. INAPPLICABILITY OF CERTAIN ADMINISTRATIVE
PROCEDURE PROVISIONS. Section 2001.062, Government Code, does
not apply to a hearing conducted under this chapter.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
SUBCHAPTER B. DETERMINATION AND NOTICE
Sec. 441.051. CIRCUMSTANCES CONSTITUTING INSOLVENCY OR
DELINQUENCY. For the purposes of this chapter, the circumstances
in which an insurer is considered insolvent, delinquent, or
threatened with delinquency include circumstances in which the
insurer:
(1) has required surplus, capital, or capital stock that is
impaired to an extent prohibited by law;
(2) continues to write new business when the insurer does not
have the surplus, capital, or capital stock that is required by
law to write new business;
(3) conducts the insurer's business fraudulently; or
(4) attempts to dissolve or liquidate without first having made
provisions satisfactory to the commissioner for liabilities
arising from insurance policies issued by the insurer.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.052. CIRCUMSTANCES CONSTITUTING INSURER EXCEEDING
POWERS. For the purposes of this chapter, the circumstances in
which an insurer is considered to have exceeded the insurer's
powers include circumstances in which the insurer:
(1) refuses to permit the commissioner, the commissioner's
deputy, or an examiner appointed by the department to examine the
insurer's books, papers, accounts, records, or affairs;
(2) is organized in this state and removes from the state books,
papers, accounts, or records that are necessary to examine the
insurer;
(3) fails to promptly answer inquiries authorized by Section
38.001;
(4) fails to comply with an order of the commissioner to remedy,
within the time prescribed by law, a prohibited deficiency in the
insurer's capital, capital stock, or surplus;
(5) without obtaining the commissioner's prior written approval:
(A) totally reinsures the insurer's entire outstanding business;
or
(B) merges or consolidates substantially all of the insurer's
property or business with another insurer;
(6) continues to write business after the insurer's certificate
of authority has been revoked or suspended; or
(7) is in a condition that makes the insurer's continuation in
business hazardous to the public or to the insurer's
policyholders or certificate holders.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.053. NOTICE TO INSURER. (a) If at any time the
commissioner determines that an insurer is insolvent, has
exceeded the insurer's powers, or has otherwise failed to comply
with the law, the commissioner shall:
(1) notify the insurer of that determination;
(2) provide to the insurer a written list of the commissioner's
requirements to abate the conditions on which that determination
was based; and
(3) if the commissioner determines that the insurer requires
supervision, notify the insurer that the insurer is under the
commissioner's supervision and that the commissioner is invoking
this chapter.
(b) The commissioner may provide the notice and information to
an insurer that agrees to supervision.
(c) The insurer shall comply with the commissioner's
requirements.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
SUBCHAPTER C. SUPERVISION
Sec. 441.101. APPOINTMENT OF SUPERVISOR. The commissioner may
appoint a supervisor to supervise an insurer.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.102. TIME FOR COMPLIANCE WITH REQUIREMENTS OF
SUPERVISION. An insurer under supervision must comply with the
commissioner's requirements under Section 441.053 not later than
the 180th day after the date of the commissioner's notice of
supervision.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.103. PAYMENT OF CLAIMS. An insurer under supervision
shall continue to pay claims under an insurance policy according
to the terms of the policy.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.104. PROHIBITED ACTS DURING SUPERVISION. During
supervision, the commissioner may prohibit the insurer from
taking any of the following actions without the prior approval of
the commissioner or supervisor:
(1) disposing of, conveying, or encumbering any of the insurer's
assets or business in force;
(2) withdrawing money from the insurer's bank accounts;
(3) lending or investing the insurer's money;
(4) transferring the insurer's property;
(5) incurring a debt, obligation, or liability;
(6) merging or consolidating with another company;
(7) entering into a new reinsurance contract or treaty;
(8) terminating, surrendering, forfeiting, converting, or
lapsing an insurance policy, except for nonpayment of premiums
due; or
(9) releasing, paying, or refunding premium deposits, accrued
cash or loan values, unearned premiums, or other reserves on an
insurance policy.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.105. HEARING ON SUPERVISION; TERMINATION BY
CONSERVATION OR RELEASE. (a) On the commissioner's own motion
or the motion of a party of record, a hearing may be scheduled
relating to an insurer under supervision after at least 10 days'
written notice to each party of record. Notice may be waived by
the parties of record.
(b) The commissioner shall place the insurer in conservatorship
if, after the hearing, it is determined that the insurer:
(1) failed to comply with the commissioner's requirements;
(2) has not been rehabilitated;
(3) is insolvent; or
(4) appears to have exceeded the insurer's powers.
(c) The commissioner may release the insurer from supervision
if, after the hearing, it is determined that the insurer:
(1) has been rehabilitated; or
(2) is no longer in a condition that makes the insurer's
continuation in business hazardous to the public or to the
insurer's policyholders or certificate holders.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
SUBCHAPTER D. CONSERVATORSHIP
Sec. 441.151. APPOINTMENT OF CONSERVATOR. (a) The commissioner
may appoint a conservator for an insurer:
(1) if:
(A) after notice and opportunity for hearing, it is determined
that the insurer:
(i) is insolvent;
(ii) appears to have exceeded the insurer's powers; or
(iii) has failed to comply with any requirement of the
commissioner; or
(B) the insurer agrees to the appointment of a conservator; and
(2) if it is determined that supervision is inadequate to
rehabilitate the insurer.
(b) The commissioner may appoint a conservator.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.152. NOTICE OF CONSERVATORSHIP. (a) Not later than
the seventh day after the date the commissioner enters an order
appointing a conservator for an insurer as provided by Section
441.151 or Subchapter F, the commissioner shall publish notice of
the conservatorship in at least one newspaper of general
circulation in each county with a population of at least 100,000.
(b) The notice must include:
(1) the name of the insurer placed in conservatorship;
(2) the date the insurer was placed in conservatorship in this
state;
(3) the reasons for placing the insurer in conservatorship;
(4) any action with respect to the insurer that is available to
a policyholder; and
(5) any requirement with which a policyholder must comply.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.153. POWERS AND DUTIES OF CONSERVATOR. (a) The
conservator appointed for an insurer under Section 441.151 shall
immediately take charge of the insurer and all of the insurer's
property, books, records, and effects, conduct the insurer's
business, and act to remove the causes and conditions that made
the conservatorship order necessary, as directed by the
commissioner.
(b) During the conservatorship, the conservator shall provide
reports to the commissioner as required by the commissioner and
may:
(1) take all necessary measures in the conservator's own name as
conservator to preserve, protect, or recover any asset or
property of the insurer, including a claim or cause of action
that the insurer may assert; and
(2) file a suit, or prosecute and defend a suit filed by or
against the insurer, as the conservator considers necessary to
protect all of the interested parties or any property affected by
the suit.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.154. PAYMENT OF CLAIMS. An insurer under
conservatorship shall continue to pay claims under an insurance
policy according to the terms of the policy.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.155. REINSURANCE DURING CONSERVATORSHIP. (a) If
during a conservatorship it appears that the interest of the
insurer's policyholders or certificate holders is best protected
by reinsuring the policies or certificates, the conservator may,
with the approval of or at the direction of the commissioner:
(1) reinsure all or part of the insurer's policies or
certificates with a solvent insurer authorized to engage in
business in this state; and
(2) to the extent that the insurer has reserves attributable to
the reinsured policies or certificates, transfer to the reinsurer
reserves in an amount sufficient to reinsure the policies or
certificates.
(b) A transfer of reserves under this section may not be
considered a preference of a creditor.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.156. HEARINGS DURING CONSERVATORSHIP. (a) On the
commissioner's own motion or the motion of a party of record, a
hearing relating to an insurer in conservatorship may be
scheduled after at least 10 days' written notice to each party of
record.
(b) The notice required by this section may be waived by the
parties of record.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.157. IMMUNITY. A conservator and the conservator's
agents and employees are not liable, and a cause of action does
not arise against the conservator or an agent or employee, for an
action taken or not taken by the conservator, agent, or employee
in connection with the adjustment, negotiation, or settlement of
a claim.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.158. VENUE. (a) A suit against an insurer in
conservatorship or against the conservator may be filed only in
Travis County unless the cause of action is based on the terms of
an insurance policy issued by the insurer.
(b) A conservator appointed under this chapter may file suit in
Travis County against any person to preserve, protect, or recover
any asset or property of the insurer, including a claim or cause
of action that may be asserted by the insurer.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.159. DURATION OF CONSERVATORSHIP. (a) Except as
provided by Subsection (b), a conservator appointed under this
chapter shall complete the conservator's duties as required by
this chapter not later than the 90th day after the date of
appointment.
(b) If the commissioner issues written findings that there is a
substantial likelihood of rehabilitation of the insurer in
conservatorship, the commissioner may extend the conservatorship
for additional successive 30-day periods. The total period of
extensions may not exceed 180 consecutive days. A hearing is not
required before the commissioner issues the findings.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.160. RETURN TO MANAGEMENT. An insurer that is
rehabilitated shall be returned to management or placed under new
management under reasonable conditions that best tend to prevent
defeat of the purposes of the conservatorship.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
SUBCHAPTER E. PROVISIONS APPLYING TO SUPERVISION AND
CONSERVATORSHIP
Sec. 441.201. CONFIDENTIALITY. (a) Hearings and orders,
notices, correspondence, reports, records, and other information
in the department's possession relating to the supervision or
conservatorship of an insurer are confidential during the
supervision or conservatorship. On termination of the
supervision or conservatorship, the information in the
department's custody that relates to the supervision or
conservatorship is public information.
(b) This section does not prohibit access by the department to
hearings or orders, notices, correspondence, reports, records, or
other information.
(c) The provisions of Chapter 2001, Government Code, relating to
discovery apply to the parties of record in a proceeding under
this chapter.
(d) The commissioner may open a proceeding under this chapter or
disclose information that is confidential under this section to a
department, agency, or instrumentality of this state, another
state, or the United States if the commissioner determines that
opening the proceeding or disclosing the information is necessary
or proper to enforce the laws of this state, another state, or
the United States.
(e) An officer or employee of the department is not liable for a
release of information that is confidential under this section
unless it is shown that the release was accomplished with actual
malice.
(f) This section does not apply to information:
(1) if the insurer's insureds are not protected by Chapter 462,
463, or 2602, or substantially similar statutes; or
(2) on the appointment by a court of a receiver for the insurer.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.202. COSTS OF SUPERVISION AND CONSERVATORSHIP. The
commissioner shall determine the costs related to services
provided by a supervisor or conservator under this chapter.
Subject to Section 442.551, the costs shall be charged against
the insurer's assets and paid as determined by the commissioner.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.203. COLLECTION OF FEES FROM REHABILITATED INSURER.
(a) The commissioner may collect fees from an insurer described
by Section 82.002 that is successfully rehabilitated by the
commissioner. The fees must be in amounts sufficient to cover
the cost of rehabilitating the insurer, but may not exceed that
cost.
(b) The department may use fees collected under this section
only for the rehabilitation of the insurer from which the fees
are collected.
(c) Fees collected under this section shall be deposited in and
expended through the Texas Department of Insurance operating
account.
(d) The commissioner may determine the terms of the collection
or repayment of the fees.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.204. REVIEW AND STAY OF CERTAIN ACTS OF SUPERVISOR OR
CONSERVATOR. (a) An insurer under supervision or
conservatorship may request the commissioner or, in the
commissioner's absence, the commissioner's appointed deputy to
review an action taken or proposed to be taken by the supervisor
or conservator.
(b) A request for review under this section must specify the
manner in which the action is believed to not be in the insurer's
best interests.
(c) A request for review under this section stays the specified
action pending review by the commissioner or the commissioner's
deputy.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.205. APPEAL OF CERTAIN ORDERS. The following orders of
the commissioner may be appealed under Subchapter D, Chapter 36:
(1) an order appointing a supervisor and providing that the
insurer may not engage in certain acts as provided by Section
441.104;
(2) an order appointing a conservator; and
(3) an order following the review under Section 441.204 of an
action of a supervisor or conservator.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.206. EX PARTE MEETING WITH COMMISSIONER.
Notwithstanding any other law, the commissioner may, at the time
of any proceeding or while a proceeding is pending under this
chapter, meet with a supervisor or conservator appointed under
this chapter and with the attorney or other representative of the
supervisor or conservator, without another person present, to
implement the commissioner's duties under this chapter or for the
supervisor or conservator to implement that person's duties under
this chapter.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.207. INSURER EMPLOYEES DURING SUPERVISION OR
CONSERVATORSHIP. (a) Notwithstanding any other provision of
this chapter, an insurer may employ an attorney, actuary, and
accountant of the insurer's choice to assist the insurer during
supervision. The supervisor shall authorize payment from the
insurer for the reasonable fees and expenses of the attorney,
actuary, or accountant.
(b) The supervisor, conservator, or commissioner shall, to the
maximum extent possible, use the insurer's employees instead of
outside consultants, actuaries, attorneys, accountants, and other
personnel or department employees to minimize the expense of
rehabilitation or the necessity of fees to cover the cost of
rehabilitation.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
SUBCHAPTER F. OUT-OF-STATE INSURERS
Sec. 441.251. APPLICABILITY. This chapter applies to an insurer
engaged in the business of insurance in this state but not
domiciled in this state, regardless of whether the insurer is
authorized to engage in the business of insurance in this state.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.252. APPOINTMENT OF ANCILLARY SUPERVISOR OR
CONSERVATOR. (a) The commissioner may appoint an ancillary
supervisor or ancillary conservator for the assets located in
this state of an insurer described by Section 441.251 in the same
manner as the commissioner appoints a supervisor or conservator
for an insurer domiciled in this state as provided by this
chapter if:
(1) the commissioner makes a determination described by Section
441.053 with regard to the insurer;
(2) the commissioner determines that the insurer does not have
the minimum surplus, capital, or capital stock required by this
code for similar domestic insurers; or
(3) the insurer agrees to the appointment.
(b) Subject to Section 441.205, the commissioner may
immediately, without prior notice and hearing, appoint an
ancillary conservator for the assets, property, books, and
records located in this state of an insurer described by Section
441.251 if a conservator, rehabilitator, receiver, liquidator, or
equivalent official is appointed in the state in which the
insurer is domiciled.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.253. POWERS AND DUTIES OF ANCILLARY SUPERVISOR OR
CONSERVATOR. (a) An ancillary supervisor or ancillary
conservator appointed under this subchapter has all the powers
provided by Sections 441.153 and 441.155 with respect to the
insurer's assets, property, books, and records located in this
state.
(b) An ancillary conservator appointed under this subchapter
may:
(1) reinsure all or part of the insurer's policies or
certificates in this state with a solvent insurer authorized to
engage in business in this state; and
(2) transfer to the reinsurer as reserves any assets in the
ancillary conservator's possession in an amount sufficient to
reinsure the policies or certificates.
(c) A transfer of assets under this section is not considered a
preference of a creditor.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.254. FAILURE TO COMPLY WITH REQUIREMENTS OF
SUPERVISION. The failure of an insurer described by Section
441.251 to comply during supervision with the requirements of
Section 441.104 with respect to any asset or policy located in
this state is grounds for the immediate revocation of the
insurer's certificate of authority to engage in business in this
state and for the immediate appointment of an ancillary
conservator to take charge of the insurer's assets located in
this state.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.255. REFERRAL FOR REMEDIAL ACTION. The commissioner
may refer an insurer described by Section 441.251 to the attorney
general for remedial action, including application for
appointment of a receiver under Chapter 442, on any grounds on
which an insurer domiciled in this state may be referred to the
attorney general for remedial action. The commissioner may refer
the insurer at any time, and action against the insurer in the
insurer's state of domicile is not a prerequisite.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
SUBCHAPTER G. POWERS AND DUTIES OF ATTORNEY GENERAL
Sec. 441.301. REMEDIAL ACTION BY ATTORNEY GENERAL. (a) The
commissioner may, at any time and regardless of whether an
insurer is under supervision or conservatorship, determine that
the insurer is not in a condition to continue business in the
interest of the insurer's policyholders or certificate holders.
The commissioner shall give notice of that determination to the
attorney general.
(b) On receipt of notice under Subsection (a), the attorney
general shall file suit in the nature of quo warranto in a court
in Travis County to:
(1) forfeit the insurer's charter; or
(2) require the insurer to comply with the law or prove to the
commissioner that the insurer is solvent, and satisfy the
requirement that the insurer's condition does not make the
continuation of the insurer's business hazardous to the public or
to the insurer's policyholders or certificate holders.
(c) The commissioner may at any time refer an insurer to the
attorney general for the purpose of taking any remedial action,
including applying for the appointment of a receiver under
Chapter 442.
(d) Supervision or conservatorship of the insurer is not
required before the attorney general may take remedial action
under this section.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
Sec. 441.302. FORFEITURE AND CANCELLATION OF CHARTER ON
CONCLUSION OF BUSINESS. (a) Once all an insurer's policies are
reinsured or terminated and the insurer's affairs are concluded
as provided by this chapter, the commissioner shall report that
fact to the attorney general. On receipt of the report, the
attorney general shall take action necessary to forfeit or cancel
the insurer's charter.
(b) The commissioner shall report to the attorney general the
commissioner's approval of the merger or consolidation of an
insurer with another insurer or the reinsurance of the insurer's
policies. On receipt of the report, the attorney general shall
take action to forfeit or cancel the insurer's charter in the
manner provided for the forfeiture or cancellation of the charter
of an insurer that is totally reinsured or liquidated.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.
SUBCHAPTER H. AGENTS OF RECORD FOR CERTAIN INSUREDS
Sec. 441.351. AGENTS OF RECORD. (a) Unless otherwise
prohibited, the supervisor, conservator, or receiver of an
insurer shall provide to the insured's agent of record a copy of
each communication provided to an insured if, in the judgment of
the supervisor, conservator, or receiver, providing the copy will
serve to materially protect the interests of policyholders. The
supervisor, conservator, or receiver may also request the
assistance of any statewide association of insurance agents in
providing to the association's members information that, in the
judgment of the supervisor, conservator, or receiver, may serve
to materially protect policyholders' interests.
(b) If the supervisor, conservator, or receiver sells a
delinquent insurer's policies to another insurer, the purchaser
shall:
(1) recognize the pecuniary interest of the agent of record in
the policies being sold, regardless of whether the purchaser
customarily conducts the purchaser's business through insurance
agents;
(2) conduct the purchaser's business with the insured through
the agent of record; and
(3) provide to the agent of record a written limited agency
contract providing the terms that apply to the conduct of their
business together.
(c) A limited agency contract provided under Subsection (b) must
provide a level of commission that is reasonable, adequate, and
nonconfiscatory.
(d) This subchapter does not prohibit the agent of record from
renewing with another insurer an insurance policy purchased by an
insurer from a delinquent insurer.
(e) This section does not apply to:
(1) a life, accident, or health insurance policy or contract
delivered or issued for delivery by an insurer that is subject to
any provision of a law specified in Section 841.002 or any
provision of Chapter 882, 884, 887, 888, or 982;
(2) a contract or certificate delivered or issued for delivery
by a group hospital service corporation organized under Chapter
842; or
(3) a contract or evidence of coverage delivered or issued for
delivery by a health maintenance organization operating under a
certificate of authority issued under Chapter 843.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 1, eff. April 1, 2007.