CHAPTER 841. LIFE, HEALTH, OR ACCIDENT INSURANCE COMPANIES
INSURANCE CODE
TITLE 6. ORGANIZATION OF INSURERS AND RELATED ENTITIES
SUBTITLE C. LIFE, HEALTH, AND ACCIDENT INSURERS AND RELATED
ENTITIES
CHAPTER 841. LIFE, HEALTH, OR ACCIDENT INSURANCE COMPANIES
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 841.001. DEFINITIONS.
(1) "Accident insurance company" means a corporation authorized
under a charter to engage in business involving the payment of
money or another thing of value in the event of an injury to or
the disablement or death of an individual as a result of travel
or a general accident by land or water.
(2) "Alien company" means a life, accident, or health insurance
company organized under the laws of a foreign country.
(3) "Beneficiary" is the person to whom an insurance policy is
payable.
(4) "Domestic insurance company," in this chapter and another
law described by Section 841.002, means an insurance company
organized under the laws of this state as:
(A) a life insurance company;
(B) an accident insurance company;
(C) a life and accident insurance company;
(D) a health and accident insurance company; or
(E) a life, health, and accident insurance company.
(5) "Foreign company" means a life, accident, or health
insurance company organized under the laws of another state.
(6) "Health insurance company" means a corporation authorized
under a charter to engage in business involving the payment of
money or another thing of value in the event of loss resulting
from disability incurred as a result of sickness or ill health.
(7) "Home office," with respect to an insurance company, means
the principal office of the company in the state or country under
whose laws the company is organized.
(8) "Insurance company" and "company" include all corporations
engaged as a principal in the business of life, accident, or
health insurance.
(9) "Life insurance company" means a corporation authorized
under a charter to engage in business involving the payment of
money or another thing of value conditioned on the continuance or
cessation of human life or involving an insurance, guaranty, or
contract for the payment of an endowment or annuity.
(10) "Policyholder" and "insured" mean the individual on whose
life an insurance policy is effected.
(11) "Profits," with respect to an insurance company, means the
portion of the company's funds that are not:
(A) required for the payment of losses and expenses; or
(B) set aside for any other purpose required by law.
(12) "United States branch" means:
(A) the business unit through which business is transacted
within the United States by an alien company;
(B) the assets and liabilities of the company within the United
States pertaining to the business;
(C) the management powers pertaining to the business and to the
assets and liabilities; or
(D) any combination of the items described by Paragraphs
(A)-(C).
(13) The definitions of "company" and "insurance company" apply
to this chapter and another law described by Section 841.002
unless a different meaning is plainly required by the context in
which the term appears.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.002. APPLICABILITY OF CHAPTER AND OTHER LAW. Except as
otherwise expressly provided by this code, each insurance company
incorporated or engaging in business in this state as a life
insurance company, an accident insurance company, a life and
accident insurance company, a health and accident insurance
company, or a life, health, and accident insurance company is
subject to:
(1) this chapter;
(2) Chapter 3;
(3) Chapters 425 and 492;
(4) Title 7;
(5) Sections 1202.051, 1204.151, 1204.153, and 1204.154;
(6) Subchapter A, Chapter 1202, Subchapters A and F, Chapter
1204, Subchapter A, Chapter 1273, Subchapters A, B, and D,
Chapter 1355, and Subchapter A, Chapter 1366;
(7) Subchapter A, Chapter 1507;
(8) Chapters 1203, 1210, 1251-1254, 1301, 1351, 1354, 1359,
1364, 1368, 1505, 1506, 1651, 1652, and 1701; and
(9) Chapter 177, Local Government Code.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 2E.018, eff. April 1, 2009.
Sec. 841.003. APPLICABILITY OF LAW GOVERNING CORPORATIONS. An
insurance company operating under this chapter is subject to the
Texas Business Corporation Act, the Texas Miscellaneous
Corporation Laws Act (Article 1302-1.01 et seq., Vernon's Texas
Civil Statutes), and any other law of this state that governs
corporations in general to the extent those laws are not
inconsistent with this chapter or another law described by
Section 841.002.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.004. NET ASSETS DEFINED; RULES. (a) A company's "net
assets" consist of the company's funds that are available for the
payment of a company's obligations in this state, including:
(1) uncollected premiums that are not more than three months
past due and deferred premiums on policies actually in force,
after the deduction of:
(A) all unpaid losses and claims;
(B) all claims for losses; and
(C) all other debts, exclusive of capital stock; and
(2) if the total value of the equipment exceeds $2,000, the
value of all electronic machines that comprise a data processing
system or systems and of all other office equipment, furniture,
machines, and labor-saving devices purchased for and used in
connection with the business of the insurance company to the
extent that the total actual cash market value of those assets is
less than 10 percent of the other admitted assets of the company.
(b) The commissioner may adopt rules defining electronic
machines and systems, office equipment, furniture, machines, and
labor-saving devices described by Subsection (a) and stating the
maximum period for which each class of equipment may be
amortized.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
SUBCHAPTER B. FORMATION AND STRUCTURE OF DOMESTIC COMPANIES
Sec. 841.051. FORMATION OF COMPANY. (a) Three or more
residents of this state may form:
(1) a life insurance company;
(2) an accident insurance company;
(3) a life and accident insurance company;
(4) a health and accident insurance company; or
(5) a life, health, and accident insurance company.
(b) To form a domestic insurance company:
(1) each incorporator must sign and acknowledge the articles of
incorporation of the company; and
(2) the incorporators must file the articles of incorporation
with the department.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.052. ARTICLES OF INCORPORATION. (a) Articles of
incorporation of a proposed domestic insurance company must
state:
(1) the name of the company;
(2) the location of the company's home office;
(3) the kinds of insurance business in which the company
proposes to engage;
(4) the name and place of residence of each incorporator;
(5) the amount of the company's capital stock;
(6) the number of shares of the company's capital stock;
(7) the amount of the company's surplus; and
(8) the period of the company's duration, which may be
perpetual.
(b) The incorporators of a domestic insurance company may
include in the articles of incorporation other provisions that
are not inconsistent with law.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.053. COMPANY NAME. (a) The name of a domestic
insurance company must contain the words "Insurance Company."
(b) A domestic insurance company's name may not be so similar to
the name of another domestic insurance company as to likely
mislead the public.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.054. CAPITAL STOCK AND SURPLUS REQUIREMENTS. (a) A
domestic insurance company must have capital stock in an amount
of at least $700,000 and surplus in an amount of at least
$700,000.
(b) All of the capital stock required by Subsection (a) must be
fully subscribed and paid up and delivered to the incorporators
before the articles of incorporation are filed.
(c) At the time of incorporation, the required capital and
surplus shall consist only of:
(1) United States currency;
(2) bonds of the United States, this state, or a county or
municipality of this state; or
(3) government insured mortgage loans that are authorized by
this chapter or Chapter 425, with not more than 50 percent of the
required capital invested in first mortgage real property loans.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 2E.019, eff. April 1, 2009.
Sec. 841.055. SHARES OF STOCK. (a) The shares of stock of an
insurance company operating under this chapter may be divided or
converted into shares of stock with a par value or shares of
stock without par value or into a combination of shares with or
without par value.
(b) Each issued share of stock must be fully paid for and
nonassessable.
(c) The insurance company by an amendment to its charter may
increase or decrease the total number of shares of stock the
company is authorized to issue if:
(1) shares representing at least 50 percent of the total par
value of the authorized shares with a par value, if any, have
been in good faith subscribed and fully paid for; and
(2) shares representing at least 50 percent of the total number
of the authorized shares without a par value, if any, have been
in good faith subscribed and fully paid for.
(d) Authorized but unissued shares of stock of an insurance
company are not considered capital, stock, or capital stock of
the company.
(e) This section and Sections 841.056 and 841.057 do not impair
the charter rights of an insurance company authorized to issue
shares of stock with or without a par value before September 6,
1955.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.056. REQUIREMENTS FOR SHARES OF STOCK WITH PAR VALUE.
(a) The shares of stock of an insurance company operating under
this chapter that are divided or converted into par value shares,
if any, must have a par value of not less than $1 or more than
$100.
(b) Each par value share of stock must be fully paid for before
issuance in an amount that is not less than the share's par
value.
(c) When an application for charter or an amendment to the
charter authorizing the issuance of shares of stock with a par
value is filed, the insurance company shall file with the
department a statement under oath stating:
(1) the total number of par value shares subscribed; and
(2) the actual total consideration the company received for
those shares.
(d) The shareholders of an insurance company authorizing par
value shares of stock must in good faith subscribe and fully pay
for shares representing at least 50 percent of the total par
value of the authorized shares with a par value before the
company:
(1) is granted a charter; or
(2) amends its charter to authorize the issuance of par value
shares.
(e) If all of the authorized par value shares of stock are not
subscribed and paid for when the charter is granted or the
amendment is filed, respectively, the insurance company shall
file with the department a certificate authenticated by a
majority of the directors stating the total number of par value
shares issued and the actual total consideration received for
those shares. The company shall file the certificate not later
than the 90th day after the date of issuance of those remaining
shares. The company is not required to file an amendment to its
charter or take further action to effect the increase in the
capital and surplus of the company.
(f) The actual consideration received by an insurance company
for a par value share constitutes capital to the extent of its
par value and the remainder, if any, constitutes surplus.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.057. REQUIREMENTS FOR SHARES OF STOCK WITHOUT PAR
VALUE. (a) The shares of stock of an insurance company
operating under this chapter that are divided or converted into
shares without par value, if any, must be equal in all respects.
(b) An insurance company may issue and dispose of authorized
shares without par value for money or for notes, mortgages, and
stocks in the form authorized by law for capital stock of
insurance companies. Each share of stock without par value must
be fully paid before issuance. After the company receives payment
for a share of stock issued under this section, the share is not
subject to additional call or assessment, and the subscriber or
holder of the share is not required to make an additional payment
with respect to the share.
(c) The shareholders of an insurance company authorizing shares
of stock without par value must in good faith subscribe and pay
for shares representing at least 50 percent of the authorized
shares without par value before the company is granted a charter
or has its charter amended to authorize the issuance of shares
without par value. The total amount paid for the shares must be
at least $250,000.
(d) When an application for charter or an amendment to the
charter authorizing the issuance of shares without par value is
filed, the insurance company shall file with the department a
statement under oath stating:
(1) the number of shares without par value subscribed; and
(2) the actual consideration the company received for those
shares.
(e) If all of the authorized shares of stock without par value
are not subscribed and paid for when the charter is granted or
the amendment is filed, respectively, the insurance company shall
file with the department a certificate authenticated by a
majority of the directors stating the number of shares without
par value issued and the consideration received for those shares.
(f) The insurance company shall file the certificate required by
Subsection (e) not later than the 90th day after the date of
issuance of those remaining shares. The portion of the
consideration received for shares without par value that is
designated as capital by the company's directors, or by the
company's shareholders if the charter or articles of
incorporation reserve the right to make that determination to the
shareholders, constitutes capital and the remainder, if any,
constitutes surplus. The company is not required to file an
amendment to its charter or take further action to effect the
increase in the capital and surplus of the company.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.058. APPLICATION FOR CHARTER. (a) To obtain a charter
for a domestic insurance company, the incorporators must pay to
the department the charter fee in an amount determined under
Chapter 202 and file with the department:
(1) an application for charter on the form and containing the
information prescribed by the commissioner;
(2) the company's articles of incorporation; and
(3) an affidavit made by two or more of the incorporators that
states that:
(A) the minimum capital and surplus requirements of Section
841.054 are satisfied;
(B) the capital and surplus are the bona fide property of the
company; and
(C) the information in the articles of incorporation is true and
correct.
(b) The commissioner may require that the incorporators provide
at their expense additional evidence of a matter required in the
affidavit before the commissioner takes further action on the
application for charter.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 2E.020, eff. April 1, 2009.
Sec. 841.059. ACTION BY COMMISSIONER AND DEPARTMENT AFTER
FILING. (a) After the charter fee is paid and all items
required for a charter under Section 841.058 are filed with the
department, the department shall make or cause to be made a full
and thorough examination of the domestic insurance company.
(b) The domestic insurance company shall pay for the examination
under Subsection (a)(2).
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
1022, Sec. 8, eff. June 19, 2009.
Sec. 841.061. ACTION ON APPLICATION. (a) In considering the
application, the commissioner shall determine if:
(1) the minimum capital and surplus required by Section 841.054
are the bona fide property of the domestic insurance company;
(2) the proposed officers, directors, and managing executive of
the company have sufficient insurance experience, ability, and
standing to make success of the proposed company probable; and
(3) the applicants are acting in good faith.
(b) If the commissioner determines that the applicant has not
met the standards set out by Subsection (a), the commissioner
shall deny the application in writing, giving the reason for the
denial. An application may not be granted unless it is
adequately supported by competent evidence.
(b-1) On the applicant's request, the commissioner shall hold a
hearing on a denial. Not later than the 30th day after the date
of the applicant's request for a hearing, the commissioner shall
request a hearing date.
(b-2) An interested party may participate fully and in all
respects in any proceeding related to the application. An
intervenor has the rights and privileges of a proper or necessary
party in a civil suit in the courts of this state, including the
right to be represented by counsel.
(c) If the commissioner does not deny the application under
Subsection (b), the commissioner shall approve the application.
On approval of an application, the department shall record the
information required by Section 841.058 in records maintained for
that purpose. On receipt of a fee in the amount determined under
Chapter 202, the commissioner shall provide to the incorporators
a certified copy of the application, articles of incorporation,
and submitted affidavit.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 2E.021, eff. April 1, 2009.
Acts 2009, 81st Leg., R.S., Ch.
1022, Sec. 9, eff. June 19, 2009.
Acts 2009, 81st Leg., R.S., Ch.
1022, Sec. 10, eff. June 19, 2009.
Sec. 841.062. BEGINNING OF CORPORATE EXISTENCE. On receipt of
the certified copy of documents under Section 841.061(c), the
domestic insurance company becomes a body politic and corporate,
and the incorporators may complete organization of the company
under Section 841.063.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.063. ORGANIZATION MEETING. (a) After receipt of the
certified copy of documents under Section 841.061(c), the
incorporators shall promptly call a meeting of the domestic
insurance company's shareholders. The shareholders shall:
(1) adopt bylaws to govern the company; and
(2) elect the company's initial board of directors.
(b) The directors elected under this section serve until
directors are first elected under Section 841.153.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
SUBCHAPTER C. AUTHORITY TO ENGAGE IN BUSINESS
Sec. 841.101. CERTIFICATE OF AUTHORITY REQUIRED. A domestic
insurance company may not engage in the business of insurance in
this state, except for the lending of money, without first
obtaining from the commissioner a certificate of authority that:
(1) shows that the company has fully complied with the laws of
this state; and
(2) authorizes the company to engage in the business of
insurance in this state.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.102. SCHEDULE OF ASSETS. Two or more officers of the
domestic insurance company shall execute and file with the
department:
(1) a sworn schedule of each of the assets of the company
exhibited to the department during the examination under Section
841.059 showing the value of the assets; and
(2) a sworn statement that the assets are the bona fide,
unconditional, and unencumbered property of the company and are
worth the amount stated in the schedule.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.103. ISSUANCE OF CERTIFICATE OF AUTHORITY. (a) If the
commissioner makes a determination favorable to the applicants on
all issues under Section 841.061(a), the commissioner, on
compliance with the requirements of Section 841.102, shall issue
to the domestic insurance company a certificate of authority
authorizing the company to engage in the kinds of business
authorized by the company's charter.
(b) On written request of a domestic insurance company, the
commissioner shall provide a certified copy of the company's
certificate of authority to the company for each of the company's
agents in this state.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.104. TAX PAYMENT REQUIRED FOR ISSUANCE OF CERTAIN
CERTIFICATES OF AUTHORITY. (a) This section applies to a life
insurance company that:
(1) has previously held a certificate of authority to engage in
the business of life insurance in this state;
(2) ceased to write new business in this state under that
certificate of authority; and
(3) after ceasing to write new business, continued to collect
from residents of this state renewal or other premiums on
policies written under that certificate of authority.
(b) A life insurance company to which this section applies may
not obtain a new certificate of authority to engage in the
business of life insurance in this state until the company:
(1) files with the department under oath a report that discloses
the gross amount of renewal or other premiums received each
calendar year from residents of this state after the period
covered by the company's last tax report of gross premium
receipts filed under this code; and
(2) pays to the state occupation taxes on those premiums.
(c) The life insurance company shall pay the occupation tax for
each year of nonpayment. The company shall pay the tax for each
year at the same rate for that year as a company engaged in the
business of life insurance in this state during that year.
(d) The life insurance company shall remit the penalties for
failure to pay the taxes and file required reports when the
company pays the taxes and receives a certificate of authority.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 17, eff. April 1,
2005.
SUBCHAPTER D. MANAGEMENT OF COMPANY
Sec. 841.151. CONDUCTING SHAREHOLDERS' MEETING. (a) At a
meeting of a domestic insurance company's shareholders, each
shareholder is entitled to one vote for each fully paid up share
of stock appearing in the shareholder's name on the company's
books, except to the extent that the articles of incorporation
increase, limit, or deny voting rights to the holders of the
shares of a class of stock as authorized by the Texas Business
Corporation Act.
(b) A shareholder may vote in person or by written proxy.
(c) At a shareholders' meeting, a quorum is any number of
shareholders whose cumulative stock ownership in the domestic
insurance company represents a majority of the company's paid up
capital stock.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.152. BOARD OF DIRECTORS. (a) Subject to the bylaws of
the domestic insurance company, as adopted or amended by the
shareholders or directors, the board of directors has full
management and control of the company.
(b) The board consists of not fewer than five directors. A
director is not required to be a shareholder unless such a
qualification is required by the articles of incorporation or
bylaws of the company.
(c) The directors shall keep a full and correct record of the
board's transactions. The shareholders may inspect those records
during business hours.
(d) The directors shall fill a vacancy that occurs on the board
or in any office of the company.
(e) A majority of the board is a quorum.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.153. ELECTION OF DIRECTORS. (a) After a domestic
insurance company completes the organization of the company under
Section 841.063, the company shall hold an annual meeting of the
company's shareholders on the fourth Tuesday in April at the home
office of the company to elect the company's board of directors.
(b) After the directors are first elected under this section,
the annual meeting must be before May 1 of each year as
established by the company's bylaws. The directors serve one-year
terms beginning immediately after the election, except as
provided by Section 841.154.
(c) If the shareholders do not elect directors at an annual
meeting, the shareholders may elect the directors at a special
shareholders' meeting called for that purpose.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.154. STAGGERED TERMS FOR LARGE BOARD OF DIRECTORS. (a)
This section applies only to a domestic insurance company whose
board of directors consists of at least nine members.
(b) The bylaws of a domestic insurance company may provide that
the company's directors, other than initial directors, may be
elected to serve staggered terms as provided by this section.
(c) The company's directors shall be divided into two or three
classes, with each class consisting of an equal number of
directors to the extent possible. After the directors are divided
into classes:
(1) the terms of the directors in the first class expire on the
first annual meeting date after their initial election;
(2) the terms of the directors in the second class expire on the
second annual meeting date after their initial election; and
(3) the terms of the directors in the third class, if any,
expire on the third annual meeting date after their initial
election.
(d) At each annual meeting after the directors are first
elected, the shareholders shall elect the number of directors
whose terms expire on that date. Directors are elected for:
(1) staggered two-year terms, if the board is divided into two
classes; or
(2) staggered three-year terms, if the board is divided into
three classes.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.155. OFFICERS. (a) A domestic insurance company's
directors shall choose one of the directors to serve as the
company's president.
(b) Other officers of the domestic insurance company shall be
chosen in accordance with the company's bylaws. An officer is not
required to be a shareholder unless such a qualification is
required by the company's articles of incorporation or bylaws. An
officer other than the president is not required to be a director
unless such a qualification is required by the company's bylaws.
(c) The duties and compensation of a domestic insurance
company's officers are as stated in the company's bylaws. If the
bylaws do not state the duties or compensation of the officers,
the directors shall establish the duties or compensation.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.156. AMENDMENT OF CHARTER OR ARTICLES. (a) The
shareholders of a domestic insurance company by resolution may
amend the company's charter or articles of incorporation at any
shareholders' meeting.
(b) The amendment and a copy of the resolution certified by the
president and secretary of the domestic insurance company shall
be filed and recorded in the same manner as the charter.
(c) An amendment of the charter or articles takes effect when it
is recorded.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
SUBCHAPTER E. CAPITAL AND SURPLUS
Sec. 841.201. FORM OF REQUIRED CAPITAL AND SURPLUS.
Notwithstanding any other provision of this code, after a charter
is granted under this chapter, the domestic insurance company:
(1) shall maintain the company's minimum capital at all times in
a form described by Section 841.054(c); and
(2) may invest the company's surplus as provided by this code.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.202. AUTHORIZED SHARES. (a) At any shareholders'
meeting, shareholders of a domestic insurance company whose
cumulative stock ownership represents a majority of the capital
stock of the company by resolution may increase or decrease the
amount of the company's capital stock, subject to this section.
(b) Capital stock may never be decreased to an amount that is
less than the minimum amount of paid-up stock required by Section
841.054.
(c) Two officers of the domestic insurance company must sign and
acknowledge a statement of the increase or decrease. The
acknowledged statement and a certified copy of the resolution
shall be filed and recorded in the same manner as the charter.
(d) For an increase or decrease of capital stock, the domestic
insurance company may require the return of the original
certificates evidencing the stock in exchange for new
certificates. An issuance of new certificates that results in a
transfer of stock is subject to Section 841.254.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.203. COMPANY'S REPURCHASE OF STOCK. (a) A legal
reserve life insurance company may purchase in the name of the
company outstanding shares of the company's capital stock as
provided by the Texas Business Corporation Act.
(b) A purchase of stock under this section is not considered an
investment and does not violate the provisions of this code
relating to eligible investments for a legal reserve life
insurance company.
(c) A legal reserve life insurance company that purchases stock
under this section shall file with the department not later than
the 10th day after the date of the purchase a statement that
contains:
(1) the name of each shareholder from whom the shares were
purchased; and
(2) the sum of money paid for those shares.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.204. EXEMPTION FROM REQUIRED INCREASE OF CAPITAL AND
SURPLUS. (a) Except as otherwise provided by this chapter, a
domestic insurance company that after September 1, 1991, had less
than the minimum amount of capital and surplus required for a
newly incorporated company under Section 841.054 may continue to
transact the kinds of business for which it holds a certificate
of authority.
(b) The insurance company shall immediately increase the amount
of its capital to the required amount of capital under Section
841.054 if there is:
(1) a change in the control of at least 50 percent of the voting
securities of the insurance company;
(2) a change in the control of at least 50 percent of the voting
securities of a holding company controlling the insurance
company; or
(3) a change in control of at least 50 percent by any other
method of control if the insurance company or holding company is
not controlled by voting securities.
(c) For purposes of Subsection (b), a transfer of ownership that
occurs because of death, regardless of whether the decedent died
testate or intestate, may not be considered a change in the
control of an insurance company or holding company if ownership
is transferred solely to one or more individuals, each of whom
would be an heir of the decedent if the decedent had died
intestate.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.205. COMMISSIONER MAY REQUIRE LARGER CAPITAL AND
SURPLUS AMOUNTS. (a) The commissioner by rule or guideline may
require a domestic insurance company that writes or assumes a
life insurance or annuity contract or assumes liability on or
indemnifies one person for any risk under an accident and health
insurance policy, or a combination of these policies, in an
amount that exceeds $10,000, to maintain capital and surplus in
amounts that exceed the minimum amounts required by this chapter
because of:
(1) the nature and kind of risks the company underwrites or
reinsures;
(2) the premium volume of risks the company underwrites or
reinsures;
(3) the composition, quality, duration, or liquidity of the
company's investment portfolio;
(4) fluctuations in the market value of securities the company
holds; or
(5) the adequacy of the company's reserves.
(b) A rule adopted under Subsection (a) must be designed to
ensure the financial solvency of an insurance company for the
protection of policyholders but may not require that the total
admitted assets of a company exceed 106 percent of its total
liabilities.
(c) A fraternal benefit society operating under Chapter 885 and
a mutual life insurance company operating under Chapter 882 are
subject to a rule adopted under this section.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.206. IMPAIRMENT OF CAPITAL AND SURPLUS. (a) An
insurance company incorporated or authorized to do the lines of
business authorized in this chapter may not have:
(1) the company's required capital impaired;
(2) more than 90 percent of the company's required minimum
surplus impaired; or
(3) the surplus required under Section 841.205 impaired.
(b) If the commissioner determines that an insurance company's
capital or surplus is impaired in violation of this section, the
commissioner shall:
(1) order the company to immediately reduce the level of
impairment to an acceptable level of impairment as specified by
the commissioner or prohibit the company from engaging in the
business of insurance in this state; and
(2) begin proceedings as necessary to determine any further
actions with respect to the impairment.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.021, eff. September 1, 2005.
Sec. 841.207. ACTIONS OF COMMISSIONER WHEN CAPITAL AND SURPLUS
REQUIREMENTS NOT SATISFIED. If an insurance company does not
comply with the capital and surplus requirements of this chapter,
the commissioner may order the insurance company to cease writing
new business and may:
(1) place the insurance company under state supervision or
conservatorship;
(2) declare the insurance company to be in a hazardous condition
as provided by Subchapter A, Chapter 404;
(3) declare the insurance company to be impaired as provided by
Section 841.206; or
(4) apply to the insurance company any other applicable sanction
provided by this code.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 2E.022, eff. April 1, 2009.
SUBCHAPTER F. GENERAL POWERS, DUTIES, AND LIMITATIONS
Sec. 841.251. EVIDENCE OF EXPENDITURES. (a) A domestic
insurance company may not make an expenditure of $100 or more
unless the expenditure is evidenced by a voucher that:
(1) is signed by or on behalf of the individual, firm, or
corporation that receives the money; and
(2) describes the consideration received for the payment
correctly.
(b) For an expenditure for both services and disbursements, the
voucher must state the services rendered and disbursement made.
(c) For an expenditure related to a matter pending before a
legislature or public body or a department or officer of a state
or government, the voucher must describe both the nature of the
matter and the interest of the company in the matter correctly.
(d) If the domestic insurance company cannot obtain a voucher as
required by this section, the expenditure must be evidenced by:
(1) a paid check; or
(2) an affidavit that:
(A) describes the nature and purpose of the expenditure; and
(B) states the reason the voucher was not obtained.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.252. PAYMENTS TO OFFICERS, DIRECTORS, AND EMPLOYEES.
(a) Unless first authorized by a vote of a domestic insurance
company's board of directors or a committee of the board that has
the duty to authorize the payments, the company may not pay any
compensation or emolument in an amount that, when added to any
compensation or emolument paid to the person by an affiliated
domestic insurance company, exceeds $150,000 in any year to an
individual, firm, or corporation, including an officer or
director of the company.
(b) Subsection (a) does not prevent a domestic insurance company
from contracting with its agents for the payment of renewal
commissions.
(c) The shareholders of a domestic insurance company may
authorize the creation of one or more plans for the payment of
pensions, retirement benefits, or group insurance for the
company's officers and employees. The shareholders may delegate
to the company's board of directors the power and duty to
prepare, effect, finally approve, administer, and amend a plan.
(d) A mutual insurance company, acting through the company's
policyholders, may exercise the same discretion, and has the same
powers, privileges, and rights, as are conferred on a domestic
insurance company under Subsection (c).
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
94, Sec. 1, eff. September 1, 2009.
Sec. 841.253. LIFE INSURANCE COMPANY'S PAYMENT OF DIVIDENDS.
(a) A life insurance company may declare or pay a dividend to
its:
(1) policyholders only from the expense loading and profits made
by the company; and
(2) shareholders only from the company's earned surplus, as
defined by the commissioner.
(b) A life insurance company that is not showing a profit may
pay a dividend on its participating policies from the expense
loading on those policies.
(c) A life insurance company may not discriminate between
policyholders in paying a dividend from the expense loading under
this section.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.254. TRANSFER OF STOCK. (a) A domestic insurance
company's shares of stock are transferrable on the company's
books, in accordance with law and the bylaws of the company, by
the owner or the owner's authorized agent.
(b) Each person who becomes a shareholder by a transfer of
shares succeeds to all rights of the former holder of those
shares, by reason of that ownership.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.255. ANNUAL STATEMENT; FILING FEE. (a) Not later than
March 1 of each year, a domestic insurance company shall:
(1) prepare a statement showing the condition of the company on
December 31 of the preceding year; and
(2) deliver the statement to the department accompanied by a
filing fee in the amount determined under Chapter 202.
(b) The statement must be under oath of two of the domestic
insurance company's officers and show in detail:
(1) the character of the company's assets and liabilities on
December 31 of the preceding year;
(2) the amount and character of business transacted and money
received during the preceding year;
(3) how money was spent during the preceding year;
(4) the number and amount of the company's policies in force in
this state on that date; and
(5) the total amount of the company's policies in force on that
date.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 2E.023, eff. April 1, 2009.
Sec. 841.256. BUSINESS IN SEPARATE DEPARTMENTS OF DOMESTIC
INSURANCE COMPANY. A domestic insurance company may not transact
more than one of the kinds of insurance business described by
Section 841.051(a) unless the company establishes separate
departments to transact each kind of business.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.257. KINDS OF BUSINESS LIMITED. An insurance company
authorized to engage in the business of insurance under this
chapter or in accordance with Section 982.051 may not accept a
risk or write an insurance policy in this state or any other
state or country other than:
(1) a life, accident, or health insurance policy;
(2) reinsurance under Sections 492.051(b) and (c) or Chapter 493
by a life insurance company authorized to engage in the business
of insurance in this state; or
(3) reinsurance under Chapter 494 by a domestic insurance
company.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.022, eff. September 1, 2005.
Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 2E.024, eff. April 1, 2009.
Sec. 841.258. AGENTS FOR COMPANY THAT CEASES WRITING NEW
BUSINESS. An insurance company that ceases to write new business
in this state may maintain in this state agents to collect
renewal premiums on outstanding policies the company has written
under its certificate of authority.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.022, eff. September 1, 2005.
Sec. 841.259. ACTIVITIES OF DIRECTORS AND OFFICERS. (a) A
director or officer of an insurance company may not:
(1) receive money or another valuable thing for negotiating,
procuring, recommending, or aiding in a purchase or sale of
property by or a loan from the company; or
(2) have a pecuniary interest, as a principal, coprincipal,
agent, or beneficiary, in a purchase, sale, or loan described by
Subdivision (1).
(b) This section does not prohibit:
(1) a life insurance company from making a loan to a
policyholder in an amount that is not greater than the reserve
value of the policy; or
(2) a transaction, purchase, sale, or loan approved by the
commissioner under Subchapter A of Chapter 805 or Chapter 823.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.260. PROHIBITED COMMISSIONS. (a) In this section,
"contingent compensation" means a commission or other
compensation an insurance company pays to a person that is
contingent on:
(1) the writing or procurement of an insurance policy in the
company;
(2) the procurement of an application for an insurance policy in
the company;
(3) the payment of a renewal premium; or
(4) the assumption of an insurance risk by the company.
(b) A life insurance company that engages in the business of
insurance in this state may not, directly or indirectly, pay or
contract to pay a contingent compensation to:
(1) the president, vice president, secretary, or treasurer of
the company;
(2) any other officer of the company, other than an agent or
solicitor;
(3) an actuary of the company; or
(4) a medical director or other physician of the company whose
duty is to examine risks or applications for insurance for the
company.
(c) This section does not prohibit a plan of compensation to a
marketing officer according to the total amount of insurance the
insurance company writes or to the total amount of insurance in
force with the insurance company during a specified period if:
(1) the commissioner approves the plan under Subchapter A,
Chapter 805;
(2) the marketing officer is not responsible for underwriting,
rating, or otherwise approving the acceptability of insurance
risks; and
(3) the plan does not compensate the marketing officer according
to commissions on individual sales of any insurance product.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.261. CAUSES OF ACTION. (a) A domestic insurance
company may bring an action against any person, including a
policyholder or shareholder of the company, for any cause related
to the company's business.
(b) A policyholder or an heir or legal representative of a
policyholder may bring an action against a domestic insurance
company for a loss that accrues on a policy.
(c) An action enjoining, restraining, or interfering with the
prosecution of a domestic insurance company's business may be
brought only by the department.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
SUBCHAPTER G. ISSUANCE OF POLICIES
Sec. 841.301. LIMITS ON AMOUNT OF ACCIDENT AND HEALTH INSURANCE
POLICIES. (a) A domestic insurance company may not assume
liability on or indemnify one person for any risk under one or
more accident, health, or hospitalization insurance policies, or
a combination of those policies, in an amount that exceeds
$10,000, unless the amount of the issued, outstanding, and stated
capital of the company is at least equal to the minimum amount of
capital required for a newly incorporated company under Section
841.054.
(b) A domestic insurance company that before January 1, 2002,
ceases to write or assume liability on, or indemnify any risk
under, a policy described by Subsection (a) in the amount
specified by Subsection (a) and notifies the commissioner of that
action is exempt from the requirements of Subsection (a) until
the date the company resumes writing those policies. A company
that resumes assuming liability on or indemnifying risks under
those policies shall comply with Subsections (a) and (c).
(c) A domestic insurance company that is exempt under Subsection
(b) shall maintain its issued, outstanding, and stated capital in
an amount that is at least $100,000 and is at least:
(1) the amount of capital held by the company on December 31,
1991, plus 10 percent of the difference between that amount and
an amount equal to the minimum amount of capital required for a
newly incorporated company under Section 841.054, if the last
date that the company writes a policy described by Subsection (a)
is during 1993;
(2) the amount of capital held by the company on December 31,
1991, plus 20 percent of the difference between that amount and
an amount equal to the minimum amount of capital required for a
newly incorporated company under Section 841.054, if the last
date that the company writes a policy described by Subsection (a)
is during 1994;
(3) the amount of capital held by the company on December 31,
1991, plus 30 percent of the difference between that amount and
an amount equal to the minimum amount of capital required for a
newly incorporated company under Section 841.054, if the last
date that the company writes a policy described by Subsection (a)
is during 1995;
(4) the amount of capital held by the company on December 31,
1991, plus 40 percent of the difference between that amount and
an amount equal to the minimum amount of capital required for a
newly incorporated company under Section 841.054, if the last
date that the company writes a policy described by Subsection (a)
is during 1996;
(5) the amount of capital held by the company on December 31,
1991, plus 50 percent of the difference between that amount and
an amount equal to the minimum amount of capital required for a
newly incorporated company under Section 841.054, if the last
date that the company writes a policy described by Subsection (a)
is during 1997;
(6) the amount of capital held by the company on December 31,
1991, plus 60 percent of the difference between that amount and
an amount equal to the minimum amount of capital required for a
newly incorporated company under Section 841.054, if the last
date that the company writes a policy described by Subsection (a)
is during 1998;
(7) the amount of capital held by the company on December 31,
1991, plus 70 percent of the difference between that amount and
an amount equal to the minimum amount of capital required for a
newly incorporated company under Section 841.054, if the last
date that the company writes a policy described by Subsection (a)
is during 1999;
(8) the amount of capital held by the company on December 31,
1991, plus 80 percent of the difference between that amount and
an amount equal to the minimum amount of capital required for a
newly incorporated company under Section 841.054, if the last
date that the company writes a policy described by Subsection (a)
is during 2000; and
(9) the amount of capital held by the company on December 31,
1991, plus 90 percent of the difference between that amount and
an amount equal to the minimum amount of capital required for a
newly incorporated company under Section 841.054, if the last
date that the company writes a policy described by Subsection (a)
is during 2001.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.302. LIMITS ON LIFE OR ACCIDENTAL DEATH INSURANCE. (a)
Until the amount of the capital and surplus of a domestic
insurance company is at least $100,000, the company may not
insure any one life for more than $20,000 in the event of death
from natural causes or more than $40,000 in the event of death
from accidental causes.
(b) If the net capital and surplus of a domestic insurance
company is at least $75,001 but less than $100,000, the company,
for any policy issued by the company, shall reinsure the amount
of the benefit that exceeds $4,000 in the event of death from
natural causes and the amount of the benefit that exceeds $8,000
in the event of death from accidental causes.
(c) If the net capital and surplus of a domestic insurance
company is at least $50,001 but less than $75,001, the company,
for any policy issued by the company, shall reinsure the amount
of the benefit that exceeds $3,000 in the event of death from
natural causes and the amount of the benefit that exceeds $6,000
in the event of death from accidental causes.
(d) If the net capital and surplus of a domestic insurance
company is at least $35,001 but less than $50,001, the company,
for any policy issued by the company, shall reinsure the amount
of the benefit that exceeds $2,000 in the event of death from
natural causes and the amount of the benefit that exceeds $4,000
in the event of death from accidental causes.
(e) If the net capital and surplus of a domestic insurance
company is $35,000 or less, the company, for any policy issued by
the company, shall reinsure the amount of the benefit that
exceeds $1,000 in the event of death from natural causes and the
amount of the benefit that exceeds $2,000 in the event of death
from accidental causes.
(f) Benefits under this section must be reinsured with a legal
reserve company that is authorized to engage in the business of
insurance in this state.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.303. ENTIRE CONTRACT. Each policy of insurance issued
or delivered in this state by any life insurance company engaged
in business in this state constitutes the entire contract between
the parties, except that if the application is made a part of the
contract, the policy and the application constitute the entire
contract.
Redesignated from Insurance Code Sec. 1101.003(a) and amended by
Acts 2003, 78th Leg., ch. 1276, Sec. 10A.204(a), eff. Sept. 1,
2003.
SUBCHAPTER H. DEPOSIT OF SECURITIES
Sec. 841.351. DEPOSIT WITH COMPTROLLER. (a) A domestic
insurance company may, at its option, deposit with the
comptroller either:
(1) securities in which the company's capital stock is invested;
or
(2) securities in an amount equal to the amount of the company's
capital stock.
(b) Securities deposited under Subsection (a) must be securities
of a class authorized by the laws of this state for investments
of a domestic insurance company's capital stock.
(c) A domestic insurance company may, at its option, withdraw a
deposit made under Subsection (a), or any portion of the deposit,
after substituting a deposit of securities of a like class and of
an amount and value equal to the withdrawn deposit or portion of
deposit.
(d) The commissioner must first approve any securities deposited
or being substituted under this section.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.352. ISSUANCE OF RECEIPT FOR DEPOSIT. When a domestic
insurance company deposits securities under this subchapter, the
comptroller shall issue to the company a receipt that:
(1) describes the deposit in a manner that identifies the
securities; and
(2) states that the securities are held on deposit as capital
stock investments of the company.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.353. ADVERTISEMENT OF DEPOSIT. A domestic insurance
company that makes a deposit under this subchapter may:
(1) advertise the fact that a deposit has been made; or
(2) print a copy of the receipt for the deposit on any policy
the company issues.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.354. ACCESS TO DEPOSIT. In accordance with reasonable
rules adopted by the comptroller and the commissioner, the proper
officer or agent of a domestic insurance company making a deposit
of securities under this subchapter may at a reasonable time:
(1) examine the deposit;
(2) detach coupons from the securities; and
(3) collect interest on the deposit.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.355. WITHDRAWAL OF DEPOSIT AFTER MERGER, CONSOLIDATION,
OR TOTAL REINSURANCE. (a) When two or more domestic insurance
companies that have two or more deposits of securities under this
subchapter merge, consolidate, or enter into a total reinsurance
contract by which the ceding company is dissolved and its assets
and liabilities are acquired or assumed by the surviving company,
the new, surviving, or reinsuring insurance company, on approval
of the commissioner, may withdraw all of the deposits, except for
the deposit of the greatest amount and value. The new, surviving,
or reinsuring insurance company must demonstrate to the
commissioner that the company is the owner of the deposited
securities before the commissioner approves the withdrawal of
those securities.
(b) In accordance with an order of the commissioner approving a
withdrawal of securities under this section, the comptroller
shall release, transfer, and deliver the withdrawn securities to
their owner.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.356. SITUS OF DEPOSIT FOR TAX PURPOSES. For purposes
of state, county, or municipal taxation, the situs of deposited
securities is the municipality and county in which the depositing
company's home office is located.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.357. MAINTENANCE OF DEPOSIT. A domestic insurance
company must maintain a deposit of securities under this
subchapter as long as the company has outstanding any liability
to a policyholder in this state.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
SUBCHAPTER O. ENFORCEMENT AND INTERVENTION
Sec. 841.701. REVOCATION OF CERTIFICATE OF AUTHORITY. (a) If
the commissioner determines that an insurance company that holds
a certificate of authority does not comply with this chapter or
another law described by Section 841.002, the commissioner shall
notify the company that the commissioner intends to revoke its
certificate of authority on the expiration of the 30-day period
after the date actual notice is delivered or mailed under this
section.
(b) Notice under this section must:
(1) be in writing; and
(2) be delivered to an executive officer of the company by
personal service or by registered mail.
(c) If an insurance company receiving notice under this section
does not fully comply before the expiration of the period
prescribed by Subsection (a), the commissioner shall revoke the
company's certificate of authority.
(d) An insurance company whose certificate of authority is
revoked under this section is not entitled to receive another
certificate of authority for a period of one year and until the
company has fully and in good faith complied with this chapter.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.702. APPEAL OF DETERMINATION TO REVOKE CERTIFICATE. An
insurance company aggrieved by an order of the commissioner to
revoke the company's certificate of authority under Section
841.701 may file suit in a court in Travis County to vacate the
order.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.022, eff. September 1, 2005.
Sec. 841.703. CERTIFICATE OF AUTHORITY VOID ON FAILURE TO
SATISFY JUDGMENT. (a) If an officer holding an execution issued
on a final judgment rendered against an insurance company demands
payment of the judgment from an officer or attorney of record of
the company and the company does not fully satisfy the judgment
before the 31st day after the date the demand is made, the
officer shall certify the demand and failure to the commissioner,
regardless of whether the demand is made in this state.
(b) On receipt of a certification under Subsection (a), the
commissioner shall declare void the certificate of authority
issued to the company under this chapter.
(c) An insurance company whose certificate of authority is
declared void under this section may not engage in the business
of insurance in this state until:
(1) the judgment is fully satisfied and discharged; and
(2) the commissioner renews the company's certificate of
authority.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 841.704. FALSE STATEMENT, REPORT, OR OTHER DOCUMENT;
CRIMINAL PENALTY. (a) A person commits an offense if the person
executes or causes to be executed a statement, report, or other
document required by law to be filed with the commissioner that
contains a material statement or fact that the person knows to be
false.
(b) A person commits an offense if the person is an officer of
an insurance company that is not organized under the laws of this
state and the person files a statement, report, or other document
required by law to be filed with the commissioner that contains a
material statement or fact that the person knows to be false.
(c) An offense under this section is punishable by imprisonment
in the Texas Department of Criminal Justice for a term of not
less than one year.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
87, Sec. 25.120, eff. September 1, 2009.
Sec. 841.705. PENALTY FOR FAILURE TO INVEST OR REPORT. (a) In
addition to the penalty provided by this subchapter, an insurance
company is subject to a penalty as prescribed by Subsection (b)
if, while holding a certificate of authority to engage in the
business of insurance in this state, or after the company ceases
to write new business or ceases to hold a certificate of
authority, the company intentionally fails or refuses to:
(1) make the investments required by Chapter 425;
(2) make a report required by a law described by Section
841.002;
(3) make any special report requested by the commissioner under
a law described by Section 841.002; or
(4) comply with another provision of a law described by Section
841.002.
(b) A penalty under this s