State Codes and Statutes

Statutes > Texas > Insurance-code > Title-2-texas-department-of-insurance > Chapter-83-emergency-cease-and-desist-orders

INSURANCE CODE

TITLE 2. TEXAS DEPARTMENT OF INSURANCE

SUBTITLE B. DISCIPLINE AND ENFORCEMENT

CHAPTER 83. EMERGENCY CEASE AND DESIST ORDERS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 83.001. DEFINITIONS. In this chapter:

(1) "Authorized person" means an individual or entity described

by Section 83.002.

(2) "Emergency" means a sudden, urgent occurrence that requires

immediate action.

(3) "Unauthorized person" means an individual or a corporation,

association, partnership, or other artificial person who directly

or indirectly does an act of insurance business that is:

(A) described by Section 101.051 or 101.052; and

(B) not done in accordance with specific authorization of law.

(4) "Unfair act" means an unfair method of competition, an

unfair or deceptive act or practice, or an unfair claim

settlement practice as defined under Chapter 541 or 542 or a rule

adopted under either chapter.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999. Amended by Acts 2001, 77th Leg., ch. 1419, Sec. 19, eff.

June 1, 2003; Acts 2001, 77th Leg., ch. 1420, Sec. 11.003, eff.

Sept. 1, 2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

730, Sec. 2B.011, eff. April 1, 2009.

Sec. 83.002. APPLICATION OF CHAPTER. (a) This chapter applies

to each company regulated by the commissioner, including:

(1) a domestic or foreign, stock or mutual, life, health, or

accident insurance company;

(2) a domestic or foreign, stock or mutual, fire or casualty

insurance company;

(3) a Mexican casualty company;

(4) a domestic or foreign Lloyd's plan insurer;

(5) a domestic or foreign reciprocal or interinsurance exchange;

(6) a domestic or foreign fraternal benefit society;

(7) a domestic or foreign title insurance company;

(8) an attorney's title insurance company;

(9) a stipulated premium insurance company;

(10) a nonprofit legal service corporation;

(11) a statewide mutual assessment company;

(12) a local mutual aid association;

(13) a local mutual burial association;

(14) an association exempt under Section 887.102;

(15) a nonprofit hospital, medical, or dental service

corporation, including a company subject to Chapter 842;

(16) a county mutual insurance company; and

(17) a farm mutual insurance company.

(b) This chapter also applies to:

(1) an agent of an entity described by Subsection (a); and

(2) an individual or a corporation, association, partnership, or

other artificial person who:

(A) is engaged in the business of insurance;

(B) holds a permit, certificate, registration, license, or other

authority under this code; or

(C) is regulated by the commissioner.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999. Amended by Acts 2001, 77th Leg., ch. 1419, Sec. 20, eff.

June 1, 2003; Acts 2001, 77th Leg., ch. 1420, Sec. 11.004, eff.

Sept. 1, 2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

730, Sec. 2B.012, eff. April 1, 2009.

Sec. 83.003. RULES. The commissioner may adopt reasonable rules

to implement this chapter, including rules that provide, to the

extent possible, uniformity of procedures between this state and

other states, the United States, or the National Association of

Insurance Commissioners.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 83.004. PROCEEDINGS UNDER OTHER LAW. The commissioner may

proceed solely under this chapter or under this chapter in

conjunction with other applicable law.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

SUBCHAPTER B. ISSUANCE OF ORDERS

Sec. 83.051. AUTHORITY OF COMMISSIONER TO ISSUE ORDER. (a) The

commissioner ex parte may issue an emergency cease and desist

order if:

(1) the commissioner believes that:

(A) an authorized person engaging in the business of insurance

is:

(i) committing an unfair act; or

(ii) in a hazardous condition or a hazardous financial condition

under Section 843.406 or Subchapter A, Chapter 404, as determined

by the commissioner; or

(B) an unauthorized person:

(i) is engaging in the business of insurance in violation of

Chapter 101 or in violation of a rule adopted under that chapter;

or

(ii) is engaging in the business of insurance in violation of

Chapter 101 and is committing an unfair act; and

(2) it appears to the commissioner that the alleged conduct:

(A) is fraudulent;

(B) is hazardous or creates an immediate danger to the public

safety; or

(C) is causing or can be reasonably expected to cause public

injury that:

(i) is likely to occur at any moment;

(ii) is incapable of being repaired or rectified; and

(iii) has or is likely to have influence or effect.

(b) An order is final on the 31st day after the date it is

received, unless the affected person requests a hearing under

Section 83.053.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

730, Sec. 2B.013, eff. April 1, 2009.

Sec. 83.052. NOTICE. (a) On issuance of an order under Section

83.051, the commissioner shall serve on the affected person an

order that:

(1) contains a statement of the charges; and

(2) requires the person immediately to cease and desist from the

acts, methods, or practices stated in the order.

(b) The commissioner shall serve the order by registered or

certified mail, return receipt requested, to the affected

person's last known address.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 83.053. REQUEST FOR HEARING. (a) A person affected by an

order is entitled to request a hearing to contest the order.

(b) The affected person must request the hearing not later than

the 30th day after the date on which the person receives the

order required by Section 83.052.

(c) A request to contest an order must:

(1) be in writing;

(2) be directed to the commissioner; and

(3) state the grounds for the request to set aside or modify the

order.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 83.054. HEARING. (a) On receiving a request for a hearing

under Section 83.053, the commissioner shall serve notice of the

time and place of the hearing.

(b) The hearing is subject to the procedures for contested cases

under Chapter 2001, Government Code. The hearing must be held not

later than the 10th day after the date the commissioner receives

the request for a hearing unless the parties mutually agree to a

later hearing date.

(c) At the hearing, the person requesting the hearing is

entitled to show cause why the order should not be affirmed.

(d) Following receipt of the proposal for decision from the

State Office of Administrative Hearings regarding the hearing,

the commissioner shall affirm, modify, or set aside in whole or

in part the order.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 83.055. EFFECT OF ORDER PENDING HEARING. Pending a hearing

under this subchapter, an order continues in effect unless the

order is stayed by the commissioner.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

SUBCHAPTER C. ENFORCEMENT

Sec. 83.101. AUTHORITY OF COMMISSIONER. If the commissioner

reasonably believes that a person has violated an order issued

under this chapter, the commissioner may:

(1) initiate proceedings under this subchapter to impose an

administrative penalty or direct restitution;

(2) refer the matter to the attorney general for enforcement;

(3) initiate a proceeding to revoke the person's certificate of

authority; or

(4) pursue another action the commissioner considers appropriate

under applicable law.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 83.102. DETERMINATION OF VIOLATION. In determining whether

an order has been violated, the commissioner shall consider the

maintenance of procedures reasonably adopted to ensure compliance

with the order.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 83.103. HEARING ON ADMINISTRATIVE PENALTY. (a) If the

commissioner pursues action to impose an administrative penalty

under Section 83.101(1), the commissioner shall serve on the

person notice of the time and place of a hearing to be held not

earlier than the 21st day after the date the notice is received.

(b) The notice must contain a statement of the facts or conduct

alleged to violate the order.

(c) The commissioner shall serve the notice by registered or

certified mail, return receipt requested, to the person's last

known address.

(d) The hearing is subject to the procedures for contested cases

under Chapter 2001, Government Code.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 83.104. IMPOSITION OF ADMINISTRATIVE PENALTY; RESTITUTION.

(a) After a hearing, if the commissioner determines that an

order has been violated, the commissioner may:

(1) impose an administrative penalty of $25,000 for each act of

violation;

(2) direct the person against whom the order was issued to make

complete restitution to each Texas resident, Texas insured, and

entity operating in this state that is harmed by the violation;

or

(3) impose the penalty and direct restitution.

(b) A person directed to make restitution shall make the

restitution in the form and amount and within the period

determined by the commissioner.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 83.105. FAILURE TO PAY PENALTY. If a person fails to pay a

penalty assessed under this subchapter, the commissioner may:

(1) refer the matter to the attorney general for enforcement; or

(2) cancel or revoke any permit, license, certificate of

authority, certificate of registration, or other authorization

issued under this code as provided by Chapter 82.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

SUBCHAPTER D. JUDICIAL REVIEW; JUDICIAL ACTION

Sec. 83.151. APPEAL. A person affected by an order of the

commissioner under Section 83.051 or 83.104 may appeal the order

by filing suit in a district court in Travis County not later

than the 20th day after the date of the order.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 83.152. EFFECT OF PETITION ON ORDER OR RELATED DECISION. A

petition for appeal filed under Section 83.151 does not stay or

vacate an order or a decision made under Subchapter B unless the

court, after hearing, issues an order that specifically stays or

vacates the order or decision.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 83.153. JUDICIAL ACTION FOR ENFORCEMENT OF ORDER;

ATTORNEY'S FEES. The department may recover reasonable

attorney's fees if judicial action is necessary to enforce an

order issued under Section 83.051 or 83.104.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

State Codes and Statutes

Statutes > Texas > Insurance-code > Title-2-texas-department-of-insurance > Chapter-83-emergency-cease-and-desist-orders

INSURANCE CODE

TITLE 2. TEXAS DEPARTMENT OF INSURANCE

SUBTITLE B. DISCIPLINE AND ENFORCEMENT

CHAPTER 83. EMERGENCY CEASE AND DESIST ORDERS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 83.001. DEFINITIONS. In this chapter:

(1) "Authorized person" means an individual or entity described

by Section 83.002.

(2) "Emergency" means a sudden, urgent occurrence that requires

immediate action.

(3) "Unauthorized person" means an individual or a corporation,

association, partnership, or other artificial person who directly

or indirectly does an act of insurance business that is:

(A) described by Section 101.051 or 101.052; and

(B) not done in accordance with specific authorization of law.

(4) "Unfair act" means an unfair method of competition, an

unfair or deceptive act or practice, or an unfair claim

settlement practice as defined under Chapter 541 or 542 or a rule

adopted under either chapter.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999. Amended by Acts 2001, 77th Leg., ch. 1419, Sec. 19, eff.

June 1, 2003; Acts 2001, 77th Leg., ch. 1420, Sec. 11.003, eff.

Sept. 1, 2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

730, Sec. 2B.011, eff. April 1, 2009.

Sec. 83.002. APPLICATION OF CHAPTER. (a) This chapter applies

to each company regulated by the commissioner, including:

(1) a domestic or foreign, stock or mutual, life, health, or

accident insurance company;

(2) a domestic or foreign, stock or mutual, fire or casualty

insurance company;

(3) a Mexican casualty company;

(4) a domestic or foreign Lloyd's plan insurer;

(5) a domestic or foreign reciprocal or interinsurance exchange;

(6) a domestic or foreign fraternal benefit society;

(7) a domestic or foreign title insurance company;

(8) an attorney's title insurance company;

(9) a stipulated premium insurance company;

(10) a nonprofit legal service corporation;

(11) a statewide mutual assessment company;

(12) a local mutual aid association;

(13) a local mutual burial association;

(14) an association exempt under Section 887.102;

(15) a nonprofit hospital, medical, or dental service

corporation, including a company subject to Chapter 842;

(16) a county mutual insurance company; and

(17) a farm mutual insurance company.

(b) This chapter also applies to:

(1) an agent of an entity described by Subsection (a); and

(2) an individual or a corporation, association, partnership, or

other artificial person who:

(A) is engaged in the business of insurance;

(B) holds a permit, certificate, registration, license, or other

authority under this code; or

(C) is regulated by the commissioner.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999. Amended by Acts 2001, 77th Leg., ch. 1419, Sec. 20, eff.

June 1, 2003; Acts 2001, 77th Leg., ch. 1420, Sec. 11.004, eff.

Sept. 1, 2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

730, Sec. 2B.012, eff. April 1, 2009.

Sec. 83.003. RULES. The commissioner may adopt reasonable rules

to implement this chapter, including rules that provide, to the

extent possible, uniformity of procedures between this state and

other states, the United States, or the National Association of

Insurance Commissioners.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 83.004. PROCEEDINGS UNDER OTHER LAW. The commissioner may

proceed solely under this chapter or under this chapter in

conjunction with other applicable law.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

SUBCHAPTER B. ISSUANCE OF ORDERS

Sec. 83.051. AUTHORITY OF COMMISSIONER TO ISSUE ORDER. (a) The

commissioner ex parte may issue an emergency cease and desist

order if:

(1) the commissioner believes that:

(A) an authorized person engaging in the business of insurance

is:

(i) committing an unfair act; or

(ii) in a hazardous condition or a hazardous financial condition

under Section 843.406 or Subchapter A, Chapter 404, as determined

by the commissioner; or

(B) an unauthorized person:

(i) is engaging in the business of insurance in violation of

Chapter 101 or in violation of a rule adopted under that chapter;

or

(ii) is engaging in the business of insurance in violation of

Chapter 101 and is committing an unfair act; and

(2) it appears to the commissioner that the alleged conduct:

(A) is fraudulent;

(B) is hazardous or creates an immediate danger to the public

safety; or

(C) is causing or can be reasonably expected to cause public

injury that:

(i) is likely to occur at any moment;

(ii) is incapable of being repaired or rectified; and

(iii) has or is likely to have influence or effect.

(b) An order is final on the 31st day after the date it is

received, unless the affected person requests a hearing under

Section 83.053.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

730, Sec. 2B.013, eff. April 1, 2009.

Sec. 83.052. NOTICE. (a) On issuance of an order under Section

83.051, the commissioner shall serve on the affected person an

order that:

(1) contains a statement of the charges; and

(2) requires the person immediately to cease and desist from the

acts, methods, or practices stated in the order.

(b) The commissioner shall serve the order by registered or

certified mail, return receipt requested, to the affected

person's last known address.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 83.053. REQUEST FOR HEARING. (a) A person affected by an

order is entitled to request a hearing to contest the order.

(b) The affected person must request the hearing not later than

the 30th day after the date on which the person receives the

order required by Section 83.052.

(c) A request to contest an order must:

(1) be in writing;

(2) be directed to the commissioner; and

(3) state the grounds for the request to set aside or modify the

order.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 83.054. HEARING. (a) On receiving a request for a hearing

under Section 83.053, the commissioner shall serve notice of the

time and place of the hearing.

(b) The hearing is subject to the procedures for contested cases

under Chapter 2001, Government Code. The hearing must be held not

later than the 10th day after the date the commissioner receives

the request for a hearing unless the parties mutually agree to a

later hearing date.

(c) At the hearing, the person requesting the hearing is

entitled to show cause why the order should not be affirmed.

(d) Following receipt of the proposal for decision from the

State Office of Administrative Hearings regarding the hearing,

the commissioner shall affirm, modify, or set aside in whole or

in part the order.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 83.055. EFFECT OF ORDER PENDING HEARING. Pending a hearing

under this subchapter, an order continues in effect unless the

order is stayed by the commissioner.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

SUBCHAPTER C. ENFORCEMENT

Sec. 83.101. AUTHORITY OF COMMISSIONER. If the commissioner

reasonably believes that a person has violated an order issued

under this chapter, the commissioner may:

(1) initiate proceedings under this subchapter to impose an

administrative penalty or direct restitution;

(2) refer the matter to the attorney general for enforcement;

(3) initiate a proceeding to revoke the person's certificate of

authority; or

(4) pursue another action the commissioner considers appropriate

under applicable law.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 83.102. DETERMINATION OF VIOLATION. In determining whether

an order has been violated, the commissioner shall consider the

maintenance of procedures reasonably adopted to ensure compliance

with the order.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 83.103. HEARING ON ADMINISTRATIVE PENALTY. (a) If the

commissioner pursues action to impose an administrative penalty

under Section 83.101(1), the commissioner shall serve on the

person notice of the time and place of a hearing to be held not

earlier than the 21st day after the date the notice is received.

(b) The notice must contain a statement of the facts or conduct

alleged to violate the order.

(c) The commissioner shall serve the notice by registered or

certified mail, return receipt requested, to the person's last

known address.

(d) The hearing is subject to the procedures for contested cases

under Chapter 2001, Government Code.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 83.104. IMPOSITION OF ADMINISTRATIVE PENALTY; RESTITUTION.

(a) After a hearing, if the commissioner determines that an

order has been violated, the commissioner may:

(1) impose an administrative penalty of $25,000 for each act of

violation;

(2) direct the person against whom the order was issued to make

complete restitution to each Texas resident, Texas insured, and

entity operating in this state that is harmed by the violation;

or

(3) impose the penalty and direct restitution.

(b) A person directed to make restitution shall make the

restitution in the form and amount and within the period

determined by the commissioner.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 83.105. FAILURE TO PAY PENALTY. If a person fails to pay a

penalty assessed under this subchapter, the commissioner may:

(1) refer the matter to the attorney general for enforcement; or

(2) cancel or revoke any permit, license, certificate of

authority, certificate of registration, or other authorization

issued under this code as provided by Chapter 82.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

SUBCHAPTER D. JUDICIAL REVIEW; JUDICIAL ACTION

Sec. 83.151. APPEAL. A person affected by an order of the

commissioner under Section 83.051 or 83.104 may appeal the order

by filing suit in a district court in Travis County not later

than the 20th day after the date of the order.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 83.152. EFFECT OF PETITION ON ORDER OR RELATED DECISION. A

petition for appeal filed under Section 83.151 does not stay or

vacate an order or a decision made under Subchapter B unless the

court, after hearing, issues an order that specifically stays or

vacates the order or decision.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 83.153. JUDICIAL ACTION FOR ENFORCEMENT OF ORDER;

ATTORNEY'S FEES. The department may recover reasonable

attorney's fees if judicial action is necessary to enforce an

order issued under Section 83.051 or 83.104.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.


State Codes and Statutes

State Codes and Statutes

Statutes > Texas > Insurance-code > Title-2-texas-department-of-insurance > Chapter-83-emergency-cease-and-desist-orders

INSURANCE CODE

TITLE 2. TEXAS DEPARTMENT OF INSURANCE

SUBTITLE B. DISCIPLINE AND ENFORCEMENT

CHAPTER 83. EMERGENCY CEASE AND DESIST ORDERS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 83.001. DEFINITIONS. In this chapter:

(1) "Authorized person" means an individual or entity described

by Section 83.002.

(2) "Emergency" means a sudden, urgent occurrence that requires

immediate action.

(3) "Unauthorized person" means an individual or a corporation,

association, partnership, or other artificial person who directly

or indirectly does an act of insurance business that is:

(A) described by Section 101.051 or 101.052; and

(B) not done in accordance with specific authorization of law.

(4) "Unfair act" means an unfair method of competition, an

unfair or deceptive act or practice, or an unfair claim

settlement practice as defined under Chapter 541 or 542 or a rule

adopted under either chapter.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999. Amended by Acts 2001, 77th Leg., ch. 1419, Sec. 19, eff.

June 1, 2003; Acts 2001, 77th Leg., ch. 1420, Sec. 11.003, eff.

Sept. 1, 2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

730, Sec. 2B.011, eff. April 1, 2009.

Sec. 83.002. APPLICATION OF CHAPTER. (a) This chapter applies

to each company regulated by the commissioner, including:

(1) a domestic or foreign, stock or mutual, life, health, or

accident insurance company;

(2) a domestic or foreign, stock or mutual, fire or casualty

insurance company;

(3) a Mexican casualty company;

(4) a domestic or foreign Lloyd's plan insurer;

(5) a domestic or foreign reciprocal or interinsurance exchange;

(6) a domestic or foreign fraternal benefit society;

(7) a domestic or foreign title insurance company;

(8) an attorney's title insurance company;

(9) a stipulated premium insurance company;

(10) a nonprofit legal service corporation;

(11) a statewide mutual assessment company;

(12) a local mutual aid association;

(13) a local mutual burial association;

(14) an association exempt under Section 887.102;

(15) a nonprofit hospital, medical, or dental service

corporation, including a company subject to Chapter 842;

(16) a county mutual insurance company; and

(17) a farm mutual insurance company.

(b) This chapter also applies to:

(1) an agent of an entity described by Subsection (a); and

(2) an individual or a corporation, association, partnership, or

other artificial person who:

(A) is engaged in the business of insurance;

(B) holds a permit, certificate, registration, license, or other

authority under this code; or

(C) is regulated by the commissioner.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999. Amended by Acts 2001, 77th Leg., ch. 1419, Sec. 20, eff.

June 1, 2003; Acts 2001, 77th Leg., ch. 1420, Sec. 11.004, eff.

Sept. 1, 2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

730, Sec. 2B.012, eff. April 1, 2009.

Sec. 83.003. RULES. The commissioner may adopt reasonable rules

to implement this chapter, including rules that provide, to the

extent possible, uniformity of procedures between this state and

other states, the United States, or the National Association of

Insurance Commissioners.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 83.004. PROCEEDINGS UNDER OTHER LAW. The commissioner may

proceed solely under this chapter or under this chapter in

conjunction with other applicable law.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

SUBCHAPTER B. ISSUANCE OF ORDERS

Sec. 83.051. AUTHORITY OF COMMISSIONER TO ISSUE ORDER. (a) The

commissioner ex parte may issue an emergency cease and desist

order if:

(1) the commissioner believes that:

(A) an authorized person engaging in the business of insurance

is:

(i) committing an unfair act; or

(ii) in a hazardous condition or a hazardous financial condition

under Section 843.406 or Subchapter A, Chapter 404, as determined

by the commissioner; or

(B) an unauthorized person:

(i) is engaging in the business of insurance in violation of

Chapter 101 or in violation of a rule adopted under that chapter;

or

(ii) is engaging in the business of insurance in violation of

Chapter 101 and is committing an unfair act; and

(2) it appears to the commissioner that the alleged conduct:

(A) is fraudulent;

(B) is hazardous or creates an immediate danger to the public

safety; or

(C) is causing or can be reasonably expected to cause public

injury that:

(i) is likely to occur at any moment;

(ii) is incapable of being repaired or rectified; and

(iii) has or is likely to have influence or effect.

(b) An order is final on the 31st day after the date it is

received, unless the affected person requests a hearing under

Section 83.053.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

730, Sec. 2B.013, eff. April 1, 2009.

Sec. 83.052. NOTICE. (a) On issuance of an order under Section

83.051, the commissioner shall serve on the affected person an

order that:

(1) contains a statement of the charges; and

(2) requires the person immediately to cease and desist from the

acts, methods, or practices stated in the order.

(b) The commissioner shall serve the order by registered or

certified mail, return receipt requested, to the affected

person's last known address.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 83.053. REQUEST FOR HEARING. (a) A person affected by an

order is entitled to request a hearing to contest the order.

(b) The affected person must request the hearing not later than

the 30th day after the date on which the person receives the

order required by Section 83.052.

(c) A request to contest an order must:

(1) be in writing;

(2) be directed to the commissioner; and

(3) state the grounds for the request to set aside or modify the

order.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 83.054. HEARING. (a) On receiving a request for a hearing

under Section 83.053, the commissioner shall serve notice of the

time and place of the hearing.

(b) The hearing is subject to the procedures for contested cases

under Chapter 2001, Government Code. The hearing must be held not

later than the 10th day after the date the commissioner receives

the request for a hearing unless the parties mutually agree to a

later hearing date.

(c) At the hearing, the person requesting the hearing is

entitled to show cause why the order should not be affirmed.

(d) Following receipt of the proposal for decision from the

State Office of Administrative Hearings regarding the hearing,

the commissioner shall affirm, modify, or set aside in whole or

in part the order.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 83.055. EFFECT OF ORDER PENDING HEARING. Pending a hearing

under this subchapter, an order continues in effect unless the

order is stayed by the commissioner.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

SUBCHAPTER C. ENFORCEMENT

Sec. 83.101. AUTHORITY OF COMMISSIONER. If the commissioner

reasonably believes that a person has violated an order issued

under this chapter, the commissioner may:

(1) initiate proceedings under this subchapter to impose an

administrative penalty or direct restitution;

(2) refer the matter to the attorney general for enforcement;

(3) initiate a proceeding to revoke the person's certificate of

authority; or

(4) pursue another action the commissioner considers appropriate

under applicable law.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 83.102. DETERMINATION OF VIOLATION. In determining whether

an order has been violated, the commissioner shall consider the

maintenance of procedures reasonably adopted to ensure compliance

with the order.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 83.103. HEARING ON ADMINISTRATIVE PENALTY. (a) If the

commissioner pursues action to impose an administrative penalty

under Section 83.101(1), the commissioner shall serve on the

person notice of the time and place of a hearing to be held not

earlier than the 21st day after the date the notice is received.

(b) The notice must contain a statement of the facts or conduct

alleged to violate the order.

(c) The commissioner shall serve the notice by registered or

certified mail, return receipt requested, to the person's last

known address.

(d) The hearing is subject to the procedures for contested cases

under Chapter 2001, Government Code.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 83.104. IMPOSITION OF ADMINISTRATIVE PENALTY; RESTITUTION.

(a) After a hearing, if the commissioner determines that an

order has been violated, the commissioner may:

(1) impose an administrative penalty of $25,000 for each act of

violation;

(2) direct the person against whom the order was issued to make

complete restitution to each Texas resident, Texas insured, and

entity operating in this state that is harmed by the violation;

or

(3) impose the penalty and direct restitution.

(b) A person directed to make restitution shall make the

restitution in the form and amount and within the period

determined by the commissioner.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 83.105. FAILURE TO PAY PENALTY. If a person fails to pay a

penalty assessed under this subchapter, the commissioner may:

(1) refer the matter to the attorney general for enforcement; or

(2) cancel or revoke any permit, license, certificate of

authority, certificate of registration, or other authorization

issued under this code as provided by Chapter 82.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

SUBCHAPTER D. JUDICIAL REVIEW; JUDICIAL ACTION

Sec. 83.151. APPEAL. A person affected by an order of the

commissioner under Section 83.051 or 83.104 may appeal the order

by filing suit in a district court in Travis County not later

than the 20th day after the date of the order.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 83.152. EFFECT OF PETITION ON ORDER OR RELATED DECISION. A

petition for appeal filed under Section 83.151 does not stay or

vacate an order or a decision made under Subchapter B unless the

court, after hearing, issues an order that specifically stays or

vacates the order or decision.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 83.153. JUDICIAL ACTION FOR ENFORCEMENT OF ORDER;

ATTORNEY'S FEES. The department may recover reasonable

attorney's fees if judicial action is necessary to enforce an

order issued under Section 83.051 or 83.104.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.