CHAPTER 441. SUPERVISION AND CONSERVATORSHIP

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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.

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;

(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.

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.

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.

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.

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.

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.

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.

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.

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.

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

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