CHAPTER 463. TEXAS LIFE, ACCIDENT, HEALTH, AND HOSPITAL SERVICE INSURANCE GUARANTY ASSOCIATION

State Codes and Statutes

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INSURANCE CODE

TITLE 4. REGULATION OF SOLVENCY

SUBTITLE D. GUARANTY ASSOCIATIONS

CHAPTER 463. TEXAS LIFE, ACCIDENT, HEALTH, AND HOSPITAL SERVICE

INSURANCE GUARANTY ASSOCIATION

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 463.001. SHORT TITLE. This chapter may be cited as the

Texas Life, Accident, Health, and Hospital Service Insurance

Guaranty Association Act.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Amended by:

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

730, Sec. 3B.012(b), eff. September 1, 2007.

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

921, Sec. 9.012(b), eff. September 1, 2007.

Sec. 463.002. PURPOSE. The purpose of this chapter is to

protect, subject to certain limitations, a person specified by

Section 463.201 against failure in the performance of a

contractual obligation under a life, accident, or health

insurance policy or annuity contract with respect to which this

chapter provides coverage as determined under Subchapter E,

because of the impairment or insolvency of the member insurer

that issued the policy or contract.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 463.003. GENERAL DEFINITIONS. In this chapter:

(1) "Association" means the Texas Life, Accident, Health, and

Hospital Service Insurance Guaranty Association.

(1-a) "Benefit plan" means a specific employee, union, or

association of natural persons benefit plan.

(2) "Board" means the board of directors of the association.

(3) "Contractual obligation" means an obligation under a policy

or contract or certificate under a group policy or contract, or

part of a policy or contract or certificate, for which coverage

is provided under Subchapter E.

(4) "Covered policy" means a policy or contract, or portion of a

policy or contract, with respect to which this chapter provides

coverage as determined under Subchapter E.

(5) "Impaired insurer" means a member insurer that is designated

an "impaired insurer" by the commissioner and is:

(A) placed by a court in this state or another state under an

order of supervision, liquidation, rehabilitation, or

conservation;

(B) placed under an order of liquidation or rehabilitation under

Chapter 443; or

commissioner under Chapter 441.

(6) "Insolvent insurer" means a member insurer that has been

placed under an order of liquidation with a finding of insolvency

by a court in this state or another state.

(7) "Member insurer" means an insurer that is required to

participate in the association under Section 463.052.

(7-a) "Owner" means the owner of a policy or contract and

"policy owner" and "contract owner" mean the person who is

identified as the legal owner under the terms of the policy or

contract or who is otherwise vested with legal title to the

policy or contract through a valid assignment completed in

accordance with the terms of the policy or contract and is

properly recorded as the owner on the books of the insurer. The

terms "owner," "contract owner," and "policy owner" do not

include persons with a mere beneficial interest in a policy or

contract.

(8) "Person" means an individual, corporation, limited liability

company, partnership, association, governmental body or entity,

or voluntary organization.

(8-a) "Plan sponsor" means:

(A) the employer in the case of a benefit plan established or

maintained by a single employer;

(B) the employee organization in the case of a benefit plan

established or maintained by an employee organization; or

or more employers or jointly by one or more employers and one or

more employee organizations, the association, committee, joint

board of trustees, or other similar group of representatives of

the parties who establish or maintain the benefit plan.

(9) "Premium" means an amount received on a covered policy, less

any premium, consideration, or deposit returned on the policy,

and any dividend or experience credit on the policy. The term

does not include:

(A) an amount received for a policy or contract or part of a

policy or contract for which coverage is not provided under

Section 463.202, except that assessable premiums may not be

reduced because of:

(i) an interest limitation provided by Section 463.203(b)(3); or

(ii) a limitation provided by Section 463.204 with respect to a

single individual, participant, annuitant, or contract owner;

(B) premiums in excess of $5 million on an unallocated annuity

contract not issued under a governmental benefit plan

established under Section 401, 403(b), or 457, Internal Revenue

Code of 1986;

States treasury for insurance for which this state or the United

States contracts to:

(i) provide welfare benefits to designated welfare recipients;

(ii) implement Title 2, Human Resources Code, or the Social

Security Act (42 U.S.C. Section 301 et seq.); or

(D) premiums in excess of $5 million with respect to multiple

nongroup policies of life insurance owned by one owner,

regardless of whether the policy owner is an individual, firm,

corporation, or other person and regardless of whether the

persons insured are officers, managers, employees, or other

persons, regardless of the number of policies or contracts held

by the owner.

(10) "Resident" means a person who resides in this state on the

earlier of the date a member insurer becomes an impaired insurer

or the date of entry of a court order that determines a member

insurer to be an impaired insurer or the date of entry of a court

order that determines a member insurer to be an insolvent insurer

and to whom the member insurer owes a contractual obligation.

For the purposes of this subdivision:

(A) a person is considered to be a resident of only one state;

(B) a person other than an individual is considered to be a

resident of the state in which the person's principal place of

business is located; and

foreign country or a resident of a United States possession,

territory, or protectorate that does not have an association

similar to the association created by this chapter is considered

a resident of the state of domicile of the insurer that issued

the policy or contract.

(10-a) "Structured settlement annuity" means an annuity

purchased to fund periodic payments for a plaintiff or other

claimant in payment for or with respect to personal injury

suffered by the plaintiff or other claimant.

(11) "Supplemental contract" means a written agreement for the

distribution of policy or contract proceeds.

(12) "Unallocated annuity contract" means an annuity contract or

group annuity certificate that is not issued to and owned by an

individual, except to the extent of any annuity benefits

guaranteed to an individual by an insurer under the contract or

certificate.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Amended by:

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

730, Sec. 3B.013(a), eff. September 1, 2007.

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

921, Sec. 9.013(a), eff. September 1, 2007.

Sec. 463.0031. DEFINITION OF PRINCIPAL PLACE OF BUSINESS OF PLAN

SPONSOR OR OTHER PERSON. (a) Except as otherwise provided by

this section, in this chapter, the "principal place of business"

of a plan sponsor or a person other than an individual means the

single state in which the individuals who establish policy for

the direction, control, and coordination of the operations of the

plan sponsor or person as a whole primarily exercise that

function, as determined by the association in its reasonable

judgment by considering the following factors:

(1) the state in which the primary executive and administrative

headquarters of the plan sponsor or person is located;

(2) the state in which the principal office of the chief

executive officer of the plan sponsor or person is located;

(3) the state in which the board of directors, or similar

governing person or persons, of the plan sponsor or person

conduct the majority of their meetings;

(4) the state in which the executive or management committee of

the board of directors, or similar governing person or persons,

of the plan sponsor or person conduct the majority of their

meetings;

(5) the state from which the management of the overall

operations of the plan sponsor or person is directed; and

(6) in the case of a benefit plan sponsored by affiliated

companies comprising a consolidated corporation, the state in

which the holding company or controlling affiliate has its

principal place of business as determined using the factors

described by Subdivisions (1)-(5).

(b) In the case of a plan sponsor, if more than 50 percent of

the participants in the benefit plan are employed in a single

state, that state is the principal place of business of the plan

sponsor.

benefit plan described in Section 463.003(8-a)(C) is the

principal place of business of the association, committee, joint

board of trustees, or other similar group of representatives of

the parties who establish or maintain the benefit plan that, in

lieu of a specific or clear designation of a principal place of

business, shall be deemed to be the principal place of business

of the employer or employee organization that has the largest

investment in that benefit plan.

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

730, Sec. 3B.013(b), eff. September 1, 2007.

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

921, Sec. 9.013(b), eff. September 1, 2007.

Sec. 463.004. CONSTRUCTION. This chapter shall be liberally

construed to implement the purpose of this chapter described by

Section 463.002. Section 463.002 shall be used to aid and guide

interpretation of this chapter.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 463.005. IMMUNITY. (a) The following persons are not

liable, and a cause of action does not arise against any of the

following persons, for a good faith act or omission in exercising

powers and performing duties under this chapter:

(1) the commissioner or the commissioner's representative;

(2) the association or the association's agent or employee;

(3) a member insurer or the insurer's agent or employee;

(4) a board member;

(5) the receiver; and

(6) a special deputy receiver or the special deputy receiver's

agent or employee.

(b) Immunity under Subsection (a) extends to participation in an

organization of one or more state associations that have similar

purposes and to a similar organization and the organization's

agent or employee.

section applies that is brought against the commissioner or the

commissioner's representative, the association or the

association's agent or employee, a member insurer or the

insurer's agent or employee, a board member, or a special deputy

receiver or the special deputy receiver's agent or employee,

including an action brought after the defendant's service with

the association, commissioner, or department has terminated.

This subsection does not require the attorney general to defend a

person with respect to an issue other than the applicability or

effect of the immunity created by this section. The attorney

general is not required to defend the association or the

association's agent or employee, a member insurer or the

insurer's agent or employee, a board member, or a special deputy

receiver or the special deputy receiver's agent or employee

against an action regarding the disposition of a claim filed with

the association under this chapter or any issue other than the

applicability or effect of the immunity created by this section.

The association may contract with the attorney general under

Chapter 771, Government Code, for legal services not covered by

this subsection.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 463.006. RULES. The commissioner shall adopt reasonable

rules as necessary to carry out and supplement this chapter and

the purposes of this chapter.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

SUBCHAPTER B. GOVERNANCE OF AND PARTICIPATION IN ASSOCIATION

Sec. 463.051. PURPOSE AND REGULATION OF ASSOCIATION. (a) The

Texas Life, Accident, Health, and Hospital Service Insurance

Guaranty Association is a nonprofit legal entity existing to pay

benefits and continue coverage as provided by this chapter.

(b) The association is subject to the applicable provisions of

this code and other insurance laws of this state and the

immediate supervision of the commissioner. The commissioner may

examine and regulate the association in the same manner as an

insurer under this code.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Amended by:

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

730, Sec. 3B.014(a), eff. September 1, 2007.

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

921, Sec. 9.014(a), eff. September 1, 2007.

Sec. 463.052. REQUIRED PARTICIPATION IN ASSOCIATION. (a) As a

condition of engaging in the business of insurance in this state,

an insurer, including a mutual assessment company, a local mutual

aid association, a statewide mutual assessment company, and a

stipulated premium company authorized to engage in business in

this state, shall participate as a member of the association if

the insurer holds a certificate of authority to engage in a kind

of insurance business in this state with respect to which this

chapter provides coverage as determined under Subchapter E. The

requirement to participate applies regardless of whether the

insurer's certificate of authority in this state is suspended,

revoked, not renewed, or voluntarily withdrawn.

(b) The following do not participate as member insurers:

(1) a health maintenance organization;

(2) a fraternal benefit society;

(3) a mandatory state pooling plan;

(4) a reciprocal or interinsurance exchange;

(5) an organization which has a certificate of authority or

license limited to the issuance of charitable gift annuities, as

defined by this code or rules adopted by the commissioner; and

(6) an entity similar to an entity described by Subdivision (1),

(2), (3), (4), or (5).

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Amended by:

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

730, Sec. 3B.013(c), eff. September 1, 2007.

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

921, Sec. 9.013(c), eff. September 1, 2007.

Sec. 463.053. BOARD OF DIRECTORS. (a) The association's powers

are exercised through a board of directors consisting of nine

individuals appointed by the commissioner as provided by this

section.

(b) The commissioner shall appoint three board members from

officers or employees of the 50 member insurers having the

largest total direct premium income according to the most recent

financial statement on file on the date of appointment.

commissioner shall appoint two board members from member insurers

other than insurers described by Subsection (b), considering the

varying categories of premium income and geographical location.

(d) The commissioner shall appoint four board members who are

public representatives.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 463.054. ELIGIBILITY TO SERVE AS PUBLIC REPRESENTATIVE. To

be eligible to serve as a public representative, an individual

may not:

(1) be an officer, director, or employee of an insurer,

insurance agency, agent, broker, solicitor, adjuster, or other

business entity regulated by the department;

(2) be a person required to register under Chapter 305,

Government Code; or

(3) be related within the second degree by affinity or

consanguinity to a person described by Subdivision (1) or (2).

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 463.055. TERM; VACANCY. (a) Board members serve staggered

six-year terms, with the terms of three members expiring each

odd-numbered year. A member may be reappointed.

(b) A board member shall serve until a successor is appointed.

insurer ceases to be an officer or employee of the insurer, the

member's office becomes vacant.

(d) The commissioner shall appoint an individual to fill a

vacancy on the board for the unexpired term.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 463.056. COMPENSATION OF BOARD MEMBERS. A board member may

not receive compensation from the association for the member's

services but may be reimbursed from the association's assets for

expenses incurred as a board member.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 463.057. FINANCIAL STATEMENT OF BOARD MEMBER. Each board

member shall file with the Texas Ethics Commission a financial

statement as provided by Subchapter B, Chapter 572, Government

Code.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 463.058. CONFLICT OF INTEREST. (a) In this section,

"transaction on behalf of an impaired insurer" includes a

reinsurance agreement, transaction, merger, purchase, sale,

contribution, or exchange of assets, insurance policies, or

property made by the association or a supervisor, conservator, or

receiver on behalf of an impaired insurer.

(b) A board member may not:

(1) receive money or another thing of value for negotiating,

procuring, participating in, recommending, or aiding a

transaction on behalf of an impaired insurer; or

(2) as a principal, coprincipal, agent, or beneficiary, have a

pecuniary interest in a transaction on behalf of an impaired

insurer.

considered to receive a thing of value or have a pecuniary

interest in a transaction on behalf of an impaired insurer

regardless of whether the receipt or interest is direct,

indirect, or through a substantial interest in a corporation,

firm, or other business unit.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

SUBCHAPTER C. GENERAL POWERS AND DUTIES OF ASSOCIATION

Sec. 463.101. GENERAL POWERS AND DUTIES. (a) The association

may:

(1) enter into contracts as necessary or proper to carry out

this chapter and the purposes of this chapter;

(2) sue or be sued, including taking:

(A) necessary or proper legal action to:

(i) recover an unpaid assessment under Subchapter D; or

(ii) settle a claim or potential claim against the association;

(B) necessary legal action to avoid payment of an improper

claim;

(3) borrow money to effect the purposes of this chapter;

(4) exercise, for the purposes of this chapter and to the extent

approved by the commissioner, the powers of a domestic life,

accident, or health insurance company or a group hospital service

corporation, except that the association may not issue an

insurance policy or annuity contract other than to perform the

association's obligations under this chapter;

(5) to further the association's purposes, exercise the

association's powers, and perform the association's duties, join

an organization of one or more state associations that have

similar purposes;

(6) request information from a person seeking coverage from the

association in determining its obligations under this chapter

with respect to the person, and the person shall promptly comply

with the request; and

(7) take any other necessary or appropriate action to discharge

the association's duties and obligations under this chapter or to

exercise the association's powers under this chapter.

(b) If not in default, a note or other evidence of indebtedness

of the association is a legal investment for a domestic insurer

and may be carried as an admitted asset.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Amended by:

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

730, Sec. 3B.015(a), eff. September 1, 2007.

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

921, Sec. 9.015(a), eff. September 1, 2007.

Sec. 463.102. PLAN OF OPERATION; AMENDMENTS. (a) The

association shall perform the association's functions under a

plan of operation approved by the commissioner. The plan of

operation must:

(1) establish:

(A) procedures for handling the assets of the association;

(B) the amount and method of reimbursing board members under

Section 463.056;

telephone conference calls;

(D) procedures for maintaining records of all financial

transactions of the association, the association's agents, and

the board; and

(E) additional procedures for assessments under Subchapter D;

and

(2) contain additional provisions necessary or proper for the

execution of the association's powers and duties.

(b) The association may amend the plan of operation. An

amendment must be approved by the commissioner and takes effect

on:

(1) the date the commissioner approves the amendment; or

(2) the 30th day after the date the amendment is submitted to

the commissioner for approval, if the commissioner does not

approve or disapprove the amendment before the 30th day.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 463.103. PERSONNEL. The association may employ or retain

employees or contractors to handle the association's financial

transactions and to perform other functions under this chapter.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 463.104. ASSOCIATION RECORDS. (a) The association shall

maintain a record of each negotiation or meeting in which the

association or the association's representative discusses the

association's activities in carrying out the powers and duties

under Section 463.101, 463.103, 463.109, or 463.111(c) or

Subchapter F.

(b) A record under Subsection (a) may be made public only on:

(1) termination of a liquidation, rehabilitation, or

conservation proceeding involving the impaired or insolvent

insurer;

(2) termination of the impairment or insolvency of the insurer;

(3) order of a court.

on the association's activities as required by Section 463.110.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 463.105. ACCOUNTS. For the purposes of administration and

assessment, the association shall maintain:

(1) an accident, health, and hospital services insurance

account;

(2) a life insurance account;

(3) an annuity account; and

(4) an administrative account.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 463.106. DELEGATION OF POWERS AND DUTIES. (a) The plan of

operation may provide that, on approval of the board and the

commissioner, a power or duty of the association is delegated to

a corporation or other organization that:

(1) performs in two or more states functions similar to those of

the association or the association's equivalent; and

(2) provides protection not substantially less favorable and

effective than that provided by this chapter.

(b) A power or duty under Section 463.261(c) or Subchapter D,

other than a duty under Section 463.161(c), may not be delegated

under this section.

duty is delegated shall be:

(1) reimbursed for a payment made on behalf of the association;

and

(2) paid for performing any other function of the association.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 463.107. EXEMPTION FROM TAXATION. The association is

exempt from payment of all fees and all taxes levied by this

state or a subdivision of this state, except taxes levied on

property.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 463.108. DETECTION AND PREVENTION OF IMPAIRMENT AND

INSOLVENCY. On a majority vote, the board:

(1) may make recommendations to the commissioner for detecting

and preventing insurer insolvencies; and

(2) shall notify the commissioner of information indicating that

a member insurer may be impaired or insolvent.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 463.109. ASSOCIATION APPEARANCE BEFORE COURT; INTERVENTION.

(a) The association may appear before a court in this state

with jurisdiction over an impaired or insolvent insurer

concerning which the association is or may become obligated under

this chapter. The association's right to appear applies to:

(1) a proposal for reinsuring, modifying, or guaranteeing the

insurer's policies or contracts;

(2) the determination of the insurer's policies or contracts and

contractual obligations; and

(3) any other matter germane to the association's powers and

duties.

(b) The association may appear or intervene before a court in

another state with jurisdiction over:

(1) an impaired or insolvent insurer concerning which the

association is or may become obligated; or

(2) a third party against whom the association may have rights

through subrogation of the insurer's policyholders.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 463.110. ANNUAL REPORT. Not later than the 120th day after

the last day of each association fiscal year, the board shall

submit to the commissioner:

(1) a financial report in a form approved by the commissioner;

and

(2) a report of the association's activities during the

preceding fiscal year.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 463.111. BOARD AND ASSOCIATION ADVICE AND ASSISTANCE. (a)

On a majority vote, the board may report and make recommendations

to the commissioner on any matter germane to:

(1) the solvency, liquidation, rehabilitation, or conservation

of a member insurer; or

(2) the solvency of an insurer seeking to engage in the business

of insurance in this state.

(b) A report or recommendation under Subsection (a) is not a

public document, and Chapter 552, Government Code, does not apply

to the report or recommendation until the insurer that is the

subject of the report or recommendation is designated as

impaired.

and advise the commissioner concerning rehabilitation, payment of

claims, continuation of coverage, or the performance of other

contractual obligations of an impaired or insolvent insurer.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 463.112. BOARD ACCESS TO RECORDS. The receiver or

statutory successor of an impaired insurer shall give the board

or a representative of the board:

(1) access to the insurer's records as necessary for the board

to carry out the board's functions under this chapter relating to

covered claims; and

(2) copies of those records on the board's request and at the

board's expense.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 463.113. BOARD REPORT AT CONCLUSION OF INSOLVENCY. (a) At

the conclusion of an insurer insolvency in which the association

was obligated to pay a covered claim, the board shall prepare and

submit to the commissioner a report containing any information

the board possesses concerning the history and causes of the

insolvency.

(b) The board:

(1) shall cooperate with the boards of directors of guaranty

associations in other states to prepare a report on the history

and causes of the insolvency of a particular insurer; and

(2) may adopt by reference a report prepared by any of those

associations.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 463.114. SUMMARY DOCUMENT; DISCLAIMER. (a) The

association shall prepare a summary document describing the

general purposes and limitations of this chapter and amend the

document as necessary to comply with this chapter. The document

must clearly and conspicuously contain on the document's face a

disclaimer that:

(1) states the name and address of the association and

department;

(2) warns the policy or contract holder that:

(A) the association may not cover the policy; or

(B) coverage, if available, is subject to substantial

limitations and exclusions and requires continuous residence in

this state;

(3) states that an insurer and the insurer's agent are

prohibited by law from using the association's existence to sell,

solicit, or induce the purchase of any kind of insurance;

(4) warns the policy or contract holder not to rely on

association coverage in selecting an insurer; and

(5) provides other information the commissioner prescribes.

(b) The association shall submit the document to the

commissioner for approval.

document, an insurer may not deliver a policy or contract with

respect to which this chapter provides coverage as determined

under Subchapter E to a policy or contract holder before a copy

of the summary document is delivered to the policy or contract

holder. The document must also be available on request of a

policyholder.

(d) The distribution, delivery, content, or interpretation of a

summary document does not guarantee that a policy or contract or

a policy or contract holder is provided coverage by this chapter

if a member insurer becomes impaired or insolvent. Failure to

receive the document does not give an insured or policy,

contract, or certificate holder any rights greater than those

provided by this chapter.

(e) An insurer or agent may not deliver a policy or contract

described by Section 463.202 that is excluded from the coverage

provided by this chapter by Section 463.203 unless the insurer or

agent, either before or in conjunction with delivery, gives the

policy or contract holder a separate written notice clearly and

conspicuously disclosing that the policy or contract is not

covered by the association.

(f) The commissioner shall specify by rule the form and content

of the disclaimer required by Subsection (a) and the notice

required by Subsection (e).

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

SUBCHAPTER D. ASSESSMENTS

Sec. 463.151. MAKING AND PAYMENT OF ASSESSMENT. (a) The

association shall assess member insurers, separately for each

account under Section 463.105, in the amounts and at the times

the board determines necessary to provide money for the

association to exercise the association's powers, perform the

association's duties, and carry out the purposes of this chapter.

The association may not authorize and call an assessment to meet

the requirements of the association with respect to an impaired

or insolvent insurer until the assessment is necessary to carry

out the purposes of this chapter. The board shall classify

assessments under Section 463.152 and determine the amount of

assessments with reasonable accuracy, recognizing that exact

determinations may not always be possible.

(a-1) The association shall notify each member insurer of its

anticipated pro rata share of an authorized assessment not yet

called not later than the 180th day after the date the assessment

is authorized.

(b) An assessment is due on the date the association specifies,

which may not be earlier than the 30th day after the date the

association gives written notice of the assessment to member

insurers. Interest accrues on an unpaid amount at a rate of 10

percent beginning on the due date.

business in this state is revoked or surrendered remains liable

for any unpaid assessment made before the date of the revocation

or surrender.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Amended by:

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

730, Sec. 3B.016(a), eff. September 1, 2007.

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

921, Sec. 9.016(a), eff. September 1, 2007.

Sec. 463.152. CLASSES OF ASSESSMENTS. (a) Assessments are

classified as Class A or Class B assessments.

(b) Class A assessments are authorized and called to pay:

(1) the association's administrative costs;

(2) administrative expenses that:

(A) are properly incurred under this chapter; and

(B) relate to an unauthorized insurer or to an entity that is

not a member insurer; and

(3) other general expenses not related to a particular impaired

or insolvent insurer.

necessary for the association to carry out the association's

powers and duties under Sections 463.101, 463.103, 463.109, and

463.111(c) and Subchapter F with regard to an impaired or

insolvent insurer.

(d) For purposes of this section, an assessment is authorized at

the time a resolution by the board is passed under which an

assessment will be called immediately or in the future from

member insurers for a specified amount and an assessment is

called at the time a notice has been issued by the association to

member insurers requiring that an authorized assessment be paid

within a period stated in the notice. An authorized assessment

becomes a called assessment at the time notice is mailed by the

association to member insurers.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Amended by:

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

730, Sec. 3B.016(b), eff. September 1, 2007.

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

921, Sec. 9.016(b), eff. September 1, 2007.

Sec. 463.153. AMOUNT OF ASSESSMENTS. (a) The board shall

determine the amount of a Class A assessment for each account

under Section 463.105, considering with respect to member

insurers one or more of the following as shown by annual

statements for the year preceding the date of the assessment:

(1) annual premium receipts;

(2) admitted assets; or

(3) insurance in force.

(b) Class B assessments against a member insurer for each

account under Section 463.105 shall be authorized and called in

the proportion that the premiums received on business in this

state by the insurer on policies or contracts covered by each

account for the three most recent calendar years for which

information is available preceding the year in which the insurer

became impaired or insolvent bear to premiums received on

business in this state for those calendar years by all assessed

member insurers. The amount of a Class B assessment shall be

allocated among the separate accounts in accordance with an

allocation formula that may be based on:

(1) the premiums or reserves of the impaired or insolvent

insurer; or

(2) any other standard deemed by the board in the board's sole

discretion as being fair and reasonable under the circumstances.

account under Section 463.105 may not exceed two percent of the

insurer's premiums on the policies covered by the account during

the three calendar years preceding the year in which the insurer

became an impaired or insolvent insurer. If two or more

assessments are authorized in a calendar year with respect to

insurers that become impaired or insolvent in different calendar

years, the average annual premiums for purposes of the aggregate

assessment percentage limitation described by this subsection

shall be equal to the higher of the three-year average annual

premiums for the applicable subaccount or account as computed in

accordance with this section. If the maximum assessment and the

other assets of the association do not provide in a year an

amount sufficient to carry out the association's

responsibilities, the association shall make necessary additional

assessments as soon as this chapter permits.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Amended by:

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

730, Sec. 3B.016(c), eff. September 1, 2007.

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

921, Sec. 9.016(c), eff. September 1, 2007.

Sec. 463.154. DEFERMENT. The association may wholly or partly

defer an assessment of a member insurer if the association

believes payment of the assessment would endanger the ability of

the insurer to fulfill the insurer's contractual obligations.

The amount of the assessment that is deferred may be assessed

against the other member insurers in a manner consistent with

this subchapter.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 463.155. DEPOSIT OF ASSESSMENTS. The association may

deposit assessments into the Texas Treasury Safekeeping Trust

Company in accordance with procedures established by the

comptroller. The comptroller shall account to the association

for the deposited money separately from all other money.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 463.156. CERTIFICATE OF CONTRIBUTION. The association

shall issue to each member insurer that pays a Class B assessment

a certificate of contribution, in a form the commissioner

prescribes, for the amount paid. All outstanding certificates

are of equal priority regardless of the amount of the assessment

paid or the date the certificate is issued.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 463.157. REFUNDS. (a) The board may refund to member

insurers the amount by which the association's assets, including

any net realized gains and income from investments, exceed the

amount the board determines is necessary to carry out the

association's obligations regarding that amount during the next

year.

(b) A refund must be made:

(1) by an equitable method established in the plan of operation;

and

(2) in proportion to the contribution of each member insurer.

association's continuing expenses and for future losses if

refunds are impractical.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 463.158. USE OF ASSESSMENTS. Money from assessments

supplements the marshalling of an impaired insurer's assets to

make payments on the insurer's behalf.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 463.159. FAILURE TO PAY; COLLECTION BY COMMISSIONER. On

failure of a member insurer to pay an assessment when due, the

commissioner may either:

(1) suspend or revoke, after notice and hearing, the insurer's

certificate of authority to engage in the business of insurance

in this state; or

(2) levy a forfeiture in an amount not less than $100 each month

or more than five percent of the unpaid assessment each month.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 463.160. PREMIUM TAX CREDIT FOR CLASS A ASSESSMENT. The

amount of a Class A assessment paid by a member insurer shall be

allowed as a credit on the amount of premium taxes due in the

same manner as a credit is allowed under Section 401.151(e).

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 463.161. PREMIUM TAX CREDIT FOR CLASS B ASSESSMENT. (a) A

member insurer is entitled to show as an admitted asset a

certificate of contribution in the form the commissioner approves

under Section 463.156. Unless the commissioner requires a longer

period, the certificate may be shown at:

(1) for the calendar year of issuance, an amount equal to the

certificate's original face value approved by the commissioner;

and

(2) beginning with the year following the calendar year of

issuance, an amount equal to the certificate's original face

value, reduced by 20 percent a year for each year after the year

of issuance, for a period of five years.

(b) An amount written off during a calendar year under

Subsection (a) shall be allowed as a credit against the member

insurer's premium tax owed for business engaged in during that

year. The insurer is not required to write off in a single year

an amount that exceeds the amount of premium tax owed for the

business described by this subsection.

commissioner shall deliver to the comptroller for deposit to the

credit of the general revenue fund, any amount owed as a refund

from the association under Section 463.157 that was written off

and used for a tax credit under this section.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Amended by:

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

730, Sec. 3B.017(a), eff. September 1, 2007.

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

921, Sec. 9.017(a), eff. September 1, 2007.

Sec. 463.162. ASSIGNMENT OR TRANSFER OF CREDIT. (a) A member

insurer may assign or transfer a credit against premium tax to

another member insurer if:

(1) an acquisition, merger, or total assumption of reinsurance

occurs between the insurers; or

(2) the commissioner by order approves the assignment or

transfer.

(b) Not later than the later of November 1 or the 60th day after

the date of the assignment or transfer, each member insurer

shall:

(1) report the assignment or transfer to the comptroller on a

form the comptroller prescribes; and

(2) include with the report any documents from the commissioner

that show approval of the assignment or transfer.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 463.163. INSURED'S LIABILITY UNDER ASSESSMENT PLAN. This

chapter does not reduce the liability for unpaid assessments of

the insureds of an impaired or insolvent insurer operating under

a plan with assessment liability.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

SUBCHAPTER E. COVERAGE PROVIDED BY ASSOCIATION

Sec. 463.201. INSUREDS COVERED. (a) Subject to Subsections (b)

and (c), this chapter provides coverage for a policy or contract

described by Section 463.202 to a person who is:

(1) a person, other than a certificate holder under a group

policy or contract who is not a resident, who is a beneficiary,

assignee, or payee of a person described by Subdivision (2);

(2) a person who is an owner of or certificate holder under a

policy or contract specified by Section 463.202, other than an

unallocated annuity contract or structured settlement annuity,

and who is:

(A) a resident; or

(B) not a resident, but only under all of the following

conditions:

(i) the insurers that issued the policies or contracts are

domiciled in this state;

(ii) the state in which the person resides has an association

similar to the association; and

(iii) the person is not eligible for coverage by an association

in any other state because the insurer was not licensed in the

state at the time specified in that state's guaranty association

law;

(3) a person who is the owner of an unallocated annuity contract

issued to or in connection with:

(A) a benefit plan whose plan sponsor has the sponsor's

principal place of business in this state; or

(B) a government lottery, if the owner is a resident; or

(4) a person who is the payee under a structured settlement

annuity, or beneficiary of the payee if the payee is deceased,

if:

(A) the payee is a resident, regardless of where the contract

owner resides;

(B) the payee is not a resident, the contract owner of the

structured settlement annuity is a resident, and the payee is not

eligible for coverage by the association in the state in which

the payee resides; or

insurer that issued the structured settlement annuity is

domiciled in this state, the state in which the contract owner

resides has an association similar to the association, and

neither the payee or, if applicable, the payee's beneficiary, nor

the contract owner is eligible for coverage by the association in

the state in which the payee or contract owner resides.

(b) This chapter does not provide coverage to:

(1) a person who is a payee or the beneficiary of a payee with

respect to a contract the owner of which is a resident of this

state, if the payee or the payee's beneficiary is afforded any

coverage by the association of another state; or

(2) a person otherwise described by Subsection (a)(3), if any

coverage is provided by the association of another state to that

person.

are residents of this state, and in those limited circumstances

as described in this chapter, to nonresidents. In order to avoid

duplicate coverage, if a person who would otherwise receive

coverage under this chapter is provided coverage under the laws

of any other state, the person may not be provided coverage under

this chapter. In determining the application of the provisions

of this subsection in situations in which a person could be

covered by the association of more than one state, whether as an

owner, payee, beneficiary, or assignee, this chapter shall be

construed in conjunction with other state laws to result in

coverage by only one association.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Amended by:

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

730, Sec. 3B.018(a), eff. September 1, 2007.

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

921, Sec. 9.018(a), eff. September 1, 2007.

Sec. 463.202. POLICIES AND CONTRACTS COVERED. (a) Except as

limited by this chapter, the coverage provided by this chapter to

a person specified by Section 463.201, subject to Sections

463.201(b) and (c), applies with respect to the following

policies and contracts issued by a member insurer:

(1) a direct, nongroup life, health, accident, annuity, or

supplemental policy or contract;

(2) a certificate under a direct group policy or contract;

(3) a group hospital service contract; and

(4) an unallocated annuity contract.

(b) The coverage provided by this chapter also applies with

respect to all other insurance coverage written by the following

entities authorized to engage in business in this state:

(1) a mutual assessment company;

(2) a local mutual aid association;

(3) a statewide mutual assessment company; and

(4) a stipulated premium company.

certificate under a group annuity contract includes:

(1) a guaranteed investment contract;

(2) a deposit administration contract;

(3) an allocated or unallocated funding agreement;

(4) a structured settlement annuity;

(5) an annuity issued to or in connection with a government

lottery; and

(6) an immediate or deferred annuity contract.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Amended by:

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

730, Sec. 3B.018(b), eff. September 1, 2007.

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

921, Sec. 9.018(b), eff. September 1, 2007.

Sec. 463.203. POLICIES AND CONTRACTS EXCLUDED. (a) In this

section, "Moody's Corporate Bond Yield Average" means the monthly

average corporates as published by Moody's Investors Service,

Inc., or any successor to that entity.

(b) This chapter does not provide coverage for:

(1) any part of a policy or contract not guaranteed by the

insurer or under which the risk is borne by the policy or

contract owner;

(2) a policy or contract of reinsurance, unless an assumption

certificate has been issued;

(3) any part of a policy or contract to the extent that the rate

of interest on which that part is based:

(A) as averaged over the period of four years before the date

the member insurer becomes impaired or insolvent under this

chapter, whichever is earlier, exceeds a rate of interest

determined by subtracting two percentage points from Moody's

Corporate Bond Yield Average averaged for the same four-year

period or for a lesser period if the policy or contract was

issued less than four years before the date the member insurer

becomes impaired or insolvent under this chapter, whichever is

earlier; and

(B) on and after the date the member insurer becomes impaired or

insolvent under this chapter, whichever is earlier, exceeds the

rate of interest determined by subtracting three percentage

points from Moody's Corporate Bond Yield Average as most recently

available;

(4) a portion of a policy or contract issued to a plan or

program of an employer, association, similar entity, or other

person to provide life, health, or annuity benefits to the

entity's employees, members, or others, to the extent that the

plan or program is self-funded or uninsured, including benefits

payable by an employer, association, or similar entity under:

(A) a multiple employer welfare arrangement as defined by

Section 3, Employee Retirement Income Security Act of 1974 (29

U.S.C. Section 1002);

(B) a minimum premium group insurance plan;

(D) an administrative services-only contract;

(5) any part of a policy or contract to the extent that the part

provides dividends, experience rating credits, or voting rights,

or provides that fees or allowances be paid to any person,

including the policy or contract owner, in connection with the

service to or administration of the policy or contract;

(6) a policy or contract issued in this state by a member

insurer at a time the insurer was not authorized to issue the

policy or contract in this state;

(7) an unallocated annuity contract issued to or in connection

with a benefit plan protected under the federal Pension Benefit

Guaranty Corporation, regardless of whether the Pension Benefit

Guaranty Corporation has not yet become liable to make any

payments with respect to the benefit plan;

(8) any part of an unallocated annuity contract that is not

issued to or in connection with a specific employee, a benefit

plan for a union or association of individuals, or a governmental

lottery;

(9) any part of a financial guarantee, funding agreement, or

guaranteed investment contract that:

(A) does not contain a mortality guarantee; and

(B) is not issued to or in connection with a specific employee,

a benefit plan, or a governmental lottery;

(10) a part of a policy or contract to the extent that the

assessments required by Subchapter D with respect to the policy

or contract are preempted by federal or state law;

(11) a contractual agreement that established the member

insurer's obligations to provide a book value accounting guaranty

for defined contribution benefit plan participants by reference

to a portfolio of assets that is owned by the benefit plan or the

plan's trustee in a case in which neither the benefit plan

sponsor nor its trustee is an affiliate of the member insurer; or

(12) a part of a policy or contract to the extent the policy or

contract provides for interest or other changes in value that are

to be determined by the use of an index or external reference

stated in the policy or contract, but that have not been credited

to the policy or contract, or as to which the policy or contract

owner's rights are subject to forfeiture, as of the date the

member insurer becomes an impaired or insolvent insurer under

this chapter, whichever date is earlier, subject to Subsection

(c).

credited and are not subject to forfeiture as described by

Subsection (b)(12), if a policy's or contract's interest or

changes in value are credited less frequently than annually, the

interest or change in value determined by using the procedures

defined in the policy or contract is credited as if the

contractual date of crediting interest or changing values is the

earlier of the date of impairment or the date of insolvency, and

is not subject to forfeiture.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Amended by:

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

730, Sec. 3B.018(c), eff. September 1, 2007.

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

921, Sec. 9.018(c), eff. September 1, 2007.

Sec. 463.204. OBLIGATIONS EXCLUDED. A contractual obligation

does not include:

(1) death benefits in an amount in excess of $300,000 or a net

cash surrender or net cash withdrawal value in an amount in

excess of $100,000 under one or more policies on a single life;

(2) an amount in excess of:

(A) $100,000 in the present value under one or more annuity

contracts issued with respect to a single life under individual

annuity policies or group annuity policies; or

(B) $5 million in unallocated annuity contract benefits with

respect to a single contract owner regardless of the number of

those contracts;

(3) an amount in excess of the following amounts, including any

net cash surrender or cash withdrawal values, under one or more

accident, health, accident and health, or long-term care

insurance policies on a single life:

(A) $500,000 for basic hospital, medical-surgical, or major

medical insurance, as those terms are defined by this code or

rules adopted by the commissioner;

(B) $300,000 for disability and long-term care insurance, as

those terms are defined by this code or rules adopted by the

commissioner; or

hospital, medical-surgical, major medical, disability, or

long-term care insurance;

(4) an amount in excess of $100,000 in present value annuity

benefits, in the aggregate, including any net cash surrender and

net cash withdrawal values, with respect to each individual

participating in a governmental retirement benefit plan

established under Section 401, 403(b), or 457, Internal Revenue

Code of 1986 (26 U.S.C. Sections 401, 403(b), and 457), covered

by an unallocated annuity contract or the beneficiary or

beneficiaries of the individual if the individual is deceased;

(5) an amount in excess of $100,000 in present value annuity

benefits, in the aggregate, including any net cash surrender and

net cash withdrawal values, with respect to each payee of a

structured settlement annuity or the beneficiary or beneficiaries

of the payee if the payee is deceased;

(6) aggregate benefits in an amount in excess of $300,000 with

respect to a single life, except with respect to:

(A) benefits paid under basic hospital, medical-surgical, or

major medical insurance policies, described by Subdivision

(3)(A), in which case the aggregate benefits are $500,000; and

(B) benefits paid to one owner of multiple nongroup policies of

life insurance, whether the policy owner is an individual, firm,

corporation, or other person, and whether the persons insured are

officers, managers, employees, or other persons, in which case

the maximum benefits are $5 million regardless of the number of

policies and contracts held by the owner;

(7) an amount in excess of $5 million in benefits, with respect

to either one plan sponsor whose plans own directly or in trust

one or more unallocated annuity contracts not included in

Subdivision (4) irrespective of the number of contracts with

respect to the contract owner or plan sponsor or one contract

owner provided coverage under Section 463.201(a)(3)(B), except

that, if one or more unallocated annuity contracts are covered

contracts under this chapter and are owned by a trust or other

entity for the benefit of two or more plan sponsors, coverage

shall be afforded by the association if the largest interest in

the trust or entity owning the contract or contracts is held by a

plan sponsor whose principal place of business is in this state,

and in no event shall the association be obligated to cover more

than $5 million in benefits with respect to all these unallocated

contracts;

(8) any contractual obligations of the insolvent or impaired

insurer under a covered policy or contract that do not materially

affect the economic value of economic benefits of the covered

policy or contract; or

(9) punitive, exemplary, extracontractual, or bad faith damages,

regardless of whether the damages are:

(A) agreed to or assumed by an insurer or insured; or

(B) imposed by a court.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Amended by:

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

730, Sec. 3B.013(d), eff. September 1, 2007.

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

921, Sec. 9.013(d), eff. September 1, 2007.

Sec. 463.205. PROTECTION PROVIDED BY OTHER JURISDICTION. This

chapter does not provide coverage for a resident with respect to

an impaired or insolvent insurer domiciled in another

jurisdiction if guaranty protection is provided to the resident

by the law of that jurisdiction.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 463.206. ASSOCIATION DISCRETION IN MANNER OF PROVIDING

BENEFITS. (a) The board shall have discretion and may exercise

reasonable business judgment to determine the means by which the

association is to provide the benefits of this chapter in an

economical and efficient manner.

(b) If the association arranges or offers to provide the

benefits of this chapter to a covered person under a plan or

arrangement that fulfills the association's obligations under

this chapter, the person is not entitled to benefits from the

association in addition to or other than those provided under the

plan or arrangement.

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

730, Sec. 3B.015(b), eff. September 1, 2007.

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

921, Sec. 9.015(b), eff. September 1, 2007.

SUBCHAPTER F. POWERS AND DUTIES OF ASSOCIATION RELATING

TO IMPAIRED OR INSOLVENT INSURER

Sec. 463.251. IMPAIRED DOMESTIC INSURER. (a) This section

applies only to a member insurer that is an impaired domestic

insurer.

(b) With the commissioner's approval, the association may:

(1) guarantee, assume, or reinsure, or cause to be guaranteed,

assumed, or reinsured, one or more of the insurer's policies or

contracts;

(2) provide money, pledges, notes, guarantees, or other means

proper to:

(A) implement Subdivision (1); and

(B) ensure payment of the insurer's contractual obligations

until action is taken under Subdivision (1); or

(3) loan money to the insurer.

impose any condition that:

(1) does not impair the insurer's contractual obligations; and

(2) is approved by:

(A) the commissioner; and

(B) the insurer, except in a conservation or rehabilitation

ordered by a court.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 463.252. IMPAIRED DOMESTIC, FOREIGN, OR ALIEN INSURER NOT

PAYING CLAIMS. (a) This section applies only to a member

insurer that:

(1) is an impaired domestic, foreign, or alien insurer; and

(2) is not timely paying claims.

(b) Subject to Subsection (d), the association shall:

(1) with respect to the insurer, take one or more actions that

the association is authorized to take under Section 463.251 with

respect to an impaired domestic insurer, subject to the

conditions of that section; or

(2) provide substitute benefits instead of the insurer's

contractual obligations as provided by Subsection (c).

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

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