Texas Insurance Code - Not Codified - Article 1.15. To Examine Carriers
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Art. 1.15. TO EXAMINE CARRIERS.
Article repealed effective April 1, 2007
Sec. 1. The State Board of Insurance shall once each year for
the first three (3) years after organization or incorporation, and
thereafter once in each three (3) years, or oftener, if the Board
deems necessary, in person or by one or more examiners commissioned
by such Board in writing, visit each carrier organized under the
laws of this state and examine its financial condition and its
ability to meet its liabilities, as well as its compliance with the
laws of Texas affecting the conduct of its business; and such Board
shall similarly, in person or by one or more commissioned
examiners, visit and examine, either alone or jointly with
representatives of the insurance supervising departments of other
states, each insurance carrier not organized under the laws of this
state but authorized to transact business in this state. Such Board
or its commissioned examiners shall have free access to all the
books and papers of the carrier or agents thereof relating to the
business and affairs of such carrier, and shall have power to summon
and examine under oath, if necessary, the officers, agents, and
employees of such carrier and any other person relative to the
affairs of such carrier. Such Board may revoke or modify any
certificate of authority issued by such Board or by any predecessor
in office when any condition or requirement prescribed by law for
granting it no longer exists. Such Board shall give such company at
least ten (10) days written notice of its intention to revoke or
modify such certificate of authority stating specifically the
reason for the action it proposes to take.
Sec. 2. The State Board of Insurance in administering any
provision of the Insurance Code, Acts 1951, 51st Legislature,
Chapter 491, shall be authorized and empowered in determining
"value" or "market value" of any investment in or upon real estate
or the improvements thereon by any carrier authorized to do
business in the State of Texas to consider any and all matters and
things relating thereto, including but not restricted to,
appraisals by real estate boards or other qualified persons,
affidavits by other persons familiar with such values, tax
valuations, cost of acquisition, with proper deductions for
depreciation and obsolescence, cost of replacement, sales of other
comparable property, enhancement in value from whatever cause,
income received or to be received, improvements made or any other
factor or any other evidence which to said Board may be deemed
proper and material.
Sec. 3. Any insurer whose investment in or upon real estate or
the improvements thereon may have been determined or found by said
Board shall be entitled to make a written request to the Board for a
written finding by the Board; and upon such request being made to
the Board, the Board shall, within ten (10) days after receipt of
such request, enter its written order or finding setting out
separately its finding upon each factor or matter upon which its
said determination or finding of "value" or "market value" was made
and shall in such written order or finding give the names and
addresses of all persons who furnished such evidence as to each such
matter, factor or thing and upon whom the Board relied in making
such determination or finding and shall deliver a copy of such
written finding or order to the carrier so requesting the same.
Sec. 4. Any rule, regulation, order, decision or finding of
the Board under this Act shall be subject to review in accordance
with Article 1.04 of this code. The filing of such suit shall
operate as a stay of any such rule, regulation, order, decision or
finding of the Board until the court directs otherwise.
Sec. 5. If a carrier or an agent of a carrier fails or refuses
to comply with this article or rules adopted under this article or
to comply with a request of the Board or a commissioned examiner to
be examined or to provide information requested as part of an
examination by the Board or commissioned examiner, the carrier is
subject to disciplinary action under Article 1.10, Section 7, of
this code, and the Commissioner of Insurance may institute
disciplinary action pursuant to Article 1.10, Section 7, Insurance
Code.
Sec. 6. The Board, by rule, shall adopt procedures for filing
and adoption of examination reports and for hearings to be held
under this article and guidelines governing orders issued under
this article.
Sec. 7. Nothing contained in this article shall be construed
to limit the Commissioner's authority to use any final or
preliminary examination report, any examiner or company workpapers
or other documents, or any other information discovered or
developed during the course of any examination in the furtherance
of any legal or regulatory action which the Commissioner of
Insurance may, in his or her sole discretion deem appropriate.
Sec. 8. (a) In conducting an examination under this article,
the department shall use audits and work papers prepared by an
accountant or accounting firm that meets the requirements of
Section 12, Article 1.15A, of this code that are made available to
the department by the carrier. If necessary, the department may
conduct a separate audit of the carrier.
(b) The carrier shall provide the department with the work
papers of an accountant or accounting firm or the carrier and a
record of any communications between the accountant or accounting
firm and the carrier that relate to the audit. The accountant or
accounting firm shall deliver that information to the department's
examiners, who shall retain the information during the course of
the department's examination of the carrier. Information obtained
under this section is confidential and may not be disclosed to the
public except when introduced as evidence in a hearing.
(c) For purposes of this section, "work papers" has the
meaning assigned by Section 17(a), Article 1.15A, of this code.
Work papers developed in an audit conducted under this section
shall be maintained in the manner provided by Sections 17(b) and
(c), Article 1.15A, of this code.
Sec. 9. A final or preliminary examination report, and any
information obtained during the course of an examination, is
confidential and is not subject to disclosure under the open
records law, Chapter 424, Acts of the 63rd Legislature, Regular
Session, 1973 (Article 6252-17a, Vernon's Texas Civil Statutes),
and its subsequent amendments. This section applies if the carrier
examined is under supervision or conservation but does not apply to
an examination conducted in connection with a liquidation or a
receivership under this code or another insurance law of this
state.
Sec. 10. If the Commissioner determines that the financial
strength of a carrier justifies less-frequent examinations than are
required by Section 1 of this article, the Commissioner may conduct
the examination of a carrier at intervals not to exceed five years.
The Commissioner shall adopt rules governing the determination of
whether the financial strength of a carrier justifies examination
under this section. This section applies only to examination of a
carrier that has been incorporated or organized for more than three
years.
Acts 1951, 52nd Leg., ch. 491. Amended by Acts 1955, 54th Leg., p.
826, ch. 307, Sec. 3; Acts 1965, 59th Leg., p. 309, ch. 141, Sec. 1.
Sec. 1 amended by Acts 1987, 70th Leg., 2nd C.S., ch. 67, Sec. 6,
eff. Aug. 4, 1987; Sec. 1 amended by and Secs. 5 to 7 added by Acts
1991, 72nd Leg., ch. 242, Sec. 11.104, eff. Sept. 1, 1991; Sec. 4
amended by Acts 1993, 73rd Leg., ch. 685, Sec. 4.01, eff. Sept. 1,
1993; Secs. 8 to 10 added by Acts 1993, 73rd Leg., ch. 685, Sec.
7.05, eff. Sept. 1, 1993.
Article: 1.04A 1.04D 1.09-1 1.10 1.12 1.13 1.14-3 1.15 1.15A 1.15B 1.16 1.17 1.17A 1.18 1.19
Last modified: August 11, 2007
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