Texas Insurance Code - Not Codified - Article 21.11-2. Agency Contracts With Insolvent Insurers
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Art. 21.11-2. AGENCY CONTRACTS WITH INSOLVENT INSURERS.
Article repealed effective April 1, 2007
Sec. 1. Every agency contract entered into on and after the
effective date of this Act by an insurance company writing fire and
casualty insurance in Texas shall contain, or shall be construed to
contain, the following provision:
Notwithstanding any other provision of this contract, the
obligation of the agent to remit written premiums to the company
shall be changed upon the commencement of delinquency proceedings
as defined in Article 21.28, Insurance Code of Texas of 1951, as
amended. Subsequent to the commencement of delinquency
proceedings, the obligation of the agent to remit premiums shall be
confined to premiums earned prior to the date of cancellation of
policies stated in the order of a court of competent jurisdiction
under Article 21.28 of this code canceling the policies. The agent
shall not owe or remit to the company or to the Liquidator-Receiver
any premiums that are unearned as of the date of the cancellation
stated in the order canceling the policies.
Sec. 2. On or after the effective date of the cancellation of
policies stated in the court's order canceling policies, the agent
shall promptly account to the receiver for all premiums to be
returned to the insured or the replacement coverage to be obtained
and the earned premiums to be paid to the receiver. Any of those
unearned premiums in the hands of the agent on the effective date of
the policy cancellations shall be returned promptly by the agent to
the insured who paid them or, with the approval of the insured,
shall be used to purchase new coverage for the insured with a
different insurer. Any of the earned premiums in the hands of the
agent shall be remitted promptly to the receiver.
Sec. 3. This article does not prejudice any cause of action by
the receiver against any agent for the recovery of unearned
premiums that were not returned to policyholders and earned
premiums that were not promptly remitted to the receiver.
Sec. 4. This article may not be construed to render the agent
an agent of the receiver for earned or unearned premiums.
Added by Acts 1973, 63rd Leg., p. 1263, ch. 462, Sec. 1, eff. Aug.
27, 1973.
Amended by Acts 1989, 71st Leg., ch. 1082, Sec. 6.04, eff. Sept. 1,
1989.
Article: 5.171 5.172 7.01 7.02 7.19-1 7.20 7.20-1 21.11-2 21.20-2 21.28-A 21.28-C 21.28-D 21.28-E 21.31 21.32
Last modified: August 11, 2007
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