Texas Insurance Code - Not Codified - Article 21.28-A. Insurer Delinquencies And Prevention Of Insurer Delinquencies; Supervision Of Insurers And Proceedings, Conservatorships, Liquidations--Additional And Alternate Provisions
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Art. 21.28-A. INSURER DELINQUENCIES AND PREVENTION OF
INSURER DELINQUENCIES; SUPERVISION OF INSURERS AND PROCEEDINGS,
CONSERVATORSHIPS, LIQUIDATIONS--ADDITIONAL AND ALTERNATE
PROVISIONS.
Article repealed effective April 1, 2007
Purposes and findings
Sec. 1. It is the sense of the Legislature that existing
provisions and conditions of law and the ordered procedures of law
are sometimes not adequate, nor appropriate under all
circumstances, in respect of a need to remedy the financial
condition and the management of certain insurers. Neither are the
laws adequate for the rehabilitation of insurers who voluntarily
request rehabilitation. A void exists in the laws with respect to
those insurers most susceptible to rehabilitation or the regaining
of solvency. The Legislature finds and determines that the placing
of an insurer in receivership often destroys or diminishes, or is
likely to destroy or diminish, one or more of the following values
or assets: (a) the value of the insurance account or in-force
business of the insurer, (b) the value of the insurer as a going
concern, (c) the value of its agency force, and (d) the value of
other of its assets. The Legislature declares that such values and
assets should be preserved if the circumstances of the insurer's
financial condition warrant an attempt to conserve or rehabilitate
such insurer and such rehabilitation or conservation is otherwise
feasible, but in cases in which rehabilitation or conservation
would be inefficient or impracticable, the board is directed to
promulgate rules that encourage the merger of insurers in weak
financial condition with insurers in strong financial condition.
It is the purpose of the Legislature to provide for rehabilitation
and conservation of insurers by authorizing and requiring the
additional facility of supervision and conservatorship by the
commissioner, to authorize action to resolve whether an attempt be
made to rehabilitate and conserve an insurer, and to avoid, if
possible and feasible, the necessity of temporary or permanent
receivership. It is the further purpose of this Act to provide for
protection of the assets of an insurer pending determination of
whether or not an insurer can be successfully rehabilitated. It is
not the sense of the Legislature that rehabilitation will be
accomplished in every case, but it is the purpose of this Article to
provide a facility and direction for attempting the rehabilitation
without immediate resort to the harsher remedy of receivership. The
rules and procedures authorized for conservatorship may not be
employed without following the rules and procedures promulgated to
promote the merger of insurers in weak financial condition. In the
event that receivership ultimately becomes necessary, it is
nevertheless the belief and finding of the Legislature that the
preliminary supervision and conservatorship is preventive of a
dissipation of assets and will thus benefit policyholders,
creditors and owners; and the commissioner is directed, in its
discretion, to the use of this authorization. The Legislature
further finds that an insurer delinquency, or the state's
incapacity to properly proceed in a threatened delinquency,
directly or indirectly affects other insurers by creating a lack of
public confidence in insurance and in insurance companies. As
respects the state, insurer delinquencies are destructive of public
confidence in the capacity of the state to regulate insurers. These
and other harmful results of insurer delinquency are properly
minimized by a further enactment designed to protect and in aid of
insureds, creditors and owners. The Legislature intends and
expects that the inappropriate as well as the appropriate concerns
in respect of insurance and insurers will be reduced by the
existence and operation of this law. The Legislature declares that
it is a proper concern of this state and proper policy to attempt to
correct or remedy insurer misconduct, ineptness or misfortune. It
is the purpose of the Legislature to express, or to imply from
context when not expressed, an authorization, provision and
enabling of the promulgation of rules and regulations by the board
as directed in these legislative findings and in the augmentation
of this law; and to provide also for any other requisite
administrative action. In consequence of the foregoing, the
substance and procedure of this Article is here declared to be the
public policy of this state and necessary to the public welfare.
Such policy and welfare requires the availability of this law and
the application of this law whenever circumstances warrant; and it
is therefore a condition of doing an insurance business in this
state; and it is made applicable and is a consequence of any other
transactions in respect of an insurer or insurance. And in
conjunction with existing law, the rationale is effected in the
provision herein for a generally ordered sequence, and review at
each such step, of supervision, concurrent conservation and
rehabilitation (including reinsurance), and, as may at any time or
ultimately be indicated or determined, cessation of the
conservation by accomplishment of rehabilitation or by
receivership and liquidation.
Definition, application and scope
Sec. 2. As used in this Article, the following words, terms
and phrases (in single quotes in this Section of the Article but not
in quotes in other Sections) include the meanings, significance or
application described in this Section, except as another meaning is
clearly requisite from the purposes or is otherwise clearly
indicated by the context.
(a) "Insurance Company" (used interchangeably with
"insurer") is any person, organization, association or company,
(authorized or unauthorized, admitted or non-admitted) acting as an
insurer, or as principal or agent of an insurer, including stock
companies, reciprocals or interinsurance exchanges, Lloyds
associations, fraternal benefit societies, stipulated premium
companies, title insurance companies, and mutual companies of all
kinds, including state-wide mutual assessment corporations, local
mutual aids, burial associations, and county mutual insurance
companies and farm mutual insurance companies.
(b) In respect of an insurance company or insurer,
"insolvent" or "insolvency" and the phrases in further identity of
insurer delinquency and threatened insurer delinquency, mean and
include, and the conditions to which this Article is applicable
include, but are not limited to, any one or more of the following
circumstances or conditions.
(1) if an insurance company's required surplus, capital, or
capital stock is impaired to an extent prohibited by law, or
(2) if an insurance company continues to write new business
when it is not possessed of the surplus, capital or capital stock
which is required of it by law to permit it to do so, or
(3) if the business of any such insurance company is being
conducted fraudulently, or
(4) if any such insurance company attempts to dissolve or
liquidate without first having made provisions, satisfactory to the
Commissioner of Insurance, for liabilities arising from policies of
insurance issued by such company.
(c) "Exceeded its Powers" includes and means but is not
limited to the following circumstances:
(1) if an insurance company has refused to permit
examination of its books, papers, accounts, records, or affairs by
the Commissioner of Insurance, his deputy, or duly commissioned
examiners; or if any insurance company, organized in the State of
Texas, has removed from the state such books, papers, accounts or
records necessary for an examination of such insurance company, or
(2) if an insurance company has failed to promptly answer
inquiries authorized by Article 1.24 of this Code, or
(3) if an insurance company has neglected or refused to
observe an order of the Commissioner to make good, within the time
prescribed by law, any prohibited deficiency in its capital,
capital stock, or surplus, or
(4) if an insurance company without first having obtained
written approval of the Commissioner has by contract or otherwise:
(i) totally reinsured its entire outstanding business, or (ii)
merged or consolidated substantially its entire property or
business with another insurer; or
(5) if any insurance company is continuing to write business
after its license has been revoked or suspended; or
(6) if an insurance company is in a condition that renders
the continuance of its business hazardous to the public or to
holders of its policies or certificates of insurance.
(d) "Consent," as used in this Act, includes and means
agreement to either supervision or conservatorship by the insurance
company.
Notice to comply with written requirements of commissioner;
noncompliance; taking charge as conservator
Sec. 3. If upon examination or at any other time it appears to
or is the opinion of the Commissioner of Insurance that any
insurance company is insolvent, or its condition is such as to
render the continuance of its business hazardous to the public or to
holders of its policies or certificates of insurance, or if such
company appears to have exceeded its powers (as defined herein) or
has failed to comply with the law, or if such insurance company
gives its consent (as defined herein), then the Commissioner of
Insurance shall upon his determination (a) notify the insurance
company of his determination, and (b) furnish to the insurance
company a written list of the Commissioner's requirements to abate
his determination, and (c) if the Commissioner makes a further
determination to supervise he shall notify the insurance company
that it is under the supervision of the Commissioner of Insurance
and that the Commissioner is applying and effecting the provisions
of this Article. Such insurance company shall comply with the
lawful requirements of the Commissioner of Insurance. If placed
under supervision, the insurance company shall have not more than
one hundred-eighty (180) days from the date of the Commissioner's
notice of supervision to comply with the requirements of the
Commissioner. During the period of supervision, the insurance
company shall continue to pay claims according to terms of the
insurance policy, and the Commissioner may schedule a hearing
relating to the insurance company in supervision with not less than
ten (10) days' written notice to all parties of record on his own
motion or that of any party of record. However, notice may be
waived by the parties of record. If after hearing it is determined
that the insurance company has failed to comply with the lawful
requirements of the Commissioner, it has not been rehabilitated, it
is insolvent, or it is otherwise in such a condition as to render
the continuance of its business hazardous to the public or to
holders of its policies or certificates of insurance, or if the
company appears to have exceeded its powers as defined in this
Article, the Commissioner of Insurance, acting for himself, or
through a conservator appointed by the Commissioner of Insurance
for that purpose, shall take charge as conservator of the insurance
company and all of the property and effects thereof. If after
hearing it is determined that the insurance company has been
rehabilitated or its condition has otherwise been remedied such
that the continuance of its business is no longer hazardous to the
public or to holders of its policies or certificates of insurance,
the Commissioner may release that insurance company from
supervision. Section 15, Administrative Procedure and Texas
Register Act (Article 6252-13a, Vernon's Texas Civil Statutes),
does not apply to hearings held by the Commissioner or his
representative under this Article.
Confidentiality of certain proceedings and records
Sec. 3A. (a) All hearings, orders, notices, correspondence,
reports, records, and other information in the possession of the
Texas Department of Insurance relating to the supervision or
conservatorship of any insurance company are confidential during
the period of supervision and conservatorship. On termination of
the supervision and conservatorship, the information in the custody
of the department that relates to the supervision and
conservatorship becomes public information.
(b) This section does not prohibit access to hearings,
orders, notices, correspondence, reports, records, and other
information by the State Board of Insurance.
(c) The provisions of the Administrative Procedure and
Texas Register Act (Article 6252-13a, Vernon's Texas Civil
Statutes) relating to discovery apply to the parties of record in
these proceedings.
(d) The Commissioner of Insurance or the State Board of
Insurance may open the proceedings or disclose the information to a
department, agency, or instrumentality of this or another state or
the United States if the Commissioner of Insurance or the State
Board of Insurance determines that the disclosure is necessary or
proper for the enforcement of the laws of this or another state or
the United States.
(e) An officer or employee of the Texas Department of
Insurance is not liable for release of information without a
showing that the release of information was accomplished with
actual malice.
This section does not apply to information (1) if the
insureds of the insurance company are not protected by Article
9.48, 21.28-C, or 21.28-D of this code or by statutes substantially
similar to those Articles, or (2) on the appointment of a receiver
for the insurance company by a court of competent jurisdiction.
Prohibited acts during period of supervision
Sec. 4. (a) During the period of supervision, the
Commissioner may appoint a supervisor to supervise such insurance
company and may provide that the insurance company may not do any of
the following things, during the period of supervision, without the
prior approval of the Commissioner or his supervisor:
(1) Dispose of, convey or encumber any of its assets or its
business in force;
(2) Withdraw any of its bank accounts;
(3) Lend any of its funds;
(4) Invest any of its funds;
(5) Transfer any of its property;
(6) Incur any debt, obligation or liability;
(7) Merge or consolidate with another company;
(8) Enter into any new reinsurance contract or treaty; or
(9) Terminate, surrender, forfeit, convert, or lapse any
policy or contract of insurance, except for nonpayment of premiums
due, or to release, pay, or refund premium deposits, accrued cash or
loan values, unearned premiums, or other reserves on any insurance
policy or contract.
(b) The Liquidator of the State Board of Insurance, or his
duly appointed deputy, may be appointed to serve as the supervisor.
Insurance agent of record
Sec. 4A. (a) Unless otherwise prohibited, the supervisor,
conservator, or receiver shall furnish the agent of record with a
copy of each communication provided to the insured, if in the
judgment of the supervisor, conservator, or receiver, furnishing
such copy will serve to materially protect the interests of
policyholders. The supervisor, conservator, or receiver may also
request the assistance of any statewide associations of insurance
agents to furnish their members with information that in the
judgment of the supervisor, conservator, or receiver may serve to
materially protect the interests of policyholders.
(b) In the event the supervisor, conservator, or receiver
sells the insurance policies of a delinquent insurer to another
insurer, the pecuniary interest of the agent of record in the
insurance policies being sold shall be recognized by the purchaser,
whether or not the purchaser customarily conducts its business
through insurance agents.
(c) The insurer purchasing such insurance policies shall
conduct its business with the insured through the agent of record
and shall furnish the agent of record with a written limited agency
contract providing for the terms and conditions that shall serve to
guide the conduct of their business together. Such limited agency
contract shall provide a level of commission that shall be
reasonable, adequate, and nonconfiscatory.
(d) Nothing contained in this Act shall be construed to
prohibit the agent of record from renewing insurance policies
purchased by the insurer from a delinquent insurer with another
insurer.
(e) This section does not apply to:
(1) any life, accident, or health insurance policy or
contract delivered or issued for delivery by an insurer that is
subject to any provision of Chapter 3, 11, 14, or 22 of this code;
(2) any contract or certificate that is delivered or issued
for delivery by a group hospital service corporation organized
under Chapter 20 of this code; or
(3) any contract or evidence of coverage delivered or issued
for delivery by a health maintenance organization operating under a
certificate of authority issued under the Texas Health Maintenance
Organization Act (Chapter 20A, Vernon's Texas Insurance Code).
Conservatorship or liquidation
Sec. 5. If, after notice and opportunity for hearing, it is
determined that such insurance company is insolvent, or its
condition is such as to render the continuance of its business
hazardous to the public or to holders of its policies or
certificates of insurance, or if the company appears to have
exceeded its powers as defined in this Article, or has failed to
comply with any lawful requirements of the Commissioner, or upon
consent by an insurance company, and if it is determined that
supervision is inadequate to accomplish the rehabilitation of the
company, the Commissioner in his discretion may appoint a
conservator, who shall immediately take charge of such insurance
company and all of the property, books, records, and effects
thereof, and conduct the business thereof, and take such steps
toward the removal of the causes and conditions, which have
necessitated such order, as the Commissioner may direct. During
the pendency of conservatorship, the conservator shall make such
reports to the Commissioner from time to time as may be required by
the Commissioner, and shall be empowered to take all necessary
measures to preserve, protect, and recover any assets or property
of such insurance company, including claims or causes of action
belonging to or which may be asserted by such insurance company, and
to deal with the same in his own name as conservator, and shall be
empowered to file, prosecute, and defend any suit or suits which
have been filed or which may thereafter be filed by or against such
insurance company which are deemed by the conservator to be
necessary to protect all of the interested parties or any property
affected thereby. If at the time of appointment of a conservator or
at any time during the pendency of such conservatorship it appears
that the interest of the policy holders or certificate holders of
such insurance company can best be protected by reinsuring the
same, the conservator may, with the approval of or at the direction
of the Commissioner: (1) reinsure all or any part of such insurance
company's policies or certificates of insurance with some solvent
insurance company authorized to transact business in this state,
and (2) to the extent that such insurance company in
conservatorship is possessed of reserves attributable to such
policies or certificates of insurance, the conservator may transfer
to the reinsuring company such reserves or any portion thereof as
may be required to consummate the reinsurance of such policies, and
any such reserves so transferred shall not be deemed a preference of
creditors. The liquidator of the State Board of Insurance, or his
duly appointed deputy, may be appointed to serve as the
conservator. During the pendency of a conservatorship, the
Commissioner may schedule a hearing relating to the insurance
company in conservatorship with not less than ten (10) days'
written notice to all parties of record on his own motion or that of
any party of record; provided, however, that notice may be waived
by the parties of record. If the Commissioner of Insurance is
satisfied at any time and regardless of the presence or absence of
any state of supervision or conservatorship, that such insurance
company is not in condition to continue business in the interest of
its policy or certificate holders, the Commissioner of Insurance
shall give notice to the Attorney General who shall thereupon apply
to any Court in Travis County, Texas, having jurisdiction thereof
for leave to file a suit in the nature of quo warranto to forfeit the
charter of such insurance company or to require it to comply with
the law or to satisfy the Commissioner of Insurance as to its
solvency, and to satisfy the requirement that its condition is such
as to render the continuance of its business not hazardous to the
public or to the holders of its policies or certificates of
insurance. It shall be in the discretion of the Commissioner of
Insurance to determine at any time whether or not the insurance
company is placed in supervision or he will operate the insurance
company through a conservator, as provided above, or report it to
the Attorney General for the purpose of taking any remedial action
including, without limitation, applying for appointment of a
receiver under Article 21.28 of this code. No period of supervision
or conservatorship is necessary as a prerequisite for the Attorney
General to take that remedial action. When all the policies of an
insurance company are reinsured or terminated, and all of its
affairs concluded, as herein provided, the Commissioner of
Insurance shall report the same to the Attorney General, who shall
take such action as may be necessary to effect the forfeiture or
cancellation of the charter of the insurance company so reinsured
and liquidated. Where the Commissioner of Insurance lends his
approval to the merger, consolidation or reinsurance of all the
policies of one insurance company with that of another, the same
shall be reported to the Attorney General who shall proceed to
effect the forfeiture or cancellation of the charter of the
insurance company from which the policies were merged, consolidated
or reinsured, in the same manner as is provided for the charters of
companies totally reinsured or liquidated. The cost incident to
the supervisor's and conservator's service shall be fixed and
determined by the Commissioner of Insurance and, subject to
Subsection (a) of Section 8 of Article 21.28 of this code, shall be
a charge against the assets and funds of the insurance company to be
allowed and paid as the Commissioner of Insurance may determine.
A conservator and his agents and employees are not liable for
and a cause of action may not be brought against any of them for an
action taken or not taken by them relating to the adjustment,
negotiation, or settlement of claims.
Publication of notice of conservatorship
Sec. 5A. (a) On appointment of a conservator as provided by
Sections 5 and 6 of this Article, the Commissioner of Insurance
shall publish notice of the conservatorship in at least one
newspaper with general circulation in each county that has a
population of at least 100,000 according to the most recent federal
decennial census.
(b) The notice must include:
(1) the name of the insurer placed in conservatorship;
(2) the date on which the insurer was placed in
conservatorship in this state;
(3) the reasons for placing the insurer in conservatorship;
and
(4) any courses of action with relation to the insurer
available to policyholders and any duties with which the
policyholders may be required to comply.
(c) The Commissioner of Insurance must publish the notice
required by this section not later than the seventh day after the
date the Commissioner enters an order placing the insurer in
conservatorship.
Out of state companies
Sec. 6. This Article shall apply to insurance companies doing
an insurance business but not domiciled in the State of Texas,
whether authorized to do business in this state or not. In the
event that the Commissioner of Insurance makes any of the findings
provided for in Section 3 of this Article concerning any such
insurance company or finds that any such insurance company is not
possessed of the minimum surplus or capital or capital stock
required by the Insurance Code of the State of Texas for similar
type domestic companies, or if the insurance company gives its
consent as defined herein, the Commissioner of Insurance shall have
the same power and jurisdiction to appoint an ancillary supervisor
or ancillary conservator as to the assets of such out of state
insurer located in this state as provided herein for domestic
insurance companies. In the event that any such out of state
insurance company shall fail to comply with the provisions of
Section 4 of this Article with respect to any of its assets or
policies located within this state during any period of
supervision, such act or violation shall constitute sufficient
grounds for the immediate revocation of its certificate of
authority to do business in this state and for the immediate
appointment of an ancillary conservator to take charge of its
assets located within this state. In addition, if a conservator,
rehabilitator, receiver, or liquidator or his equivalent has been
appointed in the state of domicile with respect to the insurance
company, the Commissioner of Insurance in his discretion may
immediately and without prior notice and hearing appoint an
ancillary conservator for the assets, property, and books and
records of the out of state insurer located in this state subject to
Section 7 of this Article. Any ancillary supervisor or ancillary
conservator appointed with respect to assets, property, and books
and records located in this state belonging to an out of state
insurance company shall have all of the powers and authority
provided for in Section 5 of this Article with respect to such
assets, property, and books and records located in this state and,
in addition, any ancillary conservator so appointed may reinsure
all or any part of such insurance company's policyholders or
certificate holders located within this state with some solvent
insurance company authorized to transact business in this state and
may transfer to the reinsuring company, as reserve funds, assets or
any portion thereof in his possession as may be required to
consummate the reinsurance of such policies and any of such assets
transferred as reserve funds shall not be deemed a preference of
creditors. The Commissioner of Insurance, on any grounds
permitting referral to the Attorney General for remedial action
against a domestic insurance company, may at any time and without
prior action having been taken in the state of domicile, report an
out of state insurance company for remedial action including,
without limitation, making application for appointment of a
receiver under Article 21.28 of this code.
Review and Stay of Action
Sec. 7. During the period of supervision and during the
period of conservatorship, the insurance company may request the
Commissioner of Insurance or in his absence, the duly appointed
deputy for such purpose, to review an action taken or proposed to be
taken by the supervisor or conservator, specifying wherein the
action complained of is believed not to be in the best interests of
the insurance company, and such request shall stay the action
specified pending review of such action by the Commissioner or his
duly appointed deputy. Any order entered by the Commissioner
appointing a supervisor and providing that the insurance company
shall not do certain acts as provided in Section 4 of this Article,
any order entered by the Commissioner appointing a conservator, and
any order by the Commissioner following the review of an action of
the supervisor or conservator as hereinabove provided may be
appealed under Article 1.04 of this code. Either party to said
action may appeal to the Appellate Court having jurisdiction of
said cause and said appeal shall be at once returnable to said
Appellate Court having jurisdiction of said cause and said action
so appealed shall have precedence in said Appellate Court over all
causes of a different character therein pending.
Venue
Sec. 8. Except for causes of action based upon terms of an
insurance policy or policy or policies issued by an insurance
company placed in conservatorship, any suit filed against an
insurance company or its conservator, after the entrance of an
order by the Commissioner of Insurance placing such insurance
company in conservatorship and while such order is in effect, shall
be brought in a court of competent jurisdiction in Travis County,
Texas, and not elsewhere. The conservator appointed hereunder for
such company may file suit in any court of competent jurisdiction in
Travis County, Texas, against any person for the purpose of
preserving, protecting, or recovering any assets or property of
such insurance company including claims or causes of action
belonging to or which may be asserted by such insurance company.
Duration of conservatorship
Sec. 9. The conservator shall complete his duties and
responsibilities as required by this Act not later than the
ninetieth (90th) day after the date on which he is appointed
conservator. The Commissioner of Insurance may extend the
conservatorship for additional successive periods of thirty (30)
days each for a total period of extensions not to exceed one hundred
and eighty (180) successive days, if the Commissioner determines
and issues written findings that there is a substantial likelihood
of rehabilitation and no hearing is required before the
Commissioner makes his determination. During the period of
conservatorship, the insurance company shall continue to pay claims
according to the terms of the insurance policy. If rehabilitated,
the rehabilitated insurance company shall be returned to management
or new management under such reasonable conditions as will best
tend to prevent the defeat of the purposes for which it was placed
in conservatorship.
Administrative Election of Proceedings
Sec. 10. (a) If the Commissioner determines to act under
authority of this Article, or is directed by the State Board of
Insurance or a court of competent jurisdiction to act under this
Article, the sequence of his acts and proceedings shall be as set
forth herein. However, it is a purpose and substance of this
Article to authorize administrative discretion--to allow the State
Board of Insurance and the Commissioner administrative discretion
in the event of insurance company delinquencies--and in furtherance
of that purpose, the Commissioner is hereby authorized in respect
of insurance company delinquencies or suspected delinquencies to
proceed and administer either under this Article or under any other
applicable law, or under this law in conjunction with other law,
either as such law is now existing or as is hereafter enacted, and
it is so provided.
Rules and Regulations
Sec. 11. The State Board of Insurance shall be empowered to
adopt and promulgate such reasonable rules and regulations as may
be necessary for the augmentation and accomplishment of this Act,
including its purposes.
Other laws; conflicts
Sec. 12. (a) Other statutes authorized for use and
application in conjunction with this Article are Section 14 of
Article 17.25, and Articles 14.33 and 22.22 of the Insurance Code.
Also authorized for use, in conjunction with this Article, in
delinquency proceedings or threatened insolvencies of insurers,
are any other statutes or laws possible of application with this Act
or in the procedures of this Act, or in augmentation of this Act
whether or not directed as applicable by such other statute; but in
the event of conflict between this Article and any other Article,
the provisions of this Article shall govern.
(b) Notwithstanding any other provision of law, the
Commissioner may meet with a supervisor or conservator appointed
under this Article and with the attorney or other representative of
the supervisor or conservator, without the presence of any other
person, at the time of any proceeding or during the pendency of any
proceeding held under authority of this Article to carry out his
duties under this Article or for the supervisor or conservator to
carry out his duties under this Article.
Insurer's attorney, actuary, and accountant
Sec. 13. (a) Notwithstanding any other provision of this
article, during a supervision proceeding, the insurer may employ an
attorney, actuary, and accountant of the insurer's choice to assist
the insurer during the supervision.
(b) The supervisor shall authorize the payment of
reasonable fees and expenses from the insurer for the attorney,
actuary, or accountant.
Secs. 14 to 16. [Blank]
Fees from rehabilitated entities
Sec. 17. (a) The State Board of Insurance may collect fees
from any entity that is regulated by the board as provided by
Subsection (h) of Section 7 of Article 1.10 of this code and that is
successfully rehabilitated by the board. The fees shall be in
amounts sufficient to cover but not exceed the costs of
rehabilitation of that entity. The board shall use the fees for the
sole purpose of the rehabilitation of the entity from which they are
collected. Fees collected under this subsection shall be deposited
in and expended through the State Board of Insurance Operating
Fund. The supervisor, conservator, or commissioner shall use the
employees of the entity being rehabilitated, to the maximum extent
possible, instead of outside consultants, actuaries, attorneys,
accountants, other personnel or departmental employees, in order to
minimize the expense of rehabilitation or the necessity of fees for
rehabilitation.
(b) The Commissioner may determine the terms of the
collection or repayment of the fees from any successfully
rehabilitated entity.
Added by Acts 1967, 60th Leg., p. 671, ch. 281, Sec. 1, eff. Aug. 28,
1967. Amended by Acts 1981, 67th Leg., p. 2641, ch. 707, Sec.
4(29), eff. Aug. 31, 1981.
Sec. 7 amended by Acts 1983, 68th Leg., p. 284, ch. 57, Sec. 1, eff.
May 3, 1983; Sec. 2 amended by Acts 1987, 70th Leg., ch. 1073, Sec.
2, eff. Sept. 1, 1987; Sec. 3 amended by and Sec. 3A added by Acts
1987, 70th Leg., ch. 1073, Sec. 34, eff. Sept. 1, 1987; Secs. 4 to
6, 12 amended by Acts 1987, 70th Leg., ch. 1073, Sec. 34, eff. Sept.
1, 1987; Sec. 2(c) amended by Acts 1989, 71st Leg., ch. 1082, Sec.
6.11, eff. Sept. 1, 1989; Sec. 3 amended by Acts 1989, 71st Leg.,
ch. 1082, Sec. 5.01, eff. Sept. 1, 1989; Sec. 3A amended by Acts
1989, 71st Leg., ch. 1082, Sec. 4.02, eff. Sept. 1, 1989; Sec. 4A
added by Acts 1989, 71st Leg., ch. 480, Sec. 1, eff. Sept. 1, 1989;
Sec. 5 amended by Acts 1989, 71st Leg., ch. 1082, Sec. 6.12, eff.
Sept. 1, 1989; Sec. 5A added by Acts 1989, 71st Leg., ch. 1082, Sec.
4.02, eff. Sept. 1, 1989; Sec. 9 amended by Acts 1989, 71st Leg.,
ch. 1082, Sec. 5.01, eff. Sept. 1, 1989; Sec. 17 added by Acts 1989,
71st Leg., ch. 1082, Sec. 5.01, eff. Sept. 1, 1989; Sec. 1 amended
by Acts 1991, 72nd Leg., ch. 242, Sec. 11.11, eff. Sept. 1, 1991;
Sec. 4A(e) added by Acts 1991, 72nd Leg., 2nd C.S., ch. 12, Sec.
1.22, eff. Jan. 1, 1992; Sec. 3 amended by Acts 1993, 73rd Leg., ch.
685, Sec. 8.08, eff. Sept. 1, 1993; Sec. 3A(a), (e) amended by Acts
1993, 73rd Leg., ch. 685, Sec. 8.09, eff. Sept. 1, 1993; Sec. 7
amended by Acts 1993, 73rd Leg., ch. 685, Sec. 4.07, eff. Sept. 1,
1993; Sec. 13 added by Acts 1993, 73rd Leg., ch. 685, Sec. 8.10,
eff. Sept. 1, 1993; Sec. 17(a) amended by Acts 1993, 73rd Leg., ch.
685, Sec. 8.11, eff. Sept. 1, 1993; Sec. 12(a) amended by Acts
1995, 74th Leg., ch. 76, Sec. 14.47, eff. Sept. 1, 1995.
Article: 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 21.32A 21.39
Last modified: August 11, 2007
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