Texas Insurance Code - Not Codified - Article 21.49-3b. Joint Underwriting Associations
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Art. 21.49-3b. JOINT UNDERWRITING ASSOCIATIONS.
Article repealed effective April 1, 2007
Short title
Sec. 1. This article may be cited as the Joint Underwriting
Association Licensing Act.
Definitions
Sec. 2. In this article:
(1) "Board" means the State Board of Insurance.
(2) "Commissioner" means the commissioner of insurance.
(3) "Insurer" means any insurance company, corporation,
inter-insurance exchange, mutual or reciprocal association, county
mutual insurance company, Lloyd's, or other insurance carrier
licensed to do business in this state. The term does not include a
carrier that writes only life, health, or accident insurance,
variable life insurance, or variable annuity contracts.
(4) "Joint underwriting association" means a voluntary
unincorporated association of admitted insurers authorized to do
business in this state that has been authorized by its member
insurers to act on behalf of those insurers in joint underwriting or
in the issuance of syndicate policies of insurance on a several but
not joint basis.
Acting without license prohibited
Sec. 3. An association of insurers may not act as a joint
underwriting association in this state on behalf of its member
insurers unless it holds a license issued under this article.
Application
Sec. 4. (a) Each association of insurers that applies for a
license under this article must file a written application on forms
prescribed by the commissioner.
(b) The application shall include:
(1) the names and addresses of the officers and directors of
the association;
(2) a copy of the association's constitution, articles of
agreement or association, bylaws, rules, powers of attorney, or
other agreements governing its activities;
(3) a list of the insurers licensed to do business in this
state who are members of the association and the addresses of their
principal administrative offices;
(4) the name and address of a resident of this state who
shall act as the association's agent for receipt of notices or
orders of the board and for service of process; and
(5) other information as required by the commissioner.
(c) The application shall be sworn to by at least one
officer of the association.
Issuance of license
Sec. 5. The commissioner shall issue a license to a voluntary
unincorporated association of insurers that complies with the
requirements of this article.
License by Reciprocity
Sec. 6. The board may waive any of the license requirements
for an applicant with a valid license from another state that has
license requirements substantially equivalent to those of this
state.
Authority to act
Sec. 7. (a) A joint underwriting association may act only on
behalf of members of the association who are admitted and licensed
to do business in this state.
(b) A joint underwriting association may engage in only
those activities it is authorized to perform by the members of the
association.
Requirements for licensed associations
Sec. 8. (a) Each association licensed under this article
shall file a list of the names and addresses of its officers and
directors and a list of its members with the application for a
renewal license filed under Section 11 of this article. The list
shall be sworn to by at least one officer of the association.
(b) Each association licensed under this article shall
notify the commissioner of any change in any of the information
required to be filed under Section 4 of this article not later than
the 30th day after the date on which the change takes effect.
Maintenance of information
Sec. 9. (a) Each joint underwriting association shall
maintain at its principal administrative office adequate records of
all transactions.
(b) The association shall maintain the records in
accordance with prudent recognized industry standards of
recordkeeping.
(c) The commissioner or the commissioner's designated
representative is entitled to access to those records for
examination, audit, and inspection.
(d) Trade secrets, including the identity and addresses of
policyholders and certificate holders, are confidential, except
that the commissioner may use information otherwise confidential in
proceedings instituted against an association.
Independent audits and examination
Sec. 10. (a) The books of accounts of joint underwriting
associations shall be audited annually as provided by Article 1.15A
of this code by an independent certified public accountant, and a
copy of that audit shall be filed with the commissioner.
(b) The board may require an examination of each joint
underwriting association as often as it considers necessary. The
reasonable costs of the examination shall be paid by the
association on presentation to the association of a detailed
account of those costs. The officers and employees of the
association may be examined at any time, under oath, and shall
exhibit on request all books, records, accounts, documents, or
agreements governing the operations of the association. Instead of
the examination, the board may accept the report of an examination
made by the insurance supervisory official of another state under
the laws of that state.
Term of license; renewal
Sec. 11. Each license issued under this article expires three
years from the date of issuance unless renewed. To renew the
license, an application for renewal must be filed with the
commissioner by the renewal applicant and the renewal fee paid on or
before the expiration of the license. A renewed license continues
in effect for three years after the date of renewal unless otherwise
revoked or suspended.
Fees
Sec. 12. An applicant for an original or renewal joint
underwriting association license shall pay a nonrefundable fee when
the application is filed in an amount set by the board, but not to
exceed $200.
Denial, refusal, suspension, or revocation of license
Sec. 13. A license may be denied, suspended, or revoked or the
renewal of the license refused if, after notice and hearing as
provided by Section 14 of this article, the commissioner finds that
the license applicant or license holder, or an officer or director
of a license applicant or license holder, has:
(1) wilfully violated or participated in the violation of
this article or any other insurance law of this state;
(2) intentionally made a material misstatement in the
original or renewal license application;
(3) obtained or attempted to obtain the license by fraud or
misrepresentation;
(4) misappropriated or converted to a personal or other
inappropriate use or illegally withheld money required to be held
in a fiduciary capacity;
(5) been convicted of a felony, or of any misdemeanor of
which criminal fraud is an essential element; or
(6) been found by the commissioner to be incompetent or
untrustworthy.
Notice; hearings
Sec. 14. (a) Before a license may be denied, suspended, or
revoked or the renewal of the license refused, the commissioner
shall give notice by certified mail to the applicant or license
holder and shall set a date on which the applicant or license holder
may appear to be heard and to produce evidence. The hearing date
must be not less than 20 days or more than 30 days after the date on
which the notice is mailed. The notice must contain specific
reasons for the hearing and a list of the matters to be considered
at the hearing. At the hearing, the commissioner or any regular
employee of the board designated to conduct the hearing may
administer oaths, require the appearance of witnesses, examine any
person under oath, and require the production of books, records, or
papers relevant to the inquiry on the initiative of the
commissioner or on the request of the applicant or license holder.
(b) On the termination of the hearing the findings shall be
written and, on approval by the commissioner, shall be filed with
the board. The commissioner shall issue an order showing the
findings, and shall send the order by certified mail to the
applicant or license holder. The applicant or license holder may
appeal the order of the commissioner to the board.
(c) If the commissioner refuses an application for a license
as provided by this article, or suspends, revokes, or refuses to
renew a license at a hearing as provided by this article, the
applicant or license holder may appeal from that action as provided
by Article 1.04 of this code.
(d) An applicant or license holder whose license has been
denied, refused, or revoked under this article may not file another
license application before the first anniversary of the effective
date of the denial, refusal, or revocation or, if judicial review of
the denial, refusal, or revocation is sought, before the first
anniversary of the date of the final court order or decree affirming
that action. If an application is filed after that first
anniversary, the commissioner may refuse the application unless the
applicant shows good cause why the denial, refusal, or revocation
of the original license should not be a bar to the issuance of a new
license.
Exemption
Sec. 15. This article does not apply to the transaction of
life, health, or accident insurance business.
Disposition of fees
Sec. 16. Fees collected under this article shall be deposited
in the state treasury to the credit of the State Board of Insurance
operating fund. Funds may not be appropriated from the general
revenue fund to administer this article.
Violations; enforcement
Sec. 17. (a) An association that violates this article or any
rule or order adopted under this article is subject to sanctions
under Section 7, Article 1.10 of this code.
(b) The attorney general, a district or county attorney, the
commissioner, or the board may institute an injunction proceeding
or any other proceeding necessary to enforce this article.
Effective date
Sec. 18. A joint underwriting association is not required to
hold a license issued under Article 21.49-3b, Insurance Code,
before January 1, 1992.
Added by Acts 1991, 72nd Leg., ch. 242, Sec. 11.105, eff. Sept. 1,
1991. Sec. 17(a) amended by Acts 1993, 73rd Leg., ch. 685, Sec.
5.07, eff. Sept. 1, 1993.
Article: 21.41 21.42 21.47 21.49 21.49-2V 21.49-3 21.49-3a 21.49-3b 21.49-3c 21.49-3d 21.49-4 21.49-4a 21.49-5 21.49-6 21.49-7
Last modified: August 11, 2007
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