Texas Insurance Code - Not Codified - Section 21A.004. Definitions
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Sec. 21A.004. DEFINITIONS. (a) For the purposes of this
chapter:
(1) "Affiliate," "control," and "subsidiary" have the
meanings assigned by Chapter 823.
(2) "Alien insurer" means an insurer incorporated or
organized under the laws of a jurisdiction that is not a state.
(3) "Creditor" or "claimant" means a person having any claim
against an insurer, whether the claim is matured or not, liquidated
or unliquidated, secured or unsecured, absolute, fixed, or
contingent.
(4) "Delinquency proceeding" means any proceeding
instituted against an insurer for the purpose of liquidating,
rehabilitating, or conserving the insurer, and any proceeding under
Section 21A.051.
(5) "Doing business," including "doing insurance business"
and the "business of insurance," includes any of the following
acts, whether effected by mail, electronic means, or otherwise:
(A) the issuance or delivery of contracts of insurance,
either to persons resident or covering a risk located in this state;
(B) the solicitation of applications for contracts
described by Paragraph (A) or other negotiations preliminary to the
execution of the contracts;
(C) the collection of premiums, membership fees,
assessments, or other consideration for contracts described by
Paragraph (A);
(D) the transaction of matters subsequent to the execution
of contracts described by Paragraph (A) and arising out of those
contracts; or
(E) operating as an insurer under a certificate of authority
issued by the department.
(6) "Domiciliary state" means the state in which an insurer
is incorporated or organized or, in the case of an alien insurer,
its state of entry.
(7) "Foreign insurer" means an insurer domiciled in another
state.
(8) "Formal delinquency proceeding" means any
rehabilitation or liquidation proceeding.
(9) "General assets" includes:
(A) all property of the estate that is not:
(i) subject to a secured claim or a valid and existing
express trust for the security or benefit of specified persons or
classes of persons; or
(ii) required by the insurance laws of this state or any
other state to be held for the benefit of specified persons or
classes of persons; and
(B) all property of the estate and the proceeds of that
property in excess of the amount necessary to discharge any secured
claims described by Paragraph (A).
(10) "Good faith" means honesty in fact and intention, and
for the purposes of Subchapter F also requires the absence of:
(A) information that would lead a reasonable person in the
same position to know that the insurer is financially impaired or
insolvent; and
(B) knowledge regarding the imminence or pendency of any
delinquency proceeding against the insurer.
(11) "Guaranty association" means any mechanism mandated by
Article 21.28-C or 21.28-D, Chapter 2602, or other laws of this
state or a similar mechanism in another state that is created for
the payment of claims or continuation of policy obligations of
financially impaired or insolvent insurers.
(12) "Impaired" means that an insurer does not have admitted
assets at least equal to all its liabilities together with the
minimum surplus required to be maintained under this code.
(13) "Insolvency" or "insolvent" means an insurer:
(A) is unable to pay its obligations when they are due;
(B) does not have admitted assets at least equal to all its
liabilities; or
(C) has a total adjusted capital that is less than that
required under:
(i) Chapter 822, 841, or 843, as applicable; or
(ii) applicable rules or guidelines adopted by the
commissioner under Section 822.210, 841.205, or 843.404.
(14) "Insurer" means any person that has done, purports to
do, is doing, or is authorized to do the business of insurance in
this state, and is or has been subject to the authority of or to
liquidation, rehabilitation, reorganization, supervision, or
conservation by any insurance commissioner. For purposes of this
chapter, any other persons included under Section 21A.003 are
insurers.
(15) "Netting agreement" means a contract or agreement,
including terms and conditions incorporated by reference in a
contract or agreement, and a master agreement (which master
agreement, together with all schedules, confirmations,
definitions, and addenda to the agreement and transactions under
the agreement, schedules, confirmations, definitions, or addenda,
are to be treated as one netting agreement) that documents one or
more transactions between the parties to the contract or agreement
for or involving one or more qualified financial contracts and
that, among the parties to the netting agreement, provides for the
netting or liquidation of qualified financial contracts, present or
future payment obligations, or payment entitlements under the
contract or agreement, including liquidation or close-out values
relating to the obligations or entitlements.
(16) "New value" means money, money's worth in goods,
services, or new credit, or release by a transferee of property
previously transferred to the transferee in a transaction that is
neither void nor voidable by the insurer or the receiver under any
applicable law, including proceeds of the property. The term does
not include an obligation substituted for an existing obligation.
(17) "Party in interest" means the commissioner, a 10
percent or greater equity security holder in the insolvent insurer,
any affected guaranty association, any nondomiciliary commissioner
for a jurisdiction in which the insurer has outstanding claims
liabilities, and any of the following parties that have filed a
request for inclusion on the service list under Section 21A.007:
(A) an insurer that ceded to or assumed business from the
insolvent insurer; and
(B) an equity shareholder, policyholder, third-party
claimant, creditor, and any other person, including any indenture
trustee, with a financial or regulatory interest in the
receivership proceeding.
(18) "Person" means individual, aggregation of individuals,
partnership, corporation, or other entity.
(19) "Policy" means a written contract of insurance,
written agreement for or effecting insurance, or the certificate
for or effecting insurance, by whatever name. The term includes all
clauses, riders, endorsements, and papers that are a part of the
contract, agreement, or certificate. The term does not include a
contract of reinsurance.
(20) "Property of the insurer" or "property of the estate"
includes:
(A) all right, title, and interest of the insurer in
property, whether legal or equitable, tangible or intangible,
choate or inchoate, and includes choses in action, contract rights,
and any other interest recognized under the laws of this state;
(B) entitlements that:
(i) existed prior to the entry of an order of rehabilitation
or liquidation; and
(ii) may arise by operation of the provisions of this
chapter or other provisions of law allowing the receiver to avoid
prior transfers or assert other rights; and
(C) all records and data that are otherwise the property of
the insurer, in whatever form maintained, within the possession,
custody, or control of a managing general agent, third-party
administrator, management company, data processing company,
accountant, attorney, affiliate, or other person, including:
(i) claims and claim files;
(ii) policyholder lists;
(iii) application files;
(iv) litigation files;
(v) premium records;
(vi) rate books and underwriting manuals;
(vii) personnel records; and
(viii) financial records or similar records.
(21) "Qualified financial contract" means a commodity
contract, forward contract, repurchase agreement, securities
contract, swap agreement, and any similar agreement that the
commissioner determines by rule to be a qualified financial
contract for the purposes of this chapter.
(22) "Receiver" means liquidator, rehabilitator, or
ancillary conservator, as the context requires.
(23) "Receivership" means any liquidation, rehabilitation,
or ancillary conservation, as the context requires.
(24) "Receivership court" refers to the court in which a
delinquency proceeding is pending, unless the context requires
otherwise.
(25) "Reinsurance" means transactions or contracts by which
an assuming insurer agrees to indemnify a ceding insurer against
all, or a part, of any loss that the ceding insurer might sustain
under the policy or policies that it has issued or will issue.
(26) "Secured claim" means any claim secured by an asset
that is not a general asset. The term includes the right to set off
as provided in Section 21A.209. The term does not include a claim
arising from a constructive or resulting trust, a special deposit
claim, or a claim based on mere possession.
(27) "Special deposit" means a deposit established pursuant
to statute for the security or benefit of a limited class or limited
classes of persons.
(28) "Special deposit claim" means any claim secured by a
special deposit. The term does not include any claim secured by the
general assets of the insurer.
(29) "State" means any state, district, or territory of the
United States.
(30) "Transfer" includes the sale and every other and
different mode, direct or indirect, of disposing of or of parting
with property or with an interest in property, including a setoff,
or with the possession of property or of fixing a lien upon property
or upon an interest in property, absolutely or conditionally,
voluntarily or involuntarily, by or without judicial proceedings.
The retention of a security title in property delivered to an
insurer is deemed a transfer suffered by the insurer.
(31) "Unauthorized insurer" means an insurer doing the
business of insurance in this state that has not received from this
state a certificate of authority or some other type of authority
that allows for doing the business of insurance in this state.
(b) For purposes of this chapter, "admitted assets" and
"liabilities" have the meanings assigned by the department in rules
relating to risk-based capital.
(c) For purposes of Subsection (a)(21):
(1) "Commodity contract" means:
(A) a contract for the purchase or sale of a commodity for
future delivery on or subject to the rules of a board of trade
designated as a contract market by the Commodity Futures Trading
Commission under the Commodity Exchange Act (7 U.S.C. Section 1 et
seq.) or a board of trade outside the United States;
(B) an agreement that is subject to regulation under Section
19, Commodity Exchange Act (7 U.S.C. Section 23), and that is
commonly known to the commodities trade as a margin account, margin
contract, leverage account, or leverage contract; or
(C) an agreement or transaction that is subject to
regulation under Section 4c(b), Commodity Exchange Act (7 U.S.C.
Section 6c(b)), and that is commonly known to the commodities trade
as a commodity option.
(2) "Forward contract" means a contract, other than a
commodity contract, with a maturity date more than two days after
the date the contract is entered into, that is for the purchase,
sale, or transfer of a commodity, as defined by Section 1a,
Commodity Exchange Act (7 U.S.C. Section 1a), or any similar good,
article, service, right, or interest that is presently or in the
future becomes the subject of dealing in the forward contract trade
or product or byproduct of the contract. The term includes a
repurchase transaction, reverse repurchase transaction,
consignment, lease, swap, hedge transaction, deposit, loan,
option, allocated transaction, unallocated transaction, or a
combination of these or option on any of them.
(3) "Repurchase agreement" includes a reverse repurchase
agreement and means an agreement, including related terms, that
provides for the transfer of certificates of deposit, eligible
bankers' acceptances, or securities that are direct obligations of
or that are fully guaranteed as to principal and interest by the
United States against the transfer of funds by the transferee of the
certificates of deposit, eligible bankers' acceptances, or
securities with a simultaneous agreement by the transferee to
transfer to the transferor certificates of deposit, eligible
bankers' acceptances, or securities as described in this
subdivision, on demand or at a date certain not later than one year
after the transfers, against the transfer of funds. For the
purposes of this subdivision, the items that may be subject to a
repurchase agreement:
(A) include mortgage-related securities and a mortgage loan
and an interest in a mortgage loan; and
(B) do not include any participation in a commercial
mortgage loan unless the commissioner determines by rule to include
the participation within the meaning of the term.
(4) "Securities contract" means a contract for the
purchase, sale, or loan of a security, including an option for the
repurchase or sale of a security, certificate of deposit, or group
or index of securities or an interest in the group or index or based
on the value of the group or index, an option entered into on a
national securities exchange relating to foreign currencies, or the
guarantee of a settlement of cash or securities by or to a
securities clearing agency. For the purposes of this subdivision,
the term "security" includes a mortgage loan, a mortgage-related
security, and an interest in any mortgage loan or mortgage-related
security.
(5) "Swap agreement" means an agreement, including the
terms and conditions incorporated by reference in an agreement,
that is a rate swap agreement, basis swap, commodity swap, forward
rate agreement, interest rate future, interest rate option, forward
foreign exchange agreement, spot foreign exchange agreement, rate
cap agreement, rate floor agreement, rate collar agreement,
currency swap agreement, cross-currency rate swap agreement,
currency future, or currency option or any other similar agreement.
The term includes any combination agreements described by this
subdivision and an option to enter into any agreement described by
this subdivision.
(d) The definitions under this section apply only to this
chapter unless the context of another law requires otherwise.
Added by Acts 2005, 79th Leg., ch. 995, Sec. 1, eff. Sept. 1, 2005.
Section: 29.11 29.12 29.13 29.14 21A.001 21A.002 21A.003 21A.004 21A.005 21A.006 21A.007 21A.008 21A.009 21A.010 21A.011
Last modified: August 11, 2007
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