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Texas Insurance Code - Not Codified - Section 21A.008. Injunctions And Orders

Legal Research Home > Texas Lawyer > Insurance Code - Not Codified > Texas Insurance Code - Not Codified - Section 21A.008. Injunctions And Orders

Sec. 21A.008. INJUNCTIONS AND ORDERS.  (a) The receivership
court may issue any order, process, or judgment, including stays,
injunctions, or other orders, as necessary or appropriate to carry
out the provisions of this chapter or an approved rehabilitation
plan.
	(b)  This chapter may not be construed to limit the ability
of the receiver to apply to a court other than the receivership
court in any jurisdiction to carry out any provision of this chapter
or for the purpose of pursuing claims against any person.
	(c)  Except as provided by Subsection (e) or as otherwise
provided by this chapter and subject to Subsection (g), the
commencement of a delinquency proceeding under this chapter
operates as a stay, applicable to all persons, of:
	(1)  the commencement or continuation, including the
issuance or employment of process, of a judicial, administrative,
or other action or proceeding against the insurer, including an
arbitration proceeding, that was or could have been commenced
before the commencement of the delinquency proceeding under this
chapter, or to recover a claim against the insurer that arose before
the commencement of the delinquency proceeding under this chapter;
	(2)  the enforcement against the insurer or against property
of the insurer of a judgment obtained before the commencement of the
delinquency proceeding under this chapter;
	(3)  any act to obtain or retain possession of property of
the insurer or of property from the insurer or to exercise control
over property or records of the insurer;
	(4)  any act to create, perfect, or enforce any lien against
property of the insurer;
	(5)  any act to collect, assess, or recover a claim against
the insurer that arose before the commencement of a delinquency
proceeding under this chapter;
	(6)  the commencement or continuation of an action or
proceeding against a reinsurer of the insurer, by the holder of a
claim against the insurer, seeking reinsurance recoveries that are
contractually due to the insurer;  and
	(7)  except as provided by Subsection (e)(1), the
commencement or continuation of an action or proceeding by a
governmental unit to terminate or revoke an insurance license.
	(d)  Except as provided in Subsection (e) or as otherwise
provided by this chapter, the commencement of a delinquency
proceeding under this chapter operates as a stay, applicable to all
persons, of any judicial, administrative, or other action or
proceeding, including the enforcement of any judgment, against any
insured that was or could have been commenced before the
commencement of the delinquency proceeding under this chapter, or
to recover a claim against the insured that arose before or after
the commencement of the delinquency proceeding under this chapter
and for which the insurer is or may be liable under a policy of
insurance or is obligated to defend a party.  The stay provided by
this subsection terminates 90 days after the date of appointment of
the receiver, unless, for good cause shown, the stay is extended by
order of the receivership court after notice to any affected
parties and any hearing the receivership court determines is
appropriate.
	(e)  Notwithstanding Subsection (c), the commencement of a
delinquency proceeding under this chapter does not operate as a
stay of:
	(1)  regulatory actions not described by Subsection (c)(7)
that are taken by the commissioners of nondomiciliary states,
including the suspension of licenses;
	(2)  criminal proceedings;
	(3)  any act to perfect or to maintain or continue the
perfection of an interest in property to the extent that the act is
accomplished within any relation back period under applicable law;
	(4)  set off as permitted by Section 21A.209;
	(5)  pursuit and enforcement of nonmonetary governmental
claims, judgments, and proceedings;
	(6)  presentment of a negotiable instrument and the giving of
notice and protesting dishonor of the instrument;
	(7)  enforcement of rights against single beneficiary trusts
established pursuant to and in compliance with laws relating to
credit for reinsurance;
	(8)  termination, liquidation, and netting of obligations
under qualified financial contracts as provided for in Section
21A.261;
	(9)  discharge by a guaranty association of statutory
responsibilities under any law governing guaranty associations;  or
	(10)  any of the following actions:
	(A)  an audit by a governmental unit to determine tax
liability;
	(B)  the issuance to the insurer by a governmental unit of a
notice of tax deficiency;
	(C)  a demand for tax returns;  or
	(D)  the making of an assessment for any tax and issuance of a
notice and demand for payment of the assessment.
	(f)  Except as provided by Subsection (h):
	(1)  the stay of an act against property of the insurer under
Subsection (c) continues until the property is no longer property
of the receivership estate;  and
	(2)  the stay of any other act under Subsection (c) continues
until the earlier of the time the delinquency proceeding is closed
or dismissed.
	(g)  Notwithstanding the provisions of Subsection (c),
claims against the insurer that arose before the commencement of
the delinquency proceeding under this chapter may be asserted as a
counterclaim in any judicial, administrative, or other action or
proceeding initiated by or on behalf of the receiver against the
holder of the claims.
	(h)  On request of a party in interest and after notice and
any hearing the receivership court determines is appropriate, the
receivership court may grant relief from the stay of Subsection (c)
or (d), such as by terminating, annulling, modifying, or
conditioning the stay:
	(1)  for cause as described by Subsection (i);  or
	(2)  with respect to a stay of an act against property under
Subsection (c) if:
	(A)  the insurer does not have equity in the property;  and
	(B)  the property is not necessary to an effective
rehabilitation plan.
	(i)  For purposes of Subsection (h), "cause" includes the
receiver canceling a policy, surety bond, or surety undertaking if
the creditor is entitled, by contract or by law, to require the
insured or the principal to have a policy, surety bond, or surety
undertaking and the insured or the principal fails to obtain a
replacement policy, surety bond, or surety undertaking not later
than the later of:
	(1)  the 30th day after the date the receiver cancels the
policy, surety bond, or surety undertaking;  or
	(2)  the time permitted by contract or law.
	(j)  In any hearing under Subsection (h), the party seeking
relief from the stay has the burden of proof on each issue, which
must be established by clear and convincing evidence.
	(k)  The estate of an insurer that is injured by any wilful
violation of a stay provided by this section is entitled to actual
damages, including costs and attorney's fees.  In appropriate
circumstances, the receivership court may impose additional
sanctions.
	(l)  Any guaranty association or its designated
representative may intervene as a party as a matter of right or
otherwise appear and participate in any court proceeding concerning
a delinquency proceeding if the association is or may become liable
to act as a result of the rehabilitation or liquidation of the
insurer.  Exercise by any guaranty association or its designated
representative of the right to intervene conferred under this
subsection does not constitute grounds to establish general
personal jurisdiction by the courts of this state.  The intervening
guaranty association or its designated representative are subject
to the receivership court's jurisdiction for the limited purpose
for which it intervenes.
	(m)  Notwithstanding any other provision of law, bond may not
be required of the commissioner or receiver in relation to any stay
or injunction under this section.

Added by Acts 2005, 79th Leg., ch. 995, Sec. 1, eff. Sept. 1, 2005.

Last modified: August 11, 2007