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Texas Insurance Code - Not Codified - Section 21A.011. Actions By And Against Receiver

Legal Research Home > Texas Lawyer > Insurance Code - Not Codified > Texas Insurance Code - Not Codified - Section 21A.011. Actions By And Against Receiver

Sec. 21A.011. ACTIONS BY AND AGAINST RECEIVER.  (a) An
allegation by the receiver of improper or fraudulent conduct
against any person may not be the basis of a defense to the
enforcement of a contractual obligation owed to the insurer by a
third party, unless the conduct is found to have been materially and
substantially related to the contractual obligation for which
enforcement is sought.
	(b)  A prior wrongful or negligent action of any present or
former officer, manager, director, trustee, owner, employee, or
agent of the insurer may not be asserted as a defense to a claim by
the receiver under a theory of estoppel, comparative fault,
intervening cause, proximate cause, reliance, mitigation of
damages, or otherwise, except that the affirmative defense of fraud
in the inducement may be asserted against the receiver in a claim
based on a contract, and a principal under a surety bond or a surety
undertaking is entitled to credit against any reimbursement
obligation to the receiver for the value of any property pledged to
secure the reimbursement obligation to the extent that the receiver
has possession or control of the property or that the insurer or its
agents commingled or otherwise misappropriated the property.
Evidence of fraud in the inducement is admissible only if the
evidence is contained in the records of the insurer.
	(c)  An action or inaction by the department or the insurance
regulatory authorities in any state may not be asserted as a defense
to a claim by the receiver.
	(d)  Except as provided by Subsection (e), a judgment or
order entered against an insured or the insurer in contravention of
any stay or injunction under this chapter, or at any time by default
or collusion, may not be considered as evidence of liability or of
the amount of damages in adjudicating claims filed in the estate
arising out of the subject matter of the judgment or order.
	(e)  Subsection (d) does not apply to guaranty associations'
claims for amounts paid on settlements and judgments in pursuit of
their statutory obligations.
	(f)  The receiver may not be deemed a governmental entity for
the purposes of any state law awarding fees to a litigant who
prevails against a governmental entity.

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

Last modified: August 11, 2007