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Texas Insurance Code - Not Codified - Section 21A.051. Receivership Court's Seizure Order

Legal Research Home > Texas Lawyer > Insurance Code - Not Codified > Texas Insurance Code - Not Codified - Section 21A.051. Receivership Court's Seizure Order

Sec. 21A.051. RECEIVERSHIP COURT'S SEIZURE ORDER.  (a) The
commissioner may file in a district court of Travis County a
petition with respect to an insurer domiciled in this state, an
unauthorized insurer, or, pursuant to Section 21A.401, a foreign
insurer:
	(1)  alleging that grounds exist that would justify a court
order for a formal delinquency proceeding against the insurer under
this chapter;
	(2)  alleging that the interests of policyholders,
creditors, or the public will be endangered by delay;  and
	(3)  setting forth the contents of a seizure order deemed to
be necessary by the commissioner.
	(b)  Upon a filing under Subsection (a), the receivership
court may issue, ex parte and without notice or hearing, the
requested seizure order directing the commissioner to take
possession and control of all or a part of the property, books,
accounts, documents, and other records of an insurer, and of the
premises occupied by it for transaction of its business, and until
further order of the receivership court, enjoining the insurer and
its officers, managers, agents, and employees from disposition of
its property and from the transaction of its business except with
the written consent of the commissioner.  Any person having
possession or control of and refusing to deliver any of the books,
records, or assets of a person against whom a seizure order has been
issued commits an offense.  An offense under this subsection is
punishable in the manner described by Section 21A.010(e).
	(c)  A petition that prays for injunctive relief must be
verified by the commissioner or the commissioner's designee, but
need not plead or prove irreparable harm or inadequate remedy at
law.  The commissioner shall provide only the notice as the
receivership court may require.
	(d)  The receivership court shall specify in the seizure
order the duration of the seizure order, which shall be a period the
receivership court deems necessary for the commissioner to
ascertain the condition of the insurer.  On motion of the
commissioner or the insurer, or the court's own motion, the
receivership court may, from time to time, hold hearings as it deems
desirable after notice as it deems appropriate, and may extend,
shorten, or modify the terms of the seizure order.  The receivership
court shall vacate the seizure order if the commissioner fails to
commence a formal delinquency proceeding under this chapter after
having had a reasonable opportunity to do so.  An order of the
receivership court pursuant to a formal proceeding under this
chapter vacates the seizure order.
	(e)  Entry of a seizure order under this section does not
constitute a breach or an anticipatory breach of any contract of the
insurer.
	(f)  An insurer subject to an ex parte seizure order under
this section may petition the receivership court at any time after
the issuance of a seizure order for a hearing and review of the
seizure order.  The receivership court shall hold the hearing and
conduct the review not later than the 15th day after the date of the
request.  A hearing under this subsection may be held privately in
chambers, and a hearing shall be held privately in chambers if the
insurer proceeded against so requests.
	(g)  If, at any time after the issuance of a seizure order, it
appears to the receivership court that any person whose interest is
or will be substantially affected by the seizure order did not
appear at the hearing and has not been served, the receivership
court may order that notice be given to the person.  An order that
notice be given does not stay the effect of any seizure order
previously issued by the receivership court.
	(h)  Whenever the commissioner makes any seizure as provided
by Subsection (b), on the demand of the commissioner, the sheriff of
any county and the police department of any municipality shall
furnish the commissioner with the deputies, patrolmen, or officers
as may be necessary to assist the commissioner in making and
enforcing the seizure order.
	(i)  In all proceedings and judicial reviews under this
section, all records of the insurer, department files, court
records and papers, and other documents, so far as they pertain to
or are a part of the record of the proceedings, are confidential,
and all papers filed with the clerk of the court shall be held by the
clerk in a confidential file as permitted by law, except to the
extent necessary to obtain compliance with any order entered in
connection with the proceedings, unless and until:
	(1)  the court, after hearing argument in chambers, orders
otherwise;
	(2)  the insurer requests that the matter be made public;  or
	(3)  the commissioner applies for an order under Section
21A.057.

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

Last modified: August 11, 2007