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Texas Insurance Code - Not Codified - Section 21A.103. Rehabilitation Plans

Legal Research Home > Texas Lawyer > Insurance Code - Not Codified > Texas Insurance Code - Not Codified - Section 21A.103. Rehabilitation Plans

Sec. 21A.103. REHABILITATION PLANS.  (a) The rehabilitator
shall prepare and file a plan to effect rehabilitation with the
receivership court not later than the first anniversary of the
entry of the rehabilitation order or another further time as the
receivership court may allow.  Upon application of the
rehabilitator for approval of the plan, and after the notice and
hearings the receivership court may prescribe, the receivership
court may approve or disapprove the proposed plan or may modify it
and approve it as modified.  Any plan approved under this section
must be, in the judgment of the receivership court, fair and
equitable to all parties concerned.  If the plan is approved, the
rehabilitator shall carry out the plan.  A plan for a life insurer
may propose imposition of a moratorium upon loan and cash surrender
rights under policies, for a period not to exceed one year from the
entry of the rehabilitation order approving the rehabilitation
plan, unless the receivership court, for good cause shown, extends
the moratorium.
	(b)  Once a plan has been filed, any party in interest may
object to the plan.
	(c)  A plan must:
	(1)  except as provided by Subsection (e), provide no less
favorable treatment of a claim or class of claims than would occur
in liquidation, unless the holder of a particular claim or interest
agrees to a less favorable treatment of that particular claim or
interest;
	(2)  provide adequate means for the plan's implementation;
	(3)  contain information concerning the financial condition
of the insurer and the operation and effect of the plan, as far as is
reasonably practicable in light of the nature and history of the
insurer, the condition of the insurer's books and records, and the
nature of the plan;  and
	(4)  provide for the disposition of the books, records,
documents, and other information relevant to the duties and
obligations covered by the plan.
	(d)  A plan may include any other provision not inconsistent
with the provisions of this chapter, including:
	(1)  payment of distributions;
	(2)  assumption or reinsurance of all or a portion of the
insurer's remaining liabilities by, and transfer of assets and
related books and records to, an authorized insurer or other
entity;
	(3)  to the extent appropriate, application of insurance
company regulatory market conduct standards to any entity
administering claims on behalf of the receiver or assuming direct
liabilities of the insurer;
	(4)  contracting with a state guaranty association or any
other qualified entity to perform the administration of claims;
	(5)  annual independent financial and performance audits of
any entity administering claims on behalf of the receiver that is
not otherwise subject to examination pursuant to state insurance
law;  and
	(6)  termination of the insurer's liabilities other than
those under policies of insurance as of a date certain.
	(e)  A plan may designate and separately treat one or more
separate subclasses of claims consisting only of claims within the
subclasses that are for or reduced to de minimis amounts.  For
purposes of this subsection, a "de minimis amount" means any amount
equal to or less than a maximum de minimis amount approved by the
receivership court as being reasonable and necessary for
administrative convenience.

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

Last modified: August 11, 2007