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Texas Insurance Code - Not Codified - Section 21A.152. Continuance Of Coverage

Legal Research Home > Texas Lawyer > Insurance Code - Not Codified > Texas Insurance Code - Not Codified - Section 21A.152. Continuance Of Coverage

Sec. 21A.152. CONTINUANCE OF COVERAGE.  (a) Notwithstanding
any policy or contract language or any other statute, all
reinsurance contracts by which the insurer has assumed the
insurance obligations of another insurer are canceled upon entry of
an order of liquidation.
	(b)  Notwithstanding any policy or contract language or any
other statute, all policies, insurance contracts other than
reinsurance by which the insurer has ceded insurance obligations to
another person, and surety bonds or surety undertakings, other than
life or health insurance or annuities, in effect at the time of
issuance of an order of liquidation, unless further extended by the
receiver with the approval of the receivership court, continue in
force only until the earlier of:
	(1)  the 30th day after the date of entry of the liquidation
order;
	(2)  the date of expiration of the policy coverage;
	(3)  the date the insured has replaced the insurance coverage
with equivalent insurance with another insurer or otherwise
terminated the policy;
	(4)  the date the liquidator has effected a transfer of the
policy obligation pursuant to Section 21A.154(h);  or
	(5)  the date proposed by the liquidator and approved by the
receivership court to cancel coverage.
	(c)  An order of liquidation under Section 21A.151 must
terminate coverages at the time specified by Subsections (a) and
(b) for purposes of any other statute.
	(d)  Policies of life or health insurance or annuities
covered by a guaranty association and any portion of policies of
life or health insurance or annuities covered by a guaranty
association continue in force for the period and under the terms
provided for by any applicable guaranty association law.  Policies
of life or health insurance or annuities not covered by a guaranty
association and any portion of policies of life or health insurance
or annuities not covered by a guaranty association terminate under
Subsection (b), except to the extent the liquidator proposes and
the receivership court approves the use of property of the estate,
consistent with Section 21A.301, for the purpose of continuing the
contracts or coverage by transferring them to an assuming
reinsurer.
	(e)  The cancellation of any bond or surety undertaking does
not release any cosurety or guarantor.
	(f)  The obligations of the insolvent insurer's reinsurers
are not released or discharged by a cancellation under this
section.

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

Last modified: August 11, 2007