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Texas Insurance Code - Not Codified - Section 21A.210. Assessments

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Sec. 21A.210. ASSESSMENTS.  (a) As soon as practicable, but
not later than the fourth anniversary of the date of an order of
receivership of an insurer issuing assessable policies, the
receiver shall make a report to the receivership court setting
forth:
	(1)  the reasonable value of the assets of the insurer;
	(2)  the insurer's probable total liabilities;
	(3)  the probable aggregate amount of the assessment
necessary to pay all claims of creditors and expenses in full,
including expenses of administration and costs of collecting the
assessment;  and
	(4)  a recommendation as to whether an assessment should be
made and in what amount.
	(b)  Upon the basis of the report provided in Subsection (a),
including any supplements and amendments to the report, the
receivership court may approve, solely on application by the
receiver, one or more assessments against all members of the
insurer who are subject to assessment.  The order approving the
assessment shall provide instructions regarding notice of the
assessment, deadlines for payment, and other instructions to the
receiver regarding collection of the assessment.
	(c)  Subject to any applicable legal limits on ability to
assess, the aggregate assessment must be for the amount that the sum
of the probable liabilities, the expenses of administration, and
the estimated cost of collection of the assessment, exceeds the
value of existing assets, with due regard being given to
assessments that cannot be collected economically.
	(d)  After levy of assessment under Subsection (b), the
receiver shall petition the receivership court for an order
directing each member who has not paid the assessment pursuant to
the levy to show cause why a judgment for the assessment should not
be entered.
	(e)  At least 20 days before the return day of the order to
show cause, the receiver shall give notice of the order to show
cause to each member liable on the assessment.  Notice must be given
by first class mail mailed to the member's last known address as it
appears on the insurer's records, by publication, or by another
method of notification as directed by the receivership court.
Failure of the member or subscriber to receive the notice of the
assessment or of the order, within the time specified in the
assessment or order or at all, is not a defense in a proceeding to
collect the assessment.
	(f)  If a member does not appear and serve verified
objections upon the receiver on or before the return day of the
order to show cause under Subsection (d), the receivership court
shall make an order adjudging the member liable for the amount of
the assessment against the member under Subsection (d) together
with costs, and the receiver shall have a judgment against the
member for the amount of the assessment and costs in the order.
	(g)  If on or before the return day of the order to show
cause, the member appears and serves verified objections upon the
receiver, the receivership court may hear and determine the matter
or may appoint a referee to hear it and make an order as the facts
warrant.  In the event that the receiver determines that the
objections do not warrant relief from assessment, the member may
request the receivership court to review the matter and vacate the
order to show cause.
	(h)  The receiver may enforce any order or collect any
judgment under Subsection (f) by any lawful means.
	(i)  Any assessment of a subscriber or member of an insurer
made by the receiver pursuant to the order of receivership court
fixing the aggregate amount of the assessment against all members
or subscribers and approving the classification and formula made by
the receiver under this section is prima facie correct.
	(j)  Any claim filed by an assessee who fails to pay an
assessment, after the conclusion of any legal action by the
assessee objecting to the assessment, is deemed a late filed claim
under Section 21A.251.

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

Last modified: August 11, 2007