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Texas Insurance Code - Not Codified - Section 21A.212. Recovery Of Premiums Owed

Legal Research Home > Texas Lawyer > Insurance Code - Not Codified > Texas Insurance Code - Not Codified - Section 21A.212. Recovery Of Premiums Owed

Sec. 21A.212. RECOVERY OF PREMIUMS OWED.  (a) An insured
shall pay, either directly to the receiver or to any agent that has
paid or is obligated to pay the receiver on behalf of the insured,
any unpaid earned premium or retrospectively rated premium due the
insurer based on the termination of coverage under Section 21A.152.
Premium on surety business is deemed earned at inception if a policy
term cannot be determined.  All other premium is deemed earned and
is prorated equally over the determined policy term, regardless of
any provision in the bond, guaranty, contract or other agreement.
	(b)  Any person, other than the insured, shall turn over to
the receiver any unpaid premium due and owing as shown on the
records of the insurer, including any amount representing
commissions, for the full policy term due the insurer at the time of
the entry of the receivership order, whether earned or unearned,
based on the termination of coverage under Section 21A.152.  The
unpaid premium due the receiver from any person other than the
insured excludes any premium not collected from the insured and not
earned based on the termination of coverage under Section 21A.152.
	(c)  Any person, other than the insured, responsible for the
remittance of a premium, shall turn over to the receiver any
unearned commission of the person based on the termination of
coverage under Section 21A.152.  Credits, setoffs, or both may not
be allowed to an agent, broker, premium finance company, or any
other person for any amounts advanced to the insurer by the person
on behalf of, but in the absence of a payment by, the insured, or for
any other amount paid by the person to any other person after the
entry of the order of receivership.
	(d)  Persons that collect premium or finance premium under a
premium finance contract that is due the insurer in receivership
are deemed to hold that premium in trust as fiduciaries for the
benefit of the insurer and to have availed themselves of the laws of
this state, regardless of any provision to the contrary in any
agency contract or other agreement.
	(e)  Any premium finance company is obligated to pay any
amounts due the insurer from premium finance contracts, whether the
premium is earned or unearned.  The receiver has the right to
collect any unpaid financed premium directly from the premium
finance company or directly from the insured that is a party to the
premium finance contract.
	(f)  Upon satisfactory evidence of a violation of this
section by a person other than an insured, the commissioner may
pursue one or more of the following courses of action:
	(1)  suspend, revoke, or refuse to renew the licenses of the
offending party or parties;  and
	(2)  impose:
	(A)  an administrative penalty under Chapter 84 of not more
than $1,000 for each act in violation of this section by the party
or parties;  and
	(B)  any other sanction or penalty authorized by Chapter 82.

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

Last modified: August 11, 2007