Texas Insurance Code - Not Codified - Article 7.19-1. Bond Of Surety Company
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Art. 7.19-1. BOND OF SURETY COMPANY.
Article repealed effective April 1, 2007
(a) Whenever any bond, undertaking, recognizance or other
obligation is, by law or the charter, ordinances, rules and
regulations of a municipality, board, body, organization, court,
judge or public officer, required or permitted to be made, given,
tendered or filed, and whenever the performance of any act, duty or
obligation, or the refraining from any act, is required or
permitted to be guaranteed, such bond, undertaking, obligation,
recognizance or guarantee may be executed by a surety company duly
authorized to do business in this state; and, except as provided by
Subsection (b), (c), or (d) of this section, such execution by such
company of such bond, undertaking, obligation, recognizance or
guarantee shall be in all respects a full and complete compliance
with every law, charter, rule or regulation that such bond,
undertaking, obligation, recognizance or guarantee shall be
executed by one surety or by one or more sureties, or that such
sureties shall be residents, or householders, or freeholders, or
either, or both, or possess any other qualification and all courts,
judges, heads of departments, boards, bodies, municipalities, and
public officers of every character shall accept and treat such
bond, undertaking, obligation, recognizance or guarantee when so
executed by such company, as conforming to, and fully and
completely complying with, every requirement of every such law,
charter, ordinance, rule or regulation.
Provided, however, that any municipality may require in any
specifications for work or supplies, on which sealed bids are
required, that any corporate surety tender shall designate, in a
manner satisfactory to it, an agent resident in the county of such
municipality to whom any requisite notices may be delivered and on
whom service of process may be had in matters arising out of such
suretyship.
(b) If any bond, undertaking, recognizance, or other
obligation described in Subsection (a) of this section is in an
amount in excess of 10 percent of the surety company's capital and
surplus, the municipality, board, body, organization, court,
judge, or public officer may require, as a condition to accepting
the bond, undertaking, obligation, recognizance, or other
obligation, written certification that the surety company has
reinsured the portion of the risk that exceeds 10 percent of the
surety company's capital and surplus with one or more reinsurers
who are duly authorized, accredited, or trusteed to do business in
this state. For the purposes of this subsection, the amount
reinsured by any reinsurer may not exceed 10 percent of the
reinsurer's capital and surplus. The State Board of Insurance
shall furnish, on request, the amount of the allowed capital and
surplus as of the date of the last annual statutory financial
statement for a surety company or reinsurer authorized and admitted
to do business in this state.
(c) A bond that is made, given, tendered, or filed under
Chapter 53, Property Code, or Chapter 2253, Government Code, may be
executed only by a surety company that is authorized and admitted to
write surety bonds in this state. If the amount of the bond exceeds
$100,000, the surety must also:
(1) hold a certificate of authority from the United States
secretary of the treasury to qualify as a surety on obligations
permitted or required under federal law; or
(2) have obtained reinsurance for any liability in excess of
$100,000 from a reinsurer that is authorized and admitted as a
reinsurer in this state and is the holder of a certificate of
authority from the United States secretary of the treasury to
qualify as a surety or reinsurer on obligations permitted or
required under federal law.
(d) In determining whether the surety on the bond or the
reinsurer holds a certificate of authority from the United States
secretary of the treasury, a party may conclusively rely on the list
of companies holding certificates of authority as acceptable
sureties on federal bonds and as acceptable reinsuring companies
published in the Federal Register by the United States Department
of the Treasury covering the date on which the bond was executed. A
purchaser, insurer of title, or lender acquiring or insuring an
interest or title to real property may also conclusively rely on and
is protected by a statement on a recorded bond or a sworn statement
by the surety that is recorded and refers to the specific recorded
bond and that states that, at the time the bond was executed, the
surety:
(1) was a holder of a certificate of authority from the
United States secretary of the treasury to qualify as a surety on
obligations permitted or required under federal law; or
(2) had reinsured any liability in excess of $100,000 by a
reinsurer holding a certificate of authority described by
Subdivision (1) of this subsection.
Acts 1959, 56th Leg., p. 146, ch. 87, Sec. 1.
Amended by Acts 1991, 72nd Leg., ch. 242, Sec. 11.28, eff. Sept. 1,
1991. Subsec. (b) amended by Acts 1991, 72nd Leg., 2nd C.S., ch.
12, Sec. 5.01, eff. Jan. 1, 1992; Subsec. (a) amended by and
Subsecs. (c), (d) added by Acts 1997, 75th Leg., ch. 1132, Sec. 1,
eff. Sept. 1, 1997.
Article 7.19-1 was not enacted as part of the Insurance Code of
1951.
Article: 5.131 5.144 5.145 5.171 5.172 7.01 7.02 7.19-1 7.20 7.20-1 21.11-2 21.20-2 21.28-A 21.28-C 21.28-D
Last modified: August 11, 2007
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