Texas Insurance Code - Section 404.003. Order To Remedy Condition
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§ 404.003. ORDER TO REMEDY CONDITION. (a) If the
financial condition of an insurer, when reviewed as provided by
Subsection (b), indicates a condition that might make the insurer's
continued operation hazardous to the insurer's policyholders or
creditors or to the public, the commissioner may, after notice and
hearing, order the insurer to take action reasonably necessary to
remedy the condition.
(b) The insurer's financial condition must be reviewed
under Subsection (a) in conjunction with one or more of the
following:
(1) the kinds and nature of risks insured;
(2) the loss experience and ownership of the insurer;
(3) the ratio of total annual premium and net
investment income to commission expenses, general insurance
expenses, policy benefits paid, and required policy reserve
increases;
(4) the insurer's method of operation, affiliations,
or investments;
(5) any contracts that lead or may lead to contingent
liability; or
(6) agreements in respect to guaranty and surety.
(c) In an order issued under Subsection (a), the
commissioner may take any action the commissioner considers
reasonably necessary to remedy the condition described by
Subsection (a), including:
(1) requiring an insurer to:
(A) reduce the total amount of present and
potential liability for policy benefits by reinsurance;
(B) reduce the volume of new business accepted;
(C) suspend or limit writing new business for a
period;
(D) reduce general insurance and commission
expenses by specified methods; or
(E) increase the insurer's capital and surplus by
contribution; or
(2) suspending or canceling the insurer's certificate
of authority.
(d) The commissioner may use the remedies available under
Subsection (c) in conjunction with the provisions of Chapter 83 if
the commissioner determines that the financial condition of the
insurer is hazardous and can be reasonably expected to cause
significant and imminent harm to the insurer's policyholders or the
public.
Added by Acts 2005, 79th Leg., ch. 727, § 1, eff. April 1, 2007.
Section: 403.051 403.052 403.053 403.101 403.102 404.001 404.002 404.003 404.004 404.005 404.006 404.051 404.052 404.053 421.001
Last modified: August 11, 2007
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