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Texas Insurance Code - Section 425.120. Authorized Investments: Oil, Gas, And Minerals

Legal Research Home > Texas Lawyer > Insurance Code > Texas Insurance Code - Section 425.120. Authorized Investments: Oil, Gas, And Minerals

§ 425.120. AUTHORIZED INVESTMENTS:  OIL, GAS, AND 
MINERALS.  (a) In this section:
		(1)  "Producing" means producing oil, gas, or other 
minerals in paying quantities.  A well that has been shut in is 
considered to be producing oil, gas, or other minerals in paying 
quantities if shut-in royalties are being paid.
		(2)  "Production payment" means a right to oil, gas, or 
other minerals in place or as produced that entitles the owner of 
the right to a specified fraction of production until the owner 
receives a specified amount of money, or a specified number of units 
of oil, gas, or other minerals.
		(3)  "Royalty" or "overriding royalty" means a right to 
oil, gas, and other minerals in place or as produced that entitles 
the owner of the right to a specified fraction of production without 
limitation to a specified amount of money or a specified number of 
units of oil, gas, or other minerals.
	(b)  Subject to this section, in addition to and without 
limitation on the purposes for which real property may be acquired, 
secured, held, or retained under other provisions of this 
subchapter, an insurance company may secure, hold, retain, and 
convey production payments, producing royalties, and producing 
overriding royalties, or participations in production payments, 
producing royalties, or producing overriding royalties as an 
investment for the production of income.
	(c)  An insurance company may not carry an asset described by 
Subsection (b) in an amount that exceeds 90 percent of the appraised 
value of the asset.
	(d)  A single investment under this section may not exceed 10 
percent of the amount of the insurance company's capital and 
surplus that exceeds the statutory minimum capital and surplus 
applicable to the company.
	(e)  The aggregate amount of an insurance company's 
investments under this section may not exceed 10 percent of the 
company's assets as of December 31 preceding the date of the 
investment.

Added by Acts 2005, 79th Leg., ch. 727, § 1, eff. April 1, 2007.           

Last modified: August 11, 2007