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Texas Insurance Code - Section 441.001. Findings And Purpose

Legal Research Home > Texas Lawyer > Insurance Code > Texas Insurance Code - Section 441.001. Findings And Purpose

§ 441.001. FINDINGS AND PURPOSE.  (a) An insurer 
delinquency, or the state's inability to properly proceed in a 
threatened delinquency, directly or indirectly affects other 
insurers by creating a lack of public confidence in insurance and 
insurers.  Insurer delinquencies destroy public confidence in the 
state's ability to regulate insurers.  The harmful results of 
insurer delinquencies, including those described by this 
subsection, are properly minimized by laws designed to protect and 
assist insureds, creditors, and owners.
	(b)  Placing an insurer in receivership often destroys or 
diminishes, or is likely to destroy or diminish, the value of the 
insurer's assets, including:
		(1)  the insurer's insurance account or in-force 
business;                  
		(2)  the insurer as a going concern;  and                                     
		(3)  the insurer's agency force.                                              
	(c)  The value of the assets described by Subsection (b) 
should be preserved if the circumstances of the insurer's financial 
condition warrant an attempt to rehabilitate or conserve the 
insurer and the rehabilitation or conservation is otherwise 
feasible.
	(d)  It is a proper concern of this state and proper policy to 
attempt to correct or remedy insurer misconduct, ineptness, or 
misfortune.
	(e)  The purpose of this chapter is to:                                        
		(1)  provide for the rehabilitation and conservation of 
insurers by authorizing and requiring supervision and 
conservatorship by the commissioner;
		(2)  authorize action to determine whether an attempt 
should be made to rehabilitate and conserve an insurer;
		(3)  avoid, if possible and feasible, the necessity of 
placing an insurer under temporary or permanent receivership;
		(4)  provide for the protection of an insurer's assets 
pending determination of whether the insurer may be successfully 
rehabilitated;  and
		(5)  alleviate concerns regarding insurance and 
insurers.                   
	(f)  Rehabilitation of an insurer might not be accomplished 
in every case, but this chapter facilitates and directs an attempt 
to rehabilitate an insurer without immediate resort to the harsher 
remedy of receivership.  If receivership becomes necessary, the 
preliminary supervision and conservatorship may prevent a 
dissipation of assets, which will benefit policyholders, 
creditors, and owners.
	(g)  For the reasons stated by this section, the substance 
and procedures of this chapter are the public policy of this state 
and are necessary to the public welfare.  That policy and welfare 
require the availability of this chapter and the application of 
this chapter if circumstances warrant.
	(h)  This chapter provides, in conjunction with other law, a 
generally ordered sequence, and provides for review at each step, 
of supervision, concurrent conservatorship and rehabilitation, 
including reinsurance, and cessation of the conservatorship by 
rehabilitation or by receivership and liquidation if at any time 
that cessation is indicated or determined to be appropriate.

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

Last modified: August 11, 2007