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Texas Insurance Code - Section 463.252. Impaired Domestic, Foreign, Or Alien Insurer Not Paying Claims

Legal Research Home > Texas Lawyer > Insurance Code > Texas Insurance Code - Section 463.252. Impaired Domestic, Foreign, Or Alien Insurer Not Paying Claims

§ 463.252. IMPAIRED DOMESTIC, FOREIGN, OR ALIEN INSURER 
NOT PAYING CLAIMS.  (a) This section applies only to a member 
insurer that:
		(1)  is an impaired domestic, foreign, or alien 
insurer;  and               
		(2)  is not timely paying claims.                                             
	(b)  Subject to Subsection (d), the association shall:                         
		(1)  with respect to the insurer, take one or more 
actions that the association is authorized to take under Section 
463.251 with respect to an impaired domestic insurer, subject to 
the conditions of that section;  or
		(2)  provide substitute benefits instead of the 
insurer's contractual obligations as provided by Subsection (c).
	(c)  A policy or contract owner who claims emergency or 
hardship may petition for substitute benefits under standards the 
association proposes and the commissioner approves.  Substitute 
benefits are available only for a health claim, periodic annuity 
benefit payment, death benefit, supplemental benefit, or cash 
withdrawal.
	(d)  The association is required to take action under this 
section only if:  
		(1)  the laws of the insurer's state of domicile provide 
that, until all payments of or on account of the insurer's 
contractual obligations are made by all guaranty associations and 
all expenses of the associations and interest on those payments and 
expenses have been repaid to the associations or a plan of repayment 
by the insurer has been approved by the associations:
			(A)  the delinquency proceeding may not be 
dismissed;                      
			(B)  the insurer and the insurer's assets may not 
be returned to the control of the insurer's shareholders or private 
management;  and
			(C)  the insurer may not solicit or accept new 
business or have any suspended or revoked certificate of authority 
restored;
		(2)  the insurer is a domestic insurer that has been 
placed under an order of rehabilitation by a court in this state;  
or
		(3)  the insurer is a foreign or alien insurer and:                           
			(A)  the insurer has been prohibited from 
soliciting or accepting new business in this state;
			(B)  the insurer's certificate of authority has 
been suspended or revoked in this state;  and
			(C)  a petition for rehabilitation or liquidation 
has been filed in a court in the insurer's state of domicile by the 
insurance official of that state.

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

Last modified: August 10, 2007