Texas Labor Code - Section 407A.355. Deficits; Insolvencies
Legal Research Home >
Texas Lawyer > Labor Code > Texas Labor Code - Section 407A.355. Deficits; Insolvencies
§ 407A.355. DEFICITS; INSOLVENCIES. (a) For purposes of
this section, "insolvent" means:
(1) the inability of a group to pay the group's
outstanding lawful obligations as they mature in the regular course
of business; or
(2) that the group's liabilities exceed the group's
assets, determined without reducing liabilities by any reserve
discount.
(b) If the assets of a group are at any time insufficient to
enable the group to discharge its legal liabilities and other
obligations and to maintain the reserves required under this
chapter, the group shall make up the deficiency or levy an
assessment on its members for the amount needed to make up the
deficiency.
(c) In the event of a deficiency in any fund year, the
deficiency shall be made up immediately from:
(1) surplus from a fund year other than the current
fund year;
(2) administrative funds;
(3) assessments of the membership, if ordered by the
group; or
(4) any alternate method that the commissioner
approves or directs.
(d) The commissioner shall be notified before any transfer
of surplus funds from one fund year to another under Subsection (c).
(e) If the group fails to assess its members or to otherwise
make up a deficit, the commissioner shall order the group to do so.
If the commissioner determines that the group is in a hazardous
financial condition, the commissioner may take action as provided
by Article 21.28-A, Insurance Code, and may order the group to
rectify the condition through an alternate method under Subsection
(c)(4). The group is considered an insurer only for purposes of
Article 21.28-A, Insurance Code. Otherwise, to the extent of a
conflict between this chapter and that article, this chapter
prevails.
(f) If the group fails to make the required assessment of
its members after the commissioner's order under Subsection (e), or
if the deficiency is not fully made up, the group shall be deemed to
be insolvent.
(g) If a group is liquidated, the commissioner shall secure
release of the security deposit and levy an assessment on the
members of the group in an amount determined necessary by the
commissioner to discharge all liabilities of the group, including
the reasonable cost of liquidation.
Added by Acts 2003, 78th Leg., ch. 275, § 1, eff. Sept. 1, 2003.
Section: 407A.302 407A.303 407A.304 407A.351 407A.352 407A.353 407A.354 407A.355 407A.401 407A.402 407A.403 407A.404 407A.451 407A.452 407A.453
Last modified: August 10, 2007
|
