Sec. 2551.204. USE OF DEPOSIT. (a) Except as otherwise provided by Subsection (e), a deposit made under this subchapter may be used only to pay an obligation connected with title insurance.
(b) On the insolvency or dissolution of a title insurance company, the company's deposit shall be used to protect title insurance policyholders even if no accrued title insurance claims exist and other unpaid obligations do exist, except as permitted by Subsection (e).
(c) A title insurance company's deposit must be applied to:
(1) the complete payment of any obligations and liabilities of the company connected with title insurance business; and
(2) the establishment of adequate reserves or reinsurance to protect any subsequently accruing or maturing title insurance obligations and liabilities.
(d) The amount, handling, and distribution of any reserves required under Subsection (c)(2) are subject to the control and discretion of the department and are reviewable in judicial proceedings governed by rules applicable to review of rates under Subchapters D and E, Chapter 2703.
(e) Any deposit amount remaining after payments under Subsection (c) must be applied to:
(1) payment of other obligations and liabilities of the title insurance company; or
(2) distribution to shareholders.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Last modified: September 28, 2016