Texas Insurance Code Title 11, Chapter 2602 - Texas Title Insurance Guaranty Association

SUBCHAPTER A GENERAL PROVISIONS

• Texas Section 2602.001 - Short Title
  This chapter may be cited as the Texas Title Insurance Guaranty Act. Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1,
• Texas Section 2602.002 - Purposes And Findings
  (a) This chapter is for: (1) the purposes and findings stated in Sections 441.001, 441.003, 441.005, and 441.006; (2) the protection of holders of covered...
• Texas Section 2602.003 - Definitions
  In this chapter: (1) "Affiliate" means a person who, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common...
• Texas Section 2602.004 - Description Of Control
  (a) For purposes of this chapter, control is the power to direct, or cause the direction of, the management and policies of a person, other...
• Texas Section 2602.005 - Applicability; Conflict With Other Laws
  (a) This chapter applies to: (1) a title insurance company engaging in business under this title; (2) all title insurance, direct or reinsurance, written by...
• Texas Section 2602.006 - Construction
  (a) This chapter shall be liberally construed to implement the purposes of this chapter described by Section 2602.002, which shall be used to aid and...
• Texas Section 2602.007 - Prohibited Use Of Protection Provided By Chapter
  (a) A title insurance company or agent may not advertise or refer to this chapter as an inducement to the purchase of title insurance. (b)...
• Texas Section 2602.008 - Immunity
  (a) Liability does not exist and a cause of action does not arise against any of the following persons for a good faith action or...
• Texas Section 2602.009 - Association And Title Insurance Companies As Interested Parties
  The association and each title insurance company assessed under this chapter are interested parties under Sections 3(h) and 12(b), Article 21.28. Added by Acts 2003,...
• Texas Section 2602.010 - Rules
  The commissioner shall adopt reasonable rules as necessary to implement and supplement this chapter and its purposes. Added by Acts 2003, 78th Leg., ch. 1274,...
• Texas Section 2602.011 - Information Provided By And To Commissioner
  (a) The commissioner shall notify the association of the existence of an impaired title insurance company or impaired agent not later than the third day...

SUBCHAPTER B GOVERNANCE OF TEXAS TITLE INSURANCE GUARANTY ASSOCIATION

• Texas Section 2602.012 - Appeals
  (a) A title insurance company may appeal to the commissioner an action or ruling of the association relating to an assessment. (b) An action or...
• Texas Section 2602.051 - Association As Legal Entity; Supervision; Membership
  (a) The Texas Title Insurance Guaranty Association is a nonprofit legal entity. (b) The association is subject to the applicable insurance laws of this state...
• Texas Section 2602.052 - Board Of Directors
  (a) The association's powers are exercised through a board of directors consisting of nine individuals appointed by the commissioner. (b) Three board members must be...
• Texas Section 2602.053 - Eligibility To Serve As Public Representative
  (a) In this section, "immediate family" includes parents, a spouse, children, brothers, and sisters residing in the same household. (b) To be eligible to serve...
• Texas Section 2602.054 - Term; Vacancy
  (a) Board members serve staggered six-year terms, with the terms of three members expiring each odd-numbered year. A member may serve more than one term....
• Texas Section 2602.055 - Compensation Of Board Members
  A board member may not receive compensation for the member's services but is entitled to reimbursement for actual expenses incurred in performing the member's duties....

SUBCHAPTER C GENERAL POWERS AND DUTIES OF ASSOCIATION

• Texas Section 2602.057 - Rights Of Title Insurance Company With Representative On Board
  (a) A title insurance company is not prohibited, because the company has an officer, director, or employee serving as a board member, from negotiating for...
• Texas Section 2602.101 - General Powers And Duties
  (a) In addition to the other powers and duties provided by this chapter, the association may: (1) borrow money as necessary to implement this chapter...
• Texas Section 2602.102 - Plan Of Operation
  (a) The association shall perform its functions under a plan of operation. The plan of operation must contain provisions necessary or proper for the execution...
• Texas Section 2602.103 - Employees And Experts
  (a) The association may employ or retain persons to perform the functions necessary or proper under this chapter, including persons necessary to handle the association's...
• Texas Section 2602.104 - Association Records
  (a) The association shall maintain a record of each negotiation or meeting in which the association or the association's representative discusses the association's activities in...
• Texas Section 2602.105 - Meeting By Conference Call
  Notwithstanding Chapter 551, Government Code, the board may hold an open meeting by telephone conference call if immediate action is required and convening of a...
• Texas Section 2602.106 - Accounts
  For purposes of administration and assessment, the board shall establish: (1) an administrative account; (2) a title account; and (3) a guaranty fee account. Added...
• Texas Section 2602.107 - Administrative Expenses
  (a) The association may use money in the administrative account to pay administrative costs and other general expenses of the association. (b) The association may...
• Texas Section 2602.108 - Deposit Of Fees And Assessments
  The association may deposit fees and assessments it collects into the Texas Treasury Safekeeping Trust Company in accordance with procedures established by the comptroller. The...
• Texas Section 2602.109 - Use Of Excess Money In Accounts
  (a) If the association determines that money in the title account exceeds the amount reasonably necessary for efficient future operation under this chapter, the association...
• Texas Section 2602.110 - Expenses Of Administering Impaired Insurer Or Impaired Agent
  The association may advance money necessary to pay the expenses of administering the supervision, rehabilitation, receivership, conservatorship, or, as determined by a court of competent...
• Texas Section 2602.111 - Delegation Of Powers And Duties
  (a) The plan of operation may provide that, on approval of the board and the commissioner, a power or duty of the association may be...
• Texas Section 2602.112 - Exemption From Taxation
  The association is exempt from payment of all fees and all taxes levied by this state or a subdivision of this state, except taxes levied...
• Texas Section 2602.113 - Detection And Prevention Of Impairment
  (a) The board may make recommendations to the commissioner for detecting and preventing title insurance company or agent impairments. The board shall advise and counsel...
• Texas Section 2602.114 - Meeting Of Board On Impaired Title Insurance Company Or Agent
  (a) The commissioner: (1) shall call a meeting of the board when the commissioner determines that a title insurance company or agent is insolvent or...
• Texas Section 2602.115 - Association And Board Advice And Assistance
  (a) On the commissioner's request, the board shall attend hearings before the commissioner and meet with and advise the commissioner or the receiver or the...
• Texas Section 2602.116 - Board Access To Records
  The receiver or statutory successor of an impaired title insurance company shall give the board or its representative: (1) access to the company's records as...

SUBCHAPTER D POLICY GUARANTY FEES

• Texas Section 2602.117 - Board Report At Conclusion Of Impairment
  At the conclusion of a title insurance company or agent impairment in which the association exercised its powers or performed its duties under this chapter,...
• Texas Section 2602.151 - Payment Of Fee
  (a) An agent or, if there is no agent, the title insurance company shall pay the association a quarterly guaranty fee for each owner or...
• Texas Section 2602.152 - Amount Of Fee
  Annually or more frequently, the board shall determine the amount of the guaranty fee, considering the amount of money to be maintained in the guaranty...
• Texas Section 2602.153 - Use Of Fee
  (a) The association shall collect, receive, retain, and disburse the guaranty fees only as specifically provided by this chapter. (b) The following claims shall be...

SUBCHAPTER E ASSESSMENTS

• Texas Section 2602.154 - Enforcement Of Fee
  (a) After notice and opportunity for hearing, the commissioner may suspend or revoke the certificate of authority or license to engage in business in this...
• Texas Section 2602.201 - Making Of Assessment
  (a) If the commissioner determines that a title insurance company or agent has become impaired, the association shall promptly estimate the amount of additional money...
• Texas Section 2602.202 - Amount Of Assessment; Proration Of Payment
  (a) The association shall assess title insurance companies the amount necessary to pay: (1) the association's obligations under this chapter and the expenses of handling...
• Texas Section 2602.203 - Notice And Payment
  (a) Not later than the 30th day before the date an assessment is due, the association shall notify the title insurance company. (b) Not later...
• Texas Section 2602.204 - Exemption For Impaired Title Insurance Company
  A title insurance company is exempt from assessment during the period beginning on the date the commissioner designates the company as an impaired title insurance...
• Texas Section 2602.205 - Deferment
  (a) The association may defer in whole or in part an assessment of a title insurance company that would cause the company's financial statement to...
• Texas Section 2602.206 - Participation Receipts
  (a) On receipt from a title insurance company of payment of an assessment or partial assessment, the association shall provide the company with a participation...
• Texas Section 2602.207 - Accounting; Reports; Refund
  (a) The association shall adopt accounting procedures to show how money received from assessments or partial assessments is used. (b) The association shall make interim...
• Texas Section 2602.208 - Use Of Assessments
  (a) Money from assessments is considered to supplement the marshalling of an impaired title insurance company's assets to make payments on the impaired title insurance...
• Texas Section 2602.209 - Failure To Pay; Collection By Commissioner
  (a) The association shall promptly report to the commissioner a failure of a title insurance company to pay an assessment when due. (b) On failure...

SUBCHAPTER F COVERED CLAIMS

• Texas Section 2602.210 - Recovery Of Assessment In Rates; Tax Credit
  (a) A title insurance company is entitled to recover in its rates for the succeeding calendar year amounts paid in assessments not to exceed one...
• Texas Section 2602.251 - Covered Claims In General
  An unpaid claim is a covered claim if: (1) the claim is made by an insured under a title insurance policy to which this chapter...
• Texas Section 2602.252 - Claim Against Trust Funds Or Escrow Account
  An unpaid claim is a covered claim if the claim: (1) is against trust funds or an escrow account of an impaired title insurance company...
• Texas Section 2602.253 - Claim In Connection With Fidelity Of Agent
  An unpaid claim is a covered claim if an impaired title insurance company is liable for the claim in connection with the fidelity of the...
• Texas Section 2602.254 - Certain Conservator And Receiver Expenses Covered
  Reasonable and necessary administrative expenses incurred by a conservator appointed by the commissioner or a receiver appointed by a court for an unauthorized insurer operating...
• Texas Section 2602.255 - Claims Not Covered
  The following are not covered claims: (1) an amount due a reinsurer, title insurance company, insurance pool, or underwriting association as a subrogation recovery or...
• Texas Section 2602.256 - Amount Of Covered Claim; Limit
  (a) A covered claim under Section 2602.251 or 2602.253 may not exceed the lesser of $250,000 for each claimant or $250,000 for each policy. (b)...
• Texas Section 2602.257 - Exhaustion Of Other Rights Required
  (a) A person having a covered claim that is also a claim against a title insurance company under law or under an insurance policy other...
• Texas Section 2602.258 - Certain Money Authorized For Use In Paying Covered Claim; Limit
  (a) Money from assessments or guaranty fees is liable only for the difference between the amount of covered claims and the amount of assets marshalled...
• Texas Section 2602.259 - Stay Of Proceedings; Certain Decisions Not Binding
  (a) To permit the receiver or association to properly defend a pending cause of action, a proceeding in which an impaired title insurance company is...

SUBCHAPTER G ASSOCIATION POWERS AND DUTIES RELATING TO COVERED CLAIMS

• Texas Section 2602.260 - Admissibility Of Payment
  In a lawsuit brought by a conservator or receiver of an impaired title insurance company or agent to recover assets of the company or agent,...
• Texas Section 2602.301 - General Powers And Duties Of Association In Connection With Payment Of Covered Claims
  (a) The association shall: (1) investigate a claim brought against the association, the commissioner, or a special deputy receiver appointed under Chapter 443 if the...
• Texas Section 2602.302 - Payment Of Covered Claims
  (a) The association shall pay covered claims: (1) existing before the determination of impairment; or (2) arising on or before: (A) the date of cancellation...
• Texas Section 2602.303 - Servicing Facility
  (a) The association may handle claims through its employees or through one or more title insurance companies or other persons designated, subject to the approval...
• Texas Section 2602.304 - Advance As Loan
  Money advanced by the association under this chapter is considered a special fund loan to the impaired title insurance company or agent for payment of...
• Texas Section 2602.305 - Association In Place Of Impaired Title Insurance Company Or Agent
  (a) To the extent of the association's obligation on a covered claim, the association stands in the place of the impaired title insurance company or...
• Texas Section 2602.306 - Assignment Of Claimant's Rights
  (a) Any cause of action or other right of the holder of a covered claim arising from the occurrence on which the claim is based...
• Texas Section 2602.307 - Settlement By Association Binding; Priority Of Claim And Expenses
  (a) The settlement of a covered claim by the association binds the receiver or statutory successor of an impaired title insurance company. (b) The court...

SUBCHAPTER H CONSERVATOR OR RECEIVER POWERS AND DUTIES RELATING TO COVERED CLAIMS

• Texas Section 2602.308 - Report To Receiver
  The association shall periodically file with the receiver of an impaired title insurance company a statement of covered claims paid by the association and an...
• Texas Section 2602.351 - Determination Of Conservator Concerning Reinsurance, Assumption, Or Substitution
  A conservator appointed to handle the affairs of an impaired title insurance company or agent shall determine whether covered claims should or can be provided...
• Texas Section 2602.352 - Notice Of Determination Concerning Actual Payment
  (a) On determination by the conservator that covered claims should be actually paid, the conservator shall give notice of the determination to holders of covered...
• Texas Section 2602.353 - Filing Of Covered Claim
  The conservator may require in whole or in part that claimants file: (1) sworn claim forms; and (2) additional information or evidence reasonably necessary for...
• Texas Section 2602.354 - Claim By Person With Cause Of Action Against Insured
  (a) On determination by the conservator that covered claims should be actually paid or on order of the court to the receiver to give notice...

SUBCHAPTER I OPERATION OF IMPAIRED TITLE INSURANCE COMPANY OR AGENT

• Texas Section 2602.355 - Report To Association
  (a) A receiver of an impaired title insurance company or agent shall periodically submit a list of claims to the association or a similar organization...
• Texas Section 2602.401 - Issuance Or Renewal Of Policies
  (a) If an assessment has been made under this chapter for an impaired title insurance company or association funds have been provided for the company,...
• Texas Section 2602.402 - Distributions To Shareholders And Affiliates
  (a) An impaired or insolvent title insurance company may not make a distribution to shareholders until the association has recovered the total amount of valid...

SUBCHAPTER J ADDITIONAL DUTIES OF ASSOCIATION

• Texas Section 2602.403 - Assets Attributable To Covered Policies
  (a) For the purposes of this section, assets attributable to covered policies are the proportion of the assets that the reserves that should have been...
• Texas Section 2602.451 - Applicability
  This subchapter applies, at the commissioner's discretion and regardless of whether there are covered claims against an agent, to any agent that is designated by...
• Texas Section 2602.452 - Actions For Certain Agents
  (a) The commissioner may direct the association, at the association's expense and on behalf of an impaired agent, to: (1) close real estate transactions; (2)...
• Texas Section 2602.453 - Authority Of Association; Cooperation Of Officers, Owners, And Employees
  (a) On the direction of the commissioner under Section 2602.452, the association may implement any direction made by the commissioner and may access all books,...

Last modified: September 28, 2016