By Harris S.B. No. 1467
76R5310 DLF-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to a nonsubstantive revision of statutes relating to the
1-3 Texas Department of Insurance, the business of insurance, and
1-4 certain related businesses, including conforming amendments,
1-5 repeals, and penalties.
1-6 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-7 SECTION 1. ADOPTION OF TITLE. The Insurance Code is
1-8 ameneded by adding Title 2 to read as follows:
1-9 TITLE 2. TEXAS DEPARTMENT OF INSURANCE
1-10 SUBTITLE A. ADMINISTRATION OF THE
1-11 TEXAS DEPARTMENT OF INSURANCE
1-12 CHAPTER 30. GENERAL PROVISIONS
1-13 CHAPTER 31. ORGANIZATION OF DEPARTMENT
1-14 CHAPTER 32. ADMINISTRATIVE POWERS AND DUTIES
1-15 CHAPTER 33. STANDARDS OF CONDUCT
1-16 CHAPTER 34. IMMUNITY FROM LIABILITY
1-17 (Chapter 35 reserved for expansion
1-18 CHAPTER 36. DEPARTMENT RULES AND PROCEDURES
1-19 CHAPTER 37. RATEMAKING AND POLICY FORM PROCEEDINGS
1-20 CHAPTER 38. DATA COLLECTION AND REPORTS
1-21 CHAPTER 39. PUBLIC ACCESS
1-22 CHAPTER 40. DUTIES OF STATE OFFICE OF ADMINISTRATIVE HEARINGS
1-23 AND COMMISSIONER IN CERTAIN PROCEEDINGS; RATE
1-24 SETTING PROCEEDINGS
2-1 (Chapters 41-80 reserved for expansion
2-2 SUBTITLE B. DISCIPLINE AND ENFORCEMENT
2-3 CHAPTER 81. GENERAL PROVISIONS REGARDING DISCIPLINE AND
2-4 ENFORCEMENT
2-5 CHAPTER 82. SANCTIONS
2-6 CHAPTER 83. EMERGENCY CEASE AND DESIST ORDERS
2-7 CHAPTER 84. ADMINISTRATIVE PENALTIES
2-8 CHAPTER 85. GENERAL CRIMINAL ENFORCEMENT
2-9 (Chapters 86-100 reserved for expansion
2-10 CHAPTER 101. UNAUTHORIZED INSURANCE
2-11 CHAPTER 102. CHARITABLE GIFT ANNUITIES
2-12 TITLE 2. TEXAS DEPARTMENT OF INSURANCE
2-13 SUBTITLE A. ADMINISTRATION OF THE TEXAS
2-14 DEPARTMENT OF INSURANCE
2-15 CHAPTER 30. GENERAL PROVISIONS
2-16 Sec. 30.001. PURPOSE OF TITLE
2-17 Sec. 30.002. CONSTRUCTION OF TITLE
2-18 Sec. 30.003. REFERENCE IN LAW TO STATUTE REVISED BY TITLE
2-19 CHAPTER 30. GENERAL PROVISIONS
2-20 Sec. 30.001. PURPOSE OF TITLE. (a) This title is enacted
2-21 as a part of the state's continuing statutory revision program,
2-22 begun by the Texas Legislative Council in 1963 as directed by the
2-23 legislature in the law codified as Section 323.007, Government
2-24 Code. The program contemplates a topic-by-topic revision of the
2-25 state's general and permanent statute law without substantive
2-26 change.
2-27 (b) Consistent with the objectives of the statutory revision
3-1 program, the purpose of this title is to make the law encompassed
3-2 by this title more accessible and understandable by:
3-3 (1) rearranging the statutes into a more logical
3-4 order;
3-5 (2) employing a format and numbering system designed
3-6 to facilitate citation of the law and to accommodate future
3-7 expansion of the law;
3-8 (3) eliminating repealed, duplicative,
3-9 unconstitutional, expired, executed, and other ineffective
3-10 provisions; and
3-11 (4) restating the law in modern American English to
3-12 the greatest extent possible. (New.)
3-13 Sec. 30.002. CONSTRUCTION OF TITLE. Chapter 311, Government
3-14 Code (Code Construction Act), applies to the construction of each
3-15 provision in this title except as otherwise expressly provided by
3-16 this title. (New.)
3-17 Sec. 30.003. REFERENCE IN LAW TO STATUTE REVISED BY TITLE.
3-18 A reference in a law to a statute or a part of a statute revised by
3-19 this title is considered to be a reference to the part of this
3-20 title that revises that statute or part of that statute. (New.)
3-21 CHAPTER 31. ORGANIZATION OF DEPARTMENT
3-22 SUBCHAPTER A. GENERAL PROVISIONS
3-23 Sec. 31.001. DEFINITIONS
3-24 Sec. 31.002. DUTIES OF DEPARTMENT
3-25 Sec. 31.003. COMPOSITION OF DEPARTMENT
3-26 Sec. 31.004. SUNSET PROVISION
3-27 Sec. 31.005. DEFENSE BY ATTORNEY GENERAL
4-1 Sec. 31.006. TEXAS WORKERS' COMPENSATION COMMISSION
4-2 NOT AFFECTED
4-3 Sec. 31.007. REFERENCES TO BOARD
4-4 (Sections 31.008-31.020 reserved for expansion
4-5 SUBCHAPTER B. COMMISSIONER OF INSURANCE
4-6 Sec. 31.021. CHIEF EXECUTIVE
4-7 Sec. 31.022. APPOINTMENT; TERM
4-8 Sec. 31.023. QUALIFICATIONS
4-9 Sec. 31.024. INELIGIBILITY FOR PUBLIC OFFICE
4-10 Sec. 31.025. BOND
4-11 Sec. 31.026. COMPENSATION
4-12 Sec. 31.027. GROUNDS FOR REMOVAL
4-13 (Sections 31.028-31.040 reserved for expansion
4-14 SUBCHAPTER C. PERSONNEL
4-15 Sec. 31.041. DEPARTMENT PERSONNEL
4-16 Sec. 31.042. DIVISION OF RESPONSIBILITIES
4-17 Sec. 31.043. EQUAL EMPLOYMENT OPPORTUNITY POLICY;
4-18 REPORT
4-19 Sec. 31.044. QUALIFICATIONS AND STANDARDS OF CONDUCT
4-20 Sec. 31.045. CAREER LADDER PROGRAM; PERFORMANCE
4-21 EVALUATIONS
4-22 CHAPTER 31. ORGANIZATION OF DEPARTMENT
4-23 SUBCHAPTER A. GENERAL PROVISIONS
4-24 Sec. 31.001. DEFINITIONS. In this code and other insurance
4-25 laws:
4-26 (1) "Commissioner" means the commissioner of
4-27 insurance.
5-1 (2) "Department" means the Texas Department of
5-2 Insurance. (V.T.I.C. Art. 1.01A, Subsec. (a).)
5-3 Sec. 31.002. DUTIES OF DEPARTMENT. In addition to the other
5-4 duties required of the Texas Department of Insurance, the
5-5 department shall:
5-6 (1) regulate the business of insurance in this state;
5-7 and
5-8 (2) ensure that this code and other laws regarding
5-9 insurance and insurance companies are executed. (V.T.I.C.
5-10 Art. 1.01A, Subsec. (b) (part); Art. 1.10, Sec. 1.)
5-11 Sec. 31.003. COMPOSITION OF DEPARTMENT. The department is
5-12 composed of the commissioner and other officers and employees
5-13 required to efficiently implement:
5-14 (1) this code;
5-15 (2) other insurance laws of this state; and
5-16 (3) other laws granting jurisdiction or applicable to
5-17 the department or the commissioner. (V.T.I.C. Art. 1.01A, Subsec.
5-18 (b) (part).)
5-19 Sec. 31.004. SUNSET PROVISION. The Texas Department of
5-20 Insurance is subject to Chapter 325, Government Code (Texas Sunset
5-21 Act). Unless continued in existence as provided by that chapter,
5-22 the department is abolished September 1, 2005. (V.T.I.C.
5-23 Art. 1.02, Subsec. (c).)
5-24 Sec. 31.005. DEFENSE BY ATTORNEY GENERAL. The attorney
5-25 general shall defend an action brought against the commissioner or
5-26 an employee or officer of the department as a result of that
5-27 person's official act or omission, whether or not at the time of
6-1 the institution of the action that person has terminated service
6-2 with the department. (V.T.I.C. Art. 1.40, Subsec. (a) (part).)
6-3 Sec. 31.006. TEXAS WORKERS' COMPENSATION COMMISSION NOT
6-4 AFFECTED. This code does not affect the duties imposed by law on
6-5 the Texas Workers' Compensation Commission. (V.T.I.C. Art. 1.07.)
6-6 Sec. 31.007. REFERENCES TO BOARD. A reference in this code
6-7 or other law to the State Board of Insurance, the Board of
6-8 Insurance Commissioners, or an individual commissioner means the
6-9 commissioner or the department as consistent with the respective
6-10 duties of the commissioner and the department under this code and
6-11 other insurance laws. (V.T.I.C. Art. 1.01A, Subsec. (c);
6-12 Art. 1.02, Subsec. (a) (part).)
6-13 (Sections 31.008-31.020 reserved for expansion
6-14 SUBCHAPTER B. COMMISSIONER OF INSURANCE
6-15 Sec. 31.021. CHIEF EXECUTIVE. (a) The commissioner is the
6-16 department's chief executive and administrative officer. The
6-17 commissioner shall administer and enforce this code, other
6-18 insurance laws of this state, and other laws granting jurisdiction
6-19 or applicable to the department or the commissioner.
6-20 (b) The commissioner has the powers and duties vested in the
6-21 department by this code and other insurance laws of this state.
6-22 (V.T.I.C. Art. 1.02, Subsec. (b) (part); Art. 1.09, Subsec. (a)
6-23 (part).)
6-24 Sec. 31.022. APPOINTMENT; TERM. (a) The governor, with the
6-25 advice and consent of the senate, shall appoint the commissioner.
6-26 The commissioner serves a two-year term that expires on February 1
6-27 of each odd-numbered year.
7-1 (b) The governor shall appoint the commissioner without
7-2 regard to the race, color, disability, sex, religion, age, or
7-3 national origin of the appointee. (V.T.I.C. Art. 1.09, Subsec. (b)
7-4 (part).)
7-5 Sec. 31.023. QUALIFICATIONS. The commissioner must:
7-6 (1) be a competent and experienced administrator;
7-7 (2) be well informed and qualified in the field of
7-8 insurance and insurance regulation; and
7-9 (3) have at least 10 years of experience as an
7-10 executive in the administration of business or government or as a
7-11 practicing attorney or certified public accountant, with at least
7-12 five years of that experience in the field of insurance or
7-13 insurance regulation. (V.T.I.C. Art. 1.09, Subsec. (b) (part).)
7-14 Sec. 31.024. INELIGIBILITY FOR PUBLIC OFFICE. The
7-15 commissioner is ineligible to be a candidate for a public elective
7-16 office in this state, unless the commissioner has resigned and the
7-17 governor has accepted the resignation. (V.T.I.C. Art. 1.09-2.)
7-18 Sec. 31.025. BOND. Before taking office, the commissioner
7-19 must execute with a surety company licensed to do business in this
7-20 state a bond for $50,000 payable to this state and conditioned on
7-21 the faithful discharge of the commissioner's duties. (V.T.I.C.
7-22 Art. 1.09, Subsec. (c).)
7-23 Sec. 31.026. COMPENSATION. The commissioner is entitled to
7-24 compensation as provided by the General Appropriations Act.
7-25 (V.T.I.C. Art. 1.09, Subsec. (d).)
7-26 Sec. 31.027. GROUNDS FOR REMOVAL. (a) It is a ground for
7-27 removal from office if the commissioner:
8-1 (1) does not have at the time of appointment the
8-2 qualifications required by Section 31.023;
8-3 (2) does not maintain during service as commissioner
8-4 the qualifications required by Section 31.023;
8-5 (3) violates a prohibition established by Section
8-6 33.001, 33.003, 33.004, or 33.005; or
8-7 (4) cannot, because of illness or disability,
8-8 discharge the commissioner's duties for a substantial part of the
8-9 commissioner's term.
8-10 (b) The validity of an action of the commissioner or the
8-11 department is not affected by the fact that it is taken when a
8-12 ground for removal of the commissioner exists. (V.T.I.C.
8-13 Art. 1.09, Subsecs. (i), (j).)
8-14 (Sections 31.028-31.040 reserved for expansion
8-15 SUBCHAPTER C. PERSONNEL
8-16 Sec. 31.041. DEPARTMENT PERSONNEL. (a) Subject to the
8-17 General Appropriations Act or other law, the commissioner shall
8-18 appoint deputies, assistants, and other personnel as necessary to
8-19 carry out the powers and duties of the commissioner and the
8-20 department under this code, other insurance laws of this state, and
8-21 other laws granting jurisdiction or applicable to the department or
8-22 the commissioner.
8-23 (b) A person appointed under this section must have the
8-24 professional, administrative, and insurance experience necessary to
8-25 qualify the person for the position to which the person is
8-26 appointed.
8-27 (c) A person appointed as an associate or deputy
9-1 commissioner or to hold an equivalent position must have at least
9-2 five years of the experience required for appointment as
9-3 commissioner under Section 31.023. At least two years of that
9-4 experience must be in work related to the position to be held.
9-5 (V.T.I.C. Art. 1.09, Subsec. (f).)
9-6 Sec. 31.042. DIVISION OF RESPONSIBILITIES. The commissioner
9-7 shall develop and implement policies that clearly define the
9-8 respective responsibilities of the commissioner and the staff of
9-9 the department. (V.T.I.C. Art. 1.02, Subsec. (g).)
9-10 Sec. 31.043. EQUAL EMPLOYMENT OPPORTUNITY POLICY; REPORT.
9-11 (a) The commissioner or the commissioner's designee shall prepare
9-12 and maintain a written policy statement to ensure implementation of
9-13 a program of equal employment opportunity under which all personnel
9-14 transactions are made without regard to race, color, disability,
9-15 sex, religion, age, or national origin. The policy statement must
9-16 include:
9-17 (1) personnel policies, including policies relating to
9-18 recruitment, evaluation, selection, appointment, training, and
9-19 promotion of personnel that are in compliance with Chapter 21,
9-20 Labor Code;
9-21 (2) a comprehensive analysis of the department
9-22 workforce that meets federal and state guidelines;
9-23 (3) procedures by which a determination can be made of
9-24 significant underuse in the department workforce of all persons for
9-25 whom federal or state guidelines encourage a more equitable
9-26 balance; and
9-27 (4) reasonable methods to appropriately address those
10-1 areas of significant underuse.
10-2 (b) A policy statement prepared under this section must:
10-3 (1) cover an annual period;
10-4 (2) be updated annually;
10-5 (3) be reviewed by the Commission on Human Rights for
10-6 compliance with Subsection (a); and
10-7 (4) be filed with the governor.
10-8 (c) The governor shall deliver a biennial report to the
10-9 legislature based on the information received under Subsection (b).
10-10 The report may be made separately or as a part of other biennial
10-11 reports made to the legislature. (V.T.I.C. Art. 1.02, Subsecs.
10-12 (d), (e), (f).)
10-13 Sec. 31.044. QUALIFICATIONS AND STANDARDS OF CONDUCT. The
10-14 commissioner shall provide to department employees, as often as
10-15 necessary, information regarding their:
10-16 (1) qualification for office or employment under this
10-17 code; and
10-18 (2) responsibilities under applicable laws relating to
10-19 standards of conduct for state employees. (V.T.I.C. Art. 1.02,
10-20 Subsec. (h).)
10-21 Sec. 31.045. CAREER LADDER PROGRAM; PERFORMANCE EVALUATIONS.
10-22 (a) The commissioner or the commissioner's designee shall develop
10-23 an intra-agency career ladder program. The program must require
10-24 intra-agency posting of all nonentry level positions concurrently
10-25 with any public posting.
10-26 (b) The commissioner or the commissioner's designee shall
10-27 develop a system of annual performance evaluations. All merit pay
11-1 for department employees must be based on the system established
11-2 under this subsection. (V.T.I.C. Art. 1.09, Subsecs. (g), (h).)
11-3 CHAPTER 32. ADMINISTRATIVE POWERS AND DUTIES
11-4 SUBCHAPTER A. RECORDS
11-5 Sec. 32.001. GIVING CERTIFIED COPIES AND CERTIFICATES
11-6 Sec. 32.002. RECORD OF DEPARTMENT PROCEEDINGS
11-7 Sec. 32.003. STATEMENTS REGARDING CONDITION OF
11-8 EXAMINED COMPANIES
11-9 (Sections 32.004-32.020 reserved for expansion
11-10 Sec. 32.021. ANNUAL REPORTS
11-11 Sec. 32.022. BIENNIAL REPORT TO LEGISLATURE
11-12 Sec. 32.023. REPORTS TO OTHER STATES
11-13 (Sections 32.024-32.040 reserved for expansion
11-14 Sec. 32.041. FORMS
11-15 CHAPTER 32. ADMINISTRATIVE POWERS AND DUTIES
11-16 SUBCHAPTER A. RECORDS
11-17 Revised Law
11-18 Sec. 32.001. GIVING CERTIFIED COPIES AND CERTIFICATES. (a)
11-19 On request and on payment of the required fee, the department:
11-20 (1) may certify a copy of a paper or a record in a
11-21 department office and give the certified copy to any person if the
11-22 commissioner determines that providing the copy is not prejudicial
11-23 to the public interest; and
11-24 (2) shall give a certificate as provided by other law.
11-25 (b) A fee collected by the department under this section
11-26 shall be deposited in the general revenue fund to the credit of the
11-27 Texas Department of Insurance operating account. (V.T.I.C.
12-1 Art. 1.10, Sec. 11.)
12-2 Sec. 32.002. RECORD OF DEPARTMENT PROCEEDINGS. The
12-3 department shall maintain a complete record of the department's
12-4 proceedings. (V.T.I.C. Art. 1.10, Sec. 10 (part).)
12-5 Sec. 32.003. STATEMENTS REGARDING CONDITION OF EXAMINED
12-6 COMPANIES. The department shall maintain a concise statement of
12-7 the condition of each company or agency visited or examined.
12-8 (V.T.I.C. Art. 1.10, Sec. 10 (part).)
12-9 (Sections 32.004-32.020 reserved for expansion
12-10 SUBCHAPTER B. REPORTS
12-11 Sec. 32.021. ANNUAL REPORTS. (a) The department shall file
12-12 annually with the governor and the presiding officer of each house
12-13 of the legislature a complete and detailed written report that
12-14 includes:
12-15 (1) an accounting of all funds received and disbursed
12-16 by the department during the preceding fiscal year;
12-17 (2) a description of the commissioner's official acts;
12-18 (3) a description of the condition of companies doing
12-19 business in this state; and
12-20 (4) other information that exhibits the affairs of the
12-21 department.
12-22 (b) The annual report required by Subsection (a) must be in
12-23 the form and reported in the time provided by the General
12-24 Appropriations Act.
12-25 (c) The department shall:
12-26 (1) send a copy of the annual report required by
12-27 Subsection (a) to the insurance commissioner or other similar
13-1 officer of every state; and
13-2 (2) on request, send a copy to any company doing
13-3 business in this state.
13-4 (d) The department shall print a separate premium and loss
13-5 report that contains and arranges in tabular form the premium and
13-6 loss information contained in the annual statements for companies
13-7 doing business in this state.
13-8 (e) The department shall file the report required by
13-9 Subsection (d) with the Legislative Reference Library and the Texas
13-10 State Library with the annual report required by Subsection (a).
13-11 (f) The department shall notify the legislature of the
13-12 availability of the reports required by this section. (V.T.I.C.
13-13 Art. 1.10, Secs. 12, 13; Art. 1.25, Subsec. (b).)
13-14 Sec. 32.022. BIENNIAL REPORT TO LEGISLATURE. (a) On or
13-15 before December 31 of each even-numbered year, the department shall
13-16 submit to the appropriate committees of each house of the
13-17 legislature a written report that indicates any needed changes in
13-18 the laws relating to regulation of the insurance industry or any
13-19 other industry or occupation under the jurisdiction of the
13-20 department and that states the reasons for the needed changes.
13-21 (b) If the commissioner determines that any capital or
13-22 surplus requirements established by this code for any insurance
13-23 companies are inadequate, the department shall:
13-24 (1) include in the biennial report specific
13-25 recommendations relating to the amounts at which the capital or
13-26 surplus requirements should be set and the findings and evidence on
13-27 which those recommendations are based; and
14-1 (2) submit the biennial report to the governor.
14-2 (V.T.I.C. Art. 1.25, Subsec. (a); Art. 1.25A.)
14-3 Sec. 32.023. REPORTS TO OTHER STATES. On request, the
14-4 department shall provide to the insurance commissioner or other
14-5 similar officer of another state information relating to a company
14-6 of this state that does business in the other state if:
14-7 (1) the other state has enacted the substantial
14-8 provisions of the insurance laws of this state; and
14-9 (2) the commissioner or other similar officer has a
14-10 legal duty to obtain the information. (V.T.I.C. Art. 1.10, Sec.
14-11 14.)
14-12 (Sections 32.024-32.040 reserved for expansion
14-13 SUBCHAPTER C. FORMS
14-14 Sec. 32.041. FORMS. The department shall furnish to the
14-15 companies required to report to the department the necessary forms
14-16 for the required statements. (V.T.I.C. Art. 1.10, Sec. 9.)
14-17 CHAPTER 33. STANDARDS OF CONDUCT
14-18 Sec. 33.001. APPLICATION OF LAW RELATING TO ETHICAL CONDUCT
14-19 Sec. 33.002. INSURANCE BUSINESS INTEREST; SERVICE AS
14-20 COMMISSIONER
14-21 Sec. 33.003. INSURANCE BUSINESS INTEREST; EMPLOYEE
14-22 Sec. 33.004. TRADE ASSOCIATIONS
14-23 Sec. 33.005. LOBBYING ACTIVITIES
14-24 Sec. 33.006. FORMER SERVICE
14-25 Sec. 33.007. PROHIBITED REPRESENTATION
14-26 CHAPTER 33. STANDARDS OF CONDUCT
14-27 Sec. 33.001. APPLICATION OF LAW RELATING TO ETHICAL CONDUCT.
15-1 The commissioner and each employee or agent of the department is
15-2 subject to the code of ethics and the standard of conduct imposed
15-3 by Chapter 572, Government Code, and any other law regulating the
15-4 ethical conduct of state officers and employees. (V.T.I.C.
15-5 Art. 1.09-3.)
15-6 Sec. 33.002. INSURANCE BUSINESS INTEREST; SERVICE AS
15-7 COMMISSIONER. (a) A person is not eligible for appointment as
15-8 commissioner if the person, the person's spouse, or any other
15-9 person who resides in the same household as the person:
15-10 (1) is registered, certified, or licensed by the
15-11 department;
15-12 (2) is employed by or participates in the management
15-13 of a business entity or other organization regulated by or
15-14 receiving funds from the department;
15-15 (3) owns or controls, directly or indirectly, more
15-16 than a 10 percent interest in a business entity or other
15-17 organization regulated by or receiving funds from the department;
15-18 or
15-19 (4) uses or receives a substantial amount of tangible
15-20 goods, services, or funds from the department, other than
15-21 compensation or reimbursement authorized by law.
15-22 (b) A person is not eligible for appointment as commissioner
15-23 if the person:
15-24 (1) is a stockholder, director, officer, attorney,
15-25 agent, or employee of an insurance company, insurance agent,
15-26 insurance broker, or insurance adjuster; or
15-27 (2) is directly or indirectly interested in a business
16-1 described by Subdivision (1).
16-2 (c) Subsection (b) does not apply to:
16-3 (1) a person solely because the person is insured by
16-4 an insurer or is the beneficiary of insurance; or
16-5 (2) a person who:
16-6 (A) is appointed as a receiver, liquidator,
16-7 supervisor, or conservator of an insurer; or
16-8 (B) is an employee of a receiver, liquidator,
16-9 supervisor, or conservator of an insurer with respect to duties
16-10 under that employment. (V.T.I.C. Art. 1.06, Subsec. (a);
16-11 Art. 1.09, Subsec. (b) (part).)
16-12 Sec. 33.003. INSURANCE BUSINESS INTEREST; EMPLOYEE. (a) A
16-13 person who is a director, officer, attorney, agent, or employee of
16-14 an insurance company, insurance agent, insurance broker, or
16-15 insurance adjuster may not be employed by the department.
16-16 (b) A person who resides in the same household as a person
16-17 who is an officer, managerial employee, or paid consultant in the
16-18 insurance industry may not be employed in an exempt salary position
16-19 as defined by the General Appropriations Act. (V.T.I.C. Art. 1.06,
16-20 Subsec. (b); Art. 1.06AA.)
16-21 Sec. 33.004. TRADE ASSOCIATIONS. (a) A person who is an
16-22 officer, employee, or paid consultant of a trade association in the
16-23 field of insurance may not be:
16-24 (1) the commissioner; or
16-25 (2) an employee of the department who is exempt from
16-26 the state's position classification plan or is compensated at or
16-27 above the amount prescribed by the General Appropriations Act for
17-1 step 1, salary group A17, of the position classification salary
17-2 schedule.
17-3 (b) A person who is the spouse of an officer, manager, or
17-4 paid consultant of a trade association in the field of insurance
17-5 may not be:
17-6 (1) the commissioner; or
17-7 (2) an employee of the department who is exempt from
17-8 the state's position classification plan or is compensated at or
17-9 above the amount prescribed by the General Appropriations Act for
17-10 step 1, salary group A17, of the position classification salary
17-11 schedule.
17-12 (c) In this section, "trade association" means a nonprofit,
17-13 cooperative, and voluntarily joined association of business or
17-14 professional competitors designed to assist its members and its
17-15 industry or profession in dealing with mutual business or
17-16 professional problems and in promoting their common interest.
17-17 (V.T.I.C. Art. 1.06A.)
17-18 Sec. 33.005. LOBBYING ACTIVITIES. A person may not serve as
17-19 the commissioner or act as the general counsel to the commissioner
17-20 if the person is required to register as a lobbyist under Chapter
17-21 305, Government Code, because of the person's activities for
17-22 compensation on behalf of a profession related to the operation of
17-23 the department. (V.T.I.C. Art. 1.06B.)
17-24 Sec. 33.006. FORMER SERVICE. A person may not serve as the
17-25 commissioner if the person served as a member of the State Board of
17-26 Insurance. (V.T.I.C. Art. 1.09, Subsec. (b) (part).)
17-27 Sec. 33.007. PROHIBITED REPRESENTATION. (a) A person who
18-1 served as the commissioner, the general counsel to the
18-2 commissioner, or the public insurance counsel, or as an employee of
18-3 the State Office of Administrative Hearings who was involved in
18-4 hearing cases under this code or another insurance law of this
18-5 state, commits an offense if the person represents another person
18-6 in a matter before the department or receives compensation for
18-7 services performed on behalf of another person regarding a matter
18-8 pending before the department during the one-year period after the
18-9 date the person ceased to be the commissioner, the general counsel
18-10 to the commissioner, the public insurance counsel, or an employee
18-11 of the State Office of Administrative Hearings.
18-12 (b) A person who served as a member of the State Board of
18-13 Insurance or as a staff employee of a member of the State Board of
18-14 Insurance, or who served as the commissioner, the general counsel
18-15 to the commissioner, or the public insurance counsel or as an
18-16 employee of the department or the State Office of Administrative
18-17 Hearings, commits an offense if, after the person ceased to serve,
18-18 the person represents another person or receives compensation for
18-19 services performed on behalf of another person regarding a matter
18-20 with which the person was directly concerned during the person's
18-21 service. For purposes of this subsection, a person was directly
18-22 concerned with a matter if the person had personal involvement with
18-23 the matter or if the matter was within the scope of the person's
18-24 official responsibility.
18-25 (c) An offense under this section is a Class A misdemeanor.
18-26 (d) This section does not apply to a department employee
18-27 whose position is eliminated as a direct result of a reduction in
19-1 the department's workforce. (V.T.I.C. Art. 1.06C.)
19-2 CHAPTER 34. IMMUNITY FROM LIABILITY
19-3 Sec. 34.001. PERSONAL IMMUNITY
19-4 Sec. 34.002. IMMUNITY FOR FURNISHING INFORMATION RELATING
19-5 TO FRAUD
19-6 Sec. 34.003. IMMUNITY FOR INVESTIGATIONS AND RELATED REPORTS
19-7 Sec. 34.004. IMMUNITY FOR USE OF ANNUAL STATEMENT
19-8 INFORMATION
19-9 Sec. 34.005. EFFECT OF CHAPTER ON OTHER IMMUNITY
19-10 CHAPTER 34. IMMUNITY FROM LIABILITY
19-11 Sec. 34.001. PERSONAL IMMUNITY. A person who is the
19-12 commissioner or an employee of the department is not personally
19-13 liable in a civil action for:
19-14 (1) an act performed in good faith within the scope of
19-15 that person's authority; or
19-16 (2) damages caused by an official act or omission of
19-17 that person unless the act or omission is corrupt or malicious.
19-18 (V.T.I.C. Art. 1.40, Subsec. (a) (part).)
19-19 Sec. 34.002. IMMUNITY FOR FURNISHING INFORMATION RELATING TO
19-20 FRAUD. (a) A person is not liable in a civil action, including an
19-21 action for libel or slander, and a civil action may not be brought
19-22 against the person, for furnishing information relating to
19-23 suspected, anticipated, or completed fraudulent insurance acts if
19-24 the information is provided to or received from:
19-25 (1) the commissioner or an employee of the department;
19-26 (2) a law enforcement agency of this state, of another
19-27 state, or of the United States or an employee of the agency;
20-1 (3) the National Association of Insurance
20-2 Commissioners or an employee of the association; or
20-3 (4) a state or federal governmental agency established
20-4 to detect and prevent fraudulent insurance acts or to regulate the
20-5 business of insurance or an employee of the agency.
20-6 (b) A person may furnish information as described in
20-7 Subsection (a) orally or in writing, including through publishing,
20-8 disseminating, or filing bulletins or reports.
20-9 (c) Subsection (a) does not apply to a person who acts with
20-10 malice, fraudulent intent, or bad faith.
20-11 (d) A person to whom Subsection (a) applies who prevails in
20-12 a civil action arising from the furnishing of information as
20-13 described in Subsection (a) is entitled to attorney's fees and
20-14 costs if the action was not substantially justified. In this
20-15 subsection, "substantially justified" means there was a reasonable
20-16 basis in law or fact to bring the action at the time the action was
20-17 initiated. (V.T.I.C. Art. 1.40, Subsecs. (b), (c), (d).)
20-18 Sec. 34.003. IMMUNITY FOR INVESTIGATIONS AND RELATED
20-19 REPORTS. (a) A person who is the commissioner or an employee,
20-20 agent, or designee of the department is not liable in a civil
20-21 action, including an action for libel or slander, because of:
20-22 (1) an investigation of a violation of this code or an
20-23 alleged fraudulent insurance act; or
20-24 (2) the publication or dissemination of an official
20-25 report related to the investigation.
20-26 (b) Subsection (a) does not apply to a person who acts with
20-27 malice. (V.T.I.C. Art. 1.40, Subsec. (f).)
21-1 Sec. 34.004. IMMUNITY FOR USE OF ANNUAL STATEMENT
21-2 INFORMATION. (a) A person is not liable in a civil action,
21-3 including an action for libel or slander, for collecting,
21-4 reviewing, analyzing, disseminating, or reporting information
21-5 collected from annual statements filed under Article 1.11 if the
21-6 person is:
21-7 (1) the department, the commissioner, or an employee
21-8 of the department;
21-9 (2) a member or employee of or delegate to the
21-10 National Association of Insurance Commissioners or an authorized
21-11 committee, subcommittee, or task force of that association; or
21-12 (3) another person who is responsible for collecting,
21-13 reviewing, analyzing, and disseminating information from filed
21-14 annual statement convention blanks.
21-15 (b) Subsection (a) does not apply to a person who acts with
21-16 malice. (V.T.I.C. Art. 1.40, Subsec. (e).)
21-17 Sec. 34.005. EFFECT OF CHAPTER ON OTHER IMMUNITY. This
21-18 chapter does not affect or modify any common law or statutory
21-19 privilege or immunity. (V.T.I.C. Art. 1.40, Subsec. (g).)
21-20 (Chapter 35 reserved for expansion
21-21 CHAPTER 36. DEPARTMENT RULES AND PROCEDURES
21-22 SUBCHAPTER A. RULES
21-23 Sec. 36.001. RULES FOR GENERAL AND UNIFORM APPLICATION
21-24 Sec. 36.002. FISCAL IMPACT OF DEPARTMENT RULES
21-25 Sec. 36.003. RULES RESTRICTING ADVERTISING OR COMPETITIVE
21-26 BIDDING
21-27 Sec. 36.004. COMPLIANCE WITH NATIONAL ASSOCIATION OF INSURANCE
22-1 COMMISSIONERS REQUIREMENTS
22-2 (Sections 36.005-36.100 reserved for expansion
22-3 SUBCHAPTER B. DEPARTMENT PROCEDURES
22-4 Sec. 36.101. APPLICABILITY OF CERTAIN LAWS
22-5 Sec. 36.102. SUMMARY PROCEDURES FOR ROUTINE MATTERS
22-6 Sec. 36.103. REVIEW OF ACTION ON ROUTINE MATTER
22-7 Sec. 36.104. INFORMAL DISPOSITION OF CONTESTED CASE
22-8 Sec. 36.105. NEWSPAPER PUBLICATION
22-9 Sec. 36.106. WAIVER OF CERTAIN NOTICE REQUIREMENTS
22-10 Sec. 36.107. ACCEPTANCE OF ACTUARIAL OPINION
22-11 (Sections 36.108-36.150 reserved for expansion
22-12 SUBCHAPTER C. GENERAL SUBPOENA POWERS; WITNESSES AND
22-13 PRODUCTION OF RECORDS
22-14 Sec. 36.151. DEFINITION
22-15 Sec. 36.152. SUBPOENA AUTHORITY
22-16 Sec. 36.153. SERVICE OF SUBPOENA
22-17 Sec. 36.154. ENFORCEMENT OF SUBPOENA
22-18 Sec. 36.155. COMPENSATION FOR ATTENDANCE
22-19 Sec. 36.156. OUT-OF-STATE MATERIALS
22-20 Sec. 36.157. USE AS EVIDENCE IN CERTAIN CASES
22-21 Sec. 36.158. ACCESS TO INFORMATION
22-22 Sec. 36.159. PRIVILEGED AND CONFIDENTIAL RECORDS AND
22-23 INFORMATION; PROTECTIVE ORDERS
22-24 Sec. 36.160. COOPERATION WITH LAW ENFORCEMENT
22-25 Sec. 36.161. CERTAIN SUBPOENAS ISSUED TO FINANCIAL
22-26 INSTITUTIONS
22-27 Sec. 36.162. EFFECT ON CONTESTED CASE
23-1 (Sections 36.163-36.200 reserved for expansion
23-2 SUBCHAPTER D. JUDICIAL REVIEW
23-3 Sec. 36.201. ACTION SUBJECT TO JUDICIAL REVIEW
23-4 Sec. 36.202. PETITION FOR JUDICIAL REVIEW
23-5 Sec. 36.203. JUDICIAL REVIEW
23-6 Sec. 36.204. ACTION NOT VACATED
23-7 Sec. 36.205. APPEAL
23-8 CHAPTER 36. DEPARTMENT RULES AND PROCEDURES
23-9 SUBCHAPTER A. RULES
23-10 Sec. 36.001. RULES FOR GENERAL AND UNIFORM APPLICATION. (a)
23-11 The commissioner may adopt rules for the conduct and execution of
23-12 the powers and duties of the department only as authorized by
23-13 statute.
23-14 (b) Rules adopted under this section must have general and
23-15 uniform application.
23-16 (c) The commissioner shall publish the rules in a format
23-17 organized by subject matter. The published rules shall be kept
23-18 current and be available in a form convenient to any interested
23-19 person. (V.T.I.C. Art. 1.03A.)
23-20 Sec. 36.002. FISCAL IMPACT OF DEPARTMENT RULES. (a) A rule
23-21 adopted by the commissioner under Chapter 2001, Government Code, is
23-22 void if:
23-23 (1) the fiscal note or the public benefit-cost note
23-24 required by Section 2001.024, Government Code, does not accurately
23-25 state the reasonable actual costs required; and
23-26 (2) the reasonable actual costs required exceed the
23-27 stated costs by at least 25 percent.
24-1 (b) A rule that is void under this section is void beginning
24-2 on the date the rule is adopted. (V.T.I.C. Art. 1.03B.)
24-3 Sec. 36.003. RULES RESTRICTING ADVERTISING OR COMPETITIVE
24-4 BIDDING. The commissioner may not adopt rules restricting
24-5 advertising or competitive bidding by a person regulated by the
24-6 department except to prohibit false, misleading, or deceptive
24-7 practices by the person. (V.T.I.C. Art. 21.20-1.)
24-8 Sec. 36.004. COMPLIANCE WITH NATIONAL ASSOCIATION OF
24-9 INSURANCE COMMISSIONERS REQUIREMENTS. The department may not
24-10 require an insurer to comply with a rule, regulation, directive, or
24-11 standard adopted by the National Association of Insurance
24-12 Commissioners, including a rule, regulation, directive, or standard
24-13 relating to policy reserves, unless application of the rule,
24-14 regulation, directive, or standard is expressly authorized by
24-15 statute and approved by the commissioner. (V.T.I.C. Art. 1.27.)
24-16 (Sections 36.005-36.100 reserved for expansion
24-17 SUBCHAPTER B. DEPARTMENT PROCEDURES
24-18 Sec. 36.101. APPLICABILITY OF CERTAIN LAWS. Except as
24-19 specifically provided by law, the department is subject to Chapters
24-20 2001 and 2002, Government Code. (V.T.I.C. Art. 1.33A (part).)
24-21 Sec. 36.102. SUMMARY PROCEDURES FOR ROUTINE MATTERS. (a)
24-22 The commissioner by rule may:
24-23 (1) create a summary procedure for routine matters;
24-24 and
24-25 (2) designate department activities that otherwise
24-26 would be subject to Chapter 2001, Government Code, as routine
24-27 matters to be handled under the summary procedure.
25-1 (b) An activity may be designated as a routine matter only
25-2 if the activity is:
25-3 (1) voluminous;
25-4 (2) repetitive;
25-5 (3) believed to be noncontroversial; and
25-6 (4) of limited interest to anyone other than persons
25-7 immediately involved in or affected by the proposed department
25-8 action.
25-9 (c) The rules may establish procedures different from those
25-10 contained in Chapter 2001, Government Code. The procedures must
25-11 require, for each party directly involved, notice of a proposed
25-12 negative action not later than the fifth day before the date the
25-13 action is proposed to be taken.
25-14 (d) The rules may provide for the delegation of authority to
25-15 take action on a routine matter to a salaried employee of the
25-16 department designated by the commissioner. (V.T.I.C. Art. 1.33,
25-17 Subsecs. (a), (b), (c).)
25-18 Sec. 36.103. REVIEW OF ACTION ON ROUTINE MATTER. (a) A
25-19 person directly or indirectly affected by an action of the
25-20 commissioner or the department on a routine matter taken under the
25-21 summary procedure adopted under Section 36.102 is entitled to a
25-22 review of the action under Chapter 2001, Government Code.
25-23 (b) The person must apply to the commissioner not later than
25-24 the 60th day after the date of the action to be entitled to the
25-25 review.
25-26 (c) The timely filing of the application for review
25-27 immediately stays the action pending a hearing on the merits.
26-1 (d) The commissioner may adopt rules relating to an
26-2 application for review under this section and consideration of the
26-3 application. (V.T.I.C. Art. 1.33, Subsec. (d).)
26-4 Sec. 36.104. INFORMAL DISPOSITION OF CONTESTED CASE. The
26-5 commissioner may, on written agreement or stipulation of each party
26-6 and any intervenor, informally dispose of a contested case in
26-7 accordance with Section 2001.056, Government Code, notwithstanding
26-8 any provision of this code that requires a hearing before the
26-9 commissioner. (V.T.I.C. Art. 1.33, Subsec. (e) (part).)
26-10 Sec. 36.105. NEWSPAPER PUBLICATION. Except as otherwise
26-11 provided by law, a notice or other matter that this code requires
26-12 to be published must be published for three successive weeks in two
26-13 newspapers that:
26-14 (1) are printed in this state; and
26-15 (2) have a general circulation in this state.
26-16 (V.T.I.C. Art. 21.30.)
26-17 Sec. 36.106. WAIVER OF CERTAIN NOTICE REQUIREMENTS. The
26-18 commissioner may, on written agreement or stipulation of each party
26-19 and any intervenor, waive or modify the notice publication
26-20 requirement of Article 2.01, 2.03, 3.04, or 22.03. (V.T.I.C.
26-21 Art. 1.33, Subsec. (e) (part).)
26-22 Sec. 36.107. ACCEPTANCE OF ACTUARIAL OPINION. An opinion of
26-23 an actuary requested by the commissioner under this code, another
26-24 insurance law of this state, or a rule of the commissioner is
26-25 presumed to be accurate and valid, and the department shall accept
26-26 the opinion unless controverted. The department may employ, at the
26-27 department's expense, another actuary to provide an alternative
27-1 opinion. (V.T.I.C. Art. 1.11A.)
27-2 (Sections 36.108-36.150 reserved for expansion
27-3 SUBCHAPTER C. GENERAL SUBPOENA POWERS; WITNESSES AND
27-4 PRODUCTION OF RECORDS
27-5 Sec. 36.151. DEFINITION. In this subchapter, "records"
27-6 includes books, accounts, documents, papers, correspondence, and
27-7 other material. (V.T.I.C. Art. 1.19-1, Secs. 1(a) (part), (e)
27-8 (part), 2 (part), 3 (part), 5(a) (part); New.)
27-9 Sec. 36.152. SUBPOENA AUTHORITY. (a) With respect to a
27-10 matter that the commissioner has authority to consider or
27-11 investigate, the commissioner may issue a subpoena applicable
27-12 throughout the state that requires:
27-13 (1) the attendance and testimony of a witness; and
27-14 (2) the production of records.
27-15 (b) In connection with a subpoena, the commissioner may
27-16 require attendance and production of records before the
27-17 commissioner or the commissioner's designee:
27-18 (1) at the department's offices in Austin; or
27-19 (2) at another place designated by the commissioner.
27-20 (c) In connection with a subpoena, the commissioner or the
27-21 commissioner's designee may administer an oath, examine a witness,
27-22 or receive evidence.
27-23 (d) Subject to Section 36.102(d), the commissioner must
27-24 personally sign and issue the subpoena. (V.T.I.C. Art. 1.19-1,
27-25 Sec. 1(a) (part).)
27-26 Sec. 36.153. SERVICE OF SUBPOENA. (a) A subpoena issued by
27-27 the commissioner may be served, at the discretion of the
28-1 commissioner, by the commissioner, an authorized agent of the
28-2 commissioner, a sheriff, or a constable.
28-3 (b) The sheriff's or constable's fee for serving the
28-4 subpoena is the same as the fee paid to the sheriff or constable
28-5 for similar services. (V.T.I.C. Art. 1.19-1, Sec. 4(b).)
28-6 Sec. 36.154. ENFORCEMENT OF SUBPOENA. (a) On application
28-7 of the commissioner in the case of disobedience of a subpoena or
28-8 the contumacy of a person, a district court may issue an order
28-9 requiring a person subpoenaed to obey the subpoena, to give
28-10 evidence, or to produce records if the person has refused to do so.
28-11 (b) A court may punish as contempt the failure to obey a
28-12 court order under Subsection (a).
28-13 (c) If the court orders compliance with the subpoena or
28-14 finds the person in contempt for failure to obey the order, the
28-15 commissioner, or the attorney general when representing the
28-16 department, may recover reasonable costs and fees, including
28-17 attorney's fees and investigative costs incurred in the
28-18 proceedings.
28-19 (d) An application under Subsection (a) must be made in a
28-20 district court in Travis County or in the county in which the
28-21 subpoena is served. (V.T.I.C. Art. 1.19-1, Sec. 3 (part).)
28-22 Sec. 36.155. COMPENSATION FOR ATTENDANCE. A person required
28-23 by subpoena to attend a proceeding before the commissioner or the
28-24 commissioner's designee is entitled to:
28-25 (1) reimbursement for mileage in the same amount for
28-26 each mile as the mileage travel allowance for a state employee for
28-27 traveling to or from the place where the person's attendance is
29-1 required, if the place is more than 25 miles from the person's
29-2 place of residence; and
29-3 (2) a fee for each day or part of a day the person is
29-4 required to be present as a witness that is equal to the greater
29-5 of:
29-6 (A) $10; or
29-7 (B) a state employee's per diem travel
29-8 allowance. (V.T.I.C. Art. 1.19-1, Sec. 4(a).)
29-9 Sec. 36.156. OUT-OF-STATE MATERIALS. (a) A person with
29-10 materials located outside this state that are requested by the
29-11 commissioner may make the materials available for examination at
29-12 the place where the materials are located.
29-13 (b) The commissioner may designate a representative,
29-14 including an official of the state in which the materials are
29-15 located, to examine the materials.
29-16 (c) The commissioner may respond to a similar request from
29-17 an official of another state or of the United States. (V.T.I.C.
29-18 Art. 1.19-1, Sec. 1(b).)
29-19 Sec. 36.157. USE AS EVIDENCE IN CERTAIN CASES. (a) This
29-20 section applies to testimony or records resulting in a case
29-21 involving an allegation of engaging in the business of insurance
29-22 without a license.
29-23 (b) On certification by the commissioner under official
29-24 seal, testimony taken or records produced under this subchapter and
29-25 held by the department are admissible in evidence in a case
29-26 without:
29-27 (1) prior proof of correctness; and
30-1 (2) proof, other than the certificate of the
30-2 commissioner, that the testimony or records were received from the
30-3 person testifying or producing the records.
30-4 (c) The certified records, or certified copies of the
30-5 records, are prima facie evidence of the facts disclosed by the
30-6 records.
30-7 (d) This section does not limit any other provision of this
30-8 subchapter or any law that makes provision for the admission or
30-9 evidentiary value of certain evidence. (V.T.I.C. Art. 1.19-1, Sec.
30-10 2 (part).)
30-11 Sec. 36.158. ACCESS TO INFORMATION. (a) A record or other
30-12 evidence acquired under a subpoena under this subchapter is not a
30-13 public record for the period the commissioner considers reasonably
30-14 necessary to:
30-15 (1) complete the investigation;
30-16 (2) protect the person being investigated from
30-17 unwarranted injury; or
30-18 (3) serve the public interest.
30-19 (b) The record or other evidence is not subject to a
30-20 subpoena, other than a grand jury subpoena, until:
30-21 (1) the record or other evidence is released for
30-22 public inspection by the commissioner; or
30-23 (2) after notice and a hearing, a district court
30-24 determines that obeying the subpoena would not jeopardize the
30-25 public interest and any investigation by the commissioner.
30-26 (c) Except for good cause, a district court order under
30-27 Subsection (b) may not apply to:
31-1 (1) a record or communication received from another
31-2 law enforcement or regulatory agency; or
31-3 (2) the internal notes, memoranda, reports, or
31-4 communications made in connection with a matter that the
31-5 commissioner has the authority to consider or investigate.
31-6 (V.T.I.C. Art. 1.19-1, Sec. 1(d).)
31-7 Sec. 36.159. PRIVILEGED AND CONFIDENTIAL RECORDS AND
31-8 INFORMATION; PROTECTIVE ORDERS. (a) A record subpoenaed and
31-9 produced under this subchapter that is otherwise privileged or
31-10 confidential by law remains privileged or confidential until
31-11 admitted into evidence in an administrative hearing or a court.
31-12 (b) The commissioner may issue a protective order relating
31-13 to the confidentiality or privilege of a record described by
31-14 Subsection (a) to restrict the use or distribution of the record:
31-15 (1) by a person; or
31-16 (2) in a proceeding other than a proceeding before the
31-17 commissioner.
31-18 (c) Specific information relating to a particular policy or
31-19 claim is privileged and confidential while in the possession of an
31-20 insurance company, organization, association, or other entity
31-21 holding a certificate of authority from the department and may not
31-22 be disclosed by the entity to another person, except as
31-23 specifically provided by law. (V.T.I.C. Art. 1.19-1, Secs. 5(a)
31-24 (part), (b).)
31-25 Sec. 36.160. COOPERATION WITH LAW ENFORCEMENT. On request,
31-26 the commissioner may furnish records or other evidence obtained by
31-27 subpoena to:
32-1 (1) a law enforcement agency of this state, another
32-2 state, or the United States; or
32-3 (2) a prosecuting attorney of a municipality, county,
32-4 or judicial district of this state, another state, or the United
32-5 States. (V.T.I.C. Art. 1.19-1, Sec. 1(e) (part).)
32-6 Sec. 36.161. CERTAIN SUBPOENAS ISSUED TO FINANCIAL
32-7 INSTITUTIONS. A subpoena issued to a bank or other financial
32-8 institution as part of a criminal investigation is not subject to
32-9 Section 30.007, Civil Practice and Remedies Code. (V.T.I.C.
32-10 Art. 1.19-1, Sec. 1(c).)
32-11 Sec. 36.162. EFFECT ON CONTESTED CASE. Sections 36.152,
32-12 36.156, 36.158, 36.160, and 36.161 do not affect the conduct of a
32-13 contested case under Chapter 2001, Government Code. (V.T.I.C.
32-14 Art. 1.19-1, Sec. 1(g).)
32-15 (Sections 36.163-36.200 reserved for expansion
32-16 SUBCHAPTER D. JUDICIAL REVIEW
32-17 Sec. 36.201. ACTION SUBJECT TO JUDICIAL REVIEW. An action
32-18 of the commissioner subject to judicial review under this
32-19 subchapter includes a decision, order, rate, rule, form, or
32-20 administrative or other ruling of the commissioner. (V.T.I.C.
32-21 Art. 1.04, Subsec. (a) (part).)
32-22 Sec. 36.202. PETITION FOR JUDICIAL REVIEW. (a) After
32-23 failing to get relief from the commissioner, any insurance company
32-24 or other party at interest who is dissatisfied with an action of
32-25 the commissioner may file a petition for judicial review against
32-26 the commissioner as defendant.
32-27 (b) The petition must state the particular objection to the
33-1 action and may be filed only in a district court in Travis County.
33-2 (V.T.I.C. Art. 1.04, Subsec. (a) (part).)
33-3 Sec. 36.203. JUDICIAL REVIEW. Judicial review of the action
33-4 is under the substantial evidence rule and shall be conducted under
33-5 Chapter 2001, Government Code. (V.T.I.C. Art. 1.04, Subsec. (a)
33-6 (part).)
33-7 Sec. 36.204. ACTION NOT VACATED. (a) The filing of a
33-8 petition for judicial review of an action under this subchapter
33-9 does not vacate the action.
33-10 (b) After notice and hearing, the court may vacate the
33-11 action if the court finds it would serve the interest of justice to
33-12 do so. (V.T.I.C. Art. 1.04, Subsec. (a) (part).)
33-13 Sec. 36.205. APPEAL. (a) A party to the action under
33-14 Section 36.202 may appeal to an appellate court that has
33-15 jurisdiction, and the appeal is at once returnable to that court.
33-16 (b) An appeal under this section has precedence in the
33-17 appellate court over any cause of a different character pending in
33-18 the court.
33-19 (c) The commissioner is not required to give an appeal bond
33-20 in an appeal arising under this subchapter. (V.T.I.C. Art. 1.04,
33-21 Subsecs. (a) (part), (b).)
33-22 CHAPTER 37. RATEMAKING AND POLICY FORM PROCEEDINGS
33-23 SUBCHAPTER A. GENERAL PROVISIONS
33-24 Sec. 37.001. CERTAIN PROCEEDINGS RELATING TO RATEMAKING
33-25 AND POLICY FORMS; RULES
33-26 (Sections 37.002-37.050 reserved for expansion
33-27 SUBCHAPTER B. CERTAIN PROCEEDINGS RELATING TO RATES
34-1 Sec. 37.051. STREAMLINED PROCEDURES
34-2 Sec. 37.052. ROLE OF DEPARTMENT
34-3 CHAPTER 37. RATEMAKING AND POLICY FORM PROCEEDINGS
34-4 SUBCHAPTER A. GENERAL PROVISIONS
34-5 Sec. 37.001. CERTAIN PROCEEDINGS RELATING TO RATEMAKING AND
34-6 POLICY FORMS; RULES. (a) The commissioner shall adopt rules
34-7 governing proceedings necessary to approve or promulgate rates,
34-8 policy forms, or policy form endorsements under this code or
34-9 another insurance law of this state.
34-10 (b) The commissioner shall conduct the proceedings in
34-11 accordance with the rules adopted under this section.
34-12 (c) Rules adopted under this section must comply with this
34-13 code and any other insurance law of this state and must be adopted
34-14 in accordance with Chapter 2001, Government Code. (V.T.I.C.
34-15 Art. 1.33C, Subsecs. (a), (b).)
34-16 (Sections 37.002-37.050 reserved for expansion
34-17 SUBCHAPTER B. CERTAIN PROCEEDINGS RELATING TO RATES
34-18 Sec. 37.051. STREAMLINED PROCEDURES. (a) The department
34-19 shall study and the commissioner may adopt and implement procedures
34-20 for streamlining insurance rate proceedings under this code or
34-21 another insurance law of this state. The procedures must ensure
34-22 due process to each affected party.
34-23 (b) The commissioner shall consider this section in adopting
34-24 rules under Section 37.001. (V.T.I.C. Art. 1.33C, Subsec. (c);
34-25 Art. 5.121.)
34-26 Sec. 37.052. ROLE OF DEPARTMENT. (a) The application of
34-27 this section is subject to Chapter 40.
35-1 (b) The commissioner may designate the general counsel or an
35-2 assistant general counsel to serve as a hearings officer in a
35-3 proceeding in which insurance rates are set or in a prehearing
35-4 proceeding. The commissioner must make the final decision relating
35-5 to the rates to be set.
35-6 (c) The department shall provide evidence in proceedings
35-7 before the commissioner or the designated hearings officer that
35-8 promotes the adoption of fair and reasonable rates for underserved
35-9 areas to promote access to full insurance coverage for those areas.
35-10 (d) The department may appear as a matter of right as a
35-11 party, present evidence, or question a witness in a proceeding
35-12 before the commissioner or the designated hearings officer in which
35-13 insurance rates are set under this code. This subsection expires
35-14 September 1, 2001. (V.T.I.C. Art. 1.09-5.)
35-15 CHAPTER 38. DATA COLLECTION AND REPORTS
35-16 SUBCHAPTER A. GENERAL PROVISIONS
35-17 Sec. 38.001. INQUIRIES
35-18 Sec. 38.002. UNDERWRITING GUIDELINES; CONFIDENTIALITY
35-19 (Sections 38.003-38.050 reserved for expansion
35-20 SUBCHAPTER B. HEALTH BENEFIT PLAN PROVIDER REPORTING
35-21 Sec. 38.051. DEFINITION
35-22 Sec. 38.052. REQUIRED INFORMATION; RULES
35-23 (Sections 38.053-38.100 reserved for expansion
35-24 SUBCHAPTER C. DATA COLLECTION AND REPORTING
35-25 RELATING TO HIV AND AIDS
35-26 Sec. 38.101. DEFINITIONS
35-27 Sec. 38.102. PURPOSE
36-1 Sec. 38.103. DATA COLLECTION PROGRAM
36-2 Sec. 38.104. COMPILATION OF DATA AND INFORMATION; REPORT
36-3 Sec. 38.105. RECOMMENDATIONS AND REPORTS TO LEGISLATURE
36-4 Sec. 38.106. INFORMATION CONFIDENTIAL
36-5 (Sections 38.107-38.150 reserved for expansion
36-6 SUBCHAPTER D. LIABILITY INSURANCE CLOSED CLAIM REPORTS
36-7 Sec. 38.151. DEFINITIONS
36-8 Sec. 38.152. EXEMPTION
36-9 Sec. 38.153. CLOSED CLAIM REPORT
36-10 Sec. 38.154. CONTENT OF CLOSED CLAIM REPORT FORM
36-11 Sec. 38.155. SUMMARY CLOSED CLAIM REPORT
36-12 Sec. 38.156. CONTENT OF SUMMARY CLOSED CLAIM REPORT FORM
36-13 Sec. 38.157. AGGREGATE REPORT
36-14 Sec. 38.158. ALTERNATIVE REPORTING
36-15 Sec. 38.159. COMPILATION OF DATA; REPORT
36-16 Sec. 38.160. ELECTRONIC DATABASE
36-17 Sec. 38.161. REPORT TO LEGISLATURE
36-18 Sec. 38.162. INFORMATION CONFIDENTIAL
36-19 Sec. 38.163. RULES AND FORMS
36-20 (Sections 38.164-38.200 reserved for expansion
36-21 SUBCHAPTER E. STATISTICAL DATA COLLECTION
36-22 Sec. 38.201. DEFINITION
36-23 Sec. 38.202. STATISTICAL AGENT
36-24 Sec. 38.203. QUALIFICATIONS OF STATISTICAL AGENT
36-25 Sec. 38.204. POWERS AND DUTIES OF STATISTICAL AGENT
36-26 Sec. 38.205. DUTY OF INSURER
36-27 Sec. 38.206. FEES
37-1 Sec. 38.207. RULES
37-2 CHAPTER 38. DATA COLLECTION AND REPORTS
37-3 SUBCHAPTER A. GENERAL PROVISIONS
37-4 Sec. 38.001. INQUIRIES. (a) In this section,
37-5 "authorization" means a permit, certificate of registration, or
37-6 other authorization issued or existing under this code.
37-7 (b) The department may address a reasonable inquiry to an
37-8 insurance company, agent, or holder of an authorization relating
37-9 to:
37-10 (1) the person's business condition; or
37-11 (2) any matter connected with the person's
37-12 transactions that the department considers necessary for the public
37-13 good or for the proper discharge of the department's duties.
37-14 (c) A person receiving an inquiry under Subsection (b) shall
37-15 respond to the inquiry in writing not later than the 10th day after
37-16 the date the inquiry is received.
37-17 (d) A response made under this section that is otherwise
37-18 privileged or confidential by law remains privileged or
37-19 confidential until introduced into evidence at an administrative
37-20 hearing or in a court. (V.T.I.C. Art. 1.24.)
37-21 Sec. 38.002. UNDERWRITING GUIDELINES; CONFIDENTIALITY.
37-22 (a) The department or the office of public insurance counsel may
37-23 obtain a copy of an insurer's underwriting guidelines.
37-24 (b) Underwriting guidelines are confidential, and the
37-25 department or the office of public insurance counsel may not make
37-26 the guidelines available to the public.
37-27 (c) The department or the office of public insurance counsel
38-1 may disclose to the public a summary of an insurer's underwriting
38-2 guidelines in a manner that does not directly or indirectly
38-3 identify the insurer.
38-4 (d) When underwriting guidelines are furnished to the
38-5 department or the office of public insurance counsel, only a person
38-6 within the department or the office of public insurance counsel
38-7 with a need to know may have access to the guidelines. The
38-8 department and the office of public insurance counsel shall
38-9 establish internal control systems to limit access to the
38-10 guidelines and shall keep records of the access provided.
38-11 (e) This section does not preclude the use of underwriting
38-12 guidelines as evidence in prosecuting a violation of this code.
38-13 Each copy of an insurer's underwriting guidelines that is used in
38-14 prosecuting a violation is presumed to be confidential and is
38-15 subject to a protective order until all appeals of the case have
38-16 been exhausted. If an insurer is found, after the exhaustion of
38-17 all appeals, to have violated this code, a copy of the underwriting
38-18 guidelines used as evidence of the violation is no longer presumed
38-19 to be confidential.
38-20 (f) A violation of this section is a violation of Chapter
38-21 552, Government Code. (V.T.I.C. Art. 1.24D.)
38-22 (Sections 38.003-38.050 reserved for expansion
38-23 SUBCHAPTER B. HEALTH BENEFIT PLAN PROVIDER REPORTING
38-24 Sec. 38.051. DEFINITION. In this subchapter, "health
38-25 benefit plan provider" means an insurance company, group hospital
38-26 service corporation, or health maintenance organization that
38-27 issues:
39-1 (1) an individual, group, blanket, or franchise
39-2 insurance policy, an insurance agreement, a group hospital service
39-3 contract, or an evidence of coverage, that provides benefits for
39-4 medical or surgical expenses incurred as a result of an accident or
39-5 sickness; or
39-6 (2) a long-term care insurance policy, as defined by
39-7 Section 2, Article 3.70-12. (V.T.I.C. Art. 3.90, Subsec. (a);
39-8 New.)
39-9 Sec. 38.052. REQUIRED INFORMATION; RULES. (a) A health
39-10 benefit plan provider shall submit information required by the
39-11 department relating to the health benefit plan provider's:
39-12 (1) loss experience;
39-13 (2) overhead; and
39-14 (3) operating expenses.
39-15 (b) The department may also request information about
39-16 characteristics of persons covered by a health benefit plan
39-17 provider, including information relating to:
39-18 (1) age;
39-19 (2) gender;
39-20 (3) health status;
39-21 (4) job classification; and
39-22 (5) geographic distribution.
39-23 (c) A health benefit plan provider may not be required to
39-24 submit information under this section more frequently than
39-25 annually.
39-26 (d) The commissioner shall adopt rules governing the
39-27 submission of information under this subchapter. (V.T.I.C.
40-1 Art. 3.90, Subsecs. (b), (c).)
40-2 (Sections 38.053-38.100 reserved for expansion
40-3 SUBCHAPTER C. DATA COLLECTION AND REPORTING
40-4 RELATING TO HIV AND AIDS
40-5 Sec. 38.101. DEFINITIONS. In this subchapter:
40-6 (1) "HIV" and "AIDS" have the meanings assigned by
40-7 Section 81.101, Health and Safety Code.
40-8 (2) "Health benefit plan coverage" means a group
40-9 policy, contract, or certificate of health insurance or benefits
40-10 delivered, issued for delivery, or renewed in this state by:
40-11 (A) an insurance company subject to Chapter 3;
40-12 (B) a group hospital service corporation under
40-13 Chapter 20;
40-14 (C) a health maintenance organization under the
40-15 Texas Health Maintenance Organization Act (Chapter 20A, Vernon's
40-16 Texas Insurance Code); or
40-17 (D) a self-insurance trust or mechanism
40-18 providing health care benefits. (V.T.I.C. Art. 1.24C, Subsecs.
40-19 (b)(1), (2).)
40-20 Sec. 38.102. PURPOSE. The purpose of this subchapter is to:
40-21 (1) ensure that adequate health insurance and benefits
40-22 coverage is available to the citizens of this state;
40-23 (2) ensure that adequate health care is available to
40-24 protect the public health and safety; and
40-25 (3) ascertain the continuing effect of HIV and AIDS on
40-26 health insurance coverage and health benefits coverage availability
40-27 and adequacy in this state for purposes of meeting the public's
41-1 health coverage needs. (V.T.I.C. Art. 1.24C, Subsec. (a).)
41-2 Sec. 38.103. DATA COLLECTION PROGRAM. (a) The department
41-3 shall maintain a program to gather data and information relating to
41-4 the effect of HIV and AIDS on the availability, adequacy, and
41-5 affordability of health benefit plan coverage in this state.
41-6 (b) The commissioner may adopt rules necessary to implement
41-7 this subchapter, including rules relating to:
41-8 (1) reporting schedules;
41-9 (2) report forms;
41-10 (3) lists of data and information required to be
41-11 reported; and
41-12 (4) reporting procedures, guidelines, and criteria.
41-13 (V.T.I.C. Art. 1.24C, Subsecs. (c), (d).)
41-14 Sec. 38.104. COMPILATION OF DATA AND INFORMATION; REPORT.
41-15 (a) The department shall compile the data and information included
41-16 in reports required by this subchapter into composite form and
41-17 shall prepare at least annually a written report of:
41-18 (1) the composite data and information; and
41-19 (2) the department's analysis of the availability,
41-20 adequacy, and affordability of health benefit plan coverage in this
41-21 state.
41-22 (b) Subject to Section 38.106, the department shall make the
41-23 report available to the public and may charge a reasonable fee for
41-24 the report to cover the cost of making the report available.
41-25 (V.T.I.C. Art. 1.24C, Subsec. (e).)
41-26 Sec. 38.105. RECOMMENDATIONS AND REPORTS TO LEGISLATURE.
41-27 (a) The commissioner may submit to the legislature written
42-1 recommendations for legislation the commissioner considers
42-2 necessary to resolve problems related to the effect of HIV and AIDS
42-3 on the availability, adequacy, and affordability of health benefit
42-4 plan coverage in this state.
42-5 (b) The department, on request of the lieutenant governor,
42-6 the speaker of the house of representatives, or the presiding
42-7 officer of a legislative committee, shall provide to the
42-8 legislature additional composite data and information and analyses
42-9 based on the reports required by this subchapter. Reports prepared
42-10 under this subsection shall be available to the public as required
42-11 by Section 38.104. (V.T.I.C. Art. 1.24C, Subsecs. (f), (g).)
42-12 Sec. 38.106. INFORMATION CONFIDENTIAL. (a) If the
42-13 commissioner determines that information or reports submitted under
42-14 this subchapter would reveal or might reveal the identity of an
42-15 individual or associate an individual with a company, the
42-16 commissioner shall declare the information or reports confidential,
42-17 and the information or reports may not be made available to the
42-18 public.
42-19 (b) Information made confidential under this section may be
42-20 examined only by the commissioner and department employees.
42-21 (c) Data and information reported by an insurer under this
42-22 subchapter are not subject to public disclosure to the extent that
42-23 the information is protected under Chapter 552, Government Code.
42-24 The data and information may be compiled into composite form and
42-25 made public if information that could be used to identify the
42-26 reporting insurer is removed. (V.T.I.C. Art. 1.24C, Subsecs. (h),
42-27 (i).)
43-1 (Sections 38.107-38.150 reserved for expansion
43-2 SUBCHAPTER D. LIABILITY INSURANCE CLOSED CLAIM REPORTS
43-3 Sec. 38.151. DEFINITIONS. In this subchapter:
43-4 (1) "Insurer" means:
43-5 (A) an insurance company or other entity that is
43-6 admitted to do business and authorized to write liability insurance
43-7 in this state, including:
43-8 (i) a county mutual insurance company;
43-9 (ii) a Lloyd's plan insurer; and
43-10 (iii) a reciprocal or interinsurance
43-11 exchange; and
43-12 (B) a pool, joint underwriting association, or
43-13 self-insurance mechanism or trust authorized by law to insure its
43-14 participants, subscribers, or members against liability.
43-15 (2) "Liability insurance" means:
43-16 (A) general liability insurance;
43-17 (B) medical professional liability insurance;
43-18 (C) professional liability insurance other than
43-19 medical professional liability insurance;
43-20 (D) commercial automobile liability insurance;
43-21 (E) the liability portion of commercial
43-22 multiperil insurance coverage; and
43-23 (F) any other type or line of liability
43-24 insurance designated by the commissioner under Section 38.163.
43-25 (V.T.I.C. Art. 1.24B, Secs. 1(1), (2) (part).)
43-26 Sec. 38.152. EXEMPTION. This subchapter does not apply to a
43-27 farm mutual insurance company or to a county mutual fire insurance
44-1 company writing exclusively industrial fire insurance as described
44-2 by Article 17.02. (V.T.I.C. Art. 1.24B, Sec. 1(2) (part).)
44-3 Sec. 38.153. CLOSED CLAIM REPORT. (a) Not later than the
44-4 10th day after the last day of the calendar quarter in which a
44-5 claim for recovery under a liability insurance policy is closed,
44-6 the insurer shall file with the department a closed claim report if
44-7 the indemnity payment for bodily injury under the coverage is
44-8 $25,000 or more.
44-9 (b) A closed claim report must be filed, in a form
44-10 prescribed by the commissioner. (V.T.I.C. Art. 1.24B, Secs. 2(a),
44-11 5(a) (part).)
44-12 Sec. 38.154. CONTENT OF CLOSED CLAIM REPORT FORM. (a) The
44-13 closed claim report form adopted by the commissioner for a report
44-14 under Section 38.153 must require information relating to:
44-15 (1) the identity of the insurer;
44-16 (2) the liability insurance policy, including:
44-17 (A) the type or types of insurance;
44-18 (B) the policy limits;
44-19 (C) whether the policy was an occurrence or
44-20 claims-made policy;
44-21 (D) the classification of the insured; and
44-22 (E) reserves for the claim;
44-23 (3) details of:
44-24 (A) any injury, damage, or other loss that was
44-25 the subject of the claim, including:
44-26 (i) the type of injury, damage, or other
44-27 loss;
45-1 (ii) where and how the injury, damage, or
45-2 other loss occurred;
45-3 (iii) the age of any injured party; and
45-4 (iv) whether an injury was work-related;
45-5 (B) the claims process, including:
45-6 (i) whether a lawsuit was filed;
45-7 (ii) where a lawsuit, if any, was filed;
45-8 (iii) whether attorneys were involved;
45-9 (iv) the stage at which the claim was
45-10 closed;
45-11 (v) any court verdict;
45-12 (vi) any appeal;
45-13 (vii) the number of defendants; and
45-14 (viii) whether the claim was settled
45-15 outside of court and, if so, at what stage; and
45-16 (C) the amount paid on the claim, including:
45-17 (i) the total amount of a court award;
45-18 (ii) the amount paid by the insurer;
45-19 (iii) any amount paid by another insurer;
45-20 (iv) any amount paid by another defendant;
45-21 (v) any collateral source of payment;
45-22 (vi) any structured settlement;
45-23 (vii) the amount of noneconomic
45-24 compensatory damages;
45-25 (viii) the amount of prejudgment interest;
45-26 (ix) the amount paid for defense costs;
45-27 (x) the amount paid for punitive damages;
46-1 and
46-2 (xi) the amount of allocated loss
46-3 adjustment expenses; and
46-4 (4) any other information that the commissioner
46-5 determines to be significant in allowing the department and the
46-6 legislature to monitor the liability insurance industry to ensure
46-7 its solvency and to ensure that liability insurance is available,
46-8 is affordable, and provides adequate protection in this state.
46-9 (b) The department may require an insurer to include in a
46-10 closed claim report information relating to payment made for
46-11 property damage and other damage on the claim under the coverage.
46-12 (V.T.I.C. Art. 1.24B, Secs. 2(b), 3.)
46-13 Sec. 38.155. SUMMARY CLOSED CLAIM REPORT. (a) An insurer
46-14 shall file with the department a summary closed claim report for a
46-15 claim for recovery under a liability insurance policy if the
46-16 indemnity payment for bodily injury under the coverage is less than
46-17 $25,000 but more than $10,000.
46-18 (b) A summary closed claim report must be filed, in a form
46-19 prescribed by the commissioner, not later than the 10th day after
46-20 the last day of the calendar quarter in which the claim is closed.
46-21 (V.T.I.C. Art. 1.24B, Secs. 2(c), 5(a) (part).)
46-22 Sec. 38.156. CONTENT OF SUMMARY CLOSED CLAIM REPORT FORM.
46-23 The summary closed claim report form adopted by the commissioner
46-24 for a report under Section 38.155 must require information
46-25 relating to:
46-26 (1) the identity of the insurer;
46-27 (2) the liability insurance policy, including:
47-1 (A) the type or types of insurance;
47-2 (B) the classification of the insured; and
47-3 (C) reserves for the claim;
47-4 (3) details of:
47-5 (A) the claims process, including:
47-6 (i) whether a lawsuit was filed;
47-7 (ii) whether attorneys were involved;
47-8 (iii) the stage at which the claim was
47-9 closed;
47-10 (iv) any court verdict;
47-11 (v) any appeal; and
47-12 (vi) whether the claim was settled outside
47-13 of court and, if so, at what stage; and
47-14 (B) the amount paid on the claim, including:
47-15 (i) the total amount of a court award;
47-16 (ii) the amount paid to the claimant by
47-17 the insurer;
47-18 (iii) the amount paid for defense costs;
47-19 (iv) the amount paid for punitive damages;
47-20 and
47-21 (v) the amount of loss adjustment
47-22 expenses; and
47-23 (4) any other matter that the commissioner determines
47-24 to be significant in allowing the department and the legislature to
47-25 monitor the liability insurance industry to ensure its solvency and
47-26 to ensure that liability insurance is available, is affordable, and
47-27 provides adequate protection in this state. (V.T.I.C. Art. 1.24B,
48-1 Sec. 4.)
48-2 Sec. 38.157. AGGREGATE REPORT. (a) An insurer shall file
48-3 with the department one report containing the information required
48-4 under this section for all claims closed within the calendar year
48-5 for which the indemnity payments for bodily injury under the
48-6 coverage are $10,000 or less, including claims for which an
48-7 indemnity payment is not made on closing.
48-8 (b) The report must include, in summary form, at least the
48-9 following information:
48-10 (1) the aggregate number of claims; and
48-11 (2) the aggregate dollar amount paid out.
48-12 (c) The report must be filed in a form and in a manner
48-13 prescribed by the commissioner. (V.T.I.C. Art. 1.24B, Sec. 2(d).)
48-14 Sec. 38.158. ALTERNATIVE REPORTING. After notice and public
48-15 hearing, the commissioner may provide for alternative reporting in
48-16 the form of sampling of the required closed claim data instead of
48-17 requiring insurers to file the closed claim data required by this
48-18 subchapter. (V.T.I.C. Art. 1.24B, Sec. 5(b).)
48-19 Sec. 38.159. COMPILATION OF DATA; REPORT. The department
48-20 shall compile the data included in individual closed claim reports
48-21 and summary closed claim reports into a composite form and shall
48-22 prepare annually a written report of the composite data. The
48-23 department shall make the report available to the public.
48-24 (V.T.I.C. Art. 1.24B, Secs. 6(a), (b) (part).)
48-25 Sec. 38.160. ELECTRONIC DATABASE. The commissioner may:
48-26 (1) establish an electronic database composed of
48-27 reports filed with the department under this subchapter;
49-1 (2) provide the public with access to that data;
49-2 (3) establish a system to provide access to that data
49-3 by electronic data transmittal processes; and
49-4 (4) set and charge a fee for electronic access to the
49-5 database in an amount reasonable and necessary to cover the costs
49-6 of access. (V.T.I.C. Art. 1.24B, Sec. 6(d).)
49-7 Sec. 38.161. REPORT TO LEGISLATURE. (a) The department
49-8 shall submit copies of the report required by Section 38.159 to the
49-9 presiding officers of each house of the legislature.
49-10 (b) The department, on request of the lieutenant governor,
49-11 the speaker of the house of representatives, or the presiding
49-12 officer of a legislative committee, shall provide to the
49-13 legislature additional composite data based on closed claim reports
49-14 and summary closed claim reports. Reports prepared under this
49-15 subsection shall be available to the public. (V.T.I.C. Art. 1.24B,
49-16 Secs. 6(b) (part), (c).)
49-17 Sec. 38.162. INFORMATION CONFIDENTIAL. (a) Information
49-18 included in an individual closed claim report or an individual
49-19 summary closed claim report submitted by an insurer under this
49-20 subchapter is confidential and may not be made available by the
49-21 department to the public.
49-22 (b) Information included in an individual closed claim
49-23 report or an individual summary closed claim report may be examined
49-24 only by the commissioner and department employees. (V.T.I.C.
49-25 Art. 1.24B, Sec. 7.)
49-26 Sec. 38.163. RULES AND FORMS. The commissioner may adopt
49-27 necessary rules to:
50-1 (1) implement this subchapter;
50-2 (2) define terminology, criteria, content, and other
50-3 matters relating to the reports required under this subchapter; and
50-4 (3) designate other types or lines of liability
50-5 insurance required to provide information under this subchapter.
50-6 (V.T.I.C. Art. 1.24B, Sec. 5(a) (part).)
50-7 (Sections 38.164-38.200 reserved for expansion
50-8 SUBCHAPTER E. STATISTICAL DATA COLLECTION
50-9 Sec. 38.201. DEFINITION. In this subchapter, "designated
50-10 statistical agent" means an organization designated or contracted
50-11 with by the commissioner under Section 38.202. (New.)
50-12 Sec. 38.202. STATISTICAL AGENT. The commissioner may, for a
50-13 line or subline of insurance, designate or contract with a
50-14 qualified organization to serve as the statistical agent for the
50-15 commissioner to gather data relevant for regulatory purposes or as
50-16 otherwise provided by this code. (V.T.I.C. Art. 21.69, Subsec.
50-17 (a).)
50-18 Sec. 38.203. QUALIFICATIONS OF STATISTICAL AGENT. To
50-19 qualify as a statistical agent, an organization must demonstrate at
50-20 least five years of experience in data collection, data
50-21 maintenance, data quality control, accounting, and related areas.
50-22 (V.T.I.C. Art. 21.69, Subsec. (b).)
50-23 Sec. 38.204. POWERS AND DUTIES OF STATISTICAL AGENT. (a) A
50-24 designated statistical agent shall collect data from reporting
50-25 insurers under a statistical plan adopted by the commissioner.
50-26 (b) The statistical agent may provide aggregate historical
50-27 premium and loss data to its subscribers. (V.T.I.C. Art. 21.69,
51-1 Subsecs. (d), (f).)
51-2 Sec. 38.205. DUTY OF INSURER. An insurer shall provide all
51-3 premium and loss cost data to the commissioner or the designated
51-4 statistical agent as the commissioner or agent requires. (V.T.I.C.
51-5 Art. 21.69, Subsec. (e).)
51-6 Sec. 38.206. FEES. (a) A designated statistical agent may
51-7 collect from a reporting insurer any fees necessary for the agent
51-8 to recover the necessary and reasonable costs of collecting data
51-9 from that reporting insurer.
51-10 (b) A reporting insurer shall pay the fee to the statistical
51-11 agent for the data collection services provided by the statistical
51-12 agent. (V.T.I.C. Art. 21.69, Subsec. (c).)
51-13 Sec. 38.207. RULES. The commissioner may adopt rules
51-14 necessary to accomplish the purposes of this subchapter. (V.T.I.C.
51-15 Art. 21.69, Subsec. (g).)
51-16 CHAPTER 39. PUBLIC ACCESS
51-17 Sec. 39.001. ACCESS TO PROGRAMS AND FACILITIES
51-18 Sec. 39.002. PUBLIC COMMENT
51-19 Sec. 39.003. PUBLIC REPRESENTATION ON ADVISORY BODY
51-20 CHAPTER 39. PUBLIC ACCESS
51-21 Sec. 39.001. ACCESS TO PROGRAMS AND FACILITIES. (a) The
51-22 commissioner shall prepare and maintain a written plan that
51-23 describes how a person who does not speak English may be provided
51-24 reasonable access to the department's programs.
51-25 (b) The department shall comply with federal and state laws
51-26 for program and facility accessibility. (V.T.I.C. Art. 1.04C,
51-27 Subsec. (a).)
52-1 Sec. 39.002. PUBLIC COMMENT. The commissioner shall develop
52-2 and implement policies that provide the public with a reasonable
52-3 opportunity to appear before the commissioner and to speak on any
52-4 issue under the jurisdiction of the commissioner. (V.T.I.C.
52-5 Art. 1.04C, Subsec. (b).)
52-6 Sec. 39.003. PUBLIC REPRESENTATION ON ADVISORY BODY.
52-7 (a) At least one-half of the membership of each advisory body
52-8 appointed by the commissioner, other than an advisory body whose
52-9 membership is determined by this code or by another law relating to
52-10 the business of insurance in this state, must represent the general
52-11 public.
52-12 (b) A public representative may not be:
52-13 (1) an officer, director, or employee of an insurance
52-14 company, insurance agency, agent, broker, solicitor, adjuster, or
52-15 any other business entity regulated by the department;
52-16 (2) a person required to register with the Texas
52-17 Ethics Commission under Chapter 305, Government Code; or
52-18 (3) a person related within the second degree by
52-19 affinity or consanguinity to a person described by Subdivision (1)
52-20 or (2). (V.T.I.C. Art. 1.35C.)
52-21 CHAPTER 40. DUTIES OF STATE OFFICE OF ADMINISTRATIVE
52-22 HEARINGS AND COMMISSIONER IN CERTAIN PROCEEDINGS;
52-23 RATE SETTING PROCEEDINGS
52-24 SUBCHAPTER A. GENERAL PROVISIONS
52-25 Sec. 40.001. DEFINITION
52-26 Sec. 40.002. DUTIES OF STATE OFFICE OF ADMINISTRATIVE
52-27 HEARINGS
53-1 Sec. 40.003. APPLICATION OF CHAPTER; EXCEPTIONS
53-2 Sec. 40.004. MEMORANDUM OF UNDERSTANDING
53-3 Sec. 40.005. CONFLICT WITH OTHER LAW
53-4 (Sections 40.006-40.050 reserved for expansion
53-5 SUBCHAPTER B. PROCEEDINGS RELATING TO PROMULGATION OF RATES
53-6 Sec. 40.051. APPLICATION OF SUBCHAPTER
53-7 Sec. 40.052. APPLICATION OF ADMINISTRATIVE PROCEDURE ACT
53-8 Sec. 40.053. PRESENTATION OF EVIDENCE
53-9 Sec. 40.054. WITNESSES AND CROSS-EXAMINATION
53-10 Sec. 40.055. TESTIMONY OF EXPERT WITNESS; PREFILING
53-11 REQUIRED
53-12 Sec. 40.056. DEADLINES
53-13 Sec. 40.057. INFLUENCE OF COMMISSIONER PROHIBITED
53-14 Sec. 40.058. PROPOSAL FOR DECISION
53-15 Sec. 40.059. CONSIDERATION OF PROPOSAL FOR DECISION
53-16 Sec. 40.060. COMMISSIONER'S ORDER
53-17 CHAPTER 40. DUTIES OF STATE OFFICE OF ADMINISTRATIVE
53-18 HEARINGS AND COMMISSIONER IN CERTAIN PROCEEDINGS;
53-19 RATE SETTING PROCEEDINGS
53-20 SUBCHAPTER A. GENERAL PROVISIONS
53-21 Sec. 40.001. DEFINITION. In this chapter, "office" means
53-22 the State Office of Administrative Hearings. (New; V.T.I.C.
53-23 Art. 1.33B, Subsec. (b) (part).)
53-24 Sec. 40.002. DUTIES OF STATE OFFICE OF ADMINISTRATIVE
53-25 HEARINGS. The office shall conduct an administrative hearing
53-26 required to be held or that may be held under this code or another
53-27 insurance law of this state. (V.T.I.C. Art. 1.33B, Subsec. (b)
54-1 (part).)
54-2 Sec. 40.003. APPLICATION OF CHAPTER; EXCEPTIONS. (a) This
54-3 chapter applies only to a hearing required to be held before a
54-4 decision may be rendered or action taken by the commissioner or the
54-5 department.
54-6 (b) If a provision of this code or another insurance law of
54-7 this state requires that the commissioner take an action at a
54-8 hearing subject to this chapter, the commissioner shall take the
54-9 action after receipt of a proposal for decision from the office
54-10 regarding the hearing conducted by the office.
54-11 (c) This chapter does not apply to a proceeding conducted
54-12 under Article 1.04D or to a proceeding relating to:
54-13 (1) approving or reviewing rates or rating manuals
54-14 filed by an individual company, unless the rates or manuals are
54-15 contested;
54-16 (2) adopting a rule;
54-17 (3) adopting or approving a policy form or policy form
54-18 endorsement; or
54-19 (4) adopting or approving a plan of operation for an
54-20 organization subject to the jurisdiction of the department.
54-21 (V.T.I.C. Art. 1.33B, Subsecs. (a), (b) (part), (e).)
54-22 Sec. 40.004. MEMORANDUM OF UNDERSTANDING. (a) The
54-23 commissioner and the chief administrative law judge of the office
54-24 by rule shall adopt a memorandum of understanding governing
54-25 hearings conducted by the office under this code or another
54-26 insurance law of this state.
54-27 (b) The memorandum of understanding must require the chief
55-1 administrative law judge and the commissioner to cooperate in
55-2 conducting hearings under this chapter and may authorize the office
55-3 to perform any procedural act, including giving notice, that is
55-4 required to be performed by the commissioner under this code or
55-5 another insurance law of this state. (V.T.I.C. Art. 1.33B, Subsec.
55-6 (d).)
55-7 Sec. 40.005. CONFLICT WITH OTHER LAW. This chapter prevails
55-8 over another provision of this code or another insurance law of
55-9 this state unless the provision or other law states that this
55-10 chapter does not apply. (V.T.I.C. Art. 1.33B, Subsec. (f).)
55-11 (Sections 40.006-40.050 reserved for expansion
55-12 SUBCHAPTER B. PROCEEDINGS RELATING TO PROMULGATION OF
55-13 RATES
55-14 Sec. 40.051. APPLICATION OF SUBCHAPTER. Subject to Section
55-15 40.003, a proceeding to promulgate rates is governed by this
55-16 subchapter. (V.T.I.C. Art. 1.33B, Subsec. (c)(1) (part).)
55-17 Sec. 40.052. APPLICATION OF ADMINISTRATIVE PROCEDURE ACT. A
55-18 proceeding to promulgate rates is a contested case under Chapter
55-19 2001, Government Code, and to the extent not inconsistent with this
55-20 subchapter, that chapter and the Texas Rules of Civil Procedure
55-21 apply. (V.T.I.C. Art. 1.33B, Subsec. (c)(1) (part).)
55-22 Sec. 40.053. PRESENTATION OF EVIDENCE. The administrative
55-23 law judge shall provide each interested party an opportunity to
55-24 respond to and present evidence and argument concerning all issues
55-25 in the proceeding. (V.T.I.C. Art. 1.33B, Subsec. (c)(2) (part).)
55-26 Sec. 40.054. WITNESSES AND CROSS-EXAMINATION. (a) The
55-27 testimony of a witness, other than an expert witness, may be
56-1 presented either orally by the witness at the hearing or by
56-2 affidavit.
56-3 (b) Each party is entitled to cross-examine each witness
56-4 called to testify by another party to the proceeding. The
56-5 attendance of a witness providing testimony by affidavit is
56-6 required if a party files a written request that the witness appear
56-7 for cross-examination.
56-8 (c) If a witness providing testimony by affidavit fails to
56-9 appear for cross-examination after the filing of a written request
56-10 that the witness appear, the administrative law judge shall exclude
56-11 the affidavit from evidence and may not consider the affidavit for
56-12 any purpose. (V.T.I.C. Art. 1.33B, Subsec. (c)(2) (part).)
56-13 Sec. 40.055. TESTIMONY OF EXPERT WITNESS; PREFILING
56-14 REQUIRED. The direct testimony of each expert witness to be called
56-15 must be prefiled in accordance with a schedule established by the
56-16 administrative law judge. (V.T.I.C. Art. 1.33B, Subsec. (c)(2)
56-17 (part).)
56-18 Sec. 40.056. DEADLINES. The administrative law judge shall
56-19 establish reasonable deadlines for the filing of affidavits, the
56-20 designation of witnesses, and other matters as are necessary or
56-21 appropriate. (V.T.I.C. Art. 1.33B, Subsec. (c)(2) (part).)
56-22 Sec. 40.057. INFLUENCE OF COMMISSIONER PROHIBITED. The
56-23 commissioner may not attempt to influence the administrative law
56-24 judge's findings of fact, conclusions of law, or application of the
56-25 law to the facts. (V.T.I.C. Art. 1.33B, Subsec. (c)(3).)
56-26 Sec. 40.058. PROPOSAL FOR DECISION. The administrative law
56-27 judge shall:
57-1 (1) prepare a proposal for decision that includes
57-2 proposed findings of fact and conclusions of law; and
57-3 (2) serve the proposal for decision by registered mail
57-4 on each party to the proceeding. (V.T.I.C. Art. 1.33B, Subsec.
57-5 (c)(4) (part).)
57-6 Sec. 40.059. CONSIDERATION OF PROPOSAL FOR DECISION. (a)
57-7 The commissioner shall provide to each party an opportunity to file
57-8 exceptions to the proposal for decision and briefs related to the
57-9 issues addressed in the proposal.
57-10 (b) After the opportunity to file exceptions and briefs
57-11 under Subsection (a), the commissioner shall, in open meeting,
57-12 consider:
57-13 (1) the proposal for decision; and
57-14 (2) the exceptions, briefs, and arguments of the
57-15 parties.
57-16 (c) The commissioner may amend the proposal for decision,
57-17 including any finding of fact. The commissioner shall accompany
57-18 any amendment with an explanation of the basis of the amendment.
57-19 The commissioner shall base any amendment and the order adopting
57-20 the rate solely on the record made before the administrative law
57-21 judge.
57-22 (d) The commissioner may refer the matter back to the
57-23 administrative law judge to:
57-24 (1) reconsider findings and conclusions in the
57-25 proposal for decision;
57-26 (2) take additional evidence; or
57-27 (3) make additional findings of fact or conclusions of
58-1 law. (V.T.I.C. Art. 1.33B, Subsecs. (c)(4) (part), (5) (part).)
58-2 Sec. 40.060. COMMISSIONER'S ORDER. The commissioner shall
58-3 serve on each party a copy of the commissioner's order, including
58-4 the commissioner's findings of fact and conclusions of law.
58-5 (V.T.I.C. Art. 1.33B, Subsec. (c)(5) (part).)
58-6 (Chapters 41-80 reserved for expansion
58-7 SUBTITLE B. DISCIPLINE AND ENFORCEMENT
58-8 CHAPTER 81. GENERAL PROVISIONS REGARDING
58-9 DISCIPLINE AND ENFORCEMENT
58-10 Sec. 81.001. LIMITATIONS PERIOD FOR CERTAIN DISCIPLINARY
58-11 ACTIONS
58-12 Sec. 81.002. NOTICE OF CERTAIN ORDERS AND DECISIONS
58-13 Sec. 81.003. NOTIFICATION OF CERTAIN DISCIPLINARY ACTIONS
58-14 OCCURRING IN OTHER STATES; CIVIL PENALTY
58-15 Sec. 81.004. REPORT TO ATTORNEY GENERAL
58-16 CHAPTER 81. GENERAL PROVISIONS REGARDING
58-17 DISCIPLINE AND ENFORCEMENT
58-18 Sec. 81.001. LIMITATIONS PERIOD FOR CERTAIN DISCIPLINARY
58-19 ACTIONS. (a) Except as provided by Subsection (b), the department
58-20 or commissioner may not begin an action to impose a sanction,
58-21 penalty, or fine, including an administrative penalty, against an
58-22 insurer, agent, or other license holder who is subject to the
58-23 jurisdiction of the department for conduct that is a violation of
58-24 this code or another insurance law of this state after the earlier
58-25 of:
58-26 (1) the fifth anniversary of the date on which the
58-27 conduct that is a violation occurred; or
59-1 (2) the second anniversary of the earlier of:
59-2 (A) the date on which the conduct that is a
59-3 violation is first discovered by the department; or
59-4 (B) the date on which the conduct that is a
59-5 violation is made known to the department.
59-6 (b) The department or commissioner may not begin an action
59-7 to impose a sanction, penalty, or fine, including an administrative
59-8 penalty, against an insurer, agent, or other license holder who is
59-9 subject to the jurisdiction of the department for conduct that is a
59-10 violation of this code or another insurance law of this state and
59-11 that involves fraud by the insurer, agent, or license holder, after
59-12 the fifth anniversary of the earlier of:
59-13 (1) the date on which the conduct that is a violation
59-14 is first discovered by the department; or
59-15 (2) the date on which the conduct that is a violation
59-16 is made known to the department.
59-17 (c) This section does not apply to conduct that is a
59-18 violation that is ongoing at the time the department seeks to
59-19 impose the sanction, penalty, or fine. (V.T.I.C. Art. 1.41.)
59-20 Sec. 81.002. NOTICE OF CERTAIN ORDERS AND DECISIONS.
59-21 Notwithstanding Section 2001.142, Government Code, in a contested
59-22 case before the department or the commissioner the department shall
59-23 mail to each party and the party's attorney of record, by certified
59-24 mail, return receipt requested, a copy of the department's or
59-25 commissioner's written decision or order in that case. (V.T.I.C.
59-26 Art. 1.10B.)
59-27 Sec. 81.003. NOTIFICATION OF CERTAIN DISCIPLINARY ACTIONS
60-1 OCCURRING IN OTHER STATES; CIVIL PENALTY. (a) In this section,
60-2 "insurer" means any organization, corporation, or other person who
60-3 transacts insurance business, other than an organization,
60-4 corporation, or other person who is specifically made exempt from
60-5 this section by a reference to this section, without regard to
60-6 whether the organization, corporation, or other person is listed in
60-7 this subsection. The term includes:
60-8 (1) a capital stock company;
60-9 (2) a title insurance company;
60-10 (3) a reciprocal or interinsurance exchange;
60-11 (4) a Lloyd's plan insurer;
60-12 (5) a fraternal benefit society;
60-13 (6) a mutual company, including a mutual assessment
60-14 company;
60-15 (7) a statewide mutual assessment company;
60-16 (8) a local mutual aid association;
60-17 (9) a burial association;
60-18 (10) a county mutual insurance company;
60-19 (11) a farm mutual insurance company; and
60-20 (12) a fidelity, guaranty, or surety company.
60-21 (b) An insurer shall notify the commissioner and shall
60-22 deliver a copy of any applicable order or judgment to the
60-23 commissioner not later than the 30th day after the date of the:
60-24 (1) suspension or revocation of the insurer's right to
60-25 transact business in another state;
60-26 (2) receipt of an order to show cause why the
60-27 insurer's license in another state should not be suspended or
61-1 revoked; or
61-2 (3) imposition of a penalty, forfeiture, or sanction
61-3 on the insurer for a violation of the insurance laws of another
61-4 state.
61-5 (c) An insurer who violates Subsection (b) is liable for a
61-6 civil penalty, recoverable by a civil action, in an amount not to
61-7 exceed $500 for each violation. In addition to the civil penalty,
61-8 the commissioner may suspend or revoke the license of an insurer or
61-9 agent for a wilful violation of Subsection (b). (V.T.I.C.
61-10 Art. 1.30, Secs. 1(a) (part), 2, 3.)
61-11 Sec. 81.004. REPORT TO ATTORNEY GENERAL. The department
61-12 shall report to the attorney general, promptly and in detail, any
61-13 violation of law relating to insurance companies or the business of
61-14 insurance. (V.T.I.C. Art. 1.10, Sec. 8.)
61-15 CHAPTER 82. SANCTIONS
61-16 SUBCHAPTER A. GENERAL PROVISIONS
61-17 Sec. 82.001. DEFINITION
61-18 Sec. 82.002. APPLICATION OF CHAPTER
61-19 Sec. 82.003. PROCEEDINGS UNDER OTHER LAW
61-20 (Sections 82.004-82.050 reserved for expansion
61-21 SUBCHAPTER B. IMPOSITION OF SANCTIONS
61-22 Sec. 82.051. CANCELLATION OR REVOCATION OF
61-23 AUTHORIZATION
61-24 Sec. 82.052. OTHER SANCTIONS
61-25 Sec. 82.053. RESTITUTION
61-26 Sec. 82.054. CANCELLATION ON FAILURE TO COMPLY
61-27 Sec. 82.055. INFORMAL DISPOSITION
62-1 Sec. 82.056. NOTICE TO OTHER STATES
62-2 CHAPTER 82. SANCTIONS
62-3 SUBCHAPTER A. GENERAL PROVISIONS
62-4 Sec. 82.001. DEFINITION. In this chapter, "authorization"
62-5 means a permit, license, certificate of authority, certificate of
62-6 registration, or other authorization issued or existing under the
62-7 commissioner's authority or this code. (V.T.I.C. Art. 1.10, Sec.
62-8 7(a) (part); New.)
62-9 Sec. 82.002. APPLICATION OF CHAPTER. (a) This chapter
62-10 applies to each company regulated by the commissioner, including:
62-11 (1) a domestic or foreign, stock or mutual, life,
62-12 health, or accident insurance company;
62-13 (2) a domestic or foreign, stock or mutual, fire or
62-14 casualty insurance company;
62-15 (3) a Mexican casualty company;
62-16 (4) a domestic or foreign Lloyd's plan insurer;
62-17 (5) a domestic or foreign reciprocal or interinsurance
62-18 exchange;
62-19 (6) a domestic or foreign fraternal benefit society;
62-20 (7) a domestic or foreign title insurance company;
62-21 (8) an attorney's title insurance company;
62-22 (9) a stipulated premium insurance company;
62-23 (10) a nonprofit legal service corporation;
62-24 (11) a health maintenance organization;
62-25 (12) a statewide mutual assessment company;
62-26 (13) a local mutual aid association;
62-27 (14) a local mutual burial association;
63-1 (15) an association exempt under Article 14.17;
63-2 (16) a nonprofit hospital, medical, or dental service
63-3 corporation, including a company subject to Chapter 20;
63-4 (17) a county mutual insurance company; and
63-5 (18) a farm mutual insurance company.
63-6 (b) This chapter also applies to:
63-7 (1) an agent of an entity described by Subsection (a);
63-8 and
63-9 (2) a person who:
63-10 (A) is engaged in the business of insurance;
63-11 (B) holds an authorization; or
63-12 (C) is regulated by the commissioner.
63-13 (c) The commissioner's authority under this chapter applies
63-14 to each form of authorization and each person holding an
63-15 authorization. (V.T.I.C. Art. 1.10, Secs. 7(f) (part), (g).)
63-16 Sec. 82.003. PROCEEDINGS UNDER OTHER LAW. The
63-17 commissioner's authority under this chapter is in addition to any
63-18 other authority to enforce a sanction, penalty, fine, forfeiture,
63-19 denial, suspension, or revocation otherwise authorized by law.
63-20 (V.T.I.C. Art. 1.10, Sec. 7(f) (part).)
63-21 (Sections 82.004-82.050 reserved for expansion
63-22 SUBCHAPTER B. IMPOSITION OF SANCTIONS
63-23 Sec. 82.051. CANCELLATION OR REVOCATION OF AUTHORIZATION.
63-24 After notice and opportunity for a hearing, the commissioner may
63-25 cancel or revoke an authorization if the holder of the
63-26 authorization is found to be in violation of, or to have failed to
63-27 comply with, this code or a rule of the commissioner. (V.T.I.C.
64-1 Art. 1.10, Sec. 7(a) (part).)
64-2 Sec. 82.052. OTHER SANCTIONS. In addition to the
64-3 cancellation or revocation of an authorization under Section
64-4 82.051, the commissioner may:
64-5 (1) suspend the authorization for a specified time not
64-6 to exceed one year;
64-7 (2) order the holder of the authorization to cease and
64-8 desist from:
64-9 (A) the activity determined to be in violation
64-10 of this code or a rule of the commissioner; or
64-11 (B) the failure to comply with this code or a
64-12 rule of the commissioner;
64-13 (3) direct the holder of the authorization to pay an
64-14 administrative penalty under Chapter 84;
64-15 (4) direct the holder of the authorization to make
64-16 restitution under Section 82.053; or
64-17 (5) take any combination of those actions. (V.T.I.C.
64-18 Art. 1.10, Sec. 7(a) (part).)
64-19 Sec. 82.053. RESTITUTION. (a) The commissioner may direct
64-20 the holder of an authorization to make complete restitution to each
64-21 Texas resident, each Texas insured, and each entity operating in
64-22 this state that is harmed by a violation of, or failure to comply
64-23 with, this code or a rule of the commissioner.
64-24 (b) The holder of the authorization shall make the
64-25 restitution in the form and amount and within the period determined
64-26 by the commissioner. (V.T.I.C. Art. 1.10, Secs. 7(a) (part), (b).)
64-27 Sec. 82.054. CANCELLATION ON FAILURE TO COMPLY. If it is
65-1 found after hearing that a holder of an authorization has failed to
65-2 comply with an order issued under Section 82.052, the commissioner
65-3 shall cancel each authorization held by the holder. (V.T.I.C.
65-4 Art. 1.10, Sec. 7(c).)
65-5 Sec. 82.055. INFORMAL DISPOSITION. (a) The commissioner
65-6 may informally dispose of a matter under this subchapter by consent
65-7 order, agreed settlement, stipulation, or default.
65-8 (b) An informal disposition may include a provision under
65-9 which the holder of the authorization agrees to a sanction under
65-10 this subchapter with the express reservation that:
65-11 (1) the holder does not admit a violation of this code
65-12 or of a rule; and
65-13 (2) the existence of a violation is in dispute.
65-14 (V.T.I.C. Art. 1.10, Sec. 7(d).)
65-15 Sec. 82.056. NOTICE TO OTHER STATES. The commissioner shall
65-16 give notice of an action taken under this subchapter to the
65-17 insurance commissioner or other similar officer of each state.
65-18 (V.T.I.C. Art. 1.10, Sec. 7(e).)
65-19 CHAPTER 83. EMERGENCY CEASE AND DESIST ORDERS
65-20 SUBCHAPTER A. GENERAL PROVISIONS
65-21 Sec. 83.001. DEFINITIONS
65-22 Sec. 83.002. APPLICATION OF CHAPTER
65-23 Sec. 83.003. RULES
65-24 Sec. 83.004. PROCEEDINGS UNDER OTHER LAW
65-25 (Sections 83.005-83.050 reserved for expansion
65-26 SUBCHAPTER B. ISSUANCE OF ORDERS
65-27 Sec. 83.051. AUTHORITY OF COMMISSIONER TO ISSUE ORDER
66-1 Sec. 83.052. NOTICE
66-2 Sec. 83.053. REQUEST FOR HEARING
66-3 Sec. 83.054. HEARING
66-4 Sec. 83.055. EFFECT OF ORDER PENDING HEARING
66-5 (Sections 83.056-83.100 reserved for expansion
66-6 SUBCHAPTER C. ENFORCEMENT
66-7 Sec. 83.101. AUTHORITY OF COMMISSIONER
66-8 Sec. 83.102. DETERMINATION OF VIOLATION
66-9 Sec. 83.103. HEARING ON ADMINISTRATIVE PENALTY
66-10 Sec. 83.104. IMPOSITION OF ADMINISTRATIVE PENALTY;
66-11 RESTITUTION
66-12 Sec. 83.105. FAILURE TO PAY PENALTY
66-13 (Sections 83.106-83.150 reserved for expansion
66-14 SUBCHAPTER D. JUDICIAL REVIEW; JUDICIAL ACTION
66-15 Sec. 83.151. APPEAL
66-16 Sec. 83.152. EFFECT OF PETITION ON ORDER OR RELATED DECISION
66-17 Sec. 83.153. JUDICIAL ACTION FOR ENFORCEMENT OF ORDER;
66-18 ATTORNEY'S FEES
66-19 CHAPTER 83. EMERGENCY CEASE AND DESIST ORDERS
66-20 SUBCHAPTER A. GENERAL PROVISIONS
66-21 Sec. 83.001. DEFINITIONS. In this chapter:
66-22 (1) "Authorized person" means an individual or entity
66-23 described by Section 83.002.
66-24 (2) "Emergency" means a sudden, urgent occurrence that
66-25 requires immediate action.
66-26 (3) "Unauthorized person" means a person who directly
66-27 or indirectly does an act of insurance business that is:
67-1 (A) described by Section 101.051 or 101.052; and
67-2 (B) not done in accordance with specific
67-3 authorization of law.
67-4 (4) "Unfair act" means an unfair method of
67-5 competition, an unfair or deceptive act or practice, or an unfair
67-6 claim settlement practice as defined under Article 21.21 or 21.21-2
67-7 or a rule adopted under either article. (V.T.I.C. Art. 1.10A, Secs.
67-8 1(1) (part), (2), (5), 2 (part); New.)
67-9 Sec. 83.002. APPLICATION OF CHAPTER. (a) This chapter
67-10 applies to each company regulated by the commissioner, including:
67-11 (1) a domestic or foreign, stock or mutual, life,
67-12 health, or accident insurance company;
67-13 (2) a domestic or foreign, stock or mutual, fire or
67-14 casualty insurance company;
67-15 (3) a Mexican casualty company;
67-16 (4) a domestic or foreign Lloyd's plan insurer;
67-17 (5) a domestic or foreign reciprocal or interinsurance
67-18 exchange;
67-19 (6) a domestic or foreign fraternal benefit society;
67-20 (7) a domestic or foreign title insurance company;
67-21 (8) an attorney's title insurance company;
67-22 (9) a stipulated premium insurance company;
67-23 (10) a nonprofit legal service corporation;
67-24 (11) a statewide mutual assessment company;
67-25 (12) a local mutual aid association;
67-26 (13) a local mutual burial association;
67-27 (14) an association exempt under Article 14.17;
68-1 (15) a nonprofit hospital, medical, or dental service
68-2 corporation, including a company subject to Chapter 20;
68-3 (16) a county mutual insurance company; and
68-4 (17) a farm mutual insurance company.
68-5 (b) This chapter also applies to:
68-6 (1) an agent of an entity described by Subsection (a);
68-7 and
68-8 (2) a person who:
68-9 (A) is engaged in the business of insurance;
68-10 (B) holds a permit, certificate, registration,
68-11 license, or other authority under this code; or
68-12 (C) is regulated by the commissioner. (V.T.I.C.
68-13 Art. 1.10A, Sec. 1(1) (part).)
68-14 Sec. 83.003. RULES. The commissioner may adopt reasonable
68-15 rules to implement this chapter, including rules that provide, to
68-16 the extent possible, uniformity of procedures between this state
68-17 and other states, the United States, or the National Association of
68-18 Insurance Commissioners. (V.T.I.C. Art. 1.10A, Sec. 6.)
68-19 Sec. 83.004. PROCEEDINGS UNDER OTHER LAW. The commissioner
68-20 may proceed solely under this chapter or under this chapter in
68-21 conjunction with other applicable law. (V.T.I.C. Art. 1.10A, Sec.
68-22 7.)
68-23 (Sections 83.005-83.050 reserved for expansion
68-24 SUBCHAPTER B. ISSUANCE OF ORDERS
68-25 Sec. 83.051. AUTHORITY OF COMMISSIONER TO ISSUE ORDER.
68-26 (a) The commissioner ex parte may issue an emergency cease and
68-27 desist order if:
69-1 (1) the commissioner believes that:
69-2 (A) an authorized person engaging in the
69-3 business of insurance is:
69-4 (i) committing an unfair act; or
69-5 (ii) in a hazardous condition or a
69-6 hazardous financial condition under Section 19, Texas Health
69-7 Maintenance Organization Act (Article 20A.19, Vernon's Texas
69-8 Insurance Code), or Article 1.32, as determined by the
69-9 commissioner; or
69-10 (B) an unauthorized person:
69-11 (i) is engaging in the business of
69-12 insurance in violation of Chapter 101 or in violation of a rule
69-13 adopted under that chapter; or
69-14 (ii) is engaged in the business of
69-15 insurance in violation of Chapter 101 and is committing an unfair
69-16 act; and
69-17 (2) it appears to the commissioner that the alleged
69-18 conduct:
69-19 (A) is fraudulent;
69-20 (B) is hazardous or creates an immediate danger
69-21 to the public safety; or
69-22 (C) is causing or can be reasonably expected to
69-23 cause public injury that:
69-24 (i) is likely to occur at any moment;
69-25 (ii) is incapable of being repaired or
69-26 rectified; and
69-27 (iii) has or is likely to have influence
70-1 or effect.
70-2 (b) An order is final on the 31st day after the date it is
70-3 received, unless the affected person requests a hearing under
70-4 Section 83.053. (V.T.I.C. Art. 1.10A, Secs. 1(6), (7), (8), 2
70-5 (part), 3(j).)
70-6 Sec. 83.052. NOTICE. (a) On issuance of an order under
70-7 Section 83.051, the commissioner shall serve on the affected person
70-8 an order that:
70-9 (1) contains a statement of the charges; and
70-10 (2) requires the person immediately to cease and
70-11 desist from the acts, methods, or practices stated in the order.
70-12 (b) The commissioner shall serve the order by registered or
70-13 certified mail, return receipt requested, to the affected person's
70-14 last known address. (V.T.I.C. Art. 1.10A, Sec. 3(a).)
70-15 Sec. 83.053. REQUEST FOR HEARING. (a) A person affected by
70-16 an order is entitled to request a hearing to contest the order.
70-17 (b) The affected person must request the hearing not later
70-18 than the 30th day after the date on which the person receives the
70-19 order required by Section 83.052.
70-20 (c) A request to contest an order must:
70-21 (1) be in writing;
70-22 (2) be directed to the commissioner; and
70-23 (3) state the grounds for the request to set aside or
70-24 modify the order. (V.T.I.C. Art. 1.10A, Sec. 3(b).)
70-25 Sec. 83.054. HEARING. (a) On receiving a request for a
70-26 hearing under Section 83.053, the commissioner shall serve notice
70-27 of the time and place of the hearing.
71-1 (b) The hearing is subject to the procedures for contested
71-2 cases under Chapter 2001, Government Code. The hearing must be
71-3 held not later than the 10th day after the date the commissioner
71-4 receives the request for a hearing unless the parties mutually
71-5 agree to a later hearing date.
71-6 (c) At the hearing, the person requesting the hearing is
71-7 entitled to show cause why the order should not be affirmed.
71-8 (d) Following receipt of the proposal for decision from the
71-9 State Office of Administrative Hearings regarding the hearing, the
71-10 commissioner shall affirm, modify, or set aside in whole or in part
71-11 the order. (V.T.I.C. Art. 1.10A, Secs. 3(c), (e), (f).)
71-12 Sec. 83.055. EFFECT OF ORDER PENDING HEARING. Pending a
71-13 hearing under this subchapter, an order continues in effect unless
71-14 the order is stayed by the commissioner. (V.T.I.C. Art. 1.10A,
71-15 Sec. 3(d).)
71-16 (Sections 83.056-83.100 reserved for expansion
71-17 SUBCHAPTER C. ENFORCEMENT
71-18 Sec. 83.101. AUTHORITY OF COMMISSIONER. If the commissioner
71-19 reasonably believes that a person has violated an order issued
71-20 under this chapter, the commissioner may:
71-21 (1) initiate proceedings under this subchapter to
71-22 impose an administrative penalty or direct restitution;
71-23 (2) refer the matter to the attorney general for
71-24 enforcement;
71-25 (3) initiate a proceeding to revoke the person's
71-26 certificate of authority; or
71-27 (4) pursue another action the commissioner considers
72-1 appropriate under applicable law. (V.T.I.C. Art. 1.10A, Sec.
72-2 4(a).)
72-3 Sec. 83.102. DETERMINATION OF VIOLATION. In determining
72-4 whether an order has been violated, the commissioner shall consider
72-5 the maintenance of procedures reasonably adopted to ensure
72-6 compliance with the order. (V.T.I.C. Art. 1.10A, Sec. 4(c)
72-7 (part).)
72-8 Sec. 83.103. HEARING ON ADMINISTRATIVE PENALTY. (a) If the
72-9 commissioner pursues action to impose an administrative penalty
72-10 under Section 83.101(1), the commissioner shall serve on the person
72-11 notice of the time and place of a hearing to be held not earlier
72-12 than the 21st day after the date the notice is received.
72-13 (b) The notice must contain a statement of the facts or
72-14 conduct alleged to violate the order.
72-15 (c) The commissioner shall serve the notice by registered or
72-16 certified mail, return receipt requested, to the person's last
72-17 known address.
72-18 (d) The hearing is subject to the procedures for contested
72-19 cases under Chapter 2001, Government Code. (V.T.I.C. Art. 1.10A,
72-20 Secs. 4(b), (c) (part).)
72-21 Sec. 83.104. IMPOSITION OF ADMINISTRATIVE PENALTY;
72-22 RESTITUTION. (a) After a hearing, if the commissioner determines
72-23 that an order has been violated, the commissioner may:
72-24 (1) impose an administrative penalty of $25,000 for
72-25 each act of violation;
72-26 (2) direct the person against whom the order was
72-27 issued to make complete restitution to each Texas resident, Texas
73-1 insured, and entity operating in this state that is harmed by the
73-2 violation; or
73-3 (3) impose the penalty and direct restitution.
73-4 (b) A person directed to make restitution shall make the
73-5 restitution in the form and amount and within the period determined
73-6 by the commissioner. (V.T.I.C. Art. 1.10A, Sec. 4(d).)
73-7 Sec. 83.105. FAILURE TO PAY PENALTY. If a person fails to
73-8 pay a penalty assessed under this subchapter, the commissioner may:
73-9 (1) refer the matter to the attorney general for
73-10 enforcement; or
73-11 (2) cancel or revoke any permit, license, certificate
73-12 of authority, certificate of registration, or other authorization
73-13 issued under this code as provided by Chapter 82. (V.T.I.C.
73-14 Art. 1.10A, Sec. 5.)
73-15 (Sections 83.106-83.150 reserved for expansion
73-16 SUBCHAPTER D. JUDICIAL REVIEW; JUDICIAL ACTION
73-17 Sec. 83.151. APPEAL. A person affected by an order of the
73-18 commissioner under Section 83.051 or 83.104 may appeal the order by
73-19 filing suit in a district court in Travis County not later than the
73-20 20th day after the date of the order. (V.T.I.C. Art. 1.10A, Secs.
73-21 3(h) (part), 4(f) (part).)
73-22 Sec. 83.152. EFFECT OF PETITION ON ORDER OR RELATED
73-23 DECISION. A petition for appeal filed under Section 83.151 does
73-24 not stay or vacate an order or a decision made under Subchapter B
73-25 unless the court, after hearing, issues an order that specifically
73-26 stays or vacates the order or decision. (V.T.I.C. Art. 1.10A, Sec.
73-27 3(h) (part).)
74-1 Sec. 83.153. JUDICIAL ACTION FOR ENFORCEMENT OF ORDER;
74-2 ATTORNEY'S FEES. The department may recover reasonable attorney's
74-3 fees if judicial action is necessary to enforce an order issued
74-4 under Section 83.051 or 83.104. (V.T.I.C. Art. 1.10A, Secs. 3(i),
74-5 4(f) (part).)
74-6 CHAPTER 84. ADMINISTRATIVE PENALTIES
74-7 SUBCHAPTER A. GENERAL PROVISIONS
74-8 Sec. 84.001. DEFINITION
74-9 Sec. 84.002. APPLICATION OF CHAPTER TO ADMINISTRATIVE
74-10 PENALTY
74-11 Sec. 84.003. APPLICATION OF ADMINISTRATIVE PROCEDURE ACT
74-12 (Sections 84.004-84.020 reserved for expansion
74-13 SUBCHAPTER B. IMPOSITION OF ADMINISTRATIVE PENALTY
74-14 Sec. 84.021. IMPOSITION OF PENALTY
74-15 Sec. 84.022. PENALTY AMOUNT
74-16 (Sections 84.023-84.040 reserved for expansion
74-17 SUBCHAPTER C. PROCEDURAL REQUIREMENTS
74-18 Sec. 84.041. REPORT AND NOTICE OF VIOLATION AND PENALTY
74-19 Sec. 84.042. PENALTY TO BE PAID OR HEARING REQUESTED
74-20 Sec. 84.043. HEARING AND DECISION
74-21 Sec. 84.044. DECISION BY COMMISSIONER
74-22 Sec. 84.045. OPTIONS FOLLOWING DECISION: PAY OR APPEAL
74-23 Sec. 84.046. STAY OF ENFORCEMENT OF PENALTY
74-24 Sec. 84.047. COLLECTION OF PENALTY
74-25 Sec. 84.048. STANDARD OF JUDICIAL REVIEW
74-26 Sec. 84.049. DECISION BY COURT
74-27 Sec. 84.050. REMITTANCE OF PENALTY AND INTEREST
75-1 Sec. 84.051. RELEASE OF BOND
75-2 CHAPTER 84. ADMINISTRATIVE PENALTIES
75-3 SUBCHAPTER A. GENERAL PROVISIONS
75-4 Sec. 84.001. DEFINITION. In this chapter, "person" means an
75-5 individual, corporation, trust, partnership, association, or any
75-6 other legal entity. (V.T.I.C. Art. 1.10E, Sec. 1(1).)
75-7 Sec. 84.002. APPLICATION OF CHAPTER TO ADMINISTRATIVE
75-8 PENALTY. (a) This chapter applies to each monetary penalty the
75-9 department or commissioner imposes under this code or another
75-10 insurance law of this state.
75-11 (b) For purposes of this chapter, each of the monetary
75-12 penalties is an administrative penalty. (V.T.I.C. Art. 1.10E,
75-13 Secs. 1(2), 8.)
75-14 Sec. 84.003. APPLICATION OF ADMINISTRATIVE PROCEDURE ACT. A
75-15 proceeding under this chapter is subject to Chapter 2001,
75-16 Government Code. (V.T.I.C. Art. 1.10E, Sec. 7.)
75-17 (Sections 84.004-84.020 reserved for expansion
75-18 SUBCHAPTER B. IMPOSITION OF ADMINISTRATIVE PENALTY
75-19 Sec. 84.021. IMPOSITION OF PENALTY. The commissioner may
75-20 impose an administrative penalty on a person licensed or regulated
75-21 under this code or another insurance law of this state who
75-22 violates:
75-23 (1) this code;
75-24 (2) another insurance law of this state; or
75-25 (3) a rule or order adopted under this code or another
75-26 insurance law of this state. (V.T.I.C. Art. 1.10E, Sec. 2 (part).)
75-27 Sec. 84.022. PENALTY AMOUNT. (a) The penalty for a
76-1 violation may not exceed $25,000, unless a greater or lesser
76-2 penalty is specified by this code or another insurance law of this
76-3 state.
76-4 (b) The amount of the penalty shall be based on:
76-5 (1) the seriousness of the violation, including:
76-6 (A) the nature, circumstances, extent, and
76-7 gravity of the violation; and
76-8 (B) the hazard or potential hazard created to
76-9 the health, safety, or economic welfare of the public;
76-10 (2) the economic harm to the public interest or public
76-11 confidence caused by the violation;
76-12 (3) the history of previous violations;
76-13 (4) the amount necessary to deter a future violation;
76-14 (5) efforts to correct the violation;
76-15 (6) whether the violation was intentional; and
76-16 (7) any other matter that justice may require.
76-17 (V.T.I.C. Art. 1.10E, Sec. 3.)
76-18 (Sections 84.023-84.040 reserved for expansion
76-19 SUBCHAPTER C. PROCEDURAL REQUIREMENTS
76-20 Sec. 84.041. REPORT AND NOTICE OF VIOLATION AND PENALTY.
76-21 (a) If the department determines that a violation has occurred,
76-22 the department may issue to the commissioner a report that states
76-23 the facts on which the determination is based and the department's
76-24 recommendation on the imposition of an administrative penalty,
76-25 including a recommendation on the amount of the penalty.
76-26 (b) Not later than the 14th day after the date the report is
76-27 issued, the department shall give written notice of the report to
77-1 the affected person. The notice may be given by certified mail.
77-2 The notice must:
77-3 (1) include:
77-4 (A) a brief summary of the alleged violation;
77-5 and
77-6 (B) a statement of the amount of the recommended
77-7 penalty; and
77-8 (2) inform the person that the person has a right to a
77-9 hearing on the occurrence of the violation, the amount of the
77-10 penalty, or both the occurrence of the violation and the amount of
77-11 the penalty. (V.T.I.C. Art. 1.10E, Secs. 2 (part), 4(a), (b).)
77-12 Sec. 84.042. PENALTY TO BE PAID OR HEARING REQUESTED.
77-13 (a) Not later than the 20th day after the date the person receives
77-14 the notice, the person, in writing, may:
77-15 (1) accept the department's determination and
77-16 recommended administrative penalty; or
77-17 (2) request a hearing on the occurrence of the
77-18 violation, the amount of the penalty, or both the occurrence of the
77-19 violation and the amount of the penalty.
77-20 (b) If the person accepts the department's determination and
77-21 recommended penalty, the commissioner by order shall approve the
77-22 determination and require the person to pay the recommended
77-23 penalty. (V.T.I.C. Art. 1.10E, Secs. 4(c), (d).)
77-24 Sec. 84.043. HEARING AND DECISION. (a) If the person
77-25 requests a hearing or fails to respond in a timely manner to the
77-26 notice, the department shall set a hearing and give notice of the
77-27 hearing to the person.
78-1 (b) An administrative law judge of the State Office of
78-2 Administrative Hearings shall conduct the hearing.
78-3 (c) The administrative law judge shall make findings of fact
78-4 and conclusions of law and promptly issue to the commissioner a
78-5 proposal for a decision about the occurrence of the violation and
78-6 the amount of a proposed administrative penalty. (V.T.I.C.
78-7 Art. 1.10E, Sec. 4(e) (part).)
78-8 Sec. 84.044. DECISION BY COMMISSIONER. (a) Based on the
78-9 findings of fact, conclusions of law, and proposal for decision,
78-10 the commissioner by order may:
78-11 (1) find that a violation occurred and impose an
78-12 administrative penalty; or
78-13 (2) find that a violation did not occur.
78-14 (b) The notice of the commissioner's order must include a
78-15 statement of the right of the person to judicial review of the
78-16 order. (V.T.I.C. Art. 1.10E, Secs. 4(e) (part), (f).)
78-17 Sec. 84.045. OPTIONS FOLLOWING DECISION: PAY OR APPEAL.
78-18 Not later than the 30th day after the date the commissioner's order
78-19 becomes final, the person shall:
78-20 (1) pay the administrative penalty; or
78-21 (2) file a petition for judicial review contesting the
78-22 occurrence of the violation or the amount of the penalty, or both,
78-23 and either pay or not pay the penalty. (V.T.I.C. Art. 1.10E, Sec.
78-24 4(g).)
78-25 Sec. 84.046. STAY OF ENFORCEMENT OF PENALTY. (a) A person
78-26 who files a petition for judicial review without paying the
78-27 administrative penalty may, within the 30-day period prescribed by
79-1 Section 84.045:
79-2 (1) stay enforcement of the penalty by:
79-3 (A) paying the penalty to the court for
79-4 placement in an escrow account; or
79-5 (B) giving the court a supersedeas bond approved
79-6 by the court that:
79-7 (i) is for the amount of the penalty; and
79-8 (ii) is effective until all judicial
79-9 review of the board's order is final; or
79-10 (2) request the court to stay enforcement of the
79-11 penalty by:
79-12 (A) filing with the court an affidavit stating
79-13 that the person is financially unable to pay the penalty and is
79-14 financially unable to give the supersedeas bond; and
79-15 (B) giving a copy of the affidavit to the
79-16 commissioner by certified mail.
79-17 (b) If the commissioner receives a copy of an affidavit
79-18 under Subsection (a)(2), the commissioner may file with the court,
79-19 not later than the fifth day after the date the copy is received, a
79-20 contest to the affidavit. The court shall hold a hearing on the
79-21 facts alleged in the affidavit as soon as practicable and shall
79-22 stay the enforcement of the penalty on finding that the alleged
79-23 facts are true. The person who files an affidavit has the burden
79-24 of proving that the person is financially unable to pay the penalty
79-25 and to give a supersedeas bond. (V.T.I.C. Art. 1.10E, Secs. 4(h),
79-26 (i).)
79-27 Sec. 84.047. COLLECTION OF PENALTY. If the person does not
80-1 pay the administrative penalty and the enforcement of the penalty
80-2 is not stayed, the commissioner may refer the matter to the
80-3 attorney general for collection of the penalty. (V.T.I.C.
80-4 Art. 1.10E, Sec. 4(j).)
80-5 Sec. 84.048. STANDARD OF JUDICIAL REVIEW. The order of the
80-6 commissioner is subject to judicial review under the substantial
80-7 evidence rule. (V.T.I.C. Art. 1.10E, Sec. 5(a).)
80-8 Sec. 84.049. DECISION BY COURT. (a) If the court sustains
80-9 the finding that a violation occurred, the court may uphold or
80-10 reduce the amount of the administrative penalty and order the
80-11 person to pay the full or reduced amount of the penalty.
80-12 (b) If the court does not sustain the finding that a
80-13 violation occurred, the court shall order that a penalty is not
80-14 owed. (V.T.I.C. Art. 1.10E, Sec. 5(b).)
80-15 Sec. 84.050. REMITTANCE OF PENALTY AND INTEREST. (a) If
80-16 the person paid the administrative penalty and if the amount of the
80-17 penalty is reduced or the penalty is not upheld by the court, the
80-18 court shall order, when the judgment becomes final, that the
80-19 appropriate amount plus accrued interest be remitted to the person.
80-20 (b) The interest accrues at the rate charged on loans to
80-21 depository institutions by the New York Federal Reserve Bank.
80-22 (c) The interest shall be paid for the period beginning on
80-23 the date the penalty is paid and ending on the date the penalty is
80-24 remitted. (V.T.I.C. Art. 1.10E, Sec. 5(c) (part).)
80-25 Sec. 84.051. RELEASE OF BOND. (a) If the person gave a
80-26 supersedeas bond and if the administrative penalty is not upheld by
80-27 the court, the court shall order, when the judgment becomes final,
81-1 the release of the bond.
81-2 (b) If the person gave a supersedeas bond and if the amount
81-3 of the penalty is reduced, the court shall order the release of the
81-4 bond after the person pays the reduced amount. (V.T.I.C.
81-5 Art. 1.10E, Sec. 5(c) (part).)
81-6 CHAPTER 85. GENERAL CRIMINAL ENFORCEMENT
81-7 SUBCHAPTER A. GENERAL PROVISIONS
81-8 Sec. 85.001. VIOLATION OF CERTAIN LAWS FOR WHICH PUNISHMENT
81-9 IS NOT PROVIDED; OFFENSE
81-10 (Sections 85.002-85.050 reserved for expansion
81-11 SUBCHAPTER B. PROSECUTION OF OFFENSES
81-12 Sec. 85.051. VENUE FOR PROSECUTION
81-13 Sec. 85.052. ELECTION OF PROSECUTION
81-14 CHAPTER 85. GENERAL CRIMINAL ENFORCEMENT
81-15 SUBCHAPTER A. GENERAL PROVISIONS
81-16 Sec. 85.001. VIOLATION OF CERTAIN LAWS FOR WHICH PUNISHMENT
81-17 IS NOT PROVIDED; OFFENSE. (a) A person commits an offense if the
81-18 person violates a law of this state regulating the business of
81-19 life, fire, or marine insurance.
81-20 (b) Unless another penalty is provided by law, an offense
81-21 under this section is a misdemeanor punishable by a fine of not
81-22 less than $500 or more than $1,000. (V.T.I.C. Art. 21.51.)
81-23 (Sections 85.002-85.050 reserved for expansion
81-24 SUBCHAPTER B. PROSECUTION OF OFFENSES
81-25 Sec. 85.051. VENUE FOR PROSECUTION. (a) A person who
81-26 violates the Penal Code or a penal provision of this code in
81-27 performing any act subject to regulation by the department may be
82-1 prosecuted in:
82-2 (1) Travis County; or
82-3 (2) a county in which prosecution is authorized under
82-4 the Code of Criminal Procedure.
82-5 (b) A law limiting regulation by the department under this
82-6 code or another insurance law of this state does not restrict the
82-7 application of this section.
82-8 (c) This section controls if there is a conflict or
82-9 ambiguity between this section and another provision of this code
82-10 or another insurance law of this state. (V.T.I.C. Art. 21.79B.)
82-11 Sec. 85.052. ELECTION OF PROSECUTION. A person who commits
82-12 an offense under this code may be prosecuted under this code or any
82-13 other law of this state under which the person may be prosecuted.
82-14 (V.T.I.C. Art. 21.79C.)
82-15 (Chapters 86-100 reserved for expansion
82-16 CHAPTER 101. UNAUTHORIZED INSURANCE
82-17 SUBCHAPTER A. GENERAL PROVISIONS
82-18 Sec. 101.001. STATE POLICY AND PURPOSE
82-19 Sec. 101.002. DEFINITIONS
82-20 Sec. 101.003. INSURANCE EXCHANGES AND SYNDICATES; RULES
82-21 Sec. 101.004. UNCONSTITUTIONAL APPLICATION PROHIBITED;
82-22 NOTICE TO COMMISSIONER
82-23 (Sections 101.005-101.050 reserved for expansion
82-24 SUBCHAPTER B. BUSINESS OF INSURANCE; EXCEPTIONS
82-25 Sec. 101.051. CONDUCT THAT CONSTITUTES THE BUSINESS OF
82-26 INSURANCE
82-27 Sec. 101.052. ADVERTISING RELATING TO MEDICARE
83-1 SUPPLEMENT POLICIES
83-2 Sec. 101.053. APPLICATION OF SUBCHAPTER
83-3 Sec. 101.054. EXCEPTION; FULL-TIME SALARIED EMPLOYEE
83-4 Sec. 101.055. EXCEPTION; CERTAIN ENTITIES THAT REIMBURSE
83-5 MEDICAL EXPENSES
83-6 (Sections 101.056-101.100 reserved for expansion
83-7 SUBCHAPTER C. PROHIBITION; ENFORCEMENT
83-8 Sec. 101.101. DEFINITION
83-9 Sec. 101.102. UNAUTHORIZED INSURANCE PROHIBITED
83-10 Sec. 101.103. POWERS OF COMMISSIONER; REMEDIES FOR
83-11 CERTAIN CONDUCT
83-12 Sec. 101.104. REQUEST FOR INFORMATION
83-13 Sec. 101.105. CIVIL PENALTY; INJUNCTIVE RELIEF
83-14 Sec. 101.106. CRIMINAL PENALTY
83-15 (Sections 101.107-101.150 reserved for expansion
83-16 SUBCHAPTER D. CEASE AND DESIST ORDERS
83-17 Sec. 101.151. POWERS OF COMMISSIONER; NOTICE OF HEARING
83-18 Sec. 101.152. HEARING
83-19 Sec. 101.153. CEASE AND DESIST ORDER
83-20 Sec. 101.154. ENFORCEMENT; REFERRAL TO ATTORNEY GENERAL
83-21 Sec. 101.155. EFFECT OF PRIOR PROCEEDINGS
83-22 Sec. 101.156. RULES
83-23 (Sections 101.157-101.200 reserved for expansion
83-24 SUBCHAPTER E. INSURANCE CONTRACTS WITH UNAUTHORIZED INSURERS
83-25 Sec. 101.201. VALIDITY OF INSURANCE CONTRACTS
83-26 Sec. 101.202. ATTORNEY'S FEES
83-27 Sec. 101.203. INVESTIGATION AND DISCLOSURE
84-1 (Sections 101.204-101.250 reserved for expansion
84-2 SUBCHAPTER F. TAXES
84-3 Sec. 101.251. PREMIUM RECEIPTS TAX
84-4 Sec. 101.252. INDEPENDENTLY PROCURED INSURANCE TAX
84-5 Sec. 101.253. FILING REQUIREMENTS FOR CORPORATIONS
84-6 (Sections 101.254-101.300 reserved for expansion
84-7 SUBCHAPTER G. REPORTING OF UNAUTHORIZED INSURANCE
84-8 Sec. 101.301. REPORTING REQUIRED
84-9 CHAPTER 101. UNAUTHORIZED INSURANCE
84-10 SUBCHAPTER A. GENERAL PROVISIONS
84-11 Sec. 101.001. STATE POLICY AND PURPOSE. (a) It is a state
84-12 concern that many residents of this state hold insurance policies
84-13 issued by persons or insurers who are not authorized to do
84-14 insurance business in this state and who are not qualified as
84-15 eligible surplus lines insurers under Article 1.14-2. These
84-16 residents face often insurmountable obstacles in asserting legal
84-17 rights under the policies in foreign forums under unfamiliar laws
84-18 and rules of practice.
84-19 (b) It is the policy of this state to protect residents
84-20 against acts by a person or insurer who is not authorized to do
84-21 insurance business in this state by:
84-22 (1) maintaining fair and honest insurance markets;
84-23 (2) protecting the premium tax revenues of this state;
84-24 (3) protecting authorized persons and insurers, who
84-25 are subject to strict regulation, from unfair competition by
84-26 unauthorized persons and insurers; and
84-27 (4) protecting against evasion of the insurance
85-1 regulatory laws of this state.
85-2 (c) The purpose of this chapter is to subject certain
85-3 insurers and other persons to the jurisdiction of:
85-4 (1) the commissioner and proceedings before the
85-5 commissioner; and
85-6 (2) the courts of this state in suits by or on behalf
85-7 of the state or an insured or beneficiary under an insurance
85-8 contract. (V.T.I.C. Art. 1.14-1, Sec. 1 (part).)
85-9 Sec. 101.002. DEFINITIONS. In this chapter:
85-10 (1) "Insurer" includes:
85-11 (A) a corporation, association, partnership, or
85-12 individual engaged as a principal in the business of insurance;
85-13 (B) an interinsurance exchange or mutual benefit
85-14 society; or
85-15 (C) an insurance exchange or syndicate.
85-16 (2) "Unfair act" means an unfair method of competition
85-17 or an unfair or deceptive act or practice as defined under Article
85-18 21.21 or a rule adopted under that article. (V.T.I.C. Art. 1.14-1,
85-19 Secs. 2(a) (part), 3(e) (part), 3A(a) (part).)
85-20 Sec. 101.003. INSURANCE EXCHANGES AND SYNDICATES; RULES.
85-21 The commissioner shall adopt rules defining insurance exchanges and
85-22 syndicates that are insurers for purposes of Section 101.002.
85-23 (V.T.I.C. Art. 1.14-1, Secs. 2(a) (part), (c).)
85-24 Sec. 101.004. UNCONSTITUTIONAL APPLICATION PROHIBITED;
85-25 NOTICE TO COMMISSIONER. (a) Subject to Subsection (b), this
85-26 chapter does not apply to an insurer or other person to whom, under
85-27 the constitution or statutes of the United States or the
86-1 constitution of this state, it may not apply.
86-2 (b) Before commencing operations, an insurer or other person
86-3 claiming an exemption described by Subsection (a) must file with
86-4 the commissioner:
86-5 (1) notice of the claim; and
86-6 (2) documents supporting the claim. (V.T.I.C.
86-7 Art. 1.14-1, Sec. 14.)
86-8 (Sections 101.005-101.050 reserved for expansion
86-9 SUBCHAPTER B. BUSINESS OF INSURANCE; EXCEPTIONS
86-10 Sec. 101.051. CONDUCT THAT CONSTITUTES THE BUSINESS OF
86-11 INSURANCE. (a) In this section, "medical expense" includes
86-12 surgical, chiropractic, physical therapy, speech pathology,
86-13 audiology, professional mental health, dental, hospital, or
86-14 optometric expenses.
86-15 (b) The following acts in this state constitute the business
86-16 of insurance in this state:
86-17 (1) making or proposing to make, as an insurer, an
86-18 insurance contract;
86-19 (2) making or proposing to make, as guarantor or
86-20 surety, a guaranty or suretyship contract as a vocation and not
86-21 merely incidental to another legitimate business or activity of
86-22 the guarantor or surety;
86-23 (3) taking or receiving an insurance application;
86-24 (4) receiving or collecting any consideration for
86-25 insurance, including:
86-26 (A) a premium;
86-27 (B) a commission;
87-1 (C) a membership fee;
87-2 (D) an assessment; or
87-3 (E) dues;
87-4 (5) issuing or delivering an insurance contract to:
87-5 (A) a resident of this state; or
87-6 (B) a person authorized to do business in this
87-7 state;
87-8 (6) directly or indirectly acting as an agent for or
87-9 otherwise representing or assisting an insurer or other person in:
87-10 (A) soliciting, negotiating, procuring, or
87-11 effectuating insurance or a renewal of insurance;
87-12 (B) disseminating information relating to
87-13 coverage or rates;
87-14 (C) forwarding an insurance application;
87-15 (D) delivering an insurance policy or contract;
87-16 (E) inspecting a risk;
87-17 (F) setting a rate;
87-18 (G) investigating or adjusting a claim or loss;
87-19 (H) transacting a matter after the effectuation
87-20 of the contract that arises out of the contract; or
87-21 (I) representing or assisting an insurer or
87-22 other person in any other manner in the transaction of insurance
87-23 with respect to a subject of insurance that is resident, located,
87-24 or to be performed in this state;
87-25 (7) contracting to provide in this state
87-26 indemnification or expense reimbursement for a medical expense by
87-27 direct payment, reimbursement, or otherwise to a person domiciled
88-1 in this state or for a risk located in this state, whether as an
88-2 insurer, agent, administrator, trust, or funding mechanism or by
88-3 another method;
88-4 (8) doing any kind of insurance business specifically
88-5 recognized as constituting insurance business within the meaning of
88-6 statutes relating to insurance;
88-7 (9) doing or proposing to do any insurance business
88-8 that is in substance equivalent to conduct described by
88-9 Subdivisions (1)-(8) in a manner designed to evade statutes
88-10 relating to insurance; or
88-11 (10) any other transaction of business in this state
88-12 by an insurer. (V.T.I.C. Art. 1.14-1, Sec. 2(a) (part).)
88-13 Sec. 101.052. ADVERTISING RELATING TO MEDICARE SUPPLEMENT
88-14 POLICIES. With respect to a medicare supplement policy authorized
88-15 under Article 3.74, the business of insurance in this state
88-16 includes using, creating, publishing, mailing, or disseminating in
88-17 this state an advertisement relating to an act that constitutes the
88-18 business of insurance under Section 101.051 unless the
88-19 advertisement is used, created, published, mailed, or disseminated
88-20 on behalf of an insurer or other person who:
88-21 (1) is authorized under this code to engage in the
88-22 business of insurance in this state;
88-23 (2) has actual knowledge of the content of the
88-24 advertisement;
88-25 (3) has authorized the advertisement to be used,
88-26 created, published, mailed, or disseminated on that insurer's or
88-27 other person's behalf; and
89-1 (4) is clearly identified by name in the advertisement
89-2 as the sponsor of the advertisement. (V.T.I.C. Art. 1.14-1, Sec.
89-3 2(a) (part).)
89-4 Sec. 101.053. APPLICATION OF SUBCHAPTER. (a) Sections
89-5 101.051 and 101.052 apply to an act whether performed by mail or
89-6 otherwise. Venue for an act performed by mail is at the place
89-7 where the matter transmitted by mail is delivered and takes effect.
89-8 (b) Sections 101.051 and 101.052 do not apply to:
89-9 (1) the lawful transaction of surplus lines insurance
89-10 under Article 1.14-2;
89-11 (2) the lawful transaction of reinsurance by insurers;
89-12 (3) a transaction in this state that:
89-13 (A) involves a policy that:
89-14 (i) is lawfully solicited, written, and
89-15 delivered outside this state; and
89-16 (ii) covers, at the time the policy is
89-17 issued, only subjects of insurance that are not resident, located,
89-18 or expressly to be performed in this state; and
89-19 (B) takes place after the policy is issued;
89-20 (4) a transaction:
89-21 (A) that involves an insurance contract
89-22 independently procured through negotiations occurring entirely
89-23 outside this state;
89-24 (B) that is reported; and
89-25 (C) on which premium tax is paid in accordance
89-26 with this chapter;
89-27 (5) a transaction in this state that:
90-1 (A) involves group life, health, or accident
90-2 insurance, other than credit insurance, and group annuities in
90-3 which the master policy for the group was lawfully issued and
90-4 delivered in a state in which the insurer or other person was
90-5 authorized to do insurance business; and
90-6 (B) is authorized by a statute of this state;
90-7 (6) a management or accounting activity in this state
90-8 on behalf of a nonadmitted captive insurance company that insures
90-9 solely directors' and officers' liability insurance for:
90-10 (A) the directors and officers of the company's
90-11 parent and affiliated companies;
90-12 (B) the risks of the company's parent and
90-13 affiliated companies; or
90-14 (C) both the individuals and entities described
90-15 by Paragraphs (A) and (B);
90-16 (7) the issuance of a qualified charitable gift
90-17 annuity under Chapter 102; or
90-18 (8) a lawful transaction by a servicing company of the
90-19 Texas workers' compensation employers' rejected risk fund under
90-20 Section 4.08, Article 5.76-2, as that article existed before its
90-21 repeal.
90-22 (c) Subsection (b)(6) does not exempt an insured or insurer
90-23 from the payment of an applicable tax on premium or from another
90-24 applicable provision of this code. (V.T.I.C. Art. 1.14-1, Secs.
90-25 2(a) (part), (b).)
90-26 Sec. 101.054. EXCEPTION; FULL-TIME SALARIED EMPLOYEE.
90-27 Section 101.051(b)(6) does not prohibit a full-time salaried
91-1 employee of a corporate insured from acting as an insurance manager
91-2 or buyer in placing insurance on behalf of:
91-3 (1) the employee's employer; or
91-4 (2) a parent or affiliated company of the employer.
91-5 (V.T.I.C. Art. 1.14-1, Sec. 2(a) (part).)
91-6 Sec. 101.055. EXCEPTION; CERTAIN ENTITIES THAT REIMBURSE
91-7 MEDICAL EXPENSES. (a) Section 101.051(b)(7) does not apply to:
91-8 (1) a program otherwise authorized by law that is
91-9 established:
91-10 (A) by a political subdivision of this state;
91-11 (B) by a state agency; or
91-12 (C) under Chapter 791, Government Code; or
91-13 (2) a multiple employer welfare arrangement that is
91-14 fully insured as defined by 29 U.S.C. Section 1144(b)(6).
91-15 (b) Notwithstanding Subsection (a)(2), the commissioner may
91-16 apply a law regulating the business of insurance to a multiple
91-17 employer welfare arrangement described by that subdivision to the
91-18 extent that the law provides:
91-19 (1) standards requiring the maintenance of specified
91-20 levels of contributions that the plan, or a trust established under
91-21 the plan, must meet to be considered able to pay benefits in full
91-22 when due; and
91-23 (2) provisions to enforce the standards described by
91-24 Subdivision (1). (V.T.I.C. Art. 1.14-1, Sec. 2(a) (part).)
91-25 (Sections 101.056-101.100 reserved for expansion
91-26 SUBCHAPTER C. PROHIBITION; ENFORCEMENT
91-27 Sec. 101.101. DEFINITION. In this subchapter, "person"
92-1 means an individual or entity that is a person for purposes of
92-2 Section 2(a), Article 21.21. (V.T.I.C. Art. 1.14-1, Sec. 3(a).)
92-3 Sec. 101.102. UNAUTHORIZED INSURANCE PROHIBITED. (a) A
92-4 person, including an insurer, may not directly or indirectly do an
92-5 act that constitutes the business of insurance under Subchapter B
92-6 except as authorized by statute.
92-7 (b) With respect to insurance of a subject that is resident,
92-8 located, or to be performed in this state, this section does not
92-9 prohibit an act performed outside this state, including the
92-10 collection of premiums, by a person, including an insurer,
92-11 authorized to do business in this state if the transaction and
92-12 insurance contract otherwise comply with statute. (V.T.I.C.
92-13 Art. 1.14-1, Sec. 3(b).)
92-14 Sec. 101.103. POWERS OF COMMISSIONER; REMEDIES FOR CERTAIN
92-15 CONDUCT. (a) If the commissioner has reason to believe a person,
92-16 including an insurer, has violated or is threatening to violate
92-17 this chapter or a rule adopted under this chapter, or that a
92-18 person, including an insurer, violating this chapter has engaged in
92-19 or is threatening to engage in an unfair act, the commissioner may:
92-20 (1) issue a cease and desist order under Subchapter D;
92-21 (2) seek injunctive relief under Section 101.105;
92-22 (3) request the attorney general to recover a civil
92-23 penalty under Section 101.105; or
92-24 (4) take any combination of those actions.
92-25 (b) This section does not limit the department to the
92-26 remedies specified in this section. The department and this state
92-27 may choose at any time, without regard to prior proceedings under
93-1 this section, any available remedy or action to immediately stop or
93-2 enjoin a person from engaging in the business of insurance without
93-3 statutory authorization. (V.T.I.C. Art. 1.14-1, Secs. 3(e) (part),
93-4 (h).)
93-5 Sec. 101.104. REQUEST FOR INFORMATION. If the commissioner
93-6 has reason to believe that a person, including an insurer, is
93-7 performing an act described by Section 101.051 or 101.052, the
93-8 person shall immediately provide to the commissioner, on written
93-9 request of the commissioner, information relating to that act.
93-10 (V.T.I.C. Art. 1.14-1, Sec. 3(c).)
93-11 Sec. 101.105. CIVIL PENALTY; INJUNCTIVE RELIEF. (a) A
93-12 person or entity, including an insurer, that violates this chapter
93-13 is subject to a civil penalty of not more than $10,000 for each act
93-14 of violation and for each day of violation.
93-15 (b) The commissioner may request that the attorney general
93-16 institute a civil suit in a district court in Travis County for
93-17 injunctive relief to restrain a person or entity, including an
93-18 insurer, from continuing a violation or threat of violation
93-19 described by Section 101.103(a). On application for injunctive
93-20 relief and a finding that a person or entity, including an insurer,
93-21 is violating or threatening to violate this chapter, the district
93-22 court shall grant the injunctive relief and issue an injunction
93-23 without bond.
93-24 (c) On request by the commissioner, the attorney general
93-25 shall institute and conduct a civil suit in the name of the state
93-26 for injunctive relief, to recover a civil penalty, or for both
93-27 injunctive relief and a civil penalty, as authorized under this
94-1 subchapter. (V.T.I.C. Art. 1.14-1, Secs. 3(d), (e) (part), (f),
94-2 (g).)
94-3 Sec. 101.106. CRIMINAL PENALTY. (a) A person, including an
94-4 insurer, who violates Section 101.102 commits an offense.
94-5 (b) An offense under this section is a felony of the third
94-6 degree.
94-7 (c) It is a defense to prosecution under this section that
94-8 Section 101.051 or 101.052, as applicable, by its terms does not
94-9 apply to the person charged. (V.T.I.C. Art. 1.14-1, Sec. 13.)
94-10 (Sections 101.107-101.150 reserved for expansion
94-11 SUBCHAPTER D. CEASE AND DESIST ORDERS
94-12 Sec. 101.151. POWERS OF COMMISSIONER; NOTICE OF HEARING.
94-13 (a) The commissioner may set a hearing on whether to issue a cease
94-14 and desist order under Section 101.153 if the commissioner has
94-15 reason to believe that:
94-16 (1) an insurer or other person has violated or is
94-17 threatening to violate this chapter or a rule adopted under this
94-18 chapter; or
94-19 (2) an insurer or other person acting in violation of
94-20 this chapter has engaged in or is threatening to engage in an
94-21 unfair act.
94-22 (b) The commissioner shall serve on the insurer or other
94-23 person a statement of charges and a notice of hearing in the form
94-24 provided by Section 2001.052, Government Code, and applicable rules
94-25 of the commissioner. (V.T.I.C. Art. 1.14-1, Sec. 3A(a) (part).)
94-26 Sec. 101.152. HEARING. (a) Except as agreed by the parties
94-27 with prior written approval of the commissioner, a hearing under
95-1 this subchapter must be held not earlier than the fifth day or
95-2 later than the 30th day after the date of service of the statement
95-3 and notice required under Section 101.151.
95-4 (b) The hearing shall be conducted in the manner provided
95-5 for a contested case under Chapter 2001, Government Code, and the
95-6 commissioner's rules. (V.T.I.C. Art. 1.14-1, Secs. 3A(a) (part),
95-7 (b).)
95-8 Sec. 101.153. CEASE AND DESIST ORDER. After a hearing held
95-9 under this subchapter, the commissioner may issue against the
95-10 insurer or other person charged with a violation an order that
95-11 requires that the insurer or other person immediately cease and
95-12 desist from the violation. (V.T.I.C. Art. 1.14-1, Sec. 3A(c).)
95-13 Sec. 101.154. ENFORCEMENT; REFERRAL TO ATTORNEY GENERAL.
95-14 The commissioner may refer the matter to the attorney general for
95-15 enforcement if the commissioner has reason to believe that an
95-16 insurer or other person has:
95-17 (1) violated a cease and desist order issued under
95-18 this subchapter; or
95-19 (2) failed to pay an assessed penalty. (V.T.I.C.
95-20 Art. 1.14-1, Sec. 3A(f).)
95-21 Sec. 101.155. EFFECT OF PRIOR PROCEEDINGS. The commissioner
95-22 and department may proceed under this chapter or any other
95-23 applicable law without regard to prior proceedings. (V.T.I.C.
95-24 Art. 1.14-1, Sec. 3A(h).)
95-25 Sec. 101.156. RULES. The commissioner may adopt reasonable
95-26 rules necessary to implement this subchapter. (V.T.I.C.
95-27 Art. 1.14-1, Sec. 3A(g).)
96-1 (Sections 101.157-101.200 reserved for expansion
96-2 SUBCHAPTER E. INSURANCE CONTRACTS WITH UNAUTHORIZED INSURERS
96-3 Sec. 101.201. VALIDITY OF INSURANCE CONTRACTS. (a) An
96-4 insurance contract effective in this state and entered into by an
96-5 unauthorized insurer is unenforceable by the insurer. A person who
96-6 in any manner assisted directly or indirectly in the procurement of
96-7 the contract is liable to the insured for the full amount of a
96-8 claim or loss under the terms of the contract if the unauthorized
96-9 insurer fails to pay the claim or loss.
96-10 (b) This section does not apply to:
96-11 (1) insurance procured by a licensed surplus lines
96-12 agent from an eligible surplus lines insurer as defined by Article
96-13 1.14-2:
96-14 (A) that is reported; and
96-15 (B) on which premium tax is paid in accordance
96-16 with Article 1.14-2; or
96-17 (2) an independently procured contract of insurance,
96-18 as described in Section 101.053(b)(4):
96-19 (A) that is reported; and
96-20 (B) on which premium tax is paid in accordance
96-21 with this chapter. (V.T.I.C. Art. 1.14-1, Sec. 8.)
96-22 Sec. 101.202. ATTORNEY'S FEES. (a) In an action against an
96-23 unauthorized insurer or other unauthorized person on a contract of
96-24 insurance issued or delivered in this state to a resident of this
96-25 state or to a corporation authorized to do business in this state,
96-26 the court may award to the plaintiff a reasonable attorney's fee
96-27 if:
97-1 (1) the insurer or other person failed, for at least
97-2 30 days after a demand made before the commencement of the action,
97-3 to make payment under the contract's terms; and
97-4 (2) the failure to make the payment was vexatious and
97-5 without reasonable cause.
97-6 (b) An insurer's or other person's failure to defend an
97-7 action described by Subsection (a) is prima facie evidence that the
97-8 failure to make payment was vexatious and without reasonable cause.
97-9 (V.T.I.C. Art. 1.14-1, Sec. 7.)
97-10 Sec. 101.203. INVESTIGATION AND DISCLOSURE. (a) If the
97-11 commissioner has reason to believe that insurance has been
97-12 effectuated by or for a person in this state with an unauthorized
97-13 insurer, the commissioner shall in writing order the person to:
97-14 (1) produce for examination all insurance contracts
97-15 and other documents evidencing insurance with both authorized and
97-16 unauthorized insurers; and
97-17 (2) disclose to the commissioner:
97-18 (A) the amount of insurance;
97-19 (B) the name and address of each insurer;
97-20 (C) the gross amount of premiums paid or to be
97-21 paid; and
97-22 (D) the name and address of each person
97-23 assisting in the solicitation, negotiation, or effectuation of the
97-24 insurance.
97-25 (b) A person who fails to comply with a written order under
97-26 Subsection (a) before the 31st day after the date of the order or
97-27 who wilfully makes a disclosure that is untrue, deceptive, or
98-1 misleading shall forfeit:
98-2 (1) $50; and
98-3 (2) an additional $50 for each day the person
98-4 continues to fail to comply after expiration of the 30-day period.
98-5 (c) This section does not apply to:
98-6 (1) a transaction in this state that:
98-7 (A) involves a policy that:
98-8 (i) is lawfully solicited, negotiated,
98-9 written, and delivered outside this state; and
98-10 (ii) covers, at the time the policy is
98-11 issued, only subjects of insurance that are not resident, located,
98-12 or expressly to be performed in this state; and
98-13 (B) takes place after the policy is issued; or
98-14 (2) surplus lines insurance procured through eligible
98-15 surplus lines carriers as defined by Article 1.14-2. (V.T.I.C.
98-16 Art. 1.14-1, Sec. 9.)
98-17 (Sections 101.204-101.250 reserved for expansion
98-18 SUBCHAPTER F. TAXES
98-19 Sec. 101.251. PREMIUM RECEIPTS TAX. (a) In this section,
98-20 "premium" includes any consideration for insurance, including:
98-21 (1) a premium;
98-22 (2) a membership fee;
98-23 (3) an assessment; or
98-24 (4) dues.
98-25 (b) Except as provided by Subsection (j), an unauthorized
98-26 insurer shall pay to the comptroller, on a form prescribed by the
98-27 comptroller, a premium receipts tax of 4.85 percent of gross
99-1 premiums charged for insurance on a subject resident, located, or
99-2 to be performed in this state.
99-3 (c) If a policy covers risks or exposures only partially in
99-4 this state, the tax payable is computed on the portion of the
99-5 premium that is properly allocated to a risk or exposure located in
99-6 this state.
99-7 (d) In determining the amount of taxable premiums under
99-8 Subsection (c), all premiums, other than premiums properly
99-9 allocated or apportioned and reported as taxable premiums of
99-10 another state, that are written, procured, or received in this
99-11 state or that are for a policy negotiated in this state are
99-12 considered to be written on property or risks located or resident
99-13 in this state.
99-14 (e) Insurance on a subject resident, located, or to be
99-15 performed in this state is considered to be insurance procured,
99-16 continued, or renewed in this state regardless of the location from
99-17 which:
99-18 (1) the application is made;
99-19 (2) the negotiations are conducted; or
99-20 (3) the premiums are remitted.
99-21 (f) Premiums on risks or exposures that are properly
99-22 allocated to federal waters or international waters or under the
99-23 jurisdiction of a foreign government are not taxable by this state.
99-24 (g) The unauthorized insurer shall pay the premium receipts
99-25 tax required by this section before:
99-26 (1) March 1 following the calendar year in which the
99-27 insurance was effectuated, continued, or renewed; or
100-1 (2) another date specified by the comptroller.
100-2 (h) The tax imposed by this section is in lieu of all other
100-3 insurance taxes.
100-4 (i) On default of an unauthorized insurer in the payment of
100-5 the tax, the insured shall pay the tax.
100-6 (j) This section does not apply to premiums on:
100-7 (1) insurance procured by a licensed surplus lines
100-8 agent from an eligible surplus lines insurer as defined by Article
100-9 1.14-2 on which premium tax is paid in accordance with Article
100-10 1.14-2; or
100-11 (2) an independently procured contract of insurance on
100-12 which premium tax is paid in accordance with this chapter.
100-13 (V.T.I.C. Art. 1.14-1, Secs. 11(a) (part), (b).)
100-14 Sec. 101.252. INDEPENDENTLY PROCURED INSURANCE TAX. (a)
100-15 Except as provided by Subsection (f), an insured who procures
100-16 insurance in accordance with Section 101.053(b)(4), or another
100-17 person designated by the insured, shall:
100-18 (1) file a report with the comptroller; and
100-19 (2) pay an independently procured insurance tax of
100-20 4.85 percent.
100-21 (b) If a policy covers risks or exposures only partially
100-22 located in this state, the tax payable is computed on the portion
100-23 of the premium that is properly allocated to a risk or exposure
100-24 located in this state.
100-25 (c) An insured who fails to withhold from the premium the
100-26 amount of tax imposed under this section is liable for the amount
100-27 of the tax and shall pay the tax to the comptroller within the time
101-1 described by Subsection (d).
101-2 (d) Except as provided by Section 101.253, the report and
101-3 tax are due on or before:
101-4 (1) March 1 following the calendar year in which the
101-5 insurance was procured, continued, or renewed; or
101-6 (2) another date specified by the comptroller.
101-7 (e) This section does not abrogate or modify any other
101-8 provision of this chapter.
101-9 (f) This section does not apply to premiums for individual
101-10 life or individual disability insurance. (V.T.I.C. Art. 1.14-1,
101-11 Secs. 12(a), (b), (c), (d) (part), (e).)
101-12 Sec. 101.253. FILING REQUIREMENTS FOR CORPORATIONS. The
101-13 amount of tax due and payable under Section 101.252 with respect to
101-14 a corporation that files a franchise tax return shall be reported
101-15 directly to the comptroller and is due:
101-16 (1) at the time the franchise tax report is due; or
101-17 (2) on another date specified by the comptroller.
101-18 (V.T.I.C. Art. 1.14-1, Sec. 12A (part).)
101-19 (Sections 101.254-101.300 reserved for expansion
101-20 SUBCHAPTER G. REPORTING OF UNAUTHORIZED INSURANCE
101-21 Sec. 101.301. REPORTING REQUIRED. (a) A person
101-22 investigating or adjusting a loss or claim on a subject of
101-23 insurance in this state shall immediately report to the department
101-24 an insurance policy or contract that has been entered into by an
101-25 insurer who is not authorized to transact the insurance in this
101-26 state.
101-27 (b) This section does not apply to:
102-1 (1) a transaction described by Section 101.053(b)(4);
102-2 or
102-3 (2) surplus lines insurance procured through eligible
102-4 surplus lines carriers as defined by Article 1.14-2. (V.T.I.C.
102-5 Art. 1.14-1, Sec. 10.)
102-6 CHAPTER 102. CHARITABLE GIFT ANNUITIES
102-7 SUBCHAPTER A. GENERAL PROVISIONS
102-8 Sec. 102.001. DEFINITIONS
102-9 Sec. 102.002. QUALIFIED CHARITABLE GIFT ANNUITY
102-10 (Sections 102.003-102.050 reserved for expansion
102-11 SUBCHAPTER B. ISSUANCE OF CHARITABLE GIFT ANNUITY
102-12 Sec. 102.051. NOT INSURANCE; EFFECT OF CERTAIN LAWS
102-13 (Sections 102.052-102.100 reserved for expansion
102-14 SUBCHAPTER C. NOTICE
102-15 Sec. 102.101. NOTICE TO DONOR
102-16 Sec. 102.102. NOTICE TO DEPARTMENT
102-17 Sec. 102.103. EFFECT ON ANNUITY OF FAILURE TO PROVIDE
102-18 NOTICE
102-19 Sec. 102.104. ENFORCEMENT OF NOTICE REQUIREMENTS
102-20 CHAPTER 102. CHARITABLE GIFT ANNUITIES
102-21 SUBCHAPTER A. GENERAL PROVISIONS
102-22 Sec. 102.001. DEFINITIONS. In this chapter:
102-23 (1) "Charitable gift annuity" means an annuity:
102-24 (A) that is payable over the lives of one or two
102-25 individuals;
102-26 (B) that is made in return for the transfer of
102-27 cash or other property to a charitable organization; and
103-1 (C) the actuarial value of which is less than
103-2 the value of the cash or other property transferred, with the
103-3 difference in those values being a charitable deduction for federal
103-4 tax purposes.
103-5 (2) "Charitable organization" means an entity
103-6 described by:
103-7 (A) Section 501(c)(3), Internal Revenue Code of
103-8 1986; or
103-9 (B) Section 170(c), Internal Revenue Code of
103-10 1986. (V.T.I.C. Art. 1.14-1A, Secs. 1(1), (2).)
103-11 Sec. 102.002. QUALIFIED CHARITABLE GIFT ANNUITY. A
103-12 charitable gift annuity is a qualified charitable gift annuity for
103-13 purposes of this chapter if it was issued before September 1, 1995,
103-14 or if it is:
103-15 (1) described by Section 501(m)(5), Internal Revenue
103-16 Code of 1986; and
103-17 (2) issued by a charitable organization that on the
103-18 date of the annuity agreement:
103-19 (A) has, exclusive of the assets funding the
103-20 annuity agreement, a minimum of $100,000 in unrestricted cash, cash
103-21 equivalents, or publicly traded securities; and
103-22 (B) has been in continuous operation for at
103-23 least three years or is a successor or affiliate of a charitable
103-24 organization that has been in continuous operation for at least
103-25 three years. (V.T.I.C. Art. 1.14-1A, Secs. 1(3), 2(b) (part).)
103-26 (Sections 102.003-102.050 reserved for expansion
103-27 SUBCHAPTER B. ISSUANCE OF CHARITABLE GIFT ANNUITY
104-1 Sec. 102.051. NOT INSURANCE; EFFECT OF CERTAIN LAWS. The
104-2 issuance of a qualified charitable gift annuity:
104-3 (1) does not constitute engaging in the business of
104-4 insurance in this state;
104-5 (2) does not violate Section 15.05 or 17.46, Business
104-6 & Commerce Code; and
104-7 (3) is not an unconscionable action or course of
104-8 action for purposes of Section 17.50(a)(3), Business & Commerce
104-9 Code. (V.T.I.C. Art. 1.14-1A, Secs. 2(a), (b) (part); 6.)
104-10 (Sections 102.052-102.100 reserved for expansion
104-11 SUBCHAPTER C. NOTICE
104-12 Sec. 102.101. NOTICE TO DONOR. (a) A charitable
104-13 organization that issues a qualified charitable gift annuity shall
104-14 give to the donor, at the time an agreement for a qualified
104-15 charitable gift annuity is entered into, written notice that the
104-16 annuity is not:
104-17 (1) insurance under the laws of this state;
104-18 (2) subject to regulation by the department; and
104-19 (3) protected by a guaranty association affiliated
104-20 with the department.
104-21 (b) The notice must be in a separate paragraph of the
104-22 annuity agreement in a print size at least as large as the print
104-23 size generally used in the agreement. (V.T.I.C. Art. 1.14-1A, Sec.
104-24 3.)
104-25 Sec. 102.102. NOTICE TO DEPARTMENT. (a) A charitable
104-26 organization that issues qualified charitable gift annuities shall
104-27 notify the department's annuities division in writing not later
105-1 than the date on which the organization enters into the
105-2 organization's first qualified charitable gift annuity agreement.
105-3 (b) The notice required by this section must:
105-4 (1) be signed by an officer or director of the
105-5 organization;
105-6 (2) identify the organization; and
105-7 (3) certify that:
105-8 (A) the organization is a charitable
105-9 organization; and
105-10 (B) the annuities issued by the organization are
105-11 qualified charitable gift annuities.
105-12 (c) The charitable organization may not be required to
105-13 submit additional information except to determine appropriate
105-14 penalties under Section 102.104. (V.T.I.C. Art. 1.14-1A, Sec. 4.)
105-15 Sec. 102.103. EFFECT ON ANNUITY OF FAILURE TO PROVIDE
105-16 NOTICE. A charitable gift annuity that otherwise meets the
105-17 requirements of Section 102.002 is a qualified charitable gift
105-18 annuity without regard to whether the charitable organization that
105-19 issues the annuity complies with the notice requirements of this
105-20 subchapter. (V.T.I.C. Art. 1.14-1A, Sec. 5 (part).)
105-21 Sec. 102.104. ENFORCEMENT OF NOTICE REQUIREMENTS. (a) The
105-22 commissioner may enforce the notice requirements of this subchapter
105-23 by sending by certified mail, return receipt requested, a letter
105-24 demanding that the charitable organization comply with the notice
105-25 requirements.
105-26 (b) The department may fine the charitable organization in
105-27 an amount not to exceed $1,000 for each qualified charitable gift
106-1 annuity agreement issued by the organization until the time the
106-2 organization complies with this subchapter. (V.T.I.C.
106-3 Art. 1.14-1A, Sec. 5 (part).)
106-4 SECTION 2. CONFORMING AMENDMENT. Chapters 1-27, Insurance
106-5 Code, are designated as Title 1, Insurance Code, and a title
106-6 heading is added to read as follows:
106-7 TITLE 1. THE INSURANCE CODE OF 1951
106-8 SECTION 3. CONFORMING AMENDMENT. Article 1.04D(a),
106-9 Insurance Code, is amended to read as follows:
106-10 (a) Except as otherwise expressly provided for in this code
106-11 or another insurance law of this state, the comptroller shall
106-12 administer, enforce, and carry out the provisions of this code and
106-13 other insurance laws of this state that relate [duties of the
106-14 department and commissioner relative] to the collection, reporting,
106-15 and administration of taxes and certain fees and assessments
106-16 imposed under this code or another insurance law of this state [are
106-17 transferred to the comptroller effective September 1, 1993], as
106-18 specifically provided in this code.
106-19 SECTION 4. CONFORMING AMENDMENT. Article 1.10, Insurance
106-20 Code, is amended to read as follows:
106-21 Art. 1.10. CERTAIN DUTIES OF THE DEPARTMENT. In addition to
106-22 the other duties required of the Department, the Department shall
106-23 perform duties as follows:
106-24 [1. Shall Execute the Laws. See that all laws
106-25 respecting insurance and insurance companies are faithfully
106-26 executed.]
106-27 2. File Articles of Incorporation and Other Papers.
107-1 File and preserve in its office all acts or articles of
107-2 incorporation of insurance companies and all other papers required
107-3 by law to be deposited with the Department and, upon application of
107-4 any party interested therein, furnish certified copies thereof upon
107-5 payment of the fees prescribed by law.
107-6 3. Shall Calculate Reserve. For every company
107-7 transacting any kind of insurance business in this State, for which
107-8 no basis is prescribed by law, the Department shall calculate the
107-9 reinsurance reserve upon the same basis prescribed in Article 6.01
107-10 of this code as to companies transacting fire insurance business.
107-11 4. To Calculate Re-insurance Reserve. On the
107-12 thirty-first day of December of each and every year, or as soon
107-13 thereafter as may be practicable, the Department shall have
107-14 calculated in the Department the re-insurance reserve for all
107-15 unexpired risks of all insurance companies organized under the laws
107-16 of this state, or transacting business in this state, transacting
107-17 any kind of insurance other than life, fire, marine, inland,
107-18 lightning or tornado insurance, which calculation shall be in
107-19 accordance with the provisions of Paragraph 3 hereof.
107-20 5. When a Company's Surplus is Impaired. No
107-21 impairment of the capital stock of a stock company shall be
107-22 permitted. No impairment of the surplus of a stock company, or of
107-23 the minimum required aggregate surplus of a mutual, Lloyd's, or
107-24 reciprocal insurer, shall be permitted in excess of that provided
107-25 by this section. Having charged against a company other than a
107-26 life insurance company, the reinsurance reserve, as prescribed by
107-27 the laws of this State, and adding thereto all other debts and
108-1 claims against the company, the Commissioner shall, (i) if it is
108-2 determined that the surplus required by Article 2.02 or 2.20 of
108-3 this code of a stock company doing the kind or kinds of insurance
108-4 business set out in its Certificate of Authority is impaired to the
108-5 extent of more than fifty (50%) per cent of the required surplus
108-6 for a capital stock insurance company, or is less than the minimum
108-7 level of surplus required by Commissioner promulgated risk-based
108-8 capital and surplus regulations, or (ii) if it is determined that
108-9 the required aggregate surplus of a reciprocal or mutual company,
108-10 or the required aggregate of guaranty fund and surplus of a Lloyd's
108-11 company, other than a life insurance company, doing the kind or
108-12 kinds of insurance business set out in its Certificate of Authority
108-13 is impaired to the extent of more than twenty-five per cent (25%)
108-14 of the required aggregate surplus, or is less than the minimum
108-15 level of surplus required by Commissioner promulgated risk-based
108-16 capital and surplus regulations, the Commissioner shall order the
108-17 company to remedy the impairment of surplus to acceptable levels
108-18 specified by the Commissioner or to cease to do business within
108-19 this State. The Commissioner shall thereupon immediately institute
108-20 such proceedings as may be necessary to determine what further
108-21 actions shall be taken in the case.
108-22 6. Shall Publish Results of Investigation. The
108-23 Department shall publish the result of an examination of the
108-24 affairs of any company whenever the Commissioner deems it for the
108-25 interest of the public.
108-26 [7. May Order Sanctions. (a) After notice and
108-27 opportunity for a hearing, the Commissioner may cancel or revoke
109-1 any permit, license, certificate of authority, certificate of
109-2 registration, or other authorization issued or existing under the
109-3 Commissioner's authority or the authorization of this Code if the
109-4 holder or possessor of same is found to be in violation of, or to
109-5 have failed to comply with, a specific provision of the Code or any
109-6 duly promulgated rule or regulation of the Commissioner. The
109-7 Commissioner may also order one or more of the following sanctions:]
109-8 [(1) Suspend such authorization for a time
109-9 certain, not to exceed one year;]
109-10 [(2) Order the holder or possessor of such
109-11 authorization to cease and desist from the specified activity
109-12 determined to be in violation of specific provisions of this Code
109-13 or rules and regulations of the Commissioner or from failure to
109-14 comply with such provisions of this Code or such rules and
109-15 regulations;]
109-16 [(3) Direct the holder or possessor of such
109-17 authorization to pay an administrative penalty in accordance with
109-18 Article 1.10E of this code; or]
109-19 [(4) Direct the holder or possessor of such
109-20 authorization to make complete restitution to all Texas residents,
109-21 Texas insureds, and entities operating in Texas harmed by the
109-22 violation or failure to comply.]
109-23 [(b) Restitution under Subdivision (4) of Subsection
109-24 (a) must be made in the form and amount and within the period
109-25 determined by the Commissioner.]
109-26 [(c) If it is found after hearing that any holder or
109-27 possessor has failed to comply with an order issued pursuant to
110-1 Subsection (a), the Commissioner shall, unless its order is
110-2 lawfully stayed, cancel all authorizations of such holder or
110-3 possessor.]
110-4 [(d) The Commissioner may informally dispose of any
110-5 matter specified in this section by consent order, agreed
110-6 settlement, stipulations, or default. An informal disposition or
110-7 consent order may include a provision under which the holder or
110-8 possessor agrees to a sanction under this section with the express
110-9 reservation that:]
110-10 [(1) the holder or possessor is not admitting
110-11 any violation of this code or of a rule or regulation; and]
110-12 [(2) the existence of a violation is in dispute.]
110-13 [(e) The Commissioner shall give notice of any action
110-14 taken pursuant to this section to the Insurance Commissioner or
110-15 other similar officer of every state.]
110-16 [(f) The authority vested in the Commissioner in this
110-17 Article shall be in addition to and not in lieu of any other
110-18 authority to enforce or cause to be enforced any sanctions,
110-19 penalties, fines, forfeitures, denials, suspensions, or revocations
110-20 otherwise authorized by law, and shall be applicable to every form
110-21 of authorization to any person or entity holding or possessing the
110-22 same.]
110-23 [(g) This section applies to all companies regulated
110-24 by the Commissioner, including but not limited to domestic and
110-25 foreign, stock and mutual life, health, and accident insurance
110-26 companies; domestic and foreign, stock and mutual, fire and
110-27 casualty insurance companies; Mexican casualty companies;
111-1 domestic and foreign Lloyd's plan insurers; domestic and foreign
111-2 reciprocal or interinsurance exchanges; domestic and foreign
111-3 fraternal benefit societies; domestic and foreign title insurance
111-4 companies; attorney's title insurance companies; stipulated
111-5 premium insurance companies; nonprofit legal service corporations;
111-6 health maintenance organizations; statewide mutual assessment
111-7 companies; local mutual aid associations; local mutual burial
111-8 associations; exempt associations under Article 14.17 of this
111-9 Code; nonprofit hospital, medical, or dental service corporations
111-10 including but not limited to companies subject to Chapter 20 of
111-11 this Code; county mutual insurance companies; and farm mutual
111-12 insurance companies. Also, this section applies to all agents of
111-13 those companies and generally to all other individuals,
111-14 corporations, associations, partnerships, and other natural or
111-15 artificial persons engaged in the business of insurance or that
111-16 hold a permit, certificate, registration, license, or other
111-17 authority under this Code or that are regulated by the
111-18 Commissioner.]
111-19 [8. Report to Attorney General. The Department shall
111-20 report promptly and in detail to the Attorney General any violation
111-21 of law relative to insurance companies or the business of
111-22 insurance.]
111-23 [9. Shall Furnish Blanks. The Department shall
111-24 furnish to the companies required to report to the Department the
111-25 necessary blank forms for the statements required.]
111-26 [10. Shall Keep Records. The Department shall
111-27 preserve in a permanent form a full record of the Department's
112-1 proceedings and a concise statement of the condition of each
112-2 company or agency visited or examined.]
112-3 [11. Give Certified Copies. At the request of any
112-4 person, and on the payment of the legal fee, the Department shall
112-5 give certified copies of any record or papers in its office, when
112-6 the Commissioner deems it not prejudicial to public interest and
112-7 shall give such other certificates as are provided for by law. The
112-8 fees collected by the Department under this section shall be
112-9 deposited in the State Treasury to the credit of the Texas
112-10 Department of Insurance operating fund.]
112-11 [12. Report to Governor and Legislature. The
112-12 Department shall file annually with the Governor and the presiding
112-13 officer of each house of the Legislature a complete and detailed
112-14 written report accounting for all funds received and disbursed by
112-15 the Department during the preceding fiscal year. The annual report
112-16 must be in the form and reported in the time provided by the
112-17 General Appropriations Act. The report shall also contain the
112-18 Commissioner's official acts, the condition of companies doing
112-19 business in this State, and such other information as will exhibit
112-20 the affairs of the Department.]
112-21 [13. Send Copies of Reports To. The Department shall
112-22 send a copy of the annual report to the Insurance Commissioner or
112-23 other similar officer of every state and, on request, shall send a
112-24 copy to each company doing business in Texas.]
112-25 [14. Report Laws to Other States. On request, the
112-26 Department shall communicate to the Insurance Commissioner or other
112-27 similar officer of any other state, in which the substantial
113-1 provisions of the law of this State relative to insurance have
113-2 been, or shall be, enacted, any facts which by law it is his duty
113-3 to ascertain respecting the companies of this State doing business
113-4 within such other state.]
113-5 15. See That No Company Does Business. The
113-6 Commissioner shall see that no company is permitted to transact the
113-7 business of life insurance in this State whose charter authorizes
113-8 it to do a fire, marine, lightning, tornado, or inland insurance
113-9 business, and that no company authorized to do a life insurance
113-10 business in this State be permitted to take fire, marine or inland
113-11 risks.
113-12 16. Admit Mutual Companies. The Commissioner shall
113-13 admit into this State mutual insurance companies engaged in
113-14 cyclone, tornado, hail and storm insurance which are organized
113-15 under the laws of other states and which have Two Million
113-16 ($2,000,000.00) Dollars assets in excess of liabilities.
113-17 17. Voluntary Deposits. (a) In the event any
113-18 insurance company organized and doing business under the provisions
113-19 of this Code shall be required by any other state, country or
113-20 province as a requirement for permission to do an insurance
113-21 business therein to make or maintain a deposit with an officer of
113-22 any state, country, or province, such company, at its discretion,
113-23 may voluntarily deposit with the Comptroller such securities as may
113-24 be approved by the Commissioner of Insurance to be of the type and
113-25 character authorized by law to be legal investments for such
113-26 company, or cash, in any amount sufficient to enable it to meet
113-27 such requirements. The Comptroller is hereby authorized and
114-1 directed to receive such deposit and hold it exclusively for the
114-2 protection of all policyholders or creditors of the company
114-3 wherever they may be located, or for the protection of the
114-4 policyholders or creditors of a particular state, country or
114-5 province, as may be designated by such company at the time of
114-6 making such deposit. The company may, at its option, withdraw such
114-7 deposit or any part thereof, first having deposited with the
114-8 Comptroller, in lieu thereof, other securities of like class and of
114-9 equal amount and value to those withdrawn, which withdrawal and
114-10 substitution must be approved by the Commissioner of Insurance.
114-11 The proper officer of each insurance company making such deposit
114-12 shall be permitted at all reasonable times to examine such
114-13 securities and to detach coupons therefrom, and to collect interest
114-14 thereon, under such reasonable rules and regulations as may be
114-15 prescribed by the Comptroller and the Commissioner of Insurance.
114-16 Any deposit so made for the protection of policyholders or
114-17 creditors of a particular state, country or province shall not be
114-18 withdrawn, except by substitution as provided above, by the
114-19 company, except upon filing with the Commissioner of Insurance
114-20 evidence satisfactory to him that the company has withdrawn from
114-21 business, and has no unsecured liabilities outstanding or potential
114-22 policyholder liabilities or obligations in such other state,
114-23 country or province requiring such deposit, and upon the filing of
114-24 such evidence the company may withdraw such deposit at any time
114-25 upon the approval of the Commissioner of Insurance. Any deposit so
114-26 made for the protection of all policyholders or creditors wherever
114-27 they may be located shall not be withdrawn, except by substitution
115-1 as provided above, by the company except upon filing with the
115-2 Commissioner of Insurance evidence satisfactory to him that the
115-3 company does not have any unsecured liabilities outstanding or
115-4 potential policy liabilities or obligations anywhere, and upon
115-5 filing such evidence the company may withdraw such deposit upon the
115-6 approval of the Commissioner of Insurance. For the purpose of
115-7 state, county and municipal taxation, the situs of any securities
115-8 deposited with the Comptroller hereunder shall be in the city and
115-9 county where the principal business office of such company is fixed
115-10 by its charter.
115-11 (b) Any voluntary deposit held by the Comptroller or
115-12 the Department heretofore made by any insurance company in this
115-13 State, and which deposit was made for the purpose of gaining
115-14 admission to another state, may be considered, at the option of
115-15 such company, to be hereinafter held under the provisions of this
115-16 Act.
115-17 (c) When two or more companies merge or consolidate or
115-18 enter a total reinsurance contract by which the ceding company is
115-19 dissolved and its assets acquired and liabilities assumed by the
115-20 surviving company, and the companies have on deposit with the
115-21 Comptroller two or more deposits made for identical purposes under
115-22 this section or Article 4739, Revised Statutes, as amended, and now
115-23 repealed, all such deposits, except the deposit of greatest amount
115-24 and value, may be withdrawn by the new surviving or reinsuring
115-25 company, upon proper showing of duplication of such deposits and
115-26 that the company is the owner thereof.
115-27 (d) Any company which has made a deposit or deposits
116-1 under this section or Article 4739, Revised Statutes, as amended
116-2 and now repealed, shall be entitled to a return of such deposits
116-3 upon proper application therefor and a showing before the
116-4 Commissioner that such deposit or deposits are no longer required
116-5 under the laws of any state, country or province in which such
116-6 company sought or gained admission to do business upon the strength
116-7 of a certificate of such deposit.
116-8 (e) Upon being furnished a certified copy of the
116-9 Commissioner's order issued under Subsection (c) or (d) above, the
116-10 Comptroller shall release, transfer and deliver such deposit or
116-11 deposits to the owner as directed in said order.
116-12 18. Complaint File. The Department shall keep an
116-13 information file about each complaint filed with the Department
116-14 concerning an activity that is regulated by the Department or
116-15 Commissioner.
116-16 19. Notice of Complaint Status. If a written
116-17 complaint is filed with the Department, the Department, at least
116-18 quarterly and until final disposition of the complaint, shall
116-19 notify the parties to the complaint of the status of the complaint
116-20 unless the notice would jeopardize an undercover investigation.
116-21 20. Electronic Transfer of Funds. The Commissioner
116-22 shall adopt rules for the electronic transfer of any taxes, fees,
116-23 guarantee funds, or other money owed to or held for the benefit of
116-24 the state and for which the Department has the responsibility to
116-25 administer under this code or another insurance law of this state.
116-26 The Commissioner shall require the electronic transfer of any
116-27 amounts held or owed in an amount exceeding $500,000.
117-1 SECTION 5. REPEALER. Articles 1.01A, 1.02, 1.03A, 1.03B,
117-2 1.04, 1.04C, 1.06, 1.06A, 1.06AA, 1.06B, 1.06C, 1.07, 1.09, 1.09-2,
117-3 1.09-3, 1.09-5, 1.10A, 1.10B, 1.10E, 1.11A, 1.14-1, 1.14-1A,
117-4 1.19-1, 1.23, 1.24, 1.24B, 1.24C, 1.24D, 1.25, 1.25A, 1.27, 1.30,
117-5 1.33, 1.33A, 1.33B, 1.33C, 1.35C, 1.40, 1.41, 3.90, 5.121, 21.20-1,
117-6 21.30, 21.51, 21.69, 21.79B, and 21.79C, Insurance Code, are
117-7 repealed.
117-8 SECTION 6. LEGISLATIVE INTENT. This Act is enacted under
117-9 Section 43, Article III, Texas Constitution. This Act is intended
117-10 as a recodification only, and no substantive change in law is
117-11 intended by this Act.
117-12 SECTION 7. EFFECTIVE DATE. This Act takes effect September
117-13 1, 1999.
117-14 SECTION 8. EMERGENCY. The importance of this legislation
117-15 and the crowded condition of the calendars in both houses create an
117-16 emergency and an imperative public necessity that the
117-17 constitutional rule requiring bills to be read on three several
117-18 days in each house be suspended, and this rule is hereby suspended.