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- Texas Insurance Code - Not Codified
INSURANCE CODE - NOT CODIFIED TITLE 1. THE INSURANCE CODE OF 1951 CHAPTER 1. THE BOARD, ITS POWERS AND DUTIES INSURANCE CODE - NOT CODIFIED TITLE 1. THE INSURANCE CODE OF 1951 CHAPTER 1. THE BOARD, ITS POWERS AND DUTIES Text of article effective until April 1, 2009 Art. 1.01. SHORT TITLE. This Act constitutes and shall be known as the Insurance Code. Acts 1951, 52nd Leg., ch. 491.Text of article effective until April 1, 2009 Art. 1.02. RATING. (a) In this article, "insurer" means an insurance company, reciprocal or interinsurance exchange, mutual insurance company, farm mutual insurance company, capital stock company, county mutual insurance company, Lloyd's plan, a surplus lines insurer, or other legal entity engaged in the business of insurance in this state. The term includes: (1) an affiliate as described by Section 2, Article 21.49-1 of this code, or Section 823.003(a) of this code; (2) the Texas Windstorm Insurance Association created and operated under Article 21.49 of this code; (3) the FAIR Plan Association under Article 21.49A of this code; and (4) the Texas Automobile Insurance Plan Association under Article 21.81 of this code. (b) Rates used under this code must be just, fair, reasonable, adequate, not confiscatory and not excessive for the risks to which they apply, and not unfairly discriminatory. An insurer may not use rates that violate this article. (c) For purposes of this article, a rate is: (1) excessive if the rate is likely to produce a long-term profit that is unreasonably high in relation to the insurance coverage provided; (2) inadequate if the rate is insufficient to sustain projected losses and expenses to which the rate applies, and continued use of the rate: (A) endangers the solvency of an insurer using the rate; or (B) has the effect of substantially lessening competition or creating a monopoly within any market; or (3) unfairly discriminatory if the rate: (A) is not based on sound actuarial principles; (B) does not bear a reasonable relationship to the expected loss and expense experience among risks; or (C) is based in whole or in part on the race, creed, color, ethnicity, or national origin of the policyholder or an insured. Added by Acts 2003, 78th Leg., ch. 206, Sec. 13.01, eff. June 11, 2003. Art. 1.04D. DUTIES OF COMPTROLLER. (b) The duties transferred to the comptroller relative to taxes, fees, and assessments imposed under this code or another insurance law of this state relate to the collection, reporting, enforcement, and administration of all such amounts currently provided for under this code or another insurance law of this state, and also of any taxes, fees, or assessments that have been repealed or are otherwise inactive but for which amounts may still be owing or refunds may be due on or after the effective date of this article. Added by Acts 1993, 73rd Leg., ch. 685, Sec. 3.01, eff. Sept. 1, 1993. Subsec. (a) amended by Acts 1999, 76th Leg., ch. 101, Sec. 3, eff. Sept. 1, 1999; Subsecs. (a), (c), (d) repealed by Acts 2003, 78th Leg., ch. 1274, Sec. 26(b)(1), eff. April 1, 2005. Art. 1.09-1. REPRESENTED BY THE ATTORNEY GENERAL. (a) The department, the State Board of Insurance, and the Commissioner shall be represented and advised by the Attorney General in all legal matters before them or in which they shall be interested or concerned. The department, the Board, and the Commissioner may not employ or obtain any other legal services without the written approval of the Attorney General.Text of subsection effective until April 1, 2009 (b) The Commissioner shall have and exercise the power of subpoena and subpoena duces tecum for witnesses, documents, and other evidence to the extent of the jurisdiction of this state for such hearings and proceedings on its own motion.Text of subsection effective on April 1, 2009 (b) Repealed by Acts 2007, 80th Leg., R.S., Ch. 730, Sec. 1L.001(b), eff. April 1, 2009. Added by Acts 1957, 55th Leg., p. 1454, ch. 499, Sec. 3. Amended by Acts 1987, 70th Leg., 1st C.S., ch. 1, Sec. 1.03, eff. Sept. 2, 1987; Acts 1991, 72nd Leg., ch. 242, Sec. 1.02, eff. Sept. 1, 1991. Subsec. (b) amended by Acts 1993, 73rd Leg., ch. 685, Sec. 1.06, eff. Sept. 1, 1993. Amended by: Acts 2007, 80th Leg., R.S., Ch. 730, Sec. 1L.001(b), eff. April 1, 2009.Text of article effective until April 1, 2009 Art. 1.10. CERTAIN DUTIES OF THE DEPARTMENT. In addition to the other duties required of the department, the department shall perform duties as follows: 1. Deleted by Acts 1999, 76th Leg., ch. 101, Sec. 4, eff. Sept. 1, 1999. 2. File Articles of Incorporation and Other Papers. File and preserve in its office all acts or articles of incorporation of insurance companies and all other papers required by law to be deposited with the Department and, upon application of any party interested therein, furnish certified copies thereof upon payment of the fees prescribed by law. Sec. 3. Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18, eff. April 1, 2007. Sec. 4. Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18, eff. April 1, 2007. Sec. 5. Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18, eff. April 1, 2007. 6. Shall Publish Results of Investigation. The Department shall publish the result of an examination of the affairs of any company whenever the Commissioner deems it for the interest of the public. 7 to 14. Deleted by Acts 1999, 76th Leg., ch. 101, Sec. 4, eff. Sept. 1, 1999. 15, 16. Deleted by Acts 2001, 77th Leg., ch. 1419, Sec. 4, eff. June 1, 2003. Sec. 17. Repealed by Acts 2005, 79th Leg., Ch. 727, Sec. 18, eff. April 1, 2007. Acts 1951, 52nd Leg., ch. 491. Amended by Acts 1955, 54th Leg., p. 413, ch. 117, Sec. 2; Acts 1959, 56th Leg., p. 280, ch. 157, Sec. 1; Acts 1959, 56th Leg., p. 637, ch. 291, Sec. 3; Acts 1967, 60th Leg., p. 1825, ch. 705, Sec. 1 to 3, eff. Aug. 28, 1967; Acts 1979, 66th Leg., p. 574, ch. 264, Sec. 1, eff. Aug. 27, 1979; Acts 1981, 67th Leg., p. 412, ch. 170, Sec. 1, eff. May 20, 1981. Sec. 11 amended and Secs. 18, 19 added by Acts 1983, 68th Leg., p. 3894, ch. 622, Sec. 4, 17, eff. Sept. 1, 1983; Sec. 7 amended by Acts 1987, 70th Leg., ch. 416, Sec. 1, eff. June 17, 1987; Secs. 7, 13 amended by Acts 1987, 70th Leg., 2nd C.S., ch. 67, Sec. 4, eff. Aug. 4, 1987. Amended by Acts 1989, 71st Leg., ch. 273, Sec. 6, eff. Aug. 28, 1989; Sec. 16 amended by Acts 1989, 71st Leg., ch. 1082, Sec. 1.01, eff. Sept. 1, 1989; Sec. 5 amended by Acts 1991, 72nd Leg., ch. 242, Sec. 7.07, eff. Sept. 1, 1991; Sec. 7(a) amended by Acts 1991, 72nd Leg., ch. 242, Sec. 1.06, eff. Sept. 1, 1991; Sec. 20 added by Acts 1991, 72nd Leg., 2nd C.S., ch. 12, Sec. 1.26, eff. Jan. 1, 1992. Amended by Acts 1993, 73rd Leg., ch. 685, Sec. 1.07, eff. Sept. 1, 1993; Sec. 7(a) amended by Acts 1997, 75th Leg., ch. 195, Sec. 1, eff. Sept. 1, 1997; Sec. 17 amended by Acts 1997, 75th Leg., ch. 1423, Sec. 11.01, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 101, Sec. 4, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 1419, Sec. 4, eff. June 1, 2003; Acts 2003, 78th Leg., ch. 1274, Sec. 8, eff. April 1, 2005. Amended by: Acts 2005, 79th Leg., Ch. 727, Sec. 18, eff. April 1, 2007.Text of article effective until April 1, 2009 Art. 1.12. WHEN PARTIES REFUSE TO TESTIFY. If any person refuses to appear and testify or to give information authorized by this chapter to be demanded by the Board, such Board may file the sworn application of any member thereof with any district judge or district court within this State, where said witness is summoned to appear, and said judge shall summon said witness and require answers to such questions. Acts 1951, 52nd Leg., ch. 491.Text of article effective until April 1, 2009 Art. 1.13. OFFICERS SHALL EXECUTE SERVICE. Peace officers shall execute process directed to them by the Board and make return thereof to it, as in the case of process issued from any court. Acts 1951, 52nd Leg., ch. 491.Text of article effective until April 1, 2009 Art. 1.33. SPECIAL DEPOSITS Sec. 1. DEFINITION. In this article, "insurer" includes: (1) a capital stock insurance company; (2) a reciprocal or interinsurance exchange; (3) a Lloyd's plan; (4) a fraternal benefit society; (5) a mutual company, including a mutual assessment company; (6) a statewide mutual assessment company; (7) a local mutual aid association; (8) a burial association; (9) a county mutual insurance company; (10) a farm mutual insurance company; (11) a fidelity, guaranty, or surety company; (12) a title insurance company; (13) a stipulated premium company; (14) a group hospital service corporation; (15) a health maintenance organization; (16) a risk retention group; and (17) any other organization or person engaged in the business of insurance. Sec. 2. APPLICABILITY OF ARTICLE. This article applies to a person or organization engaged in the business of insurance without regard to whether the person or organization is listed in Section 1 of this article, unless another statute specifically cites this article and exempts the person or organization from this article. Sec. 3. STANDARDS AND CRITERIA. The commissioner, in the commissioner's sole discretion, may require an insurer to make a deposit under this article if the commissioner determines that one of the following conditions, if not rectified, may potentially be hazardous to the insurer's policyholders, enrollees, or creditors, or to the public: (1) the financial or operating condition of the insurer, when reviewed in conjunction with the kinds and nature of risks insured; (2) the insurer's method of operation; (3) the insurer's relationship with affiliates; (4) the nature and amount of the insurer's investments; (5) the insurer's contracts that may lead to a contingent liability; or (6) the insurer's agreements with respect to guaranty and surety. Sec. 4. REQUIRED DEPOSIT; FORM OF SECURITY. A deposit required under Section 3 of this article must be made with the comptroller and approved by the commissioner. The deposit must be made in: (1) cash; (2) securities authorized under this code to be a legal investment for the insurer that: (A) are readily marketable over a national exchange with a maturity date of not more than one year, are listed by the Securities Valuation Office of the National Association of Insurance Commissioners, and qualify as admitted assets; or (B) are clean, irrevocable, unconditional letters of credit, issued or confirmed by a financial institution organized and licensed under the laws of the United States or a state of the United States; or (3) another form of security acceptable to the commissioner. Sec. 5. DURATION OF DEPOSIT. Subject to Section 6 of this article, the comptroller shall hold a deposit required under this article until the commissioner issues a written order finding that the condition for which the deposit was required no longer exists. Sec. 6. SUBSTITUTION OR WITHDRAWAL OF DEPOSIT. (a) An insurer may file a written application with the commissioner requesting: (1) withdrawal of all or a portion of the deposit held by the comptroller under this article; or (2) substitution of all or a part of the deposited securities held by the comptroller under this article. (b) The application must state the basis for the request to withdraw the deposit or to substitute the deposited security. (c) If the application is for the substitution of a deposited security, the insurer's application must provide specific information regarding the security to be deposited as a substitute for the security held by the comptroller. (d) The commissioner shall issue an order approving or denying an application under this section not later than the 30th day after the date the department receives the application. If the commissioner does not approve or deny the application within that period, the application is denied. (e) The commissioner may, in the commissioner's sole discretion, approve an application to withdraw a deposit or substitute a deposited security if the commissioner determines that the withdrawal or substitution will not be hazardous to the insurer's policyholders, enrollees, or creditors, or to the public. (f) The comptroller may not release a deposit made under this article, or any part of the deposit, and may not accept a substitute for a deposited security unless the commissioner issues an order approving the withdrawal or substitution. Sec. 7. APPEAL. An insurer may appeal an action of the commissioner under this article in accordance with Subchapter D, Chapter 36, of this code. Sec. 8. CUMULATIVE OF OTHER DEPOSITS. A deposit required to be made under this article is in addition to any other deposit that the insurer is required or authorized to make under this code. Added by Acts 2005, 79th Leg., Ch. 409, Sec. 1, eff. June 17, 2005.Text of article effective until April 1, 2009 Art. 1.61. MEDICAID MANAGED CARE ORGANIZATION: FISCAL SOLVENCY AND COMPLAINT SYSTEM GUIDELINES. In conjunction with the Texas Department of Health, the department shall establish fiscal solvency standards and complaint system guidelines for managed care organizations that serve Medicaid clients. Guidelines must require that information regarding a managed care organization's complaint process be made available in an appropriate communication format to each Medicaid client when the person enrolls in the program. Added by Acts 1995, 74th Leg., ch. 574, Sec. 3, eff. Sept. 1, 1995.
- Texas Insurance Code - Not Codified
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