Law:Title 6. Organization Of Insurers And Related Entities (Texas)

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Subtitle A. General Provisions Applicable To Insurers And Related Entities

Contents

Chapter 801. Certificate Of Authority

Subchapter A. General Provisions

Section  801.001.  Definitions.

In this chapter:

(1)  "Control" has the meaning described by Section 823. 005.

(2)  "Insurer" means the issuer of an insurance policy that is issued to another in consideration of a premium and that insures against a loss that may be insured against under the law.  The term includes a:

(A)  fraternal benefit society;

(B)  Lloyd's plan;

(C)  mutual company of any kind, including a:

(i)  statewide mutual assessment association;

(ii)  local mutual aid association or burial association; and

(iii)  county or farm mutual insurance company;

(D)  reciprocal or interinsurance exchange;

(E)  group hospital service corporation;

(F)  health maintenance organization;

(G)  nonprofit legal services corporation; and

(H)  stock company.

(3)  "Person" has the meaning assigned by Section 823.002.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.

Amended by:

Acts 2009, 81st Leg., R.S., Ch. 1022, Sec. 1, eff. June 19, 2009.



Section  801.002.  Exemption For Certain Fraternal Benefit Societies.

This chapter does not apply to a fraternal benefit society that:

(1)  sells insurance policies only as an incidental benefit to its members; and

(2)  on September 6, 1955, was:

(A)  organized and licensed by the department as a fraternal benefit society; or

(B)  exempt under former Article 10.12 or 10.38, revised as Section 885.004.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.



Subchapter B. Certificate Of Authority

Section 801.051.  Approval, Denial, Or Disapproval Of Application For Certificate; Eligibility; Hearing.

(a) The department shall approve, deny, or disapprove an application for a certificate of authority to act as an insurer.

(b)  If the department determines that the applicant has complied with the law, the department shall approve the application and issue under the department's seal a certificate of authority to act as an insurer.

(c)  On the applicant's request, the commissioner shall hold a hearing on a denial.  Not later than the 30th day after the date of the applicant's request for a hearing, the commissioner shall request a hearing date.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.

Amended by:

Acts 2009, 81st Leg., R.S., Ch. 1022, Sec. 2, eff. June 19, 2009.



Section  801.052.  Effect And Contents Of Certificate.

A certificate of authority issued to an insurer under this chapter authorizes the insurer to engage in the business of insurance. The certificate of authority must state the specific kinds of insurance authorized under the certificate.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.



Section  801.053.  Duration Of Certificate.

A certificate of authority issued to an insurer under this chapter is effective until it is suspended or revoked.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.



Section  801.054.  Preference For Domestic Company.

In issuing a certificate of authority to an applicant under this chapter, the department shall give preference to an application submitted by a domestic company.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.



Section  801.055.  Deposit Of Fees.

A fee collected by the department under this chapter for a certificate of authority shall be deposited to the credit of the Texas Department of Insurance operating account.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.



Section  801.056.  Failure To Provide Complete Set Of Fingerprints: Ground For Denial Of Application.

(a) In this section, "authorization" means any authorization issued by the department to engage in an activity regulated under this code, including:

(1)  a certificate of authority;

(2)  a certificate of registration;

(3)  a license; and

(4)  a permit.

(b)  The department may deny an application for an authorization if the applicant or a corporate officer of the applicant fails to provide a complete set of fingerprints on request by the department.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.



Section  801.057.  Failure To File Annual Statement: Ground For Revocation Or Suspension.

A certificate of authority of an insurer that fails to file an annual statement required by law is subject to being suspended or revoked by the department.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.



Subchapter C. Competence, Fitness, Or Reputation

Section  801.101.  Department Inquiry.

The department may inquire into the competence, fitness, or reputation of:

(1)  an officer or director of an insurer; or

(2)  a person having control of an insurer.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.



Section 801.102.  Denial Of Application Or Revocation Of Certificate.

(a) If after conducting an inquiry under Section 801.101 the department determines that the person who is the subject of the inquiry is not worthy of the public confidence, the department shall:

(1)  deny the application for a certificate of authority; or

(2)  revoke the insurer's certificate of authority.

(b)  On the applicant's request, the commissioner shall hold a hearing on a denial or revocation.  Not later than the 30th day after the date of the applicant's request for a hearing, the commissioner shall request a hearing date.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.

Amended by:

Acts 2009, 81st Leg., R.S., Ch. 1022, Sec. 3, eff. June 19, 2009.



Subchapter D. Felony Conviction

Section  801.151.  Issuance Of Certificate Prohibited.

Except as provided by Sections 801.153 and 801.154, the department may not issue a certificate of authority to an applicant if a corporate officer or member of the board of directors of the applicant has been convicted of a felony involving:

(1)  moral turpitude; or

(2)  breach of a fiduciary duty.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.



Section  801.152.  Revocation Of Certificate.

After notice and hearing, the department may revoke the certificate of authority of an insurer if a corporate officer or member of the board of directors of the insurer is convicted of a felony involving:

(1)  moral turpitude; or

(2)  breach of a fiduciary duty.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.



Section  801.153.  Petition For Issuance Or Reinstatement Of Certificate.

A company may petition the commissioner for issuance or reinstatement of a certificate of authority of the company that is denied or revoked under this subchapter:

(1)  not earlier than the later of:

(A)  the fifth anniversary of the date of the final conviction; or

(B)  if the officer or director is sentenced to confinement or imprisonment or placed on community supervision, the fifth anniversary of the date the officer or director completes the sentence or period of community supervision; or

(2)  after the officer or director ceases to be an officer or director of the insurer.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.



Section  801.154.  Grant Of Petition.

The commissioner shall grant a petition for issuance or reinstatement of a certificate of authority under this subchapter if the petitioner demonstrates that granting the petition would be in the public interest and that justice would best be served by granting the petition.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.



Section  801.155.  Rules Relating To Contents Of Petition.

The department may adopt rules under this subchapter prescribing the contents of a petition for issuance or reinstatement of a certificate of authority.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.

Chapter 802. Annual Statement

Subchapter A. Annual Statement Of Insurance Companies

Section  802.001.  Form Of Annual Statement.

(a) The commissioner, as necessary to obtain an accurate indication of the company's condition and method of transacting business, may change the form of any annual statement required to be filed by any kind of insurance company.

(b)  The form may require only information that relates to the business of the insurance company.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.



Section  802.002.  Actuarial Opinion Required.

(a) In this section, "qualified actuary" means:

(1)  a member in good standing of the American Academy of Actuaries; or

(2)  a person who has otherwise demonstrated actuarial competence to the satisfaction of the commissioner or an insurance regulatory official of another state in which the insurance company is domiciled.

(b)  An insurance company's annual statement must include a statement of a qualified actuary entitled "Statement of Actuarial Opinion" that:

(1)  is located on or is attached to the first page of the annual statement; and

(2)  provides the opinion of the actuary relating to policy reserves and other actuarial items for life insurance, accident and health insurance, and annuities, or loss and loss adjustment expense reserves for property and casualty risks, as described in the annual statement instructions of the National Association of Insurance Commissioners as appropriate for the type of risks insured.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.



Section  802.003.  Filing Date Of Annual Statement Delivered By Postal Service.

Except as otherwise specifically provided, for an annual statement that is required to be filed in the offices of the commissioner and that is delivered by the United States Postal Service to the offices of the commissioner after the date on which the annual statement is required to be filed, the date of filing is the date of:

(1)  the postal service postmark stamped on the cover in which the document is mailed; or

(2)  any other evidence of mailing authorized by the postal service reflected on the cover in which the document is mailed.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.201, eff. Sept. 1, 2003.



Subchapter B. Filing With National Association Of Insurance Commissioners

Section  802.051.

  APPLICABILITY OF

Subchapter

. This subchapter applies to each company regulated by the commissioner, including:

(1)  a stock life, health, or accident insurance company;

(2)  a mutual life, health, or accident insurance company;

(3)  a stock fire or casualty insurance company;

(4)  a mutual fire or casualty insurance company;

(5)  a Mexican casualty company;

(6)  a Lloyd's plan;

(7)  a reciprocal or interinsurance exchange;

(8)  a fraternal benefit society;

(9)  a title insurance company;

(10)  an attorney's title insurance company;

(11)  a stipulated premium insurance company;

(12)  a nonprofit legal service corporation;

(13)  a health maintenance organization;

(14)  a statewide mutual assessment company;

(15)  a local mutual aid association;

(16)  a local mutual burial association;

(17)  an association exempt under Section 887.102;

(18)  a nonprofit hospital, medical, or dental service corporation, including a company subject to Chapter 842;

(19)  a county mutual insurance company; and

(20)  a farm mutual insurance company.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.



Section  802.052.  Concurrent Filing With National Association Of Insurance Commissioners.

(a) Each domestic, foreign, or alien insurance company authorized to engage in the business of insurance in this state shall file a copy of the company's annual statement with the National Association of Insurance Commissioners at the time the company files the statement with the commissioner.

(b)  The statement required by Subsection (a) must:

(1)  meet requirements adopted by the commissioner, including:

(A)  a change in substance or form;

(B)  an additional filing; and

(C)  any requirement that the statement be in a computer compatible format; and

(2)  include the signed jurat page and the actuarial opinion, as required by the jurisdiction in which the insurance company is domiciled.

(c)  The insurance company shall also file with the National Association of Insurance Commissioners a copy of any amendment or addition to the annual statement that is subsequently filed with the commissioner.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.



Section  802.053.  Exemption Authority.

The commissioner may exempt any class of insurance companies from the requirements of this subchapter if the commissioner believes the information required under this subchapter will not be useful for regulatory purposes.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.



Section  802.054.  Compliance.

The commissioner may consider a foreign insurance company to be in compliance with the requirements of Section 802.052 if the company is domiciled in a state with a law substantially similar to that section.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.



Section  802.055.  Costs Paid By Insurance Company.

An insurance company shall pay all costs of preparing and furnishing to the National Association of Insurance Commissioners the information required under Section 802.052, including any related filing fees.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003. Amended by Acts 2003, 78th Leg., ch. 206, Sec. 17.01, eff. June 11, 2003; Acts 2003, 78th Leg., ch. 211, Sec. 2.04, eff. June 16, 2003; Acts 2003, 78th Leg., ch. 863, Sec. 1, eff. June 20, 2003.



Section 802.056.  Status Of Reports And Other Information.

A report or any other information resulting from the collection, review, analysis, and distribution of information developed from the filing of annual statement convention blanks and provided to the department by the National Association of Insurance Commissioners is considered part of the process of examination of insurance companies under this code, including Chapters 86 and 401.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch. 730, Sec. 2E.001, eff. April 1, 2009.


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