INSURANCE CODE
CHAPTER 101. UNAUTHORIZED INSURANCE
SUBCHAPTER A. GENERAL PROVISIONS
§ 101.001. STATE POLICY AND PURPOSE. (a) It is a state
concern that many residents of this state hold insurance policies
issued by persons or insurers who are not authorized to do insurance
business in this state and who are not qualified as eligible surplus
lines insurers under Article 1.14-2. These residents face often
insurmountable obstacles in asserting legal rights under the
policies in foreign forums under unfamiliar laws and rules of
practice.
(b) It is the policy of this state to protect residents
against acts by a person or insurer who is not authorized to do
insurance business in this state by:
(1) maintaining fair and honest insurance markets;
(2) protecting the premium tax revenues of this state;
(3) protecting authorized persons and insurers, who
are subject to strict regulation, from unfair competition by
unauthorized persons and insurers; and
(4) protecting against evasion of the insurance
regulatory laws of this state.
(c) The purpose of this chapter is to subject certain
insurers and persons to the jurisdiction of:
(1) the commissioner and proceedings before the
commissioner; and
(2) the courts of this state in suits by or on behalf
of the state or an insured or beneficiary under an insurance
contract.
(d) It is also a concern that this state not become a safe
harbor for persons or insurers engaged in the unauthorized business
of insurance in this state, regardless of whether the insureds or
other persons affected by the unauthorized business of insurance
are residents of this state.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
Amended by Acts 2001, 77th Leg., ch. 671, § 1, eff. Sept. 1,
2001; Acts 2001, 77th Leg., ch. 1419, § 0, 21, eff. June 1, 2003;
Acts 2001, 77th Leg., ch. 1420, § 11.005, eff. Sept. 1, 2001.
§ 101.002. DEFINITIONS. In this chapter:
(1) "Insurer" includes:
(A) a corporation, association, partnership, or
individual engaged as a principal in the business of insurance;
(B) an interinsurance exchange or mutual benefit
society; or
(C) an insurance exchange or syndicate.
(2) "Unfair act" means an unfair method of competition
or an unfair or deceptive act or practice as defined under Article
21.21 or a rule adopted under that article.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
§ 101.003. INSURANCE EXCHANGES AND SYNDICATES;
RULES. The commissioner shall adopt rules defining insurance
exchanges and syndicates that are insurers for purposes of Section
101.002.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
§ 101.004. UNCONSTITUTIONAL APPLICATION PROHIBITED;
NOTICE TO COMMISSIONER. (a) Subject to Subsection (b), this
chapter does not apply to an insurer or other person to whom, under
the constitution or statutes of the United States or the
constitution of this state, it may not apply.
(b) Before commencing operations, an insurer or other
person claiming an exemption described by Subsection (a) must file
with the commissioner:
(1) notice of the claim; and
(2) documents supporting the claim.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
SUBCHAPTER B. BUSINESS OF INSURANCE; EXCEPTIONS
§ 101.051. CONDUCT THAT CONSTITUTES THE BUSINESS OF
INSURANCE. (a) In this section, "medical expense" includes
surgical, chiropractic, physical therapy, speech pathology,
audiology, professional mental health, dental, hospital, or
optometric expenses.
(b) The following acts in this state constitute the business
of insurance in this state:
(1) making or proposing to make, as an insurer, an
insurance contract;
(2) making or proposing to make, as guarantor or
surety, a guaranty or suretyship contract as a vocation and not
merely incidental to another legitimate business or activity of the
guarantor or surety;
(3) taking or receiving an insurance application;
(4) receiving or collecting any consideration for
insurance, including:
(A) a premium;
(B) a commission;
(C) a membership fee;
(D) an assessment; or
(E) dues;
(5) issuing or delivering an insurance contract to:
(A) a resident of this state; or
(B) a person authorized to do business in this
state;
(6) directly or indirectly acting as an agent for or
otherwise representing or assisting an insurer or person in:
(A) soliciting, negotiating, procuring, or
effectuating insurance or a renewal of insurance;
(B) disseminating information relating to
coverage or rates;
(C) forwarding an insurance application;
(D) delivering an insurance policy or contract;
(E) inspecting a risk;
(F) setting a rate;
(G) investigating or adjusting a claim or loss;
(H) transacting a matter after the effectuation
of the contract that arises out of the contract; or
(I) representing or assisting an insurer or
person in any other manner in the transaction of insurance with
respect to a subject of insurance that is resident, located, or to
be performed in this state;
(7) contracting to provide in this state
indemnification or expense reimbursement for a medical expense by
direct payment, reimbursement, or otherwise to a person domiciled
in this state or for a risk located in this state, whether as an
insurer, agent, administrator, trust, or funding mechanism or by
another method;
(8) doing any kind of insurance business
specifically recognized as constituting insurance business within
the meaning of statutes relating to insurance;
(9) doing or proposing to do any insurance
business that is in substance equivalent to conduct described by
Subdivisions (1)-(8) in a manner designed to evade statutes
relating to insurance; or
(10) any other transaction of business in this
state by an insurer.
(c) An act described by Subsection (b) by an unlicensed or
unauthorized person or insurer that occurs in this state and that
affects a person in another state or jurisdiction constitutes the
business of insurance in this state.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
Amended by Acts 2001, 77th Leg., ch. 671, § 2, eff. Sept. 1,
2001; Acts 2001, 77th Leg., ch. 1419, § 22, eff. June 1, 2003;
Acts 2001, 77th Leg., ch. 1420, § 11.006, eff. Sept. 1, 2001.
§ 101.052. ADVERTISING RELATING TO MEDICARE SUPPLEMENT
POLICIES. With respect to a Medicare supplement policy authorized
under Article 3.74, the business of insurance in this state
includes using, creating, publishing, mailing, or disseminating in
this state an advertisement relating to an act that constitutes the
business of insurance under Section 101.051 unless the
advertisement is used, created, published, mailed, or disseminated
on behalf of an insurer or person who:
(1) is authorized under this code to engage in the
business of insurance in this state;
(2) has actual knowledge of the content of the
advertisement;
(3) has authorized the advertisement to be used,
created, published, mailed, or disseminated on that insurer's or
person's behalf; and
(4) is clearly identified by name in the advertisement
as the sponsor of the advertisement.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
Amended by Acts 2001, 77th Leg., ch. 1419, § 23, eff. June 1,
2003; Acts 2001, 77th Leg., ch. 1420, § 11.007, eff. Sept. 1,
2001.
§ 101.053. APPLICATION OF SUBCHAPTER. (a) Sections
101.051 and 101.052 apply to an act whether performed by mail or
otherwise. Venue for an act performed by mail is at the place where
the matter transmitted by mail is delivered and takes effect.
(b) Sections 101.051 and 101.052 do not apply to:
(1) the lawful transaction of surplus lines insurance
under Chapter 981;
(2) the lawful transaction of reinsurance by insurers;
(3) a transaction in this state that:
(A) involves a policy that:
(i) is lawfully solicited, written, and
delivered outside this state; and
(ii) covers, at the time the policy is
issued, only subjects of insurance that are not resident, located,
or expressly to be performed in this state; and
(B) takes place after the policy is issued;
(4) a transaction:
(A) that involves an insurance contract
independently procured by the insured from an insurance company not
authorized to do insurance business in this state through
negotiations occurring entirely outside this state;
(B) that is reported; and
Text of subd. (b)(4)(C) effective until April 1, 2005
(C) on which premium tax is paid in accordance
with this chapter;
Text of subd. (b)(4)(C) effective April 1, 2005
(C) on which premium tax is paid in accordance
with Chapter 226;
(5) a transaction in this state that:
(A) involves group life, health, or accident
insurance, other than credit insurance, and group annuities in
which the master policy for the group was lawfully issued and
delivered in a state in which the insurer or person was authorized
to do insurance business; and
(B) is authorized by a statute of this state;
(6) an activity in this state by or on the sole behalf
of a nonadmitted captive insurance company that insures solely:
(A) directors' and officers' liability insurance
for the directors and officers of the company's parent and
affiliated companies;
(B) the risks of the company's parent and
affiliated companies; or
(C) both the individuals and entities described
by Paragraphs (A) and (B);
(7) the issuance of a qualified charitable gift
annuity under Chapter 102; or
(8) a lawful transaction by a servicing company of the
Texas workers' compensation employers' rejected risk fund under
Section 4.08, Article 5.76-2, as that article existed before its
repeal.
(c) Subsection (b)(6) does not exempt an insured or insurer
from the payment of an applicable tax on premium or from another
applicable provision of this code.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
Amended by Acts 2001, 77th Leg., ch. 411, § 1, eff. Sept. 1,
2001; Acts 2001, 77th Leg., ch. 1419, § 24,, eff. June 1, 2003;
Acts 2001, 77th Leg., ch. 1420, § 11.008, eff. Sept. 1, 2001;
Acts 2003, 78th Leg., ch. 209, § 9, eff. Oct. 1, 2003; Acts 2003,
78th Leg., ch. 1274, § 13, eff. April 1, 2005.
§ 101.054. EXCEPTION; FULL-TIME SALARIED
EMPLOYEE. Section 101.051(b)(6) does not prohibit a full-time
salaried employee of a corporate insured from acting as an
insurance manager or buyer in placing insurance on behalf of:
(1) the employee's employer; or
(2) a parent or affiliated company of the employer.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
§ 101.055. EXCEPTION; CERTAIN ENTITIES THAT REIMBURSE
MEDICAL EXPENSES. (a) Section 101.051(b)(7) does not apply to:
(1) a program otherwise authorized by law that is
established:
(A) by a political subdivision of this state;
(B) by a state agency; or
(C) under Chapter 791, Government Code; or
(2) a multiple employer welfare arrangement that is
fully insured as defined by 29 U.S.C. Section 1144(b)(6).
(b) Notwithstanding Subsection (a)(2), the commissioner may
apply a law regulating the business of insurance to a multiple
employer welfare arrangement described by that subdivision to the
extent that the law provides:
(1) standards requiring the maintenance of specified
levels of contributions that the plan, or a trust established under
the plan, must meet to be considered able to pay benefits in full
when due; and
(2) provisions to enforce the standards described by
Subdivision (1).
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
SUBCHAPTER C. PROHIBITION; ENFORCEMENT
§ 101.101. DEFINITION. In this subchapter, "person"
means an individual or entity that is a person for purposes of
Section 2(a), Article 21.21.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
§ 101.102. UNAUTHORIZED INSURANCE PROHIBITED. (a) A
person, including an insurer, may not directly or indirectly do an
act that constitutes the business of insurance under this chapter
except as authorized by statute.
(b) With respect to insurance of a subject that is resident,
located, or to be performed in this state, this section does not
prohibit an act performed outside this state, including the
collection of premiums, by a person, including an insurer,
authorized to do business in this state if the transaction and
insurance contract otherwise comply with statute.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
§ 101.103. POWERS OF COMMISSIONER; REMEDIES FOR CERTAIN
CONDUCT.
Text of (a) effective until April 1, 2005
(a) If the commissioner has reason to believe a person,
including an insurer, has violated or is threatening to violate
this chapter or a rule adopted under this chapter, or that a person,
including an insurer, violating this chapter has engaged in or is
threatening to engage in an unfair act, the commissioner may:
Text of (a) effective April 1, 2005
(a) If the commissioner has reason to believe a person,
including an insurer, has violated or is threatening to violate
this chapter or Chapter 226 or a rule adopted under this chapter or
Chapter 226, or that a person, including an insurer, violating this
chapter or Chapter 226 has engaged in or is threatening to engage in
an unfair act, the commissioner may:
(1) issue a cease and desist order under Subchapter D;
(2) seek injunctive relief under Section 101.105;
(3) request the attorney general to recover a civil
penalty under Section 101.105; or
(4) take any combination of those actions.
(b) This section does not limit the department to the
remedies specified in this section. The department and this state
may choose at any time, without regard to prior proceedings under
this section, any available remedy or action to immediately stop or
enjoin a person from engaging in the business of insurance without
statutory authorization.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
Amended by Acts 2003, 78th Leg., ch. 1274, § 14, eff. April 1,
2005.
§ 101.104. REQUEST FOR INFORMATION. If the
commissioner has reason to believe that a person, including an
insurer, is performing an act described by Section 101.051 or
101.052, the person shall immediately provide to the commissioner,
on written request of the commissioner, information relating to
that act.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
§ 101.105. CIVIL PENALTY; INJUNCTIVE RELIEF.
Text of subsec. (a) effective until April 1, 2005
(a) A person or entity, including an insurer, that violates
this chapter is subject to a civil penalty of not more than $10,000
for each act of violation and for each day of violation.
Text of subsec. (a) effective April 1, 2005
(a) A person or entity, including an insurer, that violates
this chapter or Chapter 226 is subject to a civil penalty of not
more than $10,000 for each act of violation and for each day of
violation.
Text of subsec. (b) effective until April 1, 2005
(b) The commissioner may request that the attorney general
institute a civil suit in a district court in Travis County for
injunctive relief to restrain a person or entity, including an
insurer, from continuing a violation or threat of violation
described by Section 101.103(a). On application for injunctive
relief and a finding that a person or entity, including an insurer,
is violating or threatening to violate this chapter, the district
court shall grant the injunctive relief and issue an injunction
without bond.
Text of subsec. (b) effective April 1, 2005
(b) The commissioner may request that the attorney general
institute a civil suit in a district court in Travis County for
injunctive relief to restrain a person or entity, including an
insurer, from continuing a violation or threat of violation
described by Section 101.103(a). On application for injunctive
relief and a finding that a person or entity, including an insurer,
is violating or threatening to violate this chapter or Chapter 226,
the district court shall grant the injunctive relief and issue an
injunction without bond.
(c) On request by the commissioner, the attorney general
shall institute and conduct a civil suit in the name of the state
for injunctive relief, to recover a civil penalty, or for both
injunctive relief and a civil penalty, as authorized under this
subchapter.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
Amended by Acts 2003, 78th Leg., ch. 1274, § 15, eff. April 1,
2005.
§ 101.106. CRIMINAL PENALTY. (a) A person, including
an insurer, who violates Section 101.102 commits an offense.
(b) An offense under this section is a felony of the third
degree.
(c) It is a defense to prosecution under this section that
Section 101.051 or 101.052, as applicable, by its terms does not
apply to the person charged.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
SUBCHAPTER D. CEASE AND DESIST ORDERS
§ 101.151. POWERS OF COMMISSIONER; NOTICE OF
HEARING. (a) The commissioner may set a hearing on whether to
issue a cease and desist order under Section 101.153 if the
commissioner has reason to believe that:
(1) an insurer or person has violated or is
threatening to violate this chapter or a rule adopted under this
chapter; or
(2) an insurer or person acting in violation of this
chapter has engaged in or is threatening to engage in an unfair act.
(b) The commissioner shall serve on the insurer or person a
statement of charges and a notice of hearing in the form provided by
Section 2001.052, Government Code, and applicable rules of the
commissioner.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
Amended by Acts 2001, 77th Leg., ch. 1419, § 25, eff. June 1,
2003; Acts 2001, 77th Leg., ch. 1420, § 11.009, eff. Sept. 1,
2001.
§ 101.152. HEARING. (a) Except as agreed by the
parties with prior written approval of the commissioner, a hearing
under this subchapter must be held not earlier than the fifth day or
later than the 30th day after the date of service of the statement
and notice required under Section 101.151.
(b) The hearing shall be conducted in the manner provided
for a contested case under Chapter 2001, Government Code, and the
commissioner's rules.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
§ 101.153. CEASE AND DESIST ORDER. After a hearing held
under this subchapter, the commissioner may issue against the
insurer or person charged with a violation an order that requires
that the insurer or person immediately cease and desist from the
violation.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
Amended by Acts 2001, 77th Leg., ch. 1419, § 26, eff. June 1,
2003; Acts 2001, 77th Leg., ch. 1420, § 11.010, eff. Sept. 1,
2001.
§ 101.154. ENFORCEMENT; REFERRAL TO ATTORNEY
GENERAL. The commissioner may refer the matter to the attorney
general for enforcement if the commissioner has reason to believe
that an insurer or person has:
(1) violated a cease and desist order issued under this
subchapter; or
(2) failed to pay an assessed penalty.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
Amended by Acts 2001, 77th Leg., ch. 1419, § 27, eff. June 1,
2003; Acts 2001, 77th Leg., ch. 1420, § 11.011, eff. Sept. 1,
2001.
§ 101.155. EFFECT OF PRIOR PROCEEDINGS. The
commissioner and department may proceed under this chapter or any
other applicable law without regard to prior proceedings.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
§ 101.156. RULES. The commissioner may adopt
reasonable rules necessary to implement this subchapter.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
SUBCHAPTER E. INSURANCE CONTRACTS WITH UNAUTHORIZED INSURERS
§ 101.201. VALIDITY OF INSURANCE CONTRACTS. (a) An
insurance contract effective in this state and entered into by an
unauthorized insurer is unenforceable by the insurer. A person who
in any manner assisted directly or indirectly in the procurement of
the contract is liable to the insured for the full amount of a claim
or loss under the terms of the contract if the unauthorized insurer
fails to pay the claim or loss.
Text of subsec. (b) effective until April 1, 2005
(b) This section does not apply to insurance procured by a
licensed surplus lines agent from an eligible surplus lines insurer
as defined by Article 1.14-2 and independently procured contracts
of insurance, as described in Section 101.053(b)(4), that are
reported and on which premium tax is paid in accordance with this
chapter or Article 1.14-2.
Text of subsec. (b) effective April 1, 2005
(b) This section does not apply to insurance procured by a
licensed surplus lines agent from an eligible surplus lines insurer
as defined by Chapter 981 and independently procured contracts of
insurance, as described in Section 101.053(b)(4), that are reported
and on which premium tax is paid in accordance with Chapter 225 or
226.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
Amended by Acts 2001, 77th Leg., ch. 1420, § 11.012, eff. Sept.
1, 2001; Acts 2003, 78th Leg., ch. 1274, § 16, eff. April 1,
2005.
§ 101.202. ATTORNEY'S FEES. (a) In an action against
an unauthorized insurer or unauthorized person on a contract of
insurance issued or delivered in this state to a resident of this
state or to a corporation authorized to do business in this state,
the court may award to the plaintiff a reasonable attorney's fee if:
(1) the insurer or person failed, for at least 30 days
after a demand made before the commencement of the action, to make
payment under the contract's terms; and
(2) the failure to make the payment was vexatious and
without reasonable cause.
(b) An insurer's or person's failure to defend an action
described by Subsection (a) is prima facie evidence that the
failure to make payment was vexatious and without reasonable cause.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
Amended by Acts 2001, 77th Leg., ch. 1419, § 28, eff. June 1,
2003; Acts 2001, 77th Leg., ch. 1420, § 11.013, eff. Sept. 1,
2001.
§ 101.203. INVESTIGATION AND DISCLOSURE. (a) If the
commissioner has reason to believe that insurance has been
effectuated by or for a person in this state with an unauthorized
insurer, the commissioner shall in writing order the person to:
(1) produce for examination all insurance contracts
and other documents evidencing insurance with both authorized and
unauthorized insurers; and
(2) disclose to the commissioner:
(A) the amount of insurance;
(B) the name and address of each insurer;
(C) the gross amount of premiums paid or to be
paid; and
(D) the name and address of each person assisting
in the solicitation, negotiation, or effectuation of the insurance.
(b) A person who fails to comply with a written order under
Subsection (a) before the 31st day after the date of the order or
who wilfully makes a disclosure that is untrue, deceptive, or
misleading shall forfeit:
(1) $50; and
(2) an additional $50 for each day the person
continues to fail to comply after expiration of the 30-day period.
(c) This section does not apply to:
(1) a transaction in this state that:
(A) involves a policy that:
(i) is lawfully solicited, negotiated,
written, and delivered outside this state; and
(ii) covers, at the time the policy is
issued, only subjects of insurance that are not resident, located,
or expressly to be performed in this state; and
(B) takes place after the policy is issued; or
(2) surplus lines insurance procured through eligible
surplus lines carriers as defined by Article 1.14-2.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
SUBCHAPTER F. TAXES
Section repealed effective April 1, 2005.
§ 101.251. PREMIUM RECEIPTS TAX. (a) In this section,
"premium" includes any consideration for insurance, including:
(1) a premium;
(2) a membership fee;
(3) an assessment; or
(4) dues.
(b) Except as provided by Subsection (j), an insurer shall
pay to the comptroller, on a form prescribed by the comptroller, a
premium receipts tax of 4.85 percent of gross premiums charged for
insurance on a subject resident, located, or to be performed in this
state.
(c) If a policy covers risks or exposures only partially in
this state, the tax payable is computed on the portion of the
premium that is properly allocated to a risk or exposure located in
this state.
(d) In determining the amount of taxable premiums under
Subsection (c), all premiums, other than premiums properly
allocated or apportioned and reported as taxable premiums of
another state, that are written, procured, or received in this
state or that are for a policy negotiated in this state are
considered to be written on property or risks located or resident in
this state.
(e) Insurance on a subject resident, located, or to be
performed in this state is considered to be insurance procured,
continued, or renewed in this state regardless of the location from
which:
(1) the application is made;
(2) the negotiations are conducted; or
(3) the premiums are remitted.
(f) Premiums on risks or exposures that are properly
allocated to federal waters or international waters or under the
jurisdiction of a foreign government are not taxable by this state.
(g) The insurer shall pay the premium receipts tax required
by this section before:
(1) March 1 following the calendar year in which the
insurance was effectuated, continued, or renewed; or
(2) another date specified by the comptroller.
(h) The tax imposed by this section is in lieu of all other
insurance taxes.
(i) The tax under this section, if not paid when due, is a
liability of the insurer, the insurer agent, and the insured.
(j) This section does not apply to premiums on:
(1) insurance procured by a licensed surplus lines
agent from an eligible surplus lines insurer as defined by Article
1.14-2 on which premium tax is paid in accordance with Article
1.14-2;
(2) an independently procured contract of insurance on
which premium tax is paid in accordance with this chapter; or
(3) a contract of insurance written by an insurer that
holds a certificate of authority in this state and that is
authorized to write the contract.
(k) In this section, "insurer" has the meaning assigned by
Section 101.002 and includes an insurer that does not hold a
certificate of authority in this state, an eligible surplus lines
insurer, and an insurer that holds a certificate of authority in
this state.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
Amended by Acts 2003, 78th Leg., ch. 1310, § 76, eff. June 20,
2003.
Section repealed effective April 1, 2005.
§ 101.252. INDEPENDENTLY PROCURED INSURANCE TAX. (a)
In this section, "premium" includes any consideration for
insurance, including:
(1) a premium;
(2) a membership fee; or
(3) dues.
(b) Except as provided by Subsection (g), an insured who
procures insurance in accordance with Section 101.053(b)(4), or
another person designated by the insured, shall:
(1) file a report with the comptroller; and
(2) pay an independently procured insurance tax of
4.85 percent.
(c) If a policy covers risks or exposures only partially
located in this state, the tax payable is computed on the portion of
the premium that is properly allocated to a risk or exposure located
in this state.
(d) An insured who fails to withhold from the premium the
amount of tax imposed under this section is liable for the amount of
the tax and shall pay the tax to the comptroller within the time
described by Subsection (e).
(e) Except as provided by Section 101.253, the report and
tax are due on or before:
(1) May 15 following the calendar year in which the
insurance was procured, continued, or renewed; or
(2) another date specified by the comptroller.
(f) This section does not abrogate or modify any other
provision of this chapter.
(g) This section does not apply to premiums for individual
life or individual disability insurance.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
Amended by Acts 2001, 77th Leg., ch. 1420, § 11.014(a), eff.
Sept. 1, 2001.
Section repealed effective April 1, 2005.
§ 101.253. FILING REQUIREMENTS FOR CORPORATIONS. The
amount of tax due and payable under Section 101.252 with respect to
a corporation that files a franchise tax return shall be reported
directly to the comptroller and is due:
(1) at the time the franchise tax report is due; or
(2) on another date specified by the comptroller.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
SUBCHAPTER G. REPORTING OF UNAUTHORIZED INSURANCE
§ 101.301. REPORTING REQUIRED. (a) A person
investigating or adjusting a loss or claim on a subject of insurance
in this state shall immediately report to the department an
insurance policy or contract that has been entered into by an
insurer that is not authorized to transact the insurance in this
state.
(b) This section does not apply to:
(1) a transaction described by Section 101.053(b)(4);
or
(2) surplus lines insurance procured through eligible
surplus lines carriers as defined by Article 1.14-2.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
SUBCHAPTER H. CERTAIN PROCEEDINGS; BOND REQUIREMENTS
§ 101.351. DEFINITIONS. (a) In this subchapter,
"court proceeding" includes an action or suit.
(b) The definition of "state" assigned by Section 311. 005,
Government Code, does not apply in this chapter.
Added by Acts 2001, 77th Leg., ch. 1419, § 29, eff. June 1, 2003.
§ 101.352. APPLICABILITY. This subchapter applies only
to a court or administrative proceeding against an unauthorized
person or insurer in which the person or insurer was served under
Section 804.107.
Added by Acts 2001, 77th Leg., ch. 1419, § 29, eff. June 1, 2003.
§ 101.353. BOND REQUIREMENT FOR COURT
PROCEEDING. (a) Except as provided by Subsection (c), before an
unauthorized person or insurer may file a pleading in a court
proceeding to which this subchapter applies, the person or insurer
must deposit cash or securities or file a bond with good and
sufficient sureties approved by the court in an amount determined
by the court as sufficient to pay any final judgment that may be
rendered in the proceeding.
(b) An unauthorized person or insurer must file the deposit
required by this section with the clerk of the court in which the
proceeding is pending.
(c) The court may issue an order waiving the deposit or bond
required by this section if the unauthorized person or insurer
demonstrates to the court's satisfaction that the person or insurer
maintains sufficient available funds or securities in a state in
the United States, in trust or otherwise, to satisfy any final
judgment that may be rendered in the proceeding.
Added by Acts 2001, 77th Leg., ch. 1419, § 29, eff. June 1, 2003.
§ 101.354. BOND REQUIREMENT FOR ADMINISTRATIVE
PROCEEDING. (a) Except as provided by Subsection (c), before an
unauthorized person or insurer may file a pleading in an
administrative proceeding of the department to which this
subchapter applies, the person or insurer must, if required by
statute, deposit cash or securities or file a bond with good and
sufficient sureties approved by the commissioner in an amount
determined by the commissioner as sufficient to pay any final order
that may be entered in the proceeding.
(b) An unauthorized person or insurer must file the deposit
required by this section with the chief clerk of the department.
(c) The commissioner may issue an order waiving the deposit
or bond required by this section if the unauthorized person or
insurer demonstrates to the commissioner's satisfaction that the
person or insurer maintains sufficient available funds or
securities in a state in the United States, in trust or otherwise,
to satisfy any final order that may be entered in the proceeding.
Added by Acts 2001, 77th Leg., ch. 1419, § 29, eff. June 1, 2003.
§ 101.355. POSTPONEMENT. A court or the commissioner
may order any postponement necessary to afford an unauthorized
person or insurer a reasonable opportunity to:
(1) comply with Section 101.353 or 101.354, as appropriate;
and
(2) defend that court or administrative proceeding.
Added by Acts 2001, 77th Leg., ch. 1419, § 29, eff. June 1, 2003.
§ 101.356. MOTION TO QUASH. Sections 101.353 and
101.354 do not prevent an unauthorized person or insurer from
filing a motion to quash a writ or to set aside service made under
Section 804.107 on the ground that the person or insurer has not
engaged in the business of insurance as described by Section
101.051.
Added by Acts 2001, 77th Leg., ch. 1419, § 29, eff. June 1, 2003.
