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pg. 1326

Texas Laws | Insurance Code

(a) On forms prescribed by the department, a managing general agent shall notify the department not later than the 30th day after the date any of the following occurs: (52799)

(1) balances due to an insurer for more than 90 days exceed: (52800)

(A) $1 million; or (52801)

(B) 10 percent of the insurer's policyholder surplus, as reported in the annual statement filed with the department; (52802)

(2) balances due for more than 60 days from a property and casualty agent or managing general agent appointed by or reporting to the managing general agent exceed $500,000; (52803)

(3) authority to settle claims for an insurer is withdrawn; (52804)

(4) money held for an insurer for losses is greater than an amount that is $100,000 more than the amount necessary to pay the losses and loss adjustment expenses expected to be paid on the insurer's behalf within the next 60-day period; or (52805)

(5) the contract required under Section 4053.102 is canceled or terminated. (52806)

(b) Notwithstanding the time limitation imposed by Subsection (a), the requirement to file under Subsections (a)(1), (2), and (4) may be met with a single annual report if: (52807)

(1) the managing general agent routinely operates above the limits established by those subsections; and (52808)

(2) the department verifies that fact in accordance with rules adopted by the commissioner. (52809)

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1, 2005. (52810)

Sec. 4053.109. REINSURANCE. (52811)(Text)

(a) A managing general agent may not knowingly cede, arrange, facilitate, or bind an insurer to reinsurance. (52812)

(b) Notwithstanding Subsection (a), a managing general agent may bind a facultative reinsurance contract in accordance with an obligatory facultative agreement if the contract with the insurer contains reinsurance underwriting guidelines including, for both assumed and ceded reinsurance: (52813)

(1) a list of reinsurers with whom the automatic agreements are in effect; (52814)

(2) the coverages and amounts or percentages that may be reinsured; and (52815)

(3) commission schedules. (52816)

(c) A managing general agent may not commit an insurer to participate in insurance or reinsurance syndicates. (52817)

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1, 2005. (52818)

Sec. 4053.110. REDEMPTION OF CORPORATE SHARES. (52819)(Text)

A corporation acting as a managing general agent may redeem the shares of a shareholder or a deceased shareholder: (52820)

(1) on terms agreed on by the board of directors and the shareholder or the shareholder's personal representative; or (52821)

(2) at a price and on terms provided in the articles of incorporation, the bylaws, or an existing contract entered into between the shareholders. (52822)

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1, 2005. (52823)

Sec. 4053.151. DISCIPLINARY ACTION. (52824)(Text)

A person, firm, or corporation that violates this chapter or a rule or order adopted under this title, including this chapter, is subject to: (52825)

(1) Subchapters B and C, Chapter 4005; and (52826)

(2) Chapter 82. (52827)

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1, 2005. (52828)

Sec. 4053.152. GUARANTY FUND REIMBURSEMENT. (52829)(Text)

(a) If a court finds by a final nonappealable judgment that a violation of this chapter by a managing general agent contributes materially to the insolvency of an insurer under which the agent held an appointment, the agent shall reimburse the appropriate guaranty fund for money paid to cover losses of the insolvent insurer in an amount equal to all payments made from that guaranty fund in excess of: (52830)

(1) gross earned premiums and investment income earned on those premiums; and (52831)

(2) loss reserves for that business. (52832)

(b) The reimbursement made under this section shall be used for losses, loss adjustments, and administrative expenses on business placed by the managing general agent. (52833)

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1, 2005. (52834)


Sec. 4054.001. APPLICABILITY OF CHAPTER. (52836)(Text)

(a) This chapter applies to each agent of an insurer authorized to provide life, accident, and health insurance coverage in this state. (52837)

(b) This chapter applies to each person who: (52838)

(1) performs the acts of an agent, as described by Section 4001.051, whether through an oral, written, electronic, or other form of communication by soliciting, negotiating, procuring, or collecting a premium on an insurance or annuity contract offered by any type of insurer authorized to engage in the business of life, accident, and health insurance in this state; or (52839)

(2) represents or purports to represent a health maintenance organization in soliciting, negotiating, procuring, or effecting membership in the health maintenance organization. (52840)

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1, 2005. (52841)


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