CHAPTER 2202. JOINT UNDERWRITING
INSURANCE CODE
TITLE 10. PROPERTY AND CASUALTY INSURANCE
SUBTITLE G. POOLS, GROUPS, PLANS, AND SELF-INSURANCE
CHAPTER 2202. JOINT UNDERWRITING
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 2202.001. DEFINITIONS. In this chapter:
(1) "Insurer" means any insurance company, corporation,
reciprocal or interinsurance exchange, mutual association, county
mutual insurance company, Lloyd's plan, or other insurer
authorized to engage in business in this state. The term does
not include an insurer that writes only life, health, or accident
insurance, variable life insurance, or variable annuity
contracts.
(2) "Joint underwriting association" means a voluntary
unincorporated association of insurers authorized to engage in
business in this state that has been authorized by the
association's member insurers to act on behalf of the member
insurers in joint underwriting or in issuing syndicate insurance
policies on a several, but not joint, basis.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2202.002. INAPPLICABILITY OF CHAPTER. This chapter does
not apply to the transaction of life, health, or accident
insurance business.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2202.003. DEPOSIT OF FEES. Fees collected under this
chapter shall be deposited to the credit of the Texas Department
of Insurance operating account.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2202.004. CERTAIN APPROPRIATIONS FROM GENERAL REVENUE FUND
PROHIBITED. The legislature may not appropriate money from the
general revenue fund to administer this chapter, other than fees
collected under this chapter and deposited to the credit of the
Texas Department of Insurance operating account.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
SUBCHAPTER B. AUTHORITY TO ACT AS JOINT UNDERWRITING ASSOCIATION
Sec. 2202.051. CERTIFICATE OF AUTHORITY REQUIRED. An
association of insurers may not act as a joint underwriting
association in this state on behalf of the association's member
insurers unless the association holds a certificate of authority
issued under this chapter.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2202.052. APPLICATION FOR CERTIFICATE OF AUTHORITY. (a)
An association of insurers that applies for a certificate of
authority under this chapter must file a written application on
forms prescribed by the commissioner.
(b) The application must include:
(1) the names and addresses of the association's officers and
directors;
(2) a copy of the association's constitution, articles of
agreement or association, bylaws, rules, powers of attorney, or
other agreements governing the association's activities;
(3) a list of the insurers authorized to engage in business in
this state who are association members and the addresses of those
insurers' principal administrative offices;
(4) the name and address of a resident of this state who will
act as the association's agent for receipt of notices or orders
of the commissioner and for service of process; and
(5) other information as required by the commissioner.
(c) At least one officer of the association must swear to the
application.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2202.053. ISSUANCE OF CERTIFICATE OF AUTHORITY. The
commissioner shall issue a certificate of authority to a joint
underwriting association that complies with the requirements of
this chapter.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2202.054. TERM OF CERTIFICATE OF AUTHORITY. Unless
renewed, a certificate of authority issued under this chapter
expires on the third anniversary of the date the certificate is
issued.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2202.055. RENEWAL OF CERTIFICATE OF AUTHORITY. (a) An
applicant for the renewal of a certificate of authority must file
an application for renewal with the commissioner and pay the
renewal fee on or before the date the certificate expires.
(b) The applicant shall file a list of the names and addresses
of the association's officers and directors and a list of the
association's member insurers with the application for renewal.
At least one officer of the association must swear to the list.
(c) A renewed certificate of authority expires on the third
anniversary of the renewal date.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2202.056. FEE FOR CERTIFICATE OF AUTHORITY. (a) An
applicant for the issuance or renewal of a certificate of
authority must pay a nonrefundable fee in an amount set by the
commissioner when the applicant files the application.
(b) The fee may not exceed $200.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2202.057. RECIPROCITY. The commissioner may waive any
requirement for a certificate of authority for an applicant who
holds a certificate of authority from another state if the other
state has requirements for a certificate of authority that are
substantially equivalent to the requirements of this state.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
SUBCHAPTER C. POWERS AND DUTIES OF JOINT UNDERWRITING
ASSOCIATION
Sec. 2202.101. AUTHORITY TO ACT. A joint underwriting
association may:
(1) act only on behalf of association members who are authorized
to engage in business in this state; and
(2) engage in only those activities the association is
authorized to perform by the association members.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2202.102. NOTIFICATION OF CERTAIN INFORMATION REQUIRED. An
association holding a certificate of authority under this chapter
shall notify the commissioner of a change in the information
required to be filed under Section 2202.052 not later than the
30th day after the date the change takes effect.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2202.103. MAINTENANCE OF INFORMATION. (a) A joint
underwriting association shall maintain at the association's
principal administrative office adequate records of all
transactions.
(b) The association shall maintain the records in accordance
with prudent recognized industry standards of recordkeeping.
(c) The commissioner or the commissioner's designated
representative is entitled to access to records maintained under
Subsection (a) for examination, audit, and inspection.
(d) Trade secrets, including the identity and addresses of
policyholders and certificate holders, are confidential, except
that the commissioner may use information otherwise confidential
in proceedings instituted against an association.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
SUBCHAPTER D. AUDIT AND EXAMINATION REQUIREMENTS
Sec. 2202.151. ANNUAL AUDIT. An independent certified public
accountant shall annually audit the books of accounts of a joint
underwriting association as provided by Subchapter A, Chapter
401. A copy of the audit must be filed with the commissioner.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2202.152. EXAMINATION BY COMMISSIONER. (a) The
commissioner may require an examination of a joint underwriting
association as often as the commissioner considers necessary.
The association shall pay the reasonable costs of the examination
on presentation to the association of a detailed account of the
costs of the examination.
(b) The association's officers and employees may be examined
under oath at any time and shall exhibit on request all books,
records, accounts, documents, or agreements governing the
association's operations.
(c) Instead of the examination, the commissioner may accept the
report of an examination made by the insurance supervisory
official of another state under the laws of that state.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
SUBCHAPTER E. DISCIPLINARY ACTIONS AND
PROCEDURES; ENFORCEMENT
Sec. 2202.201. GROUNDS FOR DENIAL OF CERTIFICATE OF AUTHORITY OR
FOR DISCIPLINARY ACTION. The commissioner may deny an
application for a certificate of authority or discipline a
certificate holder under this subchapter if the commissioner
finds that the applicant or certificate holder, or an officer or
director of an applicant or certificate holder:
(1) wilfully violated or participated in the violation of this
chapter or any other insurance law of this state;
(2) intentionally made a material misstatement in the original
or renewal application;
(3) obtained or attempted to obtain the certificate by fraud or
misrepresentation;
(4) misappropriated, converted to a personal or other
inappropriate use, or illegally withheld money required to be
held in a fiduciary capacity;
(5) has been convicted of a felony or convicted of a misdemeanor
of which criminal fraud is an essential element; or
(6) is incompetent or untrustworthy.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2202.202. DENIAL OF CERTIFICATE OF AUTHORITY OR
DISCIPLINARY ACTION. If the commissioner finds that a ground for
a denial of a certificate of authority or disciplinary action
under Section 2202.201 exists, the commissioner may:
(1) deny the application for the certificate; or
(2) suspend, revoke, or refuse to renew the certificate of
authority.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2202.203. NOTICE AND HEARING. (a) Before the commissioner
may deny an application for a certificate of authority or
discipline a certificate holder under this subchapter, the
commissioner must:
(1) give notice by certified mail to the applicant or
certificate holder; and
(2) set a date on which the applicant or certificate holder may
appear to be heard and produce evidence.
(b) A hearing under Subsection (a) may not be set for a date
that is earlier than the 20th day or later than the 30th day
after the date the notice is mailed.
(c) The notice must contain specific reasons for the hearing and
a list of the matters to be considered at the hearing.
(d) At the hearing, the commissioner or a department employee
designated to conduct the hearing may:
(1) administer oaths, require the appearance of witnesses, and
examine any person under oath; and
(2) on the commissioner's initiative or on the request of the
applicant or certificate holder, require the production of books,
records, or papers relevant to the inquiry.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2202.204. ISSUANCE OF ORDER. On the termination of the
hearing, the findings shall be written and filed with the
department. The commissioner shall issue an order showing the
findings approved by the commissioner and shall send the order by
certified mail to the applicant or certificate holder.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2202.205. APPEAL. If the commissioner denies an
application for a certificate of authority as provided by this
chapter or suspends, revokes, or refuses to renew a certificate
at a hearing as provided by this chapter, the applicant or
certificate holder may appeal the commissioner's action as
provided by Subchapter D, Chapter 36.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2202.206. APPLICATION AFTER DENIAL, REFUSAL, OR REVOCATION.
(a) Except as provided by Subsection (b), an applicant for a
certificate of authority or certificate holder whose certificate
of authority has been denied, refused, or revoked under this
chapter may not file another application for a certificate of
authority before the first anniversary of the effective date of
the denial, refusal, or revocation.
(b) If an applicant or certificate holder seeks judicial review
of a denial, refusal, or revocation, the applicant or certificate
holder may not file another application for a certificate of
authority before the first anniversary of the date of a final
court order or decree affirming the denial, refusal, or
revocation.
(c) If an applicant files an application after the date
specified by this section, the commissioner may refuse the
application unless the applicant shows good cause why the denial
of the previous application or the refusal to renew or the
revocation of the original certificate of authority should not be
a bar to the issuance of a new certificate.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2202.207. ADDITIONAL SANCTIONS; INJUNCTION. (a) An
association that violates this chapter or a rule or order adopted
under this chapter is subject to sanctions under Chapter 82.
(b) The attorney general, a district or county attorney, or the
commissioner may institute proceedings for an injunction or any
other proceeding necessary to enforce this chapter.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.