CHAPTER 751. MARKET CONDUCT SURVEILLANCE
INSURANCE CODE
TITLE 5. PROTECTION OF CONSUMER INTERESTS
SUBTITLE G. REGULATION OF INSURER MARKET CONDUCT
CHAPTER 751. MARKET CONDUCT SURVEILLANCE
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 751.001. SHORT TITLE. This chapter may be cited as the
Insurance Market Conduct Surveillance Act.
Added by Acts 2005, 79th Leg., Ch.
291, Sec. 3, eff. September 1, 2005.
Sec. 751.002. PURPOSE AND SCOPE. (a) The purpose of this
chapter is to establish a framework for department market conduct
actions, including:
(1) processes and systems for identifying, assessing, and
prioritizing market conduct problems that have a substantial
adverse impact on consumers, policyholders, and claimants;
(2) development of appropriate market conduct actions by the
commissioner as required to:
(A) substantiate market conduct problems; and
(B) remedy significant market conduct problems; and
(3) procedures to communicate and coordinate market conduct
actions with other states to foster the most efficient and
effective use of resources.
(b) Notwithstanding any other law of this state, the department
or commissioner, as applicable, may undertake market analysis or
market conduct action only as provided by this chapter.
Added by Acts 2005, 79th Leg., Ch.
291, Sec. 3, eff. September 1, 2005.
Sec. 751.003. DEFINITIONS. (a) In this chapter:
(1) "Complaint" means a written or documented oral
communication, the primary intent of which is to express a
grievance or an expression of dissatisfaction.
(2) "Desk examination" means a targeted examination conducted by
an examiner at a location other than an insurer's premises. The
term includes an examination performed at the department's
offices during which the insurer provides requested documents for
department review by hard copy or by microfiche, disk, or other
electronic media.
(3) "Market analysis" means a process under which market conduct
surveillance personnel collect and analyze information from filed
schedules, surveys, required reports, and other sources as
necessary to:
(A) develop a baseline understanding of the marketplace; and
(B) identify insurer patterns or practices that:
(i) deviate significantly from the norm; or
(ii) pose a potential risk to the insurance consumer.
(4) "Market analysis handbook" means the outline of the elements
and objectives of market analysis as developed and adopted by the
National Association of Insurance Commissioners, and used to
establish a uniform process by which states may establish and
implement market analysis programs.
(5) "Market conduct action" means any activity that the
commissioner may initiate to assess and address insurer market
practices before conducting a targeted examination. The term
does not include a commissioner action taken to resolve:
(A) an individual consumer complaint; or
(B) another report relating to a specific instance of insurer
misconduct.
(6) "Market conduct examination" means a review of one or more
lines of business of an insurer domiciled in this state that is
not conducted for cause. The term includes a review of rating,
tier classification, underwriting, policyholder service, claims,
marketing and sales, producer licensing, complaint handling
practices, or compliance procedures and policies.
(7) "Market conduct examiners handbook" means the set of
guidelines, developed and adopted by the National Association of
Insurance Commissioners, that document established practices to
be used by market conduct surveillance personnel in developing
and executing an examination under this chapter.
(8) "Market conduct surveillance personnel" means those
individuals employed by or under contract with the department who
collect, analyze, review, or act on information regarding insurer
patterns or practices.
(9) "Market conduct uniform examination procedures" means the
set of guidelines developed and adopted by the National
Association of Insurance Commissioners designed to be used by
market conduct surveillance personnel in conducting an
examination under this chapter.
(10) "On-site examination" means a targeted examination that is
conducted at:
(A) the insurer's home office; or
(B) another location at which the records under review are
stored.
(11) "Qualified contract examiner" means a person qualified by
education, experience, and any applicable professional
designations who is under contract with the commissioner to
perform market conduct actions.
(12) "Standard data request" means the set of field names and
descriptions developed and adopted by the National Association of
Insurance Commissioners for use by market conduct surveillance
personnel in an examination.
(13) "Targeted examination" means a limited review and analysis,
conducted through a desk examination or an on-site examination
and in accordance with the market conduct uniform examination
procedures, of specific insurer conduct, practices, or risks
identified through market analysis that have not been remedied by
the insurer, including:
(A) underwriting and rating;
(B) marketing and sales;
(C) complaint handling operations and management;
(D) advertising materials;
(E) licensing;
(F) policyholder services;
(G) claims handling;
(H) policy forms and filings; or
(I) tier classification.
(14) "Third-party model or product" means a model or product
provided by an entity that is separate from and not under direct
or indirect corporate control of the insurer using the model or
product.
(b) In this chapter, "affiliate" and "subsidiary" have the
meanings described by Section 823.003.
Added by Acts 2005, 79th Leg., Ch.
291, Sec. 3, eff. September 1, 2005.
Sec. 751.004. IMMUNITY. (a) A cause of action does not arise,
and liability may not be imposed, for any statements made or
conduct performed in good faith while implementing this chapter,
against:
(1) the commissioner;
(2) an authorized representative of the commissioner; or
(3) an examiner appointed by the commissioner.
(b) A cause of action does not arise, and liability may not be
imposed, against any person for the act of communicating or
delivering information or data to the commissioner or the
commissioner's authorized representative or examiner under an
examination made under this chapter, if the act of communication
or delivery was performed in good faith and without fraudulent
intent or the intent to deceive.
(c) A person identified in Subsection (a) is entitled to
attorney's fees and costs if the person is the prevailing party
in a civil cause of action for libel, slander, or any other
relevant tort arising out of activities conducted in implementing
this chapter, and the party bringing the action was not
substantially justified in doing so. For purposes of this
subsection, an action is "substantially justified" if the action
had a reasonable basis in law or fact at the time that it was
initiated.
(d) This section does not abrogate or modify any common law or
statutory privilege or immunity.
Added by Acts 2005, 79th Leg., Ch.
291, Sec. 3, eff. September 1, 2005.
SUBCHAPTER B. GENERAL POWERS AND DUTIES OF COMMISSIONER
Sec. 751.051. PARTICIPATION IN NATIONAL MARKET CONDUCT
DATABASES. (a) The commissioner shall collect and report market
data to the National Association of Insurance Commissioners'
market information systems, including the complaint database
system, the examination tracking system, the regulatory
information retrieval system, or other successor systems of that
association, as determined by the commissioner.
(b) Information collected and maintained by the department shall
be compiled in a manner that meets the requirements of the
National Association of Insurance Commissioners.
Added by Acts 2005, 79th Leg., Ch.
291, Sec. 3, eff. September 1, 2005.
Sec. 751.052. COORDINATION WITH OTHER STATES; REGISTRATION OF
CONTRACT EXAMINER. (a) The commissioner shall coordinate the
department's market analysis and examination efforts with other
states through the National Association of Insurance
Commissioners.
(b) A person with whom another state contracts to perform any
market analysis or examination initiated by the other state of an
insurer domiciled in this state shall register with and provide
the following information to the department's chief examiner:
(1) the person's name;
(2) if the person is not an individual, the identity of each
examiner or other person who will perform any part of the market
analysis or examination;
(3) the name of the state that contracted with the person;
(4) the identity of the insurer to be examined; and
(5) a description of each issue that the person has been
contracted to examine.
(c) It is a violation of this code for a person to accept
compensation from multiple states for the same examination, if
doing so results in duplicative costs to the insurer being
examined. It is not a violation of this code for:
(1) an examiner to conduct an examination of an insurer for the
benefit of multiple states in a coordinated examination; and
(2) the examiner to accept compensation from the states
participating in the coordinated examination to reduce the
examination costs to the insurer being examined.
Added by Acts 2005, 79th Leg., Ch.
291, Sec. 3, eff. September 1, 2005.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
1030, Sec. 1, eff. June 19, 2009.
Sec. 751.053. INFORMATION FROM COMMISSIONER. (a) At least once
annually or more frequently if determined necessary by the
commissioner, the commissioner shall provide in an appropriate
manner to insurers and other entities subject to this code
information regarding new laws and rules, enforcement actions,
and other information the commissioner considers relevant to
ensure compliance with market conduct requirements.
(b) The commissioner may provide the notice required under
Subsection (a) in an electronic format that is designed to give
insurers and other entities adequate notice.
(c) Failure by the commissioner to provide the information
described by Subsection (a) does not constitute a defense for an
insurer who fails to comply with an insurance law of this state.
Added by Acts 2005, 79th Leg., Ch.
291, Sec. 3, eff. September 1, 2005.
Sec. 751.054. REPORT OF VIOLATIONS. (a) The commissioner shall
designate an individual within the department whose
responsibilities shall include the receipt of information from
employees of insurers and other entities regulated by the
department regarding violations of laws or rules by their
employers. The commissioner's designee shall be properly trained
in the handling of that information.
(b) Information received under this section is a confidential
communication and is not public information.
Added by Acts 2005, 79th Leg., Ch.
291, Sec. 3, eff. September 1, 2005.
Sec. 751.055. EXERCISE OF SUBPOENA AUTHORITY. The commissioner
has the subpoena power authorized by Subchapter C, Chapter 36,
for the production of documents under this chapter and
enforcement of this subtitle.
Added by Acts 2005, 79th Leg., Ch.
291, Sec. 3, eff. September 1, 2005.
SUBCHAPTER C. RELATIONS WITH OTHER STATES
Sec. 751.101. COMMISSIONER AUTHORITY; INTERACTIONS WITH OTHER
INSURANCE COMMISSIONERS OF OTHER STATES. (a) The commissioner
has responsibility for conducting market conduct examinations on
domestic insurers. The commissioner may delegate that
responsibility to the insurance commissioner of another state, if
that insurance commissioner agrees to accept the delegated
responsibility. If the commissioner elects to delegate
responsibility for examining an insurer, the commissioner shall
accept a report of the examination prepared by the insurance
commissioner to whom the responsibility has been delegated.
(b) If the insurer to be examined is part of an insurance
holding company system, the commissioner may also seek to
simultaneously examine any affiliate of the insurer that is
authorized to write the same types of insurance in this state as
the insurer if the insurance commissioner of the state in which
the affiliate is organized consents and delegates responsibility
for that examination.
(c) In lieu of conducting a targeted examination of an insurer
that holds a certificate of authority in this state but is not a
domestic insurer, the commissioner shall accept a report of a
market conduct examination regarding that insurer prepared by the
insurance commissioner of the state in which the insurer is
organized or by another state if:
(1) the laws of the examining state that are applicable to the
subject of the examination are substantially similar to those of
this state; and
(2) the examining state has a market conduct surveillance system
that the commissioner deems comparable to the market conduct
surveillance system required under this chapter.
(d) The commissioner's determination under Subsection (c)(2) is
discretionary with the commissioner and is not subject to appeal.
(e) Subject to a determination under Subsection (c), if a market
conduct examination conducted by another state results in a
finding that an insurer should modify a specific practice or
procedure, the commissioner shall accept documentation that the
insurer has made a similar modification in this state in lieu of
initiating a market conduct action or examination related to that
practice or procedure. The commissioner may require other or
additional practice or procedure modifications.
Added by Acts 2005, 79th Leg., Ch.
291, Sec. 3, eff. September 1, 2005.
SUBCHAPTER D. MARKET ANALYSIS PROCEDURES
Sec. 751.151. COLLECTION OF INFORMATION; COMMISSIONER ANALYSIS.
(a) Subject to Subsection (d), the commissioner shall gather
insurance market information from:
(1) data available to the department, including survey results
and information required to be reported to the department;
(2) information collected by the National Association of
Insurance Commissioners and other public and private sources; and
(3) information from within and outside the insurance industry.
(b) The commissioner shall analyze the information compiled
under Subsection (a) as necessary to:
(1) develop a baseline understanding of the insurance
marketplace; and
(2) identify for further review insurers or insurance practices
that deviate significantly from the norm or that pose a potential
risk to the insurance consumer.
(c) The commissioner shall use the market analysis handbook as a
resource in performing the analysis required under this section.
(d) Except as otherwise specifically provided, the department or
the commissioner, as applicable, may not require an insurer to
report information in a manner that is inconsistent with the
records the insurer maintains in the ordinary course of business
or can create at a reasonable expense or effort.
Added by Acts 2005, 79th Leg., Ch.
291, Sec. 3, eff. September 1, 2005.
Sec. 751.152. ADDITIONAL ANALYSIS OF MARKET ACTIONS. (a) If,
as a result of the market analysis, the commissioner determines
that further inquiry into a particular insurer or insurance
practice is needed, the commissioner shall consider taking one or
more of the market conduct actions described by Subsection (b)
before conducting a targeted examination. If a market conduct
action selected by the commissioner requires the participation of
or a response by the affected insurer, the commissioner shall
notify the insurer of the action selected in writing.
(b) Market conduct actions described by Subsection (a) may
include:
(1) correspondence with the insurer;
(2) insurer interviews;
(3) information gathering;
(4) policy and procedure reviews;
(5) interrogatories; and
(6) review of insurer self-evaluation and compliance programs,
including insurer membership in a best-practice organization.
(c) The commissioner shall select market conduct actions that
are efficient and cost-effective for the department and the
insurer while protecting the interests of the insurance consumer.
(d) The commissioner shall take steps reasonably necessary to:
(1) eliminate requests for information that duplicates or
conflicts with information provided as part of an insurer's
annual financial statement, the annual market conduct statement
of the National Association of Insurance Commissioners, or other
required schedules, surveys, or reports that are regularly
submitted to the commissioner, or with data requests made by
other states if that information is available to the
commissioner, unless the information is state specific; and
(2) coordinate the market conduct actions and findings of this
state with those of other states.
Added by Acts 2005, 79th Leg., Ch.
291, Sec. 3, eff. September 1, 2005.
Sec. 751.153. PROTOCOLS FOR MARKET CONDUCT ACTIONS. (a) Each
market conduct action taken as a result of a market analysis:
(1) must focus on the general business practices and compliance
activities of insurers, rather than identifying infrequent or
unintentional random errors that do not cause significant
consumer harm; and
(2) may not result in a market conduct examination, unless the
head of the insurance regulatory agency in the insurer's state of
domicile determines that a market conduct examination is needed.
(b) The commissioner may determine the frequency and timing of
the market conduct actions. The timing of an action depends on
the specific market conduct action to be initiated unless
extraordinary circumstances indicating a risk to consumers
require immediate action.
(c) If the commissioner has information that more than one
insurer is engaged in practices that may violate statutes or
rules, the commissioner may schedule and coordinate multiple
examinations simultaneously.
(d) The commissioner shall provide an insurer with an
opportunity to resolve to the satisfaction of the commissioner
any matter that arises as a result of a market analysis before
any additional market conduct actions are taken against the
insurer. If the insurer has modified a practice or procedure as
a result of a market conduct action taken or examination
conducted by the insurance commissioner of another state, and the
commissioner deems that state's market conduct surveillance
system comparable to the system required under this chapter, the
commissioner may accept the modified practice or procedure and
may require other or additional practice or procedure
modifications.
(e) For an application by the department of a handbook,
guideline, or other product referenced in this chapter that is
the work product of the National Association of Insurance
Commissioners that changes the way in which market conduct
actions are conducted, the commissioner shall give notice and
provide interested parties with an opportunity for a public
hearing as provided by Chapter 2001, Government Code, if the
change:
(1) necessitates a change in a statute or rule; or
(2) deviates from the applicable handbook, guideline, or other
product most recently adopted by the National Association of
Insurance Commissioners.
(f) Except as otherwise provided by law, each insurer or person
from whom information is sought, and each officer, director, or
agent of that insurer or person, shall provide the commissioner
with convenient and free access to all books, records, accounts,
papers, documents, and any computer or other recordings relating
to the property, assets, business, and affairs of the insurer or
person.
(g) Each officer, director, employee, insurance producer, and
agent of an insurer or person described by Subsection (f) shall,
to the extent of that individual's ability, facilitate and aid in
a department market conduct action.
Added by Acts 2005, 79th Leg., Ch.
291, Sec. 3, eff. September 1, 2005.
SUBCHAPTER E. EXAMINATIONS
Sec. 751.201. EXAMINATION. (a) If the commissioner determines
that a market conduct action described by Section 751.152(b) is
not appropriate, the commissioner may conduct a targeted
examination in accordance with the market conduct uniform
examination procedures and the market conduct examiners handbook.
(b) A targeted examination may be conducted through a desk
examination or an on-site examination. To the extent feasible,
the department shall conduct a market conduct examination through
desk examinations and data requests before conducting an on-site
examination.
(c) The department shall conduct an examination in accordance
with the market conduct examiners handbook and the market conduct
uniform examinations procedures.
(d) The department shall use the standard data request or a
successor product that is substantially similar to the standard
data request as adopted by the commissioner by rule.
(e) If the insurer to be examined is not a domestic insurer, the
commissioner shall coordinate the examination with the insurance
commissioner of the state in which the insurer is organized.
Added by Acts 2005, 79th Leg., Ch.
291, Sec. 3, eff. September 1, 2005.
Sec. 751.202. WORK PLAN. Before beginning an examination,
market conduct surveillance personnel shall prepare a work plan
that includes:
(1) the name and address of the insurer to be examined;
(2) the name and contact information of the examiner-in-charge;
(3) a statement of the reasons for the examination;
(4) a description of the scope of the examination;
(5) the date the examination is scheduled to begin;
(6) notice to any non-insurance department personnel who will
assist in the examination;
(7) a time estimate for the examination; and
(8) if the cost of the examination is billed to the affected
insurer:
(A) a budget for the examination; and
(B) an identification of factors that will be included in the
billing.
Added by Acts 2005, 79th Leg., Ch.
291, Sec. 3, eff. September 1, 2005.
Sec. 751.203. NOTICE OF EXAMINATION. (a) Unless the
examination is conducted in response to extraordinary
circumstances as described by Section 751.153(b), the department
shall notify an affected insurer of an examination not later than
the 60th day before the scheduled date of the beginning of the
examination. The notice must include the examination work plan
and a request that the insurer name an examination coordinator
for the insurer.
(b) In addition to the notice required under Subsection (a), the
commissioner shall post notice that a market conduct examination
has been scheduled on the National Association of Insurance
Commissioners examination tracking system.
(c) If a targeted examination is expanded beyond the reasons
provided to the insurer in the notice of the examination required
under Subsection (a), the commissioner shall provide written
notice to the insurer, explaining the extent of the expansion and
the reasons for the expansion. The department shall provide a
revised work plan to the insurer before the beginning of any
significantly expanded examination.
Added by Acts 2005, 79th Leg., Ch.
291, Sec. 3, eff. September 1, 2005.
Sec. 751.204. PRE-EXAMINATION CONFERENCE. Not later than the
30th day before the scheduled date of the examination, the
commissioner shall conduct a pre-examination conference with the
insurer's examination coordinator and key personnel to clarify
expectations.
Added by Acts 2005, 79th Leg., Ch.
291, Sec. 3, eff. September 1, 2005.
Sec. 751.205. EXIT CONFERENCE. Before the conclusion of an
examination, the member of the market conduct surveillance
personnel who is designated as the examiner-in-charge shall
schedule an exit conference with the insurer.
Added by Acts 2005, 79th Leg., Ch.
291, Sec. 3, eff. September 1, 2005.
Sec. 751.206. EXAMINATION REPORT. (a) Unless the commissioner
and the insurer agree to a different schedule, the commissioner
shall follow the time line established under this section.
(b) The commissioner shall deliver the draft examination report
to the insurer not later than the 60th day after the date the
examination is completed. For purposes of this section, the date
the examination is completed is the date on which the exit
conference is conducted.
(c) Not later than the 30th day after the date on which the
insurer receives the draft examination report, the insurer shall
provide any written comments regarding the report to the
department.
(d) The department shall make a good faith effort to resolve
issues with the insurer informally and shall prepare a final
examination report not later than the 30th day after the date of
receipt of the insurer's written comments on the draft report
unless a mutual agreement is reached to extend the deadline.
(e) The department shall include the insurer's responses in the
final examination report. The responses may be included as an
appendix or in the text of the examination report. An insurer is
not obligated to submit a response. An individual involved in
the examination may not be named in either the report or the
insurer response except to acknowledge the individual's
involvement.
(f) The commissioner may make corrections and other changes to
the final examination report as appropriate, and shall issue the
report to the insurer. Not later than the 30th day after receipt
of the final examination report under this subsection, the
insurer shall accept the report, accept the findings of the
report, or request a hearing. The commissioner and the insurer
by mutual agreement may extend the period for an additional 30
days. A request for a hearing must be made in writing and must
follow the requirements of Chapter 2001, Government Code.
Added by Acts 2005, 79th Leg., Ch.
291, Sec. 3, eff. September 1, 2005.
Sec. 751.207. CONFIDENTIALITY OF EXAMINATION REPORT INFORMATION.
(a) A final or preliminary market conduct examination report,
and any information obtained during the course of an examination,
is confidential and is not subject to disclosure under Chapter
552, Government Code. This section may not be construed to limit
the commissioner's authority to use any final or preliminary
market conduct examination report, any examiner or company work
papers or other documents, or any other information discovered or
developed during the course of an examination in the furtherance
of any legal or regulatory action that the commissioner, in the
commissioner's sole discretion, may deem appropriate.
(b) This chapter does not prevent the commissioner from
disclosing at any time the contents of a final market conduct
examination report to the department, the insurance department of
any other state, or an agency of the federal government, if the
department or agency receiving the report agrees in writing to
maintain the information as confidential and in a manner
consistent with this chapter.
(c) The commissioner shall provide to an insurer subject to a
final market conduct examination a written agreement described by
Subsection (b) not later than the fifth day after the date the
final market conduct examination is released under Subsection
(b).
Added by Acts 2005, 79th Leg., Ch.
291, Sec. 3, eff. September 1, 2005.
Sec. 751.208. ASSESSMENT OF COSTS OF EXAMINATION. (a) Subject
to Subsection (d), if the reasonable and necessary cost of a
market conduct examination is to be assessed against the affected
insurer, fees for that cost must be consistent with those
otherwise authorized by law. The fees must be itemized and bills
for the fees must be provided to the insurer on a monthly basis
for review prior to submission for payment.
(b) The commissioner shall actively manage and oversee
examination costs, including costs associated with the use of
department examiners and with retaining qualified contract
examiners necessary to perform an on-site examination. To the
extent the commissioner retains outside assistance, the
commissioner shall adopt by rule written protocols that:
(1) clearly identify the types of functions to be subject to
outsourcing;
(2) provide specific time lines for completion of the outsourced
review;
(3) require disclosure of recommendations made by contract
examiners;
(4) establish and use a dispute resolution or arbitration
mechanism to resolve conflicts with insurers regarding
examination fees; and
(5) require disclosure of the terms of contracts entered into
with outside consultants, and specifically terms regarding the
fees or hourly rates that may be charged by those consultants.
(c) The commissioner must review and affirmatively endorse
detailed billings made by a qualified contract examiner before
the detailed billings are sent to the insurer.
(d) An insurer may not be required to provide reimbursement for
examiner fees under Subsection (a), whether those fees are
incurred by market conduct surveillance personnel or qualified
contract examiners, to the extent that those fees exceed the fees
prescribed in the market conduct examiners handbook and any
successor documents to that handbook, unless the commissioner
demonstrates that the fees prescribed in the handbook are
inadequate under the circumstances of the examination.
Added by Acts 2005, 79th Leg., Ch.
291, Sec. 3, eff. September 1, 2005.
Sec. 751.209. LIMIT ON CERTAIN EXAMINATIONS. The commissioner
may not conduct a market conduct examination more frequently than
once every three years. The commissioner may defer conducting a
market conduct examination for longer than once every three
years.
Added by Acts 2005, 79th Leg., Ch.
291, Sec. 3, eff. September 1, 2005.
SUBCHAPTER F. CONFIDENTIALITY REQUIREMENTS
Sec. 751.251. NO WAIVER. (a) The disclosure to the
commissioner under this subchapter of a document, material, or
information does not constitute the waiver of any applicable
privilege or claim of confidentiality regarding the document,
material, or information.
(b) Notwithstanding Subsection (a), an insurer may not be
compelled to disclose a self-audit document or waive any
statutory or common law privilege. An insurer may, however,
voluntarily disclose a document described by this subsection to
the commissioner in response to any market conduct action or
examination.
(c) For the purposes of Subsection (b), "self-audit document"
means a document that is prepared as a result of or in connection
with an insurance compliance audit.
Added by Acts 2005, 79th Leg., Ch.
291, Sec. 3, eff. September 1, 2005.
Sec. 751.252. AUTHORITY OF COMMISSIONER. (a) The commissioner
may share documents, materials, or other information obtained by
or disclosed to the commissioner under this chapter with other
state, federal, and international regulatory agencies and law
enforcement authorities if the recipient agrees to and has the
legal authority to maintain the confidentiality and privileged
status of the document, material, or other information.
(b) The commissioner may receive documents, materials, or
information, including otherwise confidential and privileged
documents, materials, or information, from the National
Association of Insurance Commissioners and that association's
affiliates or subsidiaries, and from regulatory and law
enforcement officials of other foreign or domestic jurisdictions.
The commissioner shall maintain as confidential or privileged
any document, material, or information received with notice or
the understanding that the document, material, or information is
confidential or privileged under the laws of the jurisdiction
that is the source of the document, material, or information.
(c) Consistent with this section, the commissioner may enter
into agreements governing the sharing and use of information.
Added by Acts 2005, 79th Leg., Ch.
291, Sec. 3, eff. September 1, 2005.
SUBCHAPTER G. MARKET CONDUCT SURVEILLANCE PERSONNEL
Sec. 751.301. PERSONNEL; QUALIFICATIONS. (a) To conduct market
conduct surveillance under this chapter, the commissioner may
designate department staff to perform duties under this chapter,
and may supplement that staff with qualified outside professional
assistance if the commissioner determines that that assistance is
necessary.
(b) Market conduct surveillance personnel must be qualified by
education and experience and, if applicable, must hold
appropriate professional designations.
Added by Acts 2005, 79th Leg., Ch.
291, Sec. 3, eff. September 1, 2005.
Sec. 751.302. CONFLICT OF INTEREST. (a) An individual who is a
member of the market conduct surveillance personnel has a
conflict of interest, either directly or indirectly, if the
individual is affiliated with the management of, has been
employed by, or owns a pecuniary interest in an insurer subject
to an examination conducted under this chapter.
(b) This section may not be construed to automatically preclude
the individual from being:
(1) a policyholder or claimant under an insurance policy;
(2) a grantee of a mortgage or similar instrument on the
individual's residence from a regulated entity if done under
customary terms and in the ordinary course of business;
(3) an investment owner in shares of regulated diversified
investment companies; or
(4) a settlor or beneficiary of a blind trust into which any
otherwise permissible holdings have been placed.
Added by Acts 2005, 79th Leg., Ch.
291, Sec. 3, eff. September 1, 2005.
Sec. 751.303. ACCESS TO INFORMATION. (a) Except as otherwise
provided by law, market conduct surveillance personnel shall, as
practicable, have free and full access to all books and records,
and all employees, officers, and directors, of the insurer during
regular business hours.
(b) On the request of market conduct surveillance personnel, an
insurer that uses a third-party model or product for any of the
activities under examination shall make the details of those
models or products available to that personnel.
Added by Acts 2005, 79th Leg., Ch.
291, Sec. 3, eff. September 1, 2005.
Sec. 751.304. AUTHORITY OF MARKET CONDUCT SURVEILLANCE
PERSONNEL. Market conduct surveillance personnel may examine
insurance company personnel under oath if that action is ordered
by the commissioner under Subchapter C, Chapter 36.
Added by Acts 2005, 79th Leg., Ch.
291, Sec. 3, eff. September 1, 2005.
SUBCHAPTER H. SANCTIONS
Sec. 751.351. SANCTIONS. (a) The commissioner may impose
sanctions under Chapter 82 against an insurer determined, as a
result of a market conduct action or other action under this
chapter, to have violated this code, a rule adopted under this
code, or another insurance law of this state.
(b) In determining an appropriate sanction under Subsection (a)
the commissioner shall consider:
(1) any actions taken by the insurer to maintain membership in,
and comply with the standards of, best-practice organizations
that promote high ethical standards of conduct in the insurance
marketplace; and
(2) the extent to which the insurer maintains regulatory
compliance programs to self-assess, self-report, and remediate
problems detected by the insurer.
Added by Acts 2005, 79th Leg., Ch.
291, Sec. 3, eff. September 1, 2005.