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80C80(2) PB

CHAPTER 4007. NOTICE TO DEPARTMENT BY CERTAIN PROPERTY AND CASUALTY INSURANCE COMPANIES REGARDING AGENTS

Revised Law

4007.001.

APPLICABILITY OF CHAPTER.

This

chapter applies only to an insurance company authorized to engage in the business of insurance in this state under:

a provision of:

Section 36.002, 37.051(a), 403.002, 492.051(

b) or (c), or 501.159;

Subchapter H,

Chapter 544;

Chapter 251, as that

chapter relates to:

automobile insurance;

casualty insurance and fidelity, guaranty, and surety bond insurance;

fire insurance and allied lines;

workers' compensation insurance; or

aircraft insurance;

Chapter 5, 252, 253, 254, 255, 256, 426, 493, 494, 1804, 1805, 1806, 1807, or 2171;

Subtitle B, C, D, E, F, H, or I, Title 10;

Section 417.008, Government Code;

Chapter 406A, Labor Code; or

Chapter ___ [[[V.T.I.C. Art. 5.43-1]]], ___ [[[V.T.I.C. Art. 5.43-2]]], ___ [[[V.T.I.C. Art. 5.43-3]]], or 2154, Occupations Code; or

Chapter 861, 862, 883, 911, 912, 941, 942, 984, or 3503.

(V.T.I.C. Art. 21.70, Sec. (a) (part).)

Source Law

A company licensed to transact business in this state under

Chapter 5, 6, 7, 8, 15, 16, 17, 18, or 19 of this code

Revisor's Note

Section (a), V.T.I.C.

Article 21.70, refers to an insurance company "licensed to transact business in this state."

The revised law substitutes "authorized" for "licensed" because "certificate of authority" is the term used throughout this code in relation to an entity's authority to engage in business.

Section (a), V.T.I.C.

Article 21.70, refers in part to an insurance company "licensed to transact business in this state under

Chapter 5

of this code."

Chapter 5 of the Insurance Code of 1951 primarily established requirements for automobile insurance, casualty insurance, fidelity, guaranty, and surety bonds, fire and allied lines insurance, workers' compensation insurance, joint underwriting and reinsurance, and professional liability insurance.

Although that

chapter did not specifically establish a "licensing" program for insurance companies, the language of

Section (a),

Article 21.70, may be construed as referring to an insurance company that engages in the business of a kind of insurance regulated under that chapter.

The majority of the provisions of

Chapter 5 of the Insurance Code of 1951 are now revised in various parts of this code.

The revised law therefore includes references to

Chapter 5 and any provision previously contained in

Chapter 5.

Revised Law

4007.002.

NOTICE TO DEPARTMENT REQUIRED.

On forms prescribed by the commissioner, an insurance company shall notify the department not later than the 30th day after the date on which:

balances due from an insurance agent for more than 90 days exceed $1 million or 10 percent of the company's policyholder surplus computed on December 31 of the preceding year or the most recent quarter if a report is specifically required by the department;

an agent's authority to settle claims for the company is withdrawn; or

the contract with an agent is canceled or terminated.

An insurance company may comply with the notification requirement of Subsection (a)(1) by submitting a single annual report if:

the company routinely operates above the limit established by that subdivision; and

the commissioner verifies that fact under a procedure adopted by the commissioner.

(V.T.I.C. Art. 21.70, Secs. (a) (part), (b).)

Source Law

A company

shall notify the State Board of Insurance on forms promulgated by the board not later than the 30th day after the day on which any of the following circumstances occurs:

balances due from an agent for more than 90 days exceed $1 million or 10 percent of the company's policyholder surplus calculated on either December 31 of the preceding year or the most recent quarter if a report is specifically required by the State Board of Insurance;

authority for an agent to settle claims for the company is withdrawn; or

the contract with an agent is cancelled or terminated.

The requirement to file under

Section (a)(1) of this

article may be met with a single annual report if the reporting company routinely operates above the limit provided by that

section and the commissioner verifies that fact under procedures adopted by the commissioner.

Revisor's Note

Section (a), V.T.I.C.

Article 21.70, refers to the "State Board of Insurance."

Chapter 685, Acts of the 73rd Legislature, Regular Session, 1993, abolished the State Board of Insurance and transferred its functions to the commissioner of insurance and the Texas Department of Insurance.

References to the board have been changed appropriately.

80C80(2) PB

80C80(2) PB

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