INSURANCE CODE

TITLE 2. TEXAS DEPARTMENT OF INSURANCE

SUBTITLE B. DISCIPLINE AND ENFORCEMENT

CHAPTER 101. UNAUTHORIZED INSURANCE

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 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

Chapter 981 . 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,

Sec. 1, eff. Sept. 1, 1999. Amended by Acts 2001, 77th Leg., ch. 671,

Sec. 1, eff. Sept. 1, 2001; Acts 2001, 77th Leg., ch. 1419,

Sec. 21, eff. June 1, 2003; Acts 2001, 77th Leg., ch. 1420,

Sec. 11.005, eff. Sept. 1, 2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636 ),

Sec. 2B.014, eff. April 1, 2009.

Sec. 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

Chapter 541 or a rule adopted under that chapter.

Added by Acts 1999, 76th Leg., ch. 101,

Sec. 1, eff. Sept. 1, 1999.

Amended by:

Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636 ),

Sec. 2B.015, eff. April 1, 2009.

Sec. 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,

Sec. 1, eff. Sept. 1, 1999.

Sec. 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,

Sec. 1, eff. Sept. 1, 1999.

SUBCHAPTER B. BUSINESS OF INSURANCE; EXCEPTIONS

Sec. 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 a claimed exception or exemption to insurance regulation; 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,

Sec. 1, eff. Sept. 1, 1999. Amended by Acts 2001, 77th Leg., ch. 671,

Sec. 2, eff. Sept. 1, 2001; Acts 2001, 77th Leg., ch. 1419,

Sec. 22, eff. June 1, 2003; Acts 2001, 77th Leg., ch. 1420,

Sec. 11.006, eff. Sept. 1, 2001.

Amended by:

Acts 2021, 87th Leg., R.S., Ch. 60 (S.B. 1809 ),

Sec. 7, eff. September 1, 2021.

Sec. 101.052. ADVERTISING RELATING TO MEDICARE SUPPLEMENT BENEFIT PLANS. With respect to a Medicare supplement benefit plan authorized under

Chapter 1652 , 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,

Sec. 1, eff. Sept. 1, 1999. Amended by Acts 2001, 77th Leg., ch. 1419,

Sec. 23, eff. June 1, 2003; Acts 2001, 77th Leg., ch. 1420,

Sec. 11.007, eff. Sept. 1, 2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636 ),

Sec. 2B.016, eff. April 1, 2009.

Sec. 101.053. APPLICATION OF SUBCHAPTER. (

a) Sections 101.051 and 101.052 apply to

an act whether performed by mail or otherwise. Venue for