reglab/statecodes huggingface dataset:
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter C. General Powers and Duties of Association › Section 2602.104. Association Records

Sec. 2602.104.  ASSOCIATION RECORDS.  (a)  The association shall maintain a record of its activities in exercising its powers and performing its duties under this chapter.
(b)  A record under Subsection (a) may be made public only on:
(1)  termination of a liquidation, rehabilitation, or conservation proceeding involving the impaired or insolvent title insurance company;
(2)  termination of the impairment or insolvency of the title insurance company;  or
(3)  order of a court.
(c)  This section does not limit the association's duty to report on its activities under this chapter.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2019, 86th Leg., R.S., Ch. 775 (H.B. 1614), Sec. 7, eff. September 1, 2019.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter C. General Powers and Duties of Association › Section 2602.105. Meeting by Conference Call

Sec. 2602.105.  MEETING BY CONFERENCE CALL.  Notwithstanding Chapter 551, Government Code, the board may hold an open meeting by telephone conference call if immediate action is required and convening of a quorum of the board at a single location is not reasonable or practical.  The meeting is subject to the notice requirements that apply to other meetings.  The notice of the meeting must specify as the location of the meeting the location at which meetings of the board are usually held.  Each part of the meeting that is required to be open to the public must be audible to the public at that location and must be recorded.  The audio recording shall be retained and made available to the public for 30 days after the meeting date.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2019, 86th Leg., R.S., Ch. 775 (H.B. 1614), Sec. 8, eff. September 1, 2019.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter C. General Powers and Duties of Association › Section 2602.106. Accounts

Sec. 2602.106.  ACCOUNTS.  For purposes of administration and assessment, the board shall establish:
(1)  an administrative account;
(2)  a title account;  and
(3)  a guaranty fee account.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter C. General Powers and Duties of Association › Section 2602.107. Administrative Expenses

Sec. 2602.107.  ADMINISTRATIVE EXPENSES.  (a)  The association may use money in the administrative account to pay administrative costs and other general expenses of the association.
(b)  The association may transfer income from investment of the association's money in any account to the administrative account.
(c)  The association shall assess title insurance companies as provided by Subchapter E for any additional money needed for the administrative account.
(d)  The association shall pay from the guaranty fee account fees and reasonable and necessary expenses that the department incurs in an examination or audit of a title agent or direct operation under this chapter and Chapter 2651.
(e)  The association may advance money from any account to the administrative account to pay the administrative expenses of the association.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2009, 81st Leg., R.S., Ch. 1025 (H.B. 4338), Sec. 5, eff. September 1, 2009.
Acts 2019, 86th Leg., R.S., Ch. 775 (H.B. 1614), Sec. 9, eff. September 1, 2019.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter C. General Powers and Duties of Association › Section 2602.108. Deposit of Fees and Assessments

Sec. 2602.108.  DEPOSIT OF FEES AND ASSESSMENTS.  The association may deposit fees and assessments it collects into the Texas Treasury Safekeeping Trust Company in accordance with procedures established by the comptroller.  The comptroller shall account to the association for the deposited money separately from all other money.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter C. General Powers and Duties of Association › Section 2602.109. Use of Excess Money in Accounts

Sec. 2602.109.  USE OF EXCESS MONEY IN ACCOUNTS.  (a)  The association shall reserve in the title account the amount of money the association determines reasonably necessary for efficient future administration under this chapter.  The association shall return the excess  money pro rata to the holders of participation receipts on which an outstanding balance exists after deducting any credits against premium taxes taken under Section 2602.210. The amount deducted for those credits shall be deposited with the comptroller for credit to the general revenue fund. The association shall transfer to the guaranty fee account any excess money remaining in the title account after the distribution and reservation of money for administration.
(b)  If the association determines that money in the administrative account exceeds the amount reasonably necessary for efficient future operation under this chapter, the association shall transfer the excess money to the guaranty fee account.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2019, 86th Leg., R.S., Ch. 775 (H.B. 1614), Sec. 10, eff. September 1, 2019.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter C. General Powers and Duties of Association › Section 2602.110. Expenses of Administering Impaired Insurer or Impaired Agent

Sec. 2602.110.  EXPENSES OF ADMINISTERING IMPAIRED INSURER OR IMPAIRED AGENT.  (a)  The association may spend or advance money necessary to pay the expenses of administering the supervision, rehabilitation, receivership, conservatorship, or, as determined by a court of competent jurisdiction, other insolvency of an impaired title insurance company or impaired agent, on terms the association negotiates, if the company's or agent's assets are insufficient to pay those expenses.
(b)  The association may file a claim in a receivership proceeding against an impaired title insurance company or impaired agent to recover the association's reasonable costs incurred in exercising the association's powers or performing the association's duties under this chapter with respect to the impaired title insurance company or impaired agent.  Payment of a claim asserted by the association under this section in a receivership proceeding in this state is governed by Section 443.301.  Payment of a claim asserted by the association under this section in a receivership proceeding in another state is governed by the law governing priority of payment of distributions on unsecured claims by an insurance guaranty association in that state.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2009, 81st Leg., R.S., Ch. 1025 (H.B. 4338), Sec. 6, eff. September 1, 2009.
Acts 2019, 86th Leg., R.S., Ch. 775 (H.B. 1614), Sec. 11, eff. September 1, 2019.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter C. General Powers and Duties of Association › Section 2602.111. Delegation of Powers and Duties

Sec. 2602.111.  DELEGATION OF POWERS AND DUTIES.  (a)  The plan of operation may provide that, on approval of the board, a power or duty of the association may be delegated to a corporation or other organization that:
(1)  performs or will perform in two or more states functions similar to those of the association or its equivalent; and
(2)  provides protection not substantially less favorable and effective than that provided by this chapter.
(b)  A power or duty under Section 2602.101(a)(1) or (4), 2602.107, 2602.201, 2602.202, 2602.203, or 2602.205 may not be delegated under this section.
(c)  The corporation or other organization shall be:
(1)  reimbursed as a servicing facility would be reimbursed;  and
(2)  paid for its performance of any other functions of the association.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2019, 86th Leg., R.S., Ch. 775 (H.B. 1614), Sec. 12, eff. September 1, 2019.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter C. General Powers and Duties of Association › Section 2602.112. Exemption From Taxation

Sec. 2602.112.  EXEMPTION FROM TAXATION.  The association is exempt from payment of all fees and all taxes levied by this state or a subdivision of this state, except taxes levied on real or personal property.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter C. General Powers and Duties of Association › Section 2602.113. Detection and Prevention of Impairment

Sec. 2602.113.  DETECTION AND PREVENTION OF IMPAIRMENT.  (a)  The board may make recommendations to the commissioner for detecting and preventing title insurance company or agent impairments.  The board shall advise and counsel with the commissioner on matters relating to the solvency of title insurance companies and agents.
(b)  The board may report and make recommendations to the commissioner relating to any matter germane to the solvency, liquidation, rehabilitation, or conservation of a title insurance company or agent.  A report or recommendation under this subsection is not a public document until a title insurance company is designated impaired.
(c)  The board shall notify the commissioner of any information indicating that a title insurance company or agent may be unable or potentially unable to fulfill its contractual obligations and shall request a meeting with the commissioner.  The board may request appropriate investigation and action by the commissioner.  The commissioner may investigate and act as the commissioner considers appropriate.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter C. General Powers and Duties of Association › Section 2602.114. Meeting of Board on Impaired Title Insurance Company or Agent

Sec. 2602.114.  MEETING OF BOARD ON IMPAIRED TITLE INSURANCE COMPANY OR AGENT.  (a)  The commissioner:
(1)  shall call a meeting of the board when the commissioner determines that a title insurance company or agent is insolvent or impaired;  and
(2)  may call a meeting of the board when the commissioner determines that a title insurance company or agent is in danger of becoming insolvent or impaired.
(b)  The meeting is not open to the public.  Only board members, association counsel and other association representatives, the commissioner, and persons the commissioner authorizes may attend the meeting.
(c)  The commissioner may require an officer, director, or employee of the title insurance company or agent to appear before the board for conference or to give testimony.
(d)  At the meeting the commissioner may disclose to the board information that the commissioner possesses and may disclose department records, including an examination report or a preliminary report from an examiner that relates to the title insurance company or agent.
(e)  A board member may not disclose information received in the meeting unless authorized by the commissioner or required as witness in court.  A board member and the meeting are subject to the confidentiality standard imposed on an examiner under Sections 401.105 and 401.106, except that a bond is not required of a board member.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636), Sec. 2I.006, eff. April 1, 2009.
Acts 2019, 86th Leg., R.S., Ch. 775 (H.B. 1614), Sec. 13, eff. September 1, 2019.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter C. General Powers and Duties of Association › Section 2602.115. Association and Board Advice and Assistance

Sec. 2602.115.  ASSOCIATION AND BOARD ADVICE AND ASSISTANCE.  (a)  On the commissioner's request, the board shall attend hearings before the commissioner and meet with and advise the commissioner or the receiver or the conservator appointed by the commissioner on matters relating to:
(1)  the affairs of an impaired title insurance company or agent;
(2)  action that the commissioner, receiver, or conservator may take to best protect the interest of holders of covered claims against the company or agent;  and
(3)  the marshalling of assets.
(b)  On the commissioner's request, the association may assist and advise the commissioner concerning rehabilitation, payment of claims, continuation of coverage, or the performance of other contractual obligations of an impaired title insurance company or agent.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter C. General Powers and Duties of Association › Section 2602.116. Board Access to Records

Sec. 2602.116.  BOARD ACCESS TO RECORDS.  The receiver, supervisor, conservator, or other statutory successor of an impaired title insurance company or agent shall give the board or its representative:
(1)  access to the company's or agent's records as necessary for the board to perform its functions under this chapter relating to covered claims; and
(2)  copies of those records on the board's request and at the board's expense.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2019, 86th Leg., R.S., Ch. 775 (H.B. 1614), Sec. 14, eff. September 1, 2019.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter C. General Powers and Duties of Association › Section 2602.117. Board Report at Conclusion of Impairment

Sec. 2602.117.  BOARD REPORT AT CONCLUSION OF IMPAIRMENT.  At the conclusion of a title insurance company or agent impairment in which the association exercised its powers or performed its duties under this chapter, the board shall prepare, from information available to the association, and submit to the commissioner a report on the history and causes of the impairment.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter D. Policy Guaranty Fees › Section 2602.151. Payment of Fee

Sec. 2602.151.  PAYMENT OF FEE.  (a)  An agent or, if there is no agent, the title insurance company shall pay the association a quarterly guaranty fee for each owner or mortgagee title insurance policy that the agent or company is required to report on its statistical report to the department.
(b)  The fee is due:
(1)  May 1, for the quarter ending March 31;
(2)  August 1, for the quarter ending June 30;
(3)  November 1, for the quarter ending September 30;  and
(4)  February 1, for the quarter ending December 31.
(c)  The association shall deposit the fee in the guaranty fee account.
(d)  Except as provided by Section 2602.109, money in the guaranty fee account shall be derived only from guaranty fees as provided by this subchapter.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter D. Policy Guaranty Fees › Section 2602.152. Amount of Fee

Sec. 2602.152.  AMOUNT OF FEE.  Annually or more frequently, the board shall determine the amount of the guaranty fee, considering the amount of money to be maintained in the guaranty fee account that is reasonably necessary for efficient future operation under this chapter.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2009, 81st Leg., R.S., Ch. 1025 (H.B. 4338), Sec. 7, eff. September 1, 2009.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter D. Policy Guaranty Fees › Section 2602.153. Use of Fee

Sec. 2602.153.  USE OF FEE.  (a)  The association shall collect, receive, retain, disburse, and advance the guaranty fees only as specifically provided by this chapter.
(b)  The following claims shall be paid from guaranty fees only and may not be paid from assessments:
(1)  covered claims against trust funds or an escrow account of an impaired agent under Section 2602.252;
(2)  expenses incurred in complying with Subchapter J;
(3)  conservator and receiver expenses under Section 2602.254; and
(4)  administrative expenses with respect to the estate of an impaired agent under Section 2602.110.
(c)  Repealed by Acts 2009, 81st Leg., R.S., Ch. 1025, Sec. 18, eff. September 1, 2009.
(d)  Guaranty fees may be used only for payment of:
(1)  claims described by Subsection (b); and
(2)  expenses related to:
(A)  an audit or an examination conducted by the department or the association under this chapter;
(B)  the supervision and coordination of such an audit or examination; and
(C)  an action under Section 2602.452.
(e)  The association may advance money from the guaranty fee account as the association considers necessary to provide for the payment of covered claims related to an impaired agent and administrative expenses related to the evaluation and payment of those claims.  The advanced money shall be repaid to the guaranty fee account as soon as is practicable with money from guaranty fees or the estate of the impaired agent. No interest may accrue on the advanced money.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2009, 81st Leg., R.S., Ch. 1025 (H.B. 4338), Sec. 8, eff. September 1, 2009.
Acts 2009, 81st Leg., R.S., Ch. 1025 (H.B. 4338), Sec. 18, eff. September 1, 2009.
Acts 2019, 86th Leg., R.S., Ch. 775 (H.B. 1614), Sec. 15, eff. September 1, 2019.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter D. Policy Guaranty Fees › Section 2602.154. Enforcement of Fee

Sec. 2602.154.  ENFORCEMENT OF FEE.  (a)  After notice and opportunity for hearing, the commissioner may suspend or revoke the certificate of authority or license to engage in business in this state of a title insurance company or agent that does not comply with this subchapter.
(b)  The commissioner shall adopt rules that implement the program created under this subchapter.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter E. Assessments › Section 2602.201. Making of Assessment

Sec. 2602.201.  MAKING OF ASSESSMENT.  (a)  If the commissioner determines that a title insurance company has become impaired, the association shall promptly estimate the amount of additional money needed to supplement the assets of the impaired title insurance company to pay all covered claims and administrative expenses, including expenses related to processing and payment of the claims.
(b)  The association shall assess title insurance companies in writing an amount as determined under Section 2602.202.  A title insurance company does not incur real or contingent liability under this chapter until the association actually makes the written assessment.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2019, 86th Leg., R.S., Ch. 775 (H.B. 1614), Sec. 16, eff. September 1, 2019.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter E. Assessments › Section 2602.202. Amount of Assessment; Proration of Payment

Sec. 2602.202.  AMOUNT OF ASSESSMENT;  PRORATION OF PAYMENT.  (a)  The association shall assess title insurance companies the amount necessary to pay:
(1)  the association's obligations under this chapter and the expenses of handling covered claims subsequent to an impairment;  and
(2)  other expenses authorized by this chapter.
(b)  The assessment of each title insurance company must be in the proportion that the net direct written premiums of that company in this state for the calendar year preceding the assessment bear to the net direct written premiums of all title insurance companies for that year. Assessments and supplemental assessments may be made in consecutive years until the association has collected an amount sufficient to pay the obligations and expenses described under Subsection (a).  The association may make a supplemental assessment only against the same title insurance companies and in the same proportion for each company as the initial assessment.
(c)  The total assessment of a title insurance company in a year may not exceed an amount equal to two percent of the company's net direct written premiums for the calendar year preceding the assessment.  If the maximum assessment and the association's other assets are insufficient in any one year to make all necessary payments, the money available shall be prorated and the unpaid portion shall be paid as soon as money becomes available.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2019, 86th Leg., R.S., Ch. 775 (H.B. 1614), Sec. 17, eff. September 1, 2019.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter E. Assessments › Section 2602.203. Notice and Payment

Sec. 2602.203.  NOTICE AND PAYMENT.  The association shall give each title insurance company to be assessed at least 90 days' written notice of the due date of the assessment.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2019, 86th Leg., R.S., Ch. 775 (H.B. 1614), Sec. 18, eff. September 1, 2019.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter E. Assessments › Section 2602.204. Exemption for Impaired Title Insurance Company

Sec. 2602.204.  EXEMPTION FOR IMPAIRED TITLE INSURANCE COMPANY.  A title insurance company is exempt from assessment during the period beginning on the date the commissioner designates the company as an impaired title insurance company and ending on the date the commissioner determines that the company is no longer an impaired title insurance company.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter E. Assessments › Section 2602.205. Deferment

Sec. 2602.205.  DEFERMENT.  (a)  The association may defer in whole or in part an assessment of a title insurance company that would cause the company's financial statement to show amounts of capital or surplus less than the minimum amount required for a certificate of authority in any jurisdiction in which the company is authorized to engage in the business of insurance.
(b)  The title insurance company shall pay the deferred assessment when payment will not reduce capital or surplus below required minimums.  The payment shall be refunded to or credited against future assessments of any title insurance company receiving a larger assessment because of the deferment, as elected by that company.
(c)  During a period of deferment, the title insurance company may not pay a dividend to shareholders or policyholders.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter E. Assessments › Section 2602.206. Participation Receipts

Sec. 2602.206.  PARTICIPATION RECEIPTS.  (a)  On receipt from a title insurance company of payment of an assessment or partial assessment, the association shall provide the company with a participation receipt.  A participation receipt creates liability against the impaired title insurance company.
(b)  The holder of the receipt is a general creditor of the impaired title insurance company, except that if the amount of assessments the association receives exceeds the amount paid for covered claims and administrative expenses, the holders of participation receipts have preference over other general creditors to, and are entitled to share pro rata in, the excess.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2019, 86th Leg., R.S., Ch. 775 (H.B. 1614), Sec. 19, eff. September 1, 2019.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter E. Assessments › Section 2602.207. Accounting; Reports; Refund

Sec. 2602.207.  ACCOUNTING;  REPORTS;  REFUND.  (a)  The association shall adopt accounting procedures to show how money received from assessments or partial assessments is used.
(b)  The association shall make interim accounting reports as the commissioner requires.
(c)  The association shall make a final report to the commissioner showing how money received from assessments or partial assessments has been used, including a statement of any final balance of that money.  As soon as practicable after completion of the final report, the association shall refund the remaining balance to the holders of participation receipts as required by Section 2602.206(b).
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter E. Assessments › Section 2602.208. Use of Assessments

Sec. 2602.208.  USE OF ASSESSMENTS.  (a)  Money from assessments is considered to supplement the marshalling of an impaired title insurance company's assets to make payments of covered claims on the impaired title insurance company's behalf and to pay administrative expenses related to payment of covered claims.  The association may assess title insurance companies or use money from assessments to pay covered claims before the receiver exhausts the impaired title insurance company's assets.
(b)  The association may use money from assessments to negotiate and consummate contracts of reinsurance or assumption of liabilities or contracts of substitution to provide for outstanding liabilities of covered claims.
(c)  Except as provided by Section 2602.109, money from assessments may not be used for the guaranty fee account.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2019, 86th Leg., R.S., Ch. 775 (H.B. 1614), Sec. 20, eff. September 1, 2019.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter E. Assessments › Section 2602.209. Failure to Pay; Collection by Commissioner

Sec. 2602.209.  FAILURE TO PAY;  COLLECTION BY COMMISSIONER.  (a)  The association shall promptly report to the commissioner a failure of a title insurance company to pay an assessment when due.
(b)  On failure of a title insurance company to pay an assessment when due, the commissioner may either:
(1)  suspend or revoke, after notice and hearing, the company's certificate of authority to engage in business in this state;  or
(2)  assess an administrative penalty as provided by Chapter 84 in an amount not to exceed the greater of five percent of the unpaid assessment each month or $100 each month.
(c)  A title insurance company whose certificate of authority is canceled or surrendered is liable for any unpaid assessments made before the date of the cancellation or surrender.
(d)  The commissioner may collect an assessment on behalf of the association through a suit brought for that purpose.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter E. Assessments › Section 2602.210. Recovery of Assessment in Rates; Tax Credit

Sec. 2602.210.  RECOVERY OF ASSESSMENT IN RATES;  TAX CREDIT.  (a)  A title insurance company is entitled to recover in its rates for the succeeding 12 months amounts paid in assessments not to exceed one percent of the company's net direct written premiums.  In promulgating or establishing rates the commissioner shall consider assessments and refunds of assessments and shall adjust the rates to allow for recovery under this subsection.
(b)  Unless the department determines that all amounts paid as assessments by each title insurance company have been recovered under Subsection (a), for any amount not recovered the title insurance company is entitled to a credit against its premium tax under Chapter 223.  The credit may be taken at a rate of 20 percent each year for five successive years following the date of assessment and, if the title insurance company elects, may be taken over an additional number of years.
(c)  An amount of a tax credit allowed by this section that is unclaimed may be shown in the title insurance company's books and records as an admitted asset for all purposes, including an annual statement under Section 862.001.
(d)  If the association receives money related to a title insurance company receivership from any source, including payment of a claim made by the association against the estate of the title insurance company, that is in excess of the amount title insurance companies have recovered or are entitled to recover under this section, the excess money shall be held by the association in its title account to offset the amounts required for future assessments or administrative expenses of the association.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2019, 86th Leg., R.S., Ch. 775 (H.B. 1614), Sec. 21, eff. September 1, 2019.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter F. Covered Claims › Section 2602.251. Covered Claims in General

Sec. 2602.251.  COVERED CLAIMS IN GENERAL.  An unpaid claim is a covered claim if:
(1)  the claim is made by an insured under a title insurance policy to which this chapter applies;
(2)  the claim arises out of the policy and is within the coverage and applicable limits of the policy, subject to all applicable policy provisions and defenses available under the policy and applicable law;
(3)  the title insurance company that issued the policy or assumed the policy under an assumption certificate is an impaired title insurance company; and
(4)  the insured real property or a lien on the property is located in this state.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2019, 86th Leg., R.S., Ch. 775 (H.B. 1614), Sec. 22, eff. September 1, 2019.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter F. Covered Claims › Section 2602.252. Claim Against Trust Funds or Escrow Account

Sec. 2602.252.  CLAIM AGAINST TRUST FUNDS OR ESCROW ACCOUNT.  An unpaid claim is a covered claim if the claim:
(1)  is:
(A)  against trust funds or an escrow account of an impaired title insurance company or agent; or
(B)  for money received by an impaired title insurance company, the company's agent, or an authorized agent of the company's agent for deposit into a trust fund or an escrow account; and
(2)  is unpaid because of a shortage of those funds or in that account, including a shortage that exists because the money was not deposited by the impaired title insurance company or the company's agent in the fund or account.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2019, 86th Leg., R.S., Ch. 775 (H.B. 1614), Sec. 23, eff. September 1, 2019.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter F. Covered Claims › Section 2602.253. Claim in Connection With Fidelity of Agent

Sec. 2602.253.  CLAIM IN CONNECTION WITH FIDELITY OF AGENT.  An unpaid claim is a covered claim if an impaired title insurance company is liable for the claim in connection with the fidelity of the company's agent as authorized by Subchapter A, Chapter 2702.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter F. Covered Claims › Section 2602.254. Certain Conservator and Receiver Expenses Covered

Sec. 2602.254.  CERTAIN CONSERVATOR AND RECEIVER EXPENSES COVERED.  Reasonable and necessary administrative expenses incurred by a conservator appointed by the commissioner or a receiver appointed by a court for an unauthorized insurer operating in this state are covered claims if the commissioner has notified the association or the association has otherwise become aware that:
(1)  the unauthorized insurer has insufficient liquid assets to pay those expenses; and
(2)  insufficient money is available from:
(A)  abandoned money under Section 443.304; and
(B)  department appropriations for use in paying those expenses.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636), Sec. 2I.007, eff. April 1, 2009.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter F. Covered Claims › Section 2602.255. Claims Not Covered

Sec. 2602.255.  CLAIMS NOT COVERED.  The following are not covered claims:
(1)  an amount due a reinsurer, title insurance company, insurance pool, or underwriting association as a subrogation recovery or otherwise;
(2)  a supplementary payment obligation incurred before a determination is made under this chapter that a title insurance company or agent is impaired, including:
(A)  adjustment fees or expenses;
(B)  attorney's fees or expenses;
(C)  court costs;
(D)  interest;
(E)  enhanced damages, sought as a recovery against the insured, the impaired title insurance company or agent, or the association, that arise under Chapter 541 of this code or Subchapter E, Chapter 17, Business & Commerce Code, or a similar law of another state; and
(F)  bond premiums;
(3)  a shortage of trust funds or in an escrow account resulting from the insolvency of a financial institution;
(4)  exemplary, extracontractual, or bad faith damages awarded against an insured or title insurance company by a court judgment;
(5)  a claim under Section 2602.252 by a claimant who has a lien against the real property that was the subject of the transaction from which the claim arises, unless the lien is held to be invalid as a matter of law;
(6)  a claim under Section 2602.251, 2602.252, or 2602.253 by a claimant who caused or substantially contributed to the claimant's loss by the claimant's action or omission, as determined by the association or the association's agent; and
(7)  a claim filed with the association after the claim filing deadline for an impaired title insurance company or agent.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2019, 86th Leg., R.S., Ch. 775 (H.B. 1614), Sec. 24, eff. September 1, 2019.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter F. Covered Claims › Section 2602.256. Amount of Covered Claim; Limit

Sec. 2602.256.  AMOUNT OF COVERED CLAIM; LIMIT.  (a)  A covered claim under Section 2602.251 or 2602.253 may not exceed the lesser of $500,000 for each claimant or $500,000 for each policy.
(b)  A covered claim under Section 2602.252 may not exceed the lesser of $500,000 for each claimant or the amount of money actually received by the impaired title insurance company or agent as trust funds or an escrow account for each claimant in a transaction from which the claim arises, except that the cumulative amount of covered claims arising from a single transaction may not exceed $500,000.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2019, 86th Leg., R.S., Ch. 775 (H.B. 1614), Sec. 25, eff. September 1, 2019.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter F. Covered Claims › Section 2602.257. Exhaustion of Other Rights Required

Sec. 2602.257.  EXHAUSTION OF OTHER RIGHTS REQUIRED.  (a)  A person having a covered claim that is also a claim against a title insurance company under law or under an insurance policy other than a policy of an impaired title insurance company must exhaust the person's rights under law or the policy before asserting the covered claim under this chapter.
(b)  The amount payable on the covered claim is reduced by the amount of any recovery under law or the policy.
(c)  Notwithstanding any other provision, to avoid undue hardship to a claimant the association may authorize payment of a covered claim against an impaired agent without regard to the liability of any title insurance company or coverage under any insurance policy, subject to the approval of the receivership court or commissioner, as applicable.  On payment, the association is in all respects subrogated to the rights and claims of the claimant.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter F. Covered Claims › Section 2602.258. Certain Money Authorized for Use in Paying Covered Claim; Limit

Sec. 2602.258.  CERTAIN MONEY AUTHORIZED FOR USE IN PAYING COVERED CLAIM;  LIMIT.  (a)  Money from assessments or guaranty fees is liable only for the difference between the amount of covered claims and the amount of assets marshalled by a receiver or conservator for payment to holders of covered claims.
(b)  In an ancillary receivership in this state, money from assessments is liable only for the difference between the amount of covered claims and the amount of assets marshalled by receivers in other states for payment of covered claims in this state.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter F. Covered Claims › Section 2602.259. Stay of Proceedings; Certain Decisions Not Binding

Sec. 2602.259.  STAY OF PROCEEDINGS;  CERTAIN DECISIONS NOT BINDING.  (a)  To permit the receiver or association to properly defend a pending cause of action, a proceeding in which an impaired title insurance company is a party or is obligated to defend a party in a court in this state, other than a proceeding directly related to the receivership or instituted by the receiver, is stayed for:
(1)  a six-month period beginning on the later of the date of the designation of impairment or the date an ancillary proceeding is brought in this state;  and
(2)  any subsequent period as determined by the court.
(b)  If a covered claim arises from a judgment, order, verdict, finding, or other decision based on the default of an impaired title insurance company or its failure to defend an insured, the association on its own behalf or on behalf of the insured may apply to the court or administrator that made the decision to have the decision set aside and may defend the claim on its merits.
(c)  In a proceeding considering a covered claim, a judgment against an insured taken after the date the delinquency proceeding or supervision begins or a conservator is appointed is not evidence of liability or of the amount of damages, and a default or consent judgment against an insured or the impaired title insurance company or a settlement, release, or judgment entered into by the insured or the impaired title insurance company does not bind the association and is not evidence of liability or of the amount of damages in connection with a claim brought against the association or another party under this chapter.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2019, 86th Leg., R.S., Ch. 775 (H.B. 1614), Sec. 26, eff. September 1, 2019.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter F. Covered Claims › Section 2602.260. Admissibility of Payment

Sec. 2602.260.  ADMISSIBILITY OF PAYMENT.  In a lawsuit brought by a conservator, supervisor, or receiver of an impaired title insurance company or agent to recover assets of the company or agent, the fact that a claim against the company or agent has been or will be paid under this chapter is not admissible and may not be placed before a jury by evidence, argument, or reference.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2019, 86th Leg., R.S., Ch. 775 (H.B. 1614), Sec. 27, eff. September 1, 2019.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter F. Covered Claims › Section 2602.261. Appeal of Claim Determination

Sec. 2602.261.  APPEAL OF CLAIM DETERMINATION.  A claimant's right of appeal with respect to a claim determination by the association is governed by the association's plan of operation.  A claimant must bring an action, including an action for declaratory relief, challenging denial of a claim not later than one year after the date the claim was denied.
Added by Acts 2019, 86th Leg., R.S., Ch. 775 (H.B. 1614), Sec. 28, eff. September 1, 2019.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter G. Association Powers and Duties Relating to Covered Claims › Section 2602.301. General Powers and Duties of Association in Connection With Payment of Covered Claims

Sec. 2602.301.  GENERAL POWERS AND DUTIES OF ASSOCIATION IN CONNECTION WITH PAYMENT OF COVERED CLAIMS.  (a)  The association shall:
(1)  investigate a claim brought against the association, the commissioner, or a special deputy receiver appointed under Chapter 443 if the claim involves or may involve the association's rights and obligations under this chapter; and
(2)  adjust, compromise, settle, and pay a covered claim to the extent of the association's obligation, and deny all other claims.
(b)  The association may review a settlement, release, or judgment to which an impaired title insurance company or agent or its insured was a party to determine the extent to which the settlement, release, or judgment is contested.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636), Sec. 2I.008, eff. April 1, 2009.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter G. Association Powers and Duties Relating to Covered Claims › Section 2602.302. Payment of Covered Claims

Sec. 2602.302.  PAYMENT OF COVERED CLAIMS.  (a)  The association shall pay covered claims:
(1)  existing before the determination of impairment; or
(2)  arising on or before:
(A)  the date of cancellation of the impaired title insurance company's policies or the claim deadline for claims against the impaired title insurance company, as applicable; or
(B)  the claim deadline for covered claims against an impaired agent, which is the first anniversary of the date of determination of impairment.
(b)  A court in this state in which receivership proceedings of an impaired title insurance company are pending shall set, as applicable:
(1)  the date of cancellation of the policies, which may not be later than the fifth anniversary of the date of determination of impairment; or
(2)  the claim deadline, which may not be later than the first anniversary of the date of determination of impairment.
(b-1)  If an impaired title insurance company is in receivership proceedings outside of this state, the claim deadline is the first anniversary of the date of determination of impairment.
(c)  Subject to the approval of the commissioner, the association shall establish:
(1)  procedures for filing claims with the association;  and
(2)  acceptable forms of proof of covered claims.
(d)  The association shall pay claims in the order the association considers reasonable, including payment as claims are received from the claimants or in groups or categories of claims.
(e)  The association may not pay a claimant an amount exceeding the amount of the claimant's covered claim.
(f)  On payment of the last timely filed covered claim, the association is discharged from the association's obligations under this chapter.  This subsection does not discharge the association of obligations related to pending litigation.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.
Amended by:
Acts 2019, 86th Leg., R.S., Ch. 775 (H.B. 1614), Sec. 29, eff. September 1, 2019.
2023 Texas Statutes › Insurance Code › Title 11 - Title Insurance › Subtitle C - Financial Solvency › Chapter 2602 - Texas Title Insurance Guaranty Association › Subchapter G. Association Powers and Duties Relating to Covered Claims › Section 2602.303. Servicing Facility

Sec. 2602.303.  SERVICING FACILITY.  (a)  The association may handle claims through its employees or through one or more title insurance companies or other persons designated, subject to the approval of the commissioner, as a servicing facility.
(b)  A title insurance company may decline designation as a servicing facility.
(c)  The association shall reimburse a servicing facility for:
(1)  obligations of the association paid by the facility;  and
(2)  expenses incurred by the facility in handling claims for the association.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 6, eff. April 1, 2005.