Texas Administrative Code › Title 28 - INSURANCE › Part 1 - TEXAS DEPARTMENT OF INSURANCE › Chapter 19 - LICENSING AND REGULATION OF INSURANCE PROFESSIONALS › Subchapter M - LICENSING AND REGULATION OF MANAGING GENERAL AGENTS › Section 19.1202 - Definitions Concerning Licensing and Regulation of Managing General Agents

Current through Reg. 49, No. 28; July 12, 2024
The following words and terms, when used in this
					 subchapter, shall have the following meanings, unless the context clearly
					 indicates otherwise.
(1) Act--The
				  Managing General Agents' Licensing Act (the Insurance Code, Article
				  21.07-3).
(2) Affiliate--An
				  affiliate of, or person affiliated with, a specific person, is a person that
				  directly, or indirectly through one or more intermediaries, controls, or is
				  controlled by, or is under common control with, the person specified.
(3) Board--The State Board of
				  Insurance.
(4) Carrier--A company,
				  as defined in this section.
(5)
				  Commissioner--The commissioner of insurance.
(6) Company--Any insurance company,
				  corporation, inter-insurance exchange, mutual, reciprocal, association, county
				  mutual insurance company, Lloyds, or other insurance carrier licensed to
				  transact business in the State of Texas, excepting, however, those which write
				  only life, health, and accident insurance and variable life insurance and
				  variable annuity contracts.
(7)
				  Control--The possession, direct or indirect, of the power to direct or cause
				  the direction of the management and policies of a person, whether through the
				  ownership of voting securities, by contract other than a commercial contract
				  for goods or nonmanagement services, or otherwise, unless the power is the
				  result of an official position with or corporate office held by the person. The
				  term "control" shall include the terms "controlling," "controlled by," and
				  "under common control with." Control shall be presumed to exist if any person,
				  directly or indirectly, or with members of the person's immediate family, owns,
				  controls, or holds with the power to vote, or if any person other than a
				  corporate officer or director of a person holds proxies representing, 10% or
				  more of the voting securities or authority of any other person, or if any
				  person by contract or agreement is designated as an attorney-in-fact for a
				  Lloyd's plan insurer under the Insurance Code, Article 18.02, or for a
				  reciprocal or interinsurance exchange under the Insurance Code, Articles 19.02
				  and 19.10. This presumption may be rebutted by a showing that control does not
				  exist in fact. The commissioner may determine, after furnishing all persons in
				  interest notice and opportunity to be heard and making specific findings of
				  fact to support such determination, that control exists in fact,
				  notwithstanding the absence of presumption to that effect, where a person
				  exercises directly or indirectly either alone or pursuant to an agreement with
				  one or more other persons such a controlling influence over the management or
				  policies of an authorized insurer or an MGA as to make it necessary or
				  appropriate in the public interest or for the protection of the policyholders
				  of the insurer that the person be deemed to control the insurer or
				  MGA.
(8) Insurer--A company, as
				  defined in this section.
(9) Loss
				  reserves--Has the meaning given to that phrase in the Insurance Code, Article
				  21.39.
(10) MGA--A managing general
				  agent, as defined in this section.
(11) Managing general agent--Any person,
				  firm, or corporation who has supervisory responsibility for the local agency
				  and field operations of an insurance company or carrier within this state, or
				  any part thereof, or who is authorized by a company or carrier to accept or
				  process in its behalf insurance policies produced and sold by other agents. The
				  term does not include an agent licensed under the Insurance Code, Article
				  1.14-2, 21.11, or 21.14, unless that agent accepts 50% or more of that agent's
				  total annual business or does more than $500,000 of total annual business,
				  whichever amount is less, as measured by premium volume from insurance policies
				  produced and sold by other agents. An agent licensed under the Insurance Code,
				  Article 21.11, who does business in conformance with the Insurance Code,
				  Article 21.11, is not considered to derive any income from policies produced by
				  other agents, as that term is used in the Act, §2(a); however, the agent
				  is considered to derive its income from policies sold by such other agents. A
				  managing general agent may perform any of the following acts for a company or
				  carrier: receive and pass upon daily reports and monthly accounts; receive and
				  be responsible for agency balances; handle the adjustment of losses; or appoint
				  or direct local recording agents, state agents, or special agents within this
				  state, or any part thereof.
(12)
				  Person--An individual, a corporation, a partnership, an association, a joint
				  stock company, a trust, an incorporated organization, any similar entity or any
				  combination of the foregoing acting in concert, but not any securities broker
				  performing no more than the usual and customary broker's function.