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Texas Insurance Code - INS § 2210.056. Use of Association Assets

Current as of January 01, 2024 | Updated by Findlaw Staff

<Text of section effective until Sept. 1, 2027.  See, also, § 2210.056 effective Sept. 1, 2027.>

(a) The association's net earnings may not inure, in whole or in part, to the benefit of a private shareholder or individual.

(b) The association's assets may not be used for or diverted to any purpose other than to:

(1) satisfy, in whole or in part, the liability of the association on claims made on policies written by the association;

(2) make investments authorized under applicable law;

(3) pay reasonable and necessary administrative expenses incurred in connection with the operation of the association and the processing of claims against the association;

(4) satisfy, in whole or in part, the obligations of the association incurred in connection with Subchapters B-1, B-2, J, M, M-1, and M-2, including reinsurance, financing arrangements, public securities, and financial instruments;  or

(5) make remittance under the laws of this state to be used by this state to:

(A) pay claims made on policies written by the association;

(B) purchase reinsurance covering losses under those policies;  or

(C) prepare for or mitigate the effects of catastrophic natural events.

(c) On dissolution of the association, all assets of the association, other than assets pledged for the repayment of public securities issued under this chapter, revert to this state.

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Cite this article: FindLaw.com - Texas Insurance Code - INS § 2210.056. Use of Association Assets - last updated January 01, 2024 | https://codes.findlaw.com/tx/insurance-code/ins-sect-2210-056/

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