Texas § IN.443.008 - INJUNCTIONS AND ORDERS

§ IN.443.008. INJUNCTIONS AND ORDERS

INJUNCTIONS AND ORDERS. (a) The receivership court may issue any order, process, or judgment, including stays, injunctions, or other orders, as necessary or appropriate to carry out the provisions of this chapter or an approved rehabilitation plan. (b) This chapter may not be construed to limit the ability of the receiver to apply to a court other than the receivership court in any jurisdiction to carry out any provision of this chapter or for the purpose of pursuing claims against any person. (c) Except as provided by Subsection (e) or as otherwise provided by this chapter and subject to Subsection (g), the commencement of a delinquency proceeding under this chapter operates as a stay, applicable to all persons, of: (1) the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other action or proceeding against the insurer, including an arbitration proceeding, that was or could have been commenced before the commencement of the delinquency proceeding under this chapter, or to recover a claim against the insurer that arose before the commencement of the delinquency proceeding under this chapter; (2) the enforcement against the insurer or against property of the insurer of a judgment obtained before the commencement of the delinquency proceeding under this chapter; (3) any act to obtain or retain possession of property of the insurer or of property from the insurer or to exercise control over property or records of the insurer; (4) any act to create, perfect, or enforce any lien against property of the insurer; (5) any act to collect, assess, or recover a claim against the insurer that arose before the commencement of a delinquency proceeding under this chapter; (6) the commencement or continuation of an action or proceeding against a reinsurer of the insurer, by the holder of a claim against the insurer, seeking reinsurance recoveries that are contractually due to the insurer; and (7) except as provided by Subsection (e)(1), the commencement or continuation of an action or proceeding by a governmental unit to terminate or revoke an insurance license. (d) Except as provided in Subsection (e) or as otherwise provided by this chapter, the commencement of a delinquency proceeding under this chapter operates as a stay, applicable to all persons, of any judicial, administrative, or other action or proceeding, including the enforcement of any judgment, against any insured that was or could have been commenced before the commencement of the delinquency proceeding under this chapter, or to recover a claim against the insured that arose before or after the commencement of the delinquency proceeding under this chapter and for which the insurer is or may be liable under a policy of insurance or is obligated to defend a party. The stay provided by this subsection terminates 90 days after the date of appointment of the receiver, unless, for good cause shown, the stay is extended by order of the receivership court after notice to any affected parties and any hearing the receivership court determines is appropriate. (e) Notwithstanding Subsection (c), the commencement of a delinquency proceeding under this chapter does not operate as a stay of: (1) regulatory actions not described by Subsection (c)(7) that are taken by the commissioners of nondomiciliary states, including the suspension of licenses; (2) criminal proceedings; (3) any act to perfect or to maintain or continue the perfection of an interest in property to the extent that the act is accomplished within any relation back period under applicable law; (4) set off as permitted by Section 443.209; (5) pursuit and enforcement of nonmonetary governmental claims, judgments, and proceedings; (6) presentment of a negotiable instrument and the giving of notice and protesting dishonor of the instrument; (7) enforcement of rights against single beneficiary trusts established pursuant to and in compliance with laws relating to credit for reinsurance; (8) termination, liquidation, and netting of obligations under qualified financial contracts as provided for in Section 443.261; (9) discharge by a guaranty association of statutory responsibilities under any law governing guaranty associations; or (10) any of the following actions: (A) an audit by a governmental unit to determine tax liability; (B) the issuance to the insurer by a governmental unit of a notice of tax deficiency; (C) a demand for tax returns; or (D) the making of an assessment for any tax and issuance of a notice and demand for payment of the assessment. (f) Except as provided by Subsection (h): (1) the stay of an act against property of the insurer under Subsection (c) continues until the property is no longer property of the receivership estate; and (2) the stay of any other act under Subsection (c) continues until the earlier of the time the delinquency proceeding is closed or dismissed. (g) Notwithstanding the provisions of Subsection (c), claims against the insurer that arose before the commencement of the delinquency proceeding under this chapter may be asserted as a counterclaim in any judicial, administrative, or other action or proceeding initiated by or on behalf of the receiver against the holder of the claims. (h) On request of a party in interest and after notice and any hearing the receivership court determines is appropriate, the receivership court may grant relief from the stay of Subsection (c) or (d), such as by terminating, annulling, modifying, or conditioning the stay: (1) for cause as described by Subsection (i); or (2) with respect to a stay of an act against property under Subsection (c) if: (A) the insurer does not have equity in the property; and (B) the property is not necessary to an effective rehabilitation plan. (i) For purposes of Subsection (h), "cause" includes the receiver canceling a policy, surety bond, or surety undertaking if the creditor is entitled, by contract or by law, to require the insured or the principal to have a policy, surety bond, or surety undertaking and the insured or the principal fails to obtain a replacement policy, surety bond, or surety undertaking not later than the later of: (1) the 30th day after the date the receiver cancels the policy, surety bond, or surety undertaking; or (2) the time permitted by contract or law. (j) In any hearing under Subsection (h), the party seeking relief from the stay has the burden of proof on each issue, which must be established by clear and convincing evidence. (k) The estate of an insurer that is injured by any wilful violation of a stay provided by this section is entitled to actual damages, including costs and attorney's fees. In appropriate circumstances, the receivership court may impose additional sanctions. (l) Any guaranty association or its designated representative may intervene as a party as a matter of right or otherwise appear and participate in any court proceeding concerning a delinquency proceeding if the association is or may become liable to act as a result of the rehabilitation or liquidation of the insurer. Exercise by any guaranty association or its designated representative of the right to intervene conferred under this subsection does not constitute grounds to establish general personal jurisdiction by the courts of this state. The intervening guaranty association or its designated representative are subject to the receivership court's jurisdiction for the limited purpose for which it intervenes. (m) Notwithstanding any other provision of law, bond may not be required of the commissioner or receiver in relation to any stay or injunction under this section. Added by Acts 2005, 79th Leg., Ch. 995 (H.B. 2157 ), Sec. 1, eff. September 1, 2005. Redesignated from Insurance Code - Not Codified, Art/Sec 21A.008 by Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636 ), Sec. 3B.004(a)(1), eff. September 1, 2007. Amended by: Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636 ), Sec. 3B.004(d), eff. September 1, 2007. Redesignated from Insurance Code - Not Codified, Art/Sec 21A.008 by Acts 2007, 80th Leg., R.S., Ch. 921 (H.B. 3167 ), Sec. 9.004(a)(1), eff. September 1, 2007. Amended by: Acts 2007, 80th Leg., R.S., Ch. 921 (H.B. 3167 ), Sec. 9.004(d), eff. September 1, 2007.