Texas Insurance Code

§ 427.052 — SUBORDINATED LIABILITY PERMITTED

IN § 427.052Title 4. REGULATION OF SOLVENCY · Part B. RESERVES AND INVESTMENTS · Ch. 427. SUBORDINATED INDEBTEDNESS · Art. B. LOAN, ADVANCE, AND OTHER INDEBTEDNESS

Statute text

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(a)An insurer or health maintenance organization may assume a subordinated liability for repayment of a loan or advance described by Section 427.051 and payment of interest on the loan or advance if the insurer or health maintenance organization and the creditor execute a written agreement stating that the creditor may be paid only out of that portion of the insurer's or health maintenance organization's surplus that exceeds the greater of:

(1)a minimum surplus amount set in the agreement; or

(2)a minimum surplus amount of $500,000.

(b)The department or commissioner may not require the agreement to provide a minimum surplus amount that is different from the amount described by this section.

Legislative history

Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.