CHAPTER 547. FALSE ADVERTISING BY UNAUTHORIZED INSURERS - Texas Statutes

INSURANCE CODE

TITLE 5. PROTECTION OF CONSUMER INTERESTS

SUBTITLE C. DECEPTIVE, UNFAIR, AND PROHIBITED PRACTICES

CHAPTER 547. FALSE ADVERTISING BY UNAUTHORIZED INSURERS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 547.001. DEFINITIONS. In this chapter:

(1) "Alien or foreign insurer" means an insurance company

organized under the laws of:

(A) a country other than the United States; or

(B) a state of the United States other than this state.

(2) "Resident" includes a domestic, alien, or foreign:

(A) corporation;

(B) partnership; or

(C) person.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 547.002. CONSTRUCTION OF CHAPTER. This chapter shall be

construed liberally.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

SUBCHAPTER B. PROHIBITION; ENFORCEMENT

Sec. 547.051. ACTS PROHIBITED. (a) This section applies only

to an insurer's misrepresentation of:

(1) the insurer's financial condition;

(2) the terms of an existing or future contract;

(3) the benefits or advantages promised by an existing or future

contract; or

(4) the dividends or share of surplus to be received on an

existing or future contract.

(b) An unauthorized alien or foreign insurer may not:

(1) make, issue, circulate, or cause to be made, issued, or

circulated to a resident of this state a misrepresentation in an

advertisement, estimate, illustration, circular, pamphlet, or

letter that violates Chapter 541; or

(2) cause to be made to a resident of this state in a newspaper,

magazine, or other publication, or over a radio or television

station, a misrepresentation in an announcement or statement that

violates Chapter 541.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 547.052. NOTICE OF VIOLATION TO INSURER'S DOMICILIARY

STATE. (a) In this section, the domiciliary state of an alien

insurer is the state of entry or the state of the insurer's

principal office in the United States.

(b) If the department has reason to believe that an insurer has

engaged in an act prohibited by Section 547.051, the department

shall notify, by registered mail, the insurer and the insurance

supervisory official of the insurer's domiciliary state.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 547.053. ENFORCEMENT ACTION. The department shall take

action under Chapter 541 against an insurer notified under

Section 547.052 if:

(1) after the 30th day following the date of notice, the insurer

has not stopped making, issuing, or circulating or causing to be

made, issued, or circulated in this state the false

misrepresentations; and

(2) the department has reason to believe that:

(A) the insurer is issuing or delivering insurance contracts to

residents of this state or is collecting premiums on those

contracts; and

(B) a department proceeding regarding the misrepresentations is

in the public interest.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.