IN THIS SECTION
Cap: The statutory maximum amount payable by the guaranty association on an individual covered claim. The cap is $300,000 or the limits of the policy, whichever is less, for claims arising out of receiverships instituted on or after September 1, 1997. There is no cap on worker's compensation claims. [§462.213]
Claimant: A liability claimant or insured who is a resident of this state at the time of the insured event.[§462.201]
Conservation/Supervision: Administrative remedies employed by the Texas Department of Insurance with respect to financially troubled insurance companies. Each action has timetables and requirements of Departmental approval for specific activities of companies placed under such proceedings. [Chap. 441]
Covered Claim: Generally, an unpaid claim of an insured or liability claimant that
arises out of and is within the coverage of an insurance policy issued or assumed
by an insurer authorized to do business in Texas, if that insurer becomes impaired
and the claimant or insured is a resident of Texas at the time of the insured event
or the claim is a first-
Delinquency Proceeding: A proceeding commenced in court against an insurer for the purpose of liquidating, rehabilitating, reorganizing or conserving such insurer. [§443.004]
Distribution of Assets: Claims against the assets of a receivership estate are paid in a certain order of priority pursuant to the liquidation statute's "Priority of Distribution of Assets." Class 1 includes claims for the administrative expenses of the receiver and guaranty associations. Class 2 includes claims by policyholders and liability claimants for amounts not covered by the guaranty association, as well as claims by guaranty associations for reimbursement of covered claims payments. [§443.301]
Domiciliary Receivership: A receivership proceeding instituted in the state where the impaired insurer was originally incorporated.
Early Access: A court-
Exceptions to TPCIGA Coverage:
Types of Insurance Not Covered [§462.007]
Types of Claims Not Covered [§462.202 et seq.]
General Creditor Claims: Claims which are lesser priority in receivership distributions than policyholder level claims.[§443.301]
Guaranty Act: Refers to Texas Insurance Code chapter 462.
Impaired Insurer: A member insurer that is placed in receivership or liquidation under a court order based on a finding of insolvency and designated by the Commissioner as an "impaired" insurer. [§462.004]
Line Account/Line of Business: The types of property and casualty coverage for which TPCIGA makes assessments: Auto, Other Lines and Workers Compensation. [§462.105]
Rehabilitation and Liquidation Oversight: Division within the Texas Department of Insurance responsible for managing special deputy receivers and overseeing the insolvency process.
Liquidator: May also be referred to as "receiver." The term includes the commissioner of insurance and/or the commissioner's designee to act as special deputy receiver. [§443.004]
Member Insurer: An insurer that writes any kind of business to which chap. 462 applies and holds a certificate of authority to engage in the business of insurance in Texas. [§462.004]
Net Worth Exclusion: Provision in the Guaranty Act that excludes from coverage any claim, other than a worker's compensation claim, arising from an insurance policy of an insured whose aggregate net worth exceeds $50 million. [§462.212] The Association may also recover the amount of any worker's compensation claim paid on behalf of such insureds. [§462.308(a) (2)]
Over the Cap Claims: Claims for amounts in excess of the guaranty association's cap but within the limits of the insurance policy issued by the impaired insurer.
Plan of Operation: A document created by the guaranty association providing for the fair, reasonable and equitable administration of the association. [§462.103]
Premium Tax Offset: In Texas, assessments paid by member insurers can be allowed as an offset to the insurers' future insurance premium taxes at a rate of 10% for 10 years. [§462.157] Some guaranty associations utilize other methods of recoupment, including policy surcharges and incorporation of recoupment into premium rate filings.
Proof of Claim (POC): A written statement of claim against the assets of the receivership estate filed with the receiver on a form approved by the receivership court as a necessary prerequisite to share in the distribution of estate assets. [§443.252]
Receivership Court: The court in which the delinquency proceeding is pending. Texas insurance receivership proceedings are filed in the district court of Travis County, which maintains control over the receivership process. [§ 443.051]
SDR: Special Deputy Receiver -
Special Master: A person appointed by the receivership court to provide additional oversight and recommendations to the court regarding Texas insurance receivership proceedings. Many legal matters entrusted to the receivership court are referred to the Special Master for hearing and recommendations. The Special Master holds quarterly status conferences related to receiverships which normally include Insurance Department representatives, Special Deputy Receivers, guaranty associations and other interested parties.
TDI: Texas Department of Insurance
Trigger: Event which causes a guaranty association to become responsible for payment of covered claims. An impairment order signed by the Commissioner is the trigger in Texas. Many other guaranty associations are triggered by a final order of liquidation of an insurer that contains a finding of insolvency.
Glossary of Terms
Ancillary Receivership: A receivership proceeding in a state other than the state in which the insurer is legally domiciled. Also see "Domiciliary Receivership."
Assessments: Sums of money paid periodically to the guaranty association by solvent member insurers to provide funds to pay claims of impaired insurers. [Statutory reference Tex.Ins.Code §462.151, et seq.]
Bar Date: Deadline for presenting a claim to the guaranty association [§462.211] or filing a Proof of Claim with the statutory receiver. [§ 443.251]
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