Tex.
Ins. Code Section 464.054
Use of Funds
(a)
An amount advanced under Section 464.053 (Advance of Funds) may be used to supplement the assets of an unauthorized insurer to pay administrative expenses and policy claims that are approved by:(1)
the commissioner in a proceeding under Section 443.051 (Receivership Court’s Seizure Order); or(2)
the receiver in a proceeding under Section 443.052 (Commencement of Formal Delinquency Proceeding).(b)
For the purposes of Section 443.301 (Priority of Distribution)(b), approved policy claims under this chapter shall be classified as Class 2 claims.(c)
The commissioner or receiver, as applicable, is not required to make distributions from the assets of the unauthorized insurer before using amounts advanced under Section 464.053 (Advance of Funds). Any payment of a policy claim made under Subsection (a) shall be treated as a distribution under Section 443.302 (Partial and Final Distributions of Assets). If approved policy claims cannot be paid in full from the funds advanced under Section 464.053 (Advance of Funds) and the assets of the unauthorized insurer available for distribution, the claims shall be paid on a pro rata basis in the manner described in Section 443.301 (Priority of Distribution).(d)
Amounts advanced that are not needed to pay administrative expenses or policy claims shall be returned to the fund account. On a final distribution under Section 443.302 (Partial and Final Distributions of Assets) or the termination of a delinquency proceeding, any funds of the unauthorized insurer remaining after the payment in full of administrative expenses and policy claims shall be used to repay the advance, up to the amount of the advance.(e)
A person who has a policy claim may receive funds deposited or advanced under this chapter only in accordance with this section.
Source:
Section 464.054 — Use of Funds, https://statutes.capitol.texas.gov/Docs/IN/htm/IN.464.htm#464.054 (accessed May 18, 2024).
