Certain provisions of the Texas Insurance Code that would pertain to domestic insurance companies do not apply to a foreign company conducting insurance business in Texas.
What is the Foreign Insurance Company Doin In the US?
The Foreign Insurance Company is not subject to the Texas Insurance Code. The code does not expressly provide for regulation of foreign insurers who transact business in Texas. However, the Texas Legislature has provided some general guidance regarding regulation of foreign insurers in other statutes. In particular, the Texas Insurance Code requires all insurance companies licensed to do business in Texas to file an annual statement with the Commissioner of Insurance. The purpose of this requirement is to allow the Commissioner to review the financial condition of licensed insurance companies and ensure they are meeting their obligations to policyholders in Texas.
In addition, the Texas Insurance Code requires all insurance companies doing business in Texas to maintain a certain level of capital and surplus. This requirement ensures that insurers have the financial resources necessary to pay claims and meet other obligations.
The Foreign Insurance Company is also required to appoint a statutory agent in Texas. The statutory agent is responsible for receiving and transmitting process on behalf of the company. The agent must be located in Texas and must have a physical address where process can be served.
Ultimately, the decision of whether or not to regulate foreign insurance companies doing business in Texas lies with the legislature. In recent years, there has been some discussion about whether or not to subject foreign insurers to greater regulation, but no action has been taken at this time.
Should That Matter?
There are a number of factors to consider when making the decision of whether or not to purchase insurance from a company conducting foreign insurance business in Texas. The most important factor is whether or not the company is subject to the Texas Insurance Code. If the company is not subject to the code, it means that the company is not required to follow certain regulations that are in place to protect consumers. This could put you at risk if you have a claim against the company. Additionally, you may not be able to file a complaint with the Texas Department of Insurance if you are unhappy with the service you receive from the company.
It is well-settled that the Texas Insurance Code does not apply to foreign insurers doing business in Texas. This article demonstrates that such a company would not be subject to the provisions of the Texas Insurance Code, including rate regulation and policy form approval requirements. The article also sets forth certain factors for a court to consider in determining whether a particular insurer is conducting “foreign insurance” business within the meaning of the laws discussed herein.