Texas § 463.302 DISTRIBUTIONS TO SHAREHOLDERS AND AFFILIATES.

Texas Statutes

§ 463.302 — DISTRIBUTIONS TO SHAREHOLDERS AND AFFILIATES.

Texas § 463.302

Code INInsurance Code

This text of Texas § 463.302 (DISTRIBUTIONS TO SHAREHOLDERS AND AFFILIATES.) is published on Counsel Stack Legal Research, covering Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Tex. Insurance Code Code Ann. § 463.302 (2026).

Text

Sec. 463.302. DISTRIBUTIONS TO SHAREHOLDERS AND AFFILIATES.

(a)An impaired or insolvent insurer may not make a distribution to shareholders until the association has recovered the total amount of valid claims for money spent in carrying out the association's powers and performing the association's duties under Section 463.101 , 463.103 , 463.109 , or 463.111 (c) or Subchapter F with respect to that insurer, plus interest on that amount.

(b)Except as otherwise provided by this section, a receiver appointed under an order of receivership for an insurer domiciled in this state may recover on behalf of the insurer from an affiliate that controlled the insurer the amount of any distribution, other than a stock dividend the insurer paid on the insurer's capital stock, made during the five year

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Sec. 463.302. DISTRIBUTIONS TO SHAREHOLDERS AND AFFILIATES. (a) An impaired or insolvent insurer may not make a distribution to shareholders until the association has recovered the total amount of valid claims for money spent in carrying out the association's powers and performing the association's duties under Section 463.101 , 463.103 , 463.109 , or 463.111 (c) or Subchapter F with respect to that insurer, plus interest on that amount.
(b) Except as otherwise provided by this section, a receiver appointed under an order of receivership for an insurer domiciled in this state may recover on behalf of the insurer from an affiliate that controlled the insurer the amount of any distribution, other than a stock dividend the insurer paid on the insurer's capital stock, made during the five years preceding the date of the petition for liquidation or rehabilitation.
(c) A person who was an affiliate that controlled the insurer when a distribution described by Subsection (b) was paid is liable for the amount of the distribution received. A person who was an affiliate that controlled the insurer when the distribution was declared is liable for the amount of the distribution the affiliate would have received if the distribution had been paid immediately. Two or more persons liable for the same distribution are jointly and severally liable. If a person liable under this subsection is insolvent, all of the affiliates that controlled the insolvent person when the distribution was paid are jointly and severally liable for any resulting deficiency in the amount recovered from the insolvent person.
(d) The maximum amount recoverable under Subsections (b) and (c) is the amount needed in excess of all other available assets of the impaired or insolvent insurer to pay the insurer's contractual obligations.
(e) The receiver may not recover a distribution to shareholders under Subsection (b) if the insurer shows that, at the time the distribution was paid, the distribution was lawful and reasonable and that the insurer did not know and could not reasonably have known that the distribution might adversely affect the ability of the insurer to fulfill the insurer's contractual obligations.

Legislative History

Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017 ), Sec. 1, eff. April 1, 2007. Amended by: Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636 ), Sec. 3B.019(a), eff. September 1, 2007. Acts 2007, 80th Leg., R.S., Ch. 921 (H.B. 3167 ), Sec. 9.019(a), eff. September 1, 2007.