INSURANCE CODE
CHAPTER 84. ADMINISTRATIVE PENALTIES
SUBCHAPTER A. GENERAL PROVISIONS
§ 84.001. DEFINITION. In this chapter, "person" means
an individual, corporation, trust, partnership, association, or
any other legal entity.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
§ 84.002. APPLICATION OF CHAPTER TO ADMINISTRATIVE
PENALTY. (a) This chapter applies to each monetary penalty the
department or commissioner imposes under this code or another
insurance law of this state.
(b) For purposes of this chapter, each of the monetary
penalties is an administrative penalty.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
§ 84.003. APPLICATION OF ADMINISTRATIVE PROCEDURE
ACT. A proceeding under this chapter is subject to Chapter 2001,
Government Code.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
SUBCHAPTER B. IMPOSITION OF ADMINISTRATIVE PENALTY
§ 84.021. IMPOSITION OF PENALTY. The commissioner may
impose an administrative penalty on a person licensed or regulated
under this code or another insurance law of this state who violates:
(1) this code;
(2) another insurance law of this state; or
(3) a rule or order adopted under this code or another
insurance law of this state.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
§ 84.022. PENALTY AMOUNT. (a) The penalty for a
violation may not exceed $25,000, unless a greater or lesser
penalty is specified by this code or another insurance law of this
state.
(b) The amount of the penalty shall be based on:
(1) the seriousness of the violation, including:
(A) the nature, circumstances, extent, and
gravity of the violation; and
(B) the hazard or potential hazard created to the
health, safety, or economic welfare of the public;
(2) the economic harm to the public interest or public
confidence caused by the violation;
(3) the history of previous violations;
(4) the amount necessary to deter a future violation;
(5) efforts to correct the violation;
(6) whether the violation was intentional; and
(7) any other matter that justice may require.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
SUBCHAPTER C. PROCEDURAL REQUIREMENTS
§ 84.041. REPORT AND NOTICE OF VIOLATION AND
PENALTY. (a) If the department determines that a violation has
occurred, the department may issue to the commissioner a report
that states the facts on which the determination is based and the
department's recommendation on the imposition of an administrative
penalty, including a recommendation on the amount of the penalty.
(b) Not later than the 14th day after the date the report is
issued, the department shall give written notice of the report to
the affected person. The notice may be given by certified mail.
The notice must:
(1) include:
(A) a brief summary of the alleged violation;
and
(B) a statement of the amount of the recommended
penalty; and
(2) inform the person that the person has a right to a
hearing on the occurrence of the violation, the amount of the
penalty, or both the occurrence of the violation and the amount of
the penalty.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
§ 84.042. PENALTY TO BE PAID OR HEARING
REQUESTED. (a) Not later than the 20th day after the date the
person receives the notice, the person, in writing, may:
(1) accept the department's determination and
recommended administrative penalty; or
(2) request a hearing on the occurrence of the
violation, the amount of the penalty, or both the occurrence of the
violation and the amount of the penalty.
(b) If the person accepts the department's determination
and recommended penalty, the commissioner by order shall approve
the determination and require the person to pay the recommended
penalty.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
§ 84.043. HEARING AND DECISION. (a) If the person
requests a hearing or fails to respond in a timely manner to the
notice, the department shall set a hearing and give notice of the
hearing to the person.
(b) An administrative law judge of the State Office of
Administrative Hearings shall conduct the hearing.
(c) The administrative law judge shall make findings of fact
and conclusions of law and promptly issue to the commissioner a
proposal for a decision about the occurrence of the violation and
the amount of a proposed administrative penalty.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
§ 84.044. DECISION BY COMMISSIONER. (a) Based on the
findings of fact, conclusions of law, and proposal for decision,
the commissioner by order may:
(1) find that a violation occurred and impose an
administrative penalty; or
(2) find that a violation did not occur.
(b) The notice of the commissioner's order must include a
statement of the right of the person to judicial review of the
order.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
§ 84.045. OPTIONS FOLLOWING DECISION: PAY OR
APPEAL. Not later than the 30th day after the date the
commissioner's order becomes final, the person shall:
(1) pay the administrative penalty; or
(2) file a petition for judicial review contesting the
occurrence of the violation or the amount of the penalty, or both,
and either pay or not pay the penalty.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
§ 84.046. STAY OF ENFORCEMENT OF PENALTY. (a) A person
who files a petition for judicial review without paying the
administrative penalty may, within the 30-day period prescribed by
Section 84.045:
(1) stay enforcement of the penalty by:
(A) paying the penalty to the court for placement
in an escrow account; or
(B) giving the court a supersedeas bond approved
by the court that:
(i) is for the amount of the penalty; and
(ii) is effective until all judicial review
of the board's order is final; or
(2) request the court to stay enforcement of the
penalty by:
(A) filing with the court an affidavit stating
that the person is financially unable to pay the penalty and is
financially unable to give the supersedeas bond; and
(B) giving a copy of the affidavit to the
commissioner by certified mail.
(b) If the commissioner receives a copy of an affidavit
under Subsection (a)(2), the commissioner may file with the court,
not later than the fifth day after the date the copy is received, a
contest to the affidavit. The court shall hold a hearing on the
facts alleged in the affidavit as soon as practicable and shall stay
the enforcement of the penalty on finding that the alleged facts are
true. The person who files an affidavit has the burden of proving
that the person is financially unable to pay the penalty and to give
a supersedeas bond.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
§ 84.047. COLLECTION OF PENALTY. If the person does not
pay the administrative penalty and the enforcement of the penalty
is not stayed, the commissioner may refer the matter to the attorney
general for collection of the penalty.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
§ 84.048. STANDARD OF JUDICIAL REVIEW. The order of
the commissioner is subject to judicial review under the
substantial evidence rule.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
§ 84.049. DECISION BY COURT. (a) If the court sustains
the finding that a violation occurred, the court may uphold or
reduce the amount of the administrative penalty and order the
person to pay the full or reduced amount of the penalty.
(b) If the court does not sustain the finding that a
violation occurred, the court shall order that a penalty is not
owed.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
§ 84.050. REMITTANCE OF PENALTY AND INTEREST. (a) If
the person paid the administrative penalty and if the amount of the
penalty is reduced or the penalty is not upheld by the court, the
court shall order, when the judgment becomes final, that the
appropriate amount plus accrued interest be remitted to the person.
(b) The interest accrues at the rate charged on loans to
depository institutions by the New York Federal Reserve Bank.
(c) The interest shall be paid for the period beginning on
the date the penalty is paid and ending on the date the penalty is
remitted.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
§ 84.051. RELEASE OF BOND. (a) If the person gave a
supersedeas bond and if the administrative penalty is not upheld by
the court, the court shall order, when the judgment becomes final,
the release of the bond.
(b) If the person gave a supersedeas bond and if the amount
of the penalty is reduced, the court shall order the release of the
bond after the person pays the reduced amount.
Added by Acts 1999, 76th Leg., ch. 101, § 1, eff. Sept. 1, 1999.
