1. (a) Except as provided by Subsection (b), the department or commissioner may not begin an action to impose a sanction, penalty, or fine, including an administrative penalty, against an insurer, agent, or other license holder who is subject to the jurisdiction of the department for conduct that is a violation of this code or another insurance law of this state after the earlier of:

   1. (1) the fifth anniversary of the date on which the conduct that is a violation occurred; or

   2. (2) the second anniversary of the earlier of:

      1. (A) the date on which the conduct that is a violation is first discovered by the department; or
      2. (B) the date on which the conduct that is a violation is made known to the department.

2. (b) The department or commissioner may not begin an action to impose a sanction, penalty, or fine, including an administrative penalty, against an insurer, agent, or other license holder who is subject to the jurisdiction of the department for conduct that is a violation of this code or another insurance law of this state and that involves fraud by the insurer, agent, or license holder after the fifth anniversary of the earlier of:

   1. (1) the date on which the conduct that is a violation is first discovered by the department; or
   2. (2) the date on which the conduct that is a violation is made known to the department.

3. (c) This section does not apply to conduct that is:

   1. (1) a violation that is ongoing at the time the department seeks to impose the sanction, penalty, or fine; or
   2. (2) a violation of Article 21.21-6 of this code, as added by Chapter 415, Acts of the 74th Legislature, Regular Session, 1995, or Section 4(7)(a), Article 21.21 of this code, as those provisions relate to discrimination on the basis of race or color, regardless of the time the conduct occurs.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 887, Sec. 1, eff. Sept. 1, 2001.