(-d-) have no impermissible conflict of interest before
representation is undertaken, in accordance with the Texas Disciplinary Rules
of Professional Conduct adopted by the Texas Supreme Court and the Comments
prepared by the Model Rules Committee of the State Bar of Texas and amended
by Supreme Court Order (Government Code, Title 2, Subtitle G, Appendix A,
Article 10, §9) and ethics opinions issued by the Professional Ethics
Committee of the Supreme Court of Texas; and
(-e-) have never been suspended or disbarred from the
practice of law or convicted of a felony.
(II) The board of directors of the association may adopt additional
qualifying criteria for legal counsel representing the association in matters
specified in this subparagraph by amending this plan of operation.
(iii) Conflict of Interest.
(I) In representing the association pursuant to this subparagraph,
legal counsel shall be governed by the conflict-of-interest and the-appearance-of-conflict-of-interest
rules under the Texas Disciplinary Rules of Professional Conduct and the official
Comments to these rules and ethics opinions issued by the Professional Ethics
Committee of the Supreme Court of Texas.
(II) A decision relating to a conflict of interest or appearance
of a conflict of interest on the part of legal counsel under this subparagraph
shall be based on the Texas Disciplinary Rules of Professional Conduct and
the official Comments to these rules and ethics opinions issued by the Professional
Ethics Committee of the Supreme Court of Texas. No other laws or rules shall
apply in determining the existence of conflict of interest or the appearance
of conflict of interest under this plan of operation.
(III) Procedures for Handling Conflict of Interest Issues Raised
by Legal Counsel.
(-a-) If legal counsel has reason to believe that legal counsel's
representation of the association pursuant to this paragraph may result in
a conflict of interest or the appearance of a conflict of interest, legal
counsel shall immediately report, either verbally or in writing, such fact
and the surrounding circumstances, including full disclosure of the existence,
nature, implications, and possible adverse consequences of the common representation
and any advantages involved, to the chair of the board and the general manager
and either:
(-1-) withdraw from such representation; or
(-2-) if the legal counsel believes that there will be no materially
adverse effect upon the association by such representation, request the approval
of the association board of directors for legal counsel to engage in such
representation.
(-b-) After review of all disclosed facts relating
to the potential conflict of interest or appearance of conflict of interest,
if the board of directors approve legal counsel's request to continue representation
in the matter reported and the legal counsel also believes that there will
be no materially adverse effect upon the association by such representation,
the legal counsel may continue such representation.
(-c-) The chair of the board and the general manager shall
prepare the written decision of the board of directors as to continued representation
or denial of continued representation in such matter together with the reasons
for that decision and file the written decision with the association's official
records and forward a copy of the decision to legal counsel.
(IV) Procedures for Handling Conflict of Interest Issues Raised
by Persons Other than Legal Counsel.
(-a-) If a member of the association's board, the chair of
the board, or the general manager believe that representation by legal counsel
in any matter pursuant to this subparagraph may result in a conflict of interest
or the appearance of a conflict of interest, such person shall report the
perceived conflict of interest or appearance of a conflict of interest to
the chair of the board.
(-b-) The chair of the board shall contact legal counsel
and request a meeting or a telephone conference with the board of directors
and legal counsel to discuss such perceived conflict.
(-c-) During such meeting or teleconference the board
of directors shall determine, in accordance with the Texas Disciplinary Rules
of Professional Conduct and the official Comments to these rules and ethics
opinions issued by the Professional Ethics Committee of the Supreme Court
of Texas, whether a conflict of interest or the appearance of a conflict of
interest exists and following such meeting or teleconference, the board of
directors shall adopt and issue a written decision.
(-1-) If the board of directors determine that no conflict
of interest or appearance of conflict of interest exists, the written decision
shall state the reasons for such decision and that the legal counsel may continue
to represent the association in the particular matter.
(-2-) If the board of directors determine that a conflict
of interest exists, the written decision shall state the reasons for such
decision and state either that the legal counsel may not represent the association
in the matter or that the board of directors consent to the representation
by legal counsel and that legal counsel may represent the association in the
matter so long as the legal counsel also believes that there will be no materially
adverse effect upon the association by such representation.
(-d-) A written decision prepared under this subdivision
shall be included in the official records of the association and a copy of
the decision shall be forwarded to the legal counsel.
(iv) Review and Termination. The association's executive committee,
together with the general manager of the association, shall review annually
with the legal counsel the performance of such legal counsel and report their
findings to the board of directors in executive session. Representation of
the association by legal counsel may be terminated at any time by the board
of directors.
(C) Legal Representation in Any Dispute Involving a Policyholder
Claim Against the Association.
(i) Selection. The general manager of the association shall
select, in accordance with this plan of operation, legal counsel to represent
the association in handling disputes involving policyholder claims against
the association. Selection of legal counsel to represent the association in
such disputes shall be made on a case-by-case basis.
(ii) Qualifications.
(I) To be engaged to provide such legal representation, an
attorney must:
(-a-) be licensed to practice law in Texas for at least five
years;
(-b-) maintain professional liability insurance with an
insurer authorized to do business in Texas in an amount of not less than $1
million;
(-c-) be experienced in the defense of claims against
insurers;
(-d-) have no impermissible conflict of interest before
representation is undertaken, in accordance with the Texas Disciplinary Rules
of Professional Conduct adopted by the Texas Supreme Court and the Comments
prepared by the Model Rules Committee of the State Bar of Texas and amended
by Supreme Court Order (Government Code, Title 2, Subtitle G, Appendix A,
Article 10, §9) and ethics opinions issued by the Professional Ethics
Committee of the Supreme Court of Texas; and
(-e-) have never been suspended or disbarred from the
practice of law or convicted of a felony.
(II) The board of directors of the association may adopt additional
qualifying criteria for legal counsel representing the association in matters
involving policyholder claims against the association by amending this plan
of operation.
(iii) Conflict of Interest.
(I) In representing the association pursuant to this subparagraph,
legal counsel shall be governed by the conflict-of-interest and the-appearance-of-conflict-of-interest
rules under the Texas Disciplinary Rules of Professional Conduct and the
official Comments to these rules and ethics opinions issued by the Professional
Ethics Committee of the Supreme Court of Texas.
(II) A decision relating to a conflict of interest or appearance
of a conflict of interest on the part of legal counsel under this subparagraph
shall be based on the Texas Disciplinary Rules of Professional Conduct and
the official Comments to these rules and ethics opinions issued by the Professional
Ethics Committee of the Supreme Court of Texas. No other laws or rules shall
apply in determining the existence of conflict of interest or the appearance
of conflict of interest under this plan of operation.
(III) In determining whether legal counsel has a conflict of
interest, as defined in the Texas Disciplinary Rules of Professional Conduct
and the official Comments to these rules and ethics opinions issued by the
Professional Ethics Committee of the Supreme Court of Texas, the general manager
shall require the legal counsel to submit to the general manager in writing
evidence that a thorough conflicts check has been conducted to assure that
no conflict of interest exists. Such Cont'd... |