reglab/statecodes huggingface dataset:
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 885 - Fraternal Benefit Societies › Subchapter I. Regulation of Fraternal Benefit Societies › Section 885.411. Examination of Foreign Fraternal Benefit Societies

Sec. 885.411.  EXAMINATION OF FOREIGN FRATERNAL BENEFIT SOCIETIES.  (a)  The commissioner or a person appointed by the commissioner may examine a foreign fraternal benefit society transacting or applying for admission to engage in business in this state.  The commissioner may employ assistants for this purpose.
(b)  The commissioner or a person appointed by the commissioner to examine a foreign fraternal benefit society:
(1)  is entitled to free access to all books, papers, and documents that relate to the business of the society;  and
(2)  may summon, qualify as witnesses under oath, and examine the society's officers, agents, and employees and other persons in relation to the affairs, transactions, and conditions of the society.
(c)  Instead of an examination under this section, the commissioner may accept the examination of the insurance department of the state, territory, district, province, or country in which a foreign fraternal benefit society is organized.
(d)  If a foreign fraternal benefit society or the society's officers refuse to permit an examination under this section or to comply with the provisions of law relating to an examination, the commissioner shall suspend the society's authority to write new business in this state or refuse the society's application for a certificate of authority.  A suspension or refusal under this subsection continues until the commissioner receives satisfactory evidence relating to the condition and affairs of the society.  A foreign fraternal benefit society may not write any new business in this state during a suspension under this subsection.
(e)  A foreign fraternal benefit society is subject to the provisions of Subchapter A, Chapter 86, and Sections 401.051, 401.052, 401.054-401.062, 401.151, 401.152, 401.155, and 401.156 that apply to an insurer that is not organized under the laws of this state but is authorized to engage in business in this state.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636), Sec. 2E.098, eff. April 1, 2009.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 885 - Fraternal Benefit Societies › Subchapter I. Regulation of Fraternal Benefit Societies › Section 885.412. Adverse Publication Prohibited

Sec. 885.412.  ADVERSE PUBLICATION PROHIBITED.  (a)  Pending, during, or after an examination or investigation of a fraternal benefit society, the commissioner may not make public a financial statement, report, or finding, or permit a financial statement, report, or finding affecting the status, standing, or rights of the society to become public, until:
(1)  the commissioner serves a copy of the statement, report, or finding on the society at its home office;  and
(2)  the society has been provided a reasonable opportunity to:
(A)  answer the statement, report, or finding;  and
(B)  make a showing in connection with the statement, report, or finding as the society desires.
(b)  This section does not apply to a proceeding involving a fraternal benefit society instituted by the commissioner or the state, including an administrative hearing, a proceeding under Chapter 441 or 443, or a court proceeding.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636), Sec. 2E.099, eff. April 1, 2009.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 885 - Fraternal Benefit Societies › Subchapter I. Regulation of Fraternal Benefit Societies › Section 885.413. Fees

Sec. 885.413.  FEES.  The department shall deposit fees collected under this chapter to the credit of the Texas Department of Insurance operating account. Sections 201.001 and 201.002 apply to fees collected under this chapter.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636), Sec. 2E.100, eff. April 1, 2009.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 885 - Fraternal Benefit Societies › Subchapter I. Regulation of Fraternal Benefit Societies › Section 885.414. Remedies Not Exclusive

Sec. 885.414.  REMEDIES NOT EXCLUSIVE.  (a)  This chapter does not prevent or limit any action by or remedy available to the department or the state under Chapter 441 or 443 or other applicable law.
(b)  In addition to any other provision of law relating to disciplinary action regarding a fraternal benefit society, Chapter 82 applies to a fraternal benefit society.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636), Sec. 2E.101, eff. April 1, 2009.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 885 - Fraternal Benefit Societies › Subchapter J. Conversion of Fraternal Benefit Society › Section 885.451. Conversion of Fraternal Benefit Society to Mutual or Stock Company

Sec. 885.451.  CONVERSION OF FRATERNAL BENEFIT SOCIETY TO MUTUAL OR STOCK COMPANY.  (a)  Subject to Subsection (b), a fraternal benefit society engaging in business in this state may convert to a mutual life insurance company or incorporated stock company by complying with this subchapter.
(b)  A fraternal benefit society may not convert to a mutual life insurance company or incorporated stock company except on terms that, in the commissioner's opinion, will fully protect the rights and interests of the society's members and holders of benefit certificates.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 885 - Fraternal Benefit Societies › Subchapter J. Conversion of Fraternal Benefit Society › Section 885.452. Meeting of Lodge Representatives; Notice

Sec. 885.452.  MEETING OF LODGE REPRESENTATIVES;  NOTICE.  (a)  The governing body of a fraternal benefit society that proposes converting to a mutual life insurance company or incorporated stock company shall call a meeting of lodge representatives.  The meeting may not be held before the 90th day after the date the meeting is called.
(b)  Not later than the 40th day before the date of the meeting, the fraternal benefit society shall mail to each society member or holder of a benefit certificate, at the member's or holder's mailing address as shown by the society's records, and to each lodge:
(1)  notice of the meeting;  and
(2)  a general plan of the proposed conversion.
(c)  Not later than the 20th day after the date of receipt of the notice, each lodge shall meet in a regular or called session to act on the proposal and choose a representative to the governing body for the state, if the society operates in more than one state.
(d)  The lodge representatives chosen under Subsection (c) shall meet and choose the requisite number of representatives to which the state is entitled to the supreme or grand lodge, if that body is located in this state.
(e)  A fraternal benefit society shall submit the plan of the proposed conversion to the commissioner, and the commissioner must approve the plan, before the society may submit the plan to the society's members, holders of benefit certificates, and lodges.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 885 - Fraternal Benefit Societies › Subchapter J. Conversion of Fraternal Benefit Society › Section 885.453. Resolution to Convert; Additional Requirements

Sec. 885.453.  RESOLUTION TO CONVERT;  ADDITIONAL REQUIREMENTS.  (a)  As provided by the notice under Section 885.452 and after convening the supreme governing body of the fraternal benefit society, the lodge representatives shall vote on whether to adopt a resolution authorizing the conversion of the society to a mutual life insurance company or incorporated stock company.  To take effect, the resolution must be approved by lodge representatives of lodges that constitute at least 60 percent of the total membership of the fraternal benefit society.
(b)  The resolution authorizing the conversion must:
(1)  set out or ratify a certificate of incorporation amending the fraternal benefit society's charter;  and
(2)  state:
(A)  the society's name;
(B)  the name of the new company by which the society will be known;
(C)  the object of the company;
(D)  the location of the company's principal office;
(E)  the names of the principal officers of the company, who serve until their successors are elected and qualified;  and
(F)  the period, if any, of the duration of the company.
(c)  If the fraternal benefit society is converting to a mutual life insurance company:
(1)  the resolution authorizing the conversion must also state the amount of the unencumbered surplus;
(2)  the amount and form of the unencumbered surplus must comply with Sections 882.055, 882.301(a), 882.302, 882.304, and 882.404;  and
(3)  the conversion must comply with Sections 882.056(a) and (b), 882.057, 882.058, 882.059, and 882.101.
(d)  If the fraternal benefit society is converting to an incorporated stock company:
(1)  the resolution authorizing the conversion must also state:
(A)  the amount of the surplus, the amount of capital stock authorized, and the number of shares into which the capital stock is divided;  and
(B)  the amount of capital stock to be immediately paid in;
(2)  the amounts and form of the surplus and capital must comply with Sections 841.054, 841.055, 841.056, 841.057, 841.204, 841.205, 841.301, and 841.302;  and
(3)  the conversion must comply with Sections 841.058, 841.059(a)(1), 841. 060, 841.061, 841.062, and 841.063.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 885 - Fraternal Benefit Societies › Subchapter J. Conversion of Fraternal Benefit Society › Section 885.454. Conversion Documents

Sec. 885.454.  CONVERSION DOCUMENTS.  (a)  A fraternal benefit society that converts to a mutual life insurance company or incorporated stock company shall file with the department:
(1)  the certificate of incorporation as adopted or amended;  and
(2)  a report of the meeting of lodge representatives, certified by the presiding officers under the corporate seal of the fraternal benefit society.
(b)  The certificate of incorporation must be incorporated in the charter of the proposed company.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 885 - Fraternal Benefit Societies › Subchapter J. Conversion of Fraternal Benefit Society › Section 885.455. Sale of Stock of Converted Fraternal Benefit Society

Sec. 885.455.  SALE OF STOCK OF CONVERTED FRATERNAL BENEFIT SOCIETY.  (a)  If a fraternal benefit society converts to an incorporated stock company, each holder of a benefit certificate or other member of the society has a preference right to subscribe for the proportion of the total capital stock offered for sale that the amount of the member's insurance bears to the society's total insurance in force at the time the society's supreme governing body authorizes the conversion.  The right provided by this subsection expires on the 90th day after the date the society's supreme governing body authorizes the conversion.
(b)  Before an incorporated stock company that is converted from a fraternal benefit society may offer any stock for public sale, the society's membership has a preference right to purchase the stock.  A member may not subscribe for or purchase more than:
(1)  25 percent of the capital stock of the new company;  or
(2)  10 percent of the capital stock of the new company, if there are other members applying in writing to purchase stock whose subscriptions are not filled.
(c)  If the membership of a converted fraternal benefit society has not subscribed for the total capital stock authorized, the new company may permit others who were not society members at the time of the conversion to subscribe for stock and hold equal rights in the ownership of the stock.
(d)  Not later than the 10th day after the date a fraternal benefit society approves a resolution authorizing the society to convert to an incorporated stock company, the society shall notify each holder of a benefit certificate or other member of:
(1)  the member's right to subscribe for and purchase the stock of the incorporated stock company;
(2)  the amount of stock for which the member is entitled to subscribe;  and
(3)  all other terms of the subscription and purchase.
(e)  The notice required under Subsection (d) must be in a form approved by the department.  Proof of depositing a letter addressed to each holder of a benefit certificate or other member providing the notice in the approved form is considered proof of compliance with the requirements of Subsection (d) and this subsection.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 885 - Fraternal Benefit Societies › Subchapter J. Conversion of Fraternal Benefit Society › Section 885.456. Legal Effect of Conversion to Mutual Life Insurance Company

Sec. 885.456.  LEGAL EFFECT OF CONVERSION TO MUTUAL LIFE INSURANCE COMPANY.  A fraternal benefit society that converts to a mutual life insurance company is subject to Chapter 882.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 885 - Fraternal Benefit Societies › Subchapter J. Conversion of Fraternal Benefit Society › Section 885.457. Completion and Legal Effect of Conversion to Stock Company

Sec. 885.457.  COMPLETION AND LEGAL EFFECT OF CONVERSION TO STOCK COMPANY.  (a)  The conversion of a fraternal benefit society to an incorporated stock company is complete when the society has:
(1)  complied with this subchapter and other state law regulating the incorporation of a life insurance company;  and
(2)  received from the commissioner its charter or certificate of authority to transact business as an incorporated stock company.
(b)  A fraternal benefit society that converts to an incorporated stock company:
(1)  is considered by law to have each right, privilege, power, or authority of any other stock corporation organized for engaging in the business of life insurance in this state;
(2)  is subject to laws applicable to a stock corporation organized under Chapter 841 for engaging in the business of life insurance in this state;
(3)  is considered by law to be a continuation of the business of the fraternal benefit society on the formation of the new company or amendment of its former charter;  and
(4)  succeeds to and is invested with each right, privilege, or franchise and all property of the former society, including debts due on any account and all choses in action.
(c)  On conversion of a fraternal benefit society to an incorporated stock company, the title to any real estate by deed or otherwise vested in the society vests in the company, and the title is not in any way impaired because of the conversion.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 885 - Fraternal Benefit Societies › Subchapter J. Conversion of Fraternal Benefit Society › Section 885.458. Continuing Obligations of Converted Fraternal Benefit Society

Sec. 885.458.  CONTINUING OBLIGATIONS OF CONVERTED FRATERNAL BENEFIT SOCIETY.  (a)  The rights of each member, holder of a benefit certificate, or creditor and the standing of each claim against a fraternal benefit society that converts under this subchapter must be preserved unimpaired under the new corporation.
(b)  Each debt, liability, and duty of a converted fraternal benefit society attaches to the new corporation and may be enforced against it to the same extent as if the debt or liability had been incurred or contracted by the new corporation.
(c)  Each outstanding benefit certificate issued by a converted fraternal benefit society is a valid obligation of the new corporation without the issuance of a new certificate.
(d)  A new corporation formed from a converted fraternal benefit society is obligated to perform each obligation owing by the society to a holder of a benefit certificate issued by the society.  The holder may enforce a benefit certificate against the new corporation to the same extent as if the certificate had been issued by the new corporation after conversion.
(e)  A pending suit in which a converted fraternal benefit society was a party is not affected by the conversion and may be prosecuted by or against the new corporation as if the conversion had not taken place.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 885 - Fraternal Benefit Societies › Subchapter J. Conversion of Fraternal Benefit Society › Section 885.459. Name of Converted Fraternal Benefit Society

Sec. 885.459.  NAME OF CONVERTED FRATERNAL BENEFIT SOCIETY.  The name of a mutual life insurance company or incorporated stock company to which a fraternal benefit society converts:
(1)  must, if possible, be a continuation of the society's name;  and
(2)  may not, if the new company's name is changed from the society's name, be:
(A)  the same as that of any other company engaging in business in this state;  or
(B)  a name similar to that of any other company engaging in business in this state.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 885 - Fraternal Benefit Societies › Subchapter J. Conversion of Fraternal Benefit Society › Section 885.460. Principal Office of Converted Fraternal Benefit Society

Sec. 885.460.  PRINCIPAL OFFICE OF CONVERTED FRATERNAL BENEFIT SOCIETY.  The principal office of a mutual life insurance company or incorporated stock company created by the conversion of a fraternal benefit society under this subchapter must be located in this state.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 885 - Fraternal Benefit Societies › Subchapter J. Conversion of Fraternal Benefit Society › Section 885.461. Social or Charitable Clubs Formed by Members of Converted Fraternal Benefit Society

Sec. 885.461.  SOCIAL OR CHARITABLE CLUBS FORMED BY MEMBERS OF CONVERTED FRATERNAL BENEFIT SOCIETY.  The members of a converted fraternal benefit society or the policyholders in the new corporation may form local clubs for social and charitable purposes.  A club formed under this section:
(1)  may not be connected with the management of the corporation;  and
(2)  does not affect the corporation's liability or the insurance in effect.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 885 - Fraternal Benefit Societies › Subchapter K. Termination of Fraternal Benefit Society › Section 885.501. Discontinuation of Business by Domestic Fraternal Benefit Society

Sec. 885.501.  DISCONTINUATION OF BUSINESS BY DOMESTIC FRATERNAL BENEFIT SOCIETY.  A domestic fraternal benefit society's certificate of authority becomes void if the society:
(1)  discontinues business for a period of one year;  or
(2)  has fewer than 400 members holding benefit certificates.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 885 - Fraternal Benefit Societies › Subchapter K. Termination of Fraternal Benefit Society › Section 885.502. Initiation of Proceedings for Termination of Domestic Fraternal Benefit Society

Sec. 885.502.  INITIATION OF PROCEEDINGS FOR TERMINATION OF DOMESTIC FRATERNAL BENEFIT SOCIETY.  (a)  The commissioner may advise the attorney general of the commissioner's determination if:
(1)  after examining a domestic fraternal benefit society, the commissioner determines that the society:
(A)  has failed to comply with any provision of this chapter;
(B)  is exceeding its powers;
(C)  is not fulfilling its contracts in good faith;  or
(D)  is engaging in business fraudulently;  or
(2)  the commissioner determines that a domestic fraternal benefit society:
(A)  has, after its first year of existence, had fewer than 400 members;  or
(B)  has discontinued business.
(b)  The attorney general shall bring an action in quo warranto against the fraternal benefit society if the attorney general determines that circumstances warrant the action.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 885 - Fraternal Benefit Societies › Subchapter K. Termination of Fraternal Benefit Society › Section 885.503. Issuance of Injunction and Appointment of Receiver

Sec. 885.503.  ISSUANCE OF INJUNCTION AND APPOINTMENT OF RECEIVER.  (a)  If it appears on the trial of an action brought under Section 885.502(b) that the fraternal benefit society should be closed, the court shall:
(1)  enjoin the society from engaging in further business;  and
(2)  appoint a receiver for the society.
(b)  A receiver appointed under Subsection (a)(2) shall:
(1)  immediately take possession of the books, papers, money, and other assets of the fraternal benefit society;  and
(2)  promptly, under the court's direction, proceed to close the society's affairs and distribute its funds to the persons entitled to those funds.
(c)  A court in this state may not hear an application for an injunction against or proceedings for the dissolution of or the appointment of a receiver for a domestic fraternal benefit society or lodge unless the attorney general makes the application or brings the proceedings.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 885 - Fraternal Benefit Societies › Subchapter O. Criminal Penalties › Section 885.701. False Statements; Criminal Penalty

Sec. 885.701.  FALSE STATEMENTS;  CRIMINAL PENALTY.  (a)  A person commits an offense if the person wilfully makes a false or fraudulent statement or representation:
(1)  in or with reference to an application for membership in a fraternal benefit society authorized to engage in business in this state;  or
(2)  for the purpose of obtaining money from or benefits in a fraternal benefit society transacting business under this chapter.
(b)  An offense under this section is a misdemeanor punishable by:
(1)  a fine of not less than $100 or more than $500;
(2)  confinement in jail for not less than 30 days or more than one year;  or
(3)  both the fine and confinement.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 885 - Fraternal Benefit Societies › Subchapter O. Criminal Penalties › Section 885.702. Soliciting Membership in Unauthorized Fraternal Benefit Society; Criminal Penalty

Sec. 885.702.  SOLICITING MEMBERSHIP IN UNAUTHORIZED FRATERNAL BENEFIT SOCIETY;  CRIMINAL PENALTY.  (a)  A person commits an offense if the person solicits membership for or in any manner assists in procuring membership in a fraternal benefit society that is not authorized to transact business in this state.
(b)  An offense under this section is a misdemeanor punishable by a fine of not less than $50 or more than $200.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 885 - Fraternal Benefit Societies › Subchapter O. Criminal Penalties › Section 885.703. Soliciting Membership in Lodge of Unauthorized Fraternal Benefit Society; Criminal Penalty

Sec. 885.703.  SOLICITING MEMBERSHIP IN LODGE OF UNAUTHORIZED FRATERNAL BENEFIT SOCIETY;  CRIMINAL PENALTY.  (a)  A person commits an offense if the person solicits for or organizes a lodge of a fraternal benefit society without first obtaining from the commissioner a certificate of authority that entitles the society to engage in business in this state.
(b)  An offense under this section is a misdemeanor punishable by:
(1)  a fine of not less than $100 or more than $250;
(2)  confinement in jail for not less than three months or more than six months;  or
(3)  both a fine and confinement.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 885 - Fraternal Benefit Societies › Subchapter O. Criminal Penalties › Section 885.704. Exception to Solicitation Offenses

Sec. 885.704.  EXCEPTION TO SOLICITATION OFFENSES.  Sections 885.702 and 885.703 do not:
(1)  prohibit a member of an existing lodge from soliciting a person to become a member of the lodge;  or
(2)  apply to a member of a lodge who participates in, directs, or conducts the organization or establishment of a lodge within the limits of the county in which the person resides or of the person's lodge district.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 885 - Fraternal Benefit Societies › Subchapter O. Criminal Penalties › Section 885.705. General Criminal Penalty

Sec. 885.705.  GENERAL CRIMINAL PENALTY.  (a)  An officer, agent, or employee of a domestic fraternal benefit society commits an offense if the person neglects, refuses to comply with, or violates any provision of the laws of this state governing domestic fraternal benefit societies.
(b)  An offense under this section is a misdemeanor punishable by a fine not to exceed $200.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 885 - Fraternal Benefit Societies › Subchapter O. Criminal Penalties › Section 885.706. Other Penalties

Sec. 885.706.  OTHER PENALTIES.  Notwithstanding Section 885.705, if another section of this chapter provides a penalty for a violation of the section, the penalty provided in the other section prevails.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 886 - Local Mutual Aid Associations › Subchapter A. General Provisions › Section 886.001. Definition

Sec. 886.001.  DEFINITION.  In this chapter, "local mutual aid association" means an entity, including a society or association of any sort, authorized under this chapter to engage in the business of insurance and pay benefits with money provided by assessments on the members as needed, including a burial association described by Section 888.001.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 886 - Local Mutual Aid Associations › Subchapter A. General Provisions › Section 886.002. Applicability of Chapter; Exemptions

Sec. 886.002.  APPLICABILITY OF CHAPTER;  EXEMPTIONS.  (a)  Except as provided by Subsection (b), this chapter and Chapters 887 and 888 apply to local mutual aid associations.
(b)  This chapter does not apply to the following entities unless the entity is a burial association described by Section 888.001:
(1)  a labor union, domestic order, or association that does not provide a death benefit of more than $150;
(2)  an association described by Section 885.004;  or
(3)  any society or association operating before March 21, 1929, statewide on an assessment basis under a charter granted under another statute of this state.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 886 - Local Mutual Aid Associations › Subchapter A. General Provisions › Section 886.003. Limited Exemption From Insurance Laws

Sec. 886.003.  LIMITED EXEMPTION FROM INSURANCE LAWS.  A local mutual aid association is subject only to this chapter and Chapters 887 and 888.  Except as otherwise provided by this chapter, a local mutual aid association is exempt from all other insurance laws of this state, unless a local mutual aid association is expressly designated in the law.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 886 - Local Mutual Aid Associations › Subchapter A. General Provisions › Section 886.004. Organization of New Association Prohibited

Sec. 886.004.  ORGANIZATION OF NEW ASSOCIATION PROHIBITED.  A new local mutual aid association may not be organized under this chapter.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 886 - Local Mutual Aid Associations › Subchapter B. Authority to Engage in Business › Section 886.051. Operation Under Certificate of Authority

Sec. 886.051.  OPERATION UNDER CERTIFICATE OF AUTHORITY.  A local mutual aid association engages in business under a certificate of authority issued by the department.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 886 - Local Mutual Aid Associations › Subchapter B. Authority to Engage in Business › Section 886.052. Compliance With Law Required

Sec. 886.052.  COMPLIANCE WITH LAW REQUIRED.  An individual, firm, or corporation may not engage in business in this state as a local mutual aid society or association that pays a death benefit or other benefit and that pays benefits with money provided by assessments made as necessary unless the individual, firm, or corporation is acting in accordance with this chapter or another law of this state.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 886 - Local Mutual Aid Associations › Subchapter C. Powers and Duties of Association › Section 886.101. General Powers of Association

Sec. 886.101.  GENERAL POWERS OF ASSOCIATION.  A local mutual aid association is a body corporate that may sue and be sued in its own name and exercise the other powers and functions specifically granted in this chapter, but not otherwise.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 886 - Local Mutual Aid Associations › Subchapter C. Powers and Duties of Association › Section 886.102. Applicability of Texas Non-Profit Corporation Act

Sec. 886.102.  APPLICABILITY OF TEXAS NON-PROFIT CORPORATION ACT.  (a)  Except to the extent of any conflict with this code, the Texas Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes) applies to a local mutual aid association.  The commissioner has each power and duty of, and shall perform each act to be performed by, the secretary of state under that Act with respect to local mutual aid associations.
(b)  On advance approval of the commissioner, a local mutual aid association may pay dividends to its members.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 886 - Local Mutual Aid Associations › Subchapter C. Powers and Duties of Association › Section 886.103. Articles of Association, Constitution, and Bylaws

Sec. 886.103.  ARTICLES OF ASSOCIATION, CONSTITUTION, AND BYLAWS.  (a)  The articles of association of a local mutual aid association must state:
(1)  the name of the association, which must be distinctly different from other associations operating in the same area;
(2)  the purpose for which the association is created, including the upper and lower age limits of individuals to whom benefit certificates may be issued;
(3)  the location of the principal office of the association;
(4)  the territory in which the association will engage in business;
(5)  the titles of the officers of the association;  and
(6)  the number of directors of the association.
(b)  The constitution and bylaws of the association may not violate, and must be in harmony with, this chapter.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 886 - Local Mutual Aid Associations › Subchapter C. Powers and Duties of Association › Section 886.104. Benefits Authorized

Sec. 886.104.  BENEFITS AUTHORIZED.  (a)  Except as provided by Subsection (b), a local mutual aid association may provide only for the payment of death benefits.  An association may not provide for old age benefits or benefits for accidental injury or sickness.
(b)  A local mutual aid association organized before March 21, 1929, that provides for the payment of death, old age, and accident benefits may continue to provide those benefits.
(c)  The policy issued by the association must clearly state the benefits provided.
(d)  A local mutual aid association may not issue a policy providing for:
(1)  a level premium;
(2)  guaranteed benefits;  or
(3)  surrender of loan values.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 886 - Local Mutual Aid Associations › Subchapter C. Powers and Duties of Association › Section 886.105. Territorial Limitations

Sec. 886.105.  TERRITORIAL LIMITATIONS.  (a)  A local mutual aid association may conduct business in any county in this state.
(b)  If the articles of association of an association provide that the association engages in business only in a limited territory, the association may amend the articles to permit statewide business.  After the amendment, the association is entitled to receive a certificate of authority permitting statewide business.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 886 - Local Mutual Aid Associations › Subchapter C. Powers and Duties of Association › Section 886.106. Connection With Other Associations Prohibited

Sec. 886.106.  CONNECTION WITH OTHER ASSOCIATIONS PROHIBITED.  (a)  A local mutual aid association may not have any connection with another local mutual aid association.
(b)  An association may not contribute any form of salary or compensation to an executive officer of another association.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 886 - Local Mutual Aid Associations › Subchapter C. Powers and Duties of Association › Section 886.107. Annual Statement; Filing Fee

Sec. 886.107.  ANNUAL STATEMENT;  FILING FEE.  (a)  For the filing of each annual statement, the department shall charge the appropriate fee.  The fee must be:
(1)  payable to the department;  and
(2)  deposited in the Texas Department of Insurance operating account.
(b)  Sections 201.001 and 201.002 apply to the fee.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636), Sec. 2E.102, eff. April 1, 2009.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 886 - Local Mutual Aid Associations › Subchapter C. Powers and Duties of Association › Section 886.108. Surety Bond

Sec. 886.108.  SURETY BOND.  (a)  A local mutual aid association's officer responsible for the funds of the association shall file with the department a surety bond.
(b)  The surety bond must be:
(1)  executed by a surety company authorized to do business in this state;
(2)  satisfactory to the department;  and
(3)  payable in an amount and conditioned as specified by Section 887.054.
(c)  This section does not apply to a local mutual aid association that:
(1)  has a total membership of 1,000 or fewer members;
(2)  charges $1 or less each for annual dues or assessments;  and
(3)  charges $2.50 or less for a membership fee.
(d)  An association exempted under Subsection (c) shall file with the department a bond in the amount of $1,000 and conditioned as provided by Section 887.054.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 886 - Local Mutual Aid Associations › Subchapter C. Powers and Duties of Association › Section 886.109. Voluntary Dissolution

Sec. 886.109.  VOLUNTARY DISSOLUTION.  A local mutual aid association may dissolve by vote of the majority of the members at:
(1)  a regular meeting called by the secretary;  or
(2)  a special meeting called for the purpose of considering dissolution.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 886 - Local Mutual Aid Associations › Subchapter C. Powers and Duties of Association › Section 886.110. Automatic Dissolution

Sec. 886.110.  AUTOMATIC DISSOLUTION.  A local mutual aid association is dissolved automatically and forfeits its right to engage in the business of insurance if:
(1)  the association's membership falls below 25 percent of the maximum value of the policy issued;  or
(2)  the association's membership falls below 50 percent of the maximum value of the policy issued and the association fails to notify each member of the amount paid on the preceding death claim when assessment is made.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 886 - Local Mutual Aid Associations › Subchapter O. Disciplinary Procedures and Criminal Penalty › Section 886.701. Revocation

Sec. 886.701.  REVOCATION.  Except as otherwise provided by law, the department may revoke the right of a local mutual aid association to engage in the business of insurance in this state only on:
(1)  the judgment of a court;
(2)  the filing of articles of dissolution by the members of the association or by the officers on behalf of the members;  or
(3)  a filing showing that the association's membership has been merged and taken over by another association.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 886 - Local Mutual Aid Associations › Subchapter O. Disciplinary Procedures and Criminal Penalty › Section 886.702. Grounds for Dissolution or Forfeiture

Sec. 886.702.  GROUNDS FOR DISSOLUTION OR FORFEITURE.  (a)  In addition to any other penalties imposed on a local mutual aid association or on its members or officers, an association is subject to dissolution and forfeiture of its right to engage in the business of insurance if the association:
(1)  ceases to engage in the business of insurance;
(2)  falls below the requirements of this chapter;
(3)  engages in the business of insurance without a certificate of authority;
(4)  fails to make reports as required by law;
(5)  refuses to submit to examination by the department or pay the cost of an examination;
(6)  engages in the business of insurance in a fraudulent, illegal, or dishonest manner;  or
(7)  violates this chapter.
(b)  The attorney general shall, at the request of the department, file any action necessary to wind up the affairs of an association to which Subsection (a) applies and provide for the appointment of a receiver if necessary.
(c)  An action under this section must be brought in Travis County.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 886 - Local Mutual Aid Associations › Subchapter O. Disciplinary Procedures and Criminal Penalty › Section 886.703. Criminal Penalty

Sec. 886.703.  CRIMINAL PENALTY.  (a)  A person commits an offense if the person violates this chapter.
(b)  An offense under this section is a misdemeanor punishable by a fine not to exceed $500.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 887 - Provisions Applicable to Certain Mutual Assessment Companies › Subchapter A. General Provisions › Section 887.001. Definitions

Sec. 887.001.  DEFINITIONS.  In this chapter:
(1)  "Assessment" means any money or thing of value, including premiums, paid in consideration of insurance provided by an insurance certificate.
(2)  "Association" means an organization subject to this chapter.
(3)  "Insurance certificate" means an insurance policy, contract of insurance, certificate of membership, or other document through which insurance is effected or evidenced.
(4)  "Member" includes a certificate holder or any other insured of an association.
(5)  "Membership fee" means the amount of the first assessment or assessments placed in the expense fund of an association and representing the cost of soliciting or procuring a member, as permitted by the department.
(6)  "Mortuary fund" includes a mortuary fund, relief fund, claim fund, or similar fund.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 887 - Provisions Applicable to Certain Mutual Assessment Companies › Subchapter A. General Provisions › Section 887.002. Purpose

Sec. 887.002.  PURPOSE.  The primary purpose of this chapter and Chapter 888 is to secure to members and the beneficiaries of members the full and prompt payment of all claims, according to the maximum benefit provided under the insurance certificate.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 887 - Provisions Applicable to Certain Mutual Assessment Companies › Subchapter A. General Provisions › Section 887.003. Applicability of Chapter

Sec. 887.003.  APPLICABILITY OF CHAPTER.  (a)  This chapter governs:
(1)  local mutual aid associations;
(2)  statewide mutual life associations;
(3)  life, health, and accident associations;
(4)  mutual assessment life, health, and accident associations;
(5)  burial associations;  and
(6)  similar entities.
(b)  Except as provided by Section 887.004, this chapter applies to insurance companies and associations, whether incorporated or not:
(1)  that issue policies or certificates of insurance on the lives of individuals on a mutual assessment plan or that provide health and accident benefits on a mutual assessment plan or whose funds are derived from assessments on certificate holders or members;  and
(2)  that are not governed by:
(A)  Chapter 841, 861, 882, 883, 885, 941, or 942;  or
(B)  Chapter 5, Title 78, Revised Statutes, as provided by Section 18, Chapter 40, Acts of the 41st Legislature, 1st Called Session, 1929, as amended by Section 1, Chapter 60, General Laws, Acts of the 41st Legislature, 2nd Called Session, 1929.
(c)  This chapter does not apply to mutual fire insurance companies.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 887 - Provisions Applicable to Certain Mutual Assessment Companies › Subchapter A. General Provisions › Section 887.004. Inapplicability to Certain Organizations of Members of Religious Denomination

Sec. 887.004.  INAPPLICABILITY TO CERTAIN ORGANIZATIONS OF MEMBERS OF RELIGIOUS DENOMINATION.  This chapter does not apply to an association that:
(1)  is not operated for profit;
(2)  is composed only of the members of a particular religious denomination;
(3)  does not provide insurance benefits in an amount greater than $1,000 on any one individual;  and
(4)  does not pay any officer of the association a salary greater than $100 a month.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.