reglab/statecodes huggingface dataset:
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle B - Organization of Regulated Entities › Chapter 826 - Conversion of Mutual Insurance Company to Stock Insurance Company › Subchapter D. Rights of Members on Conversion › Section 826.152. Amendment of Policies

Sec. 826.152.  AMENDMENT OF POLICIES.  A converting company, by endorsement or rider approved by the commissioner and sent to the policyholder, may simultaneously with or at any time after the adoption of a conversion plan amend an insurance policy in effect to terminate a right of the holder of the policy to share in the surplus or profits of the converting company.  The amendment is void if the conversion plan does not take 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 B - Organization of Regulated Entities › Chapter 826 - Conversion of Mutual Insurance Company to Stock Insurance Company › Subchapter E. Conversion Through Mutual Holding Company › Section 826.201. Conversion Through Creation of Holding Company

Sec. 826.201.  CONVERSION THROUGH CREATION OF HOLDING COMPANY.  (a)  A converting company, on approval by the commissioner, may reorganize by forming a holding company based on a mutual plan and continuing the corporate existence of the converting company as a stock insurance company.
(b)  A mutual holding company is considered an insurer subject to this chapter and Chapter 883.  A mutual holding company is automatically a party to an administrative proceeding under this code involving an insurance company that, as a result of a reorganization under this subchapter, is a subsidiary of the mutual holding company.  In any proceeding involving the resulting company, the assets of the mutual holding company are considered assets of the resulting company for purposes of satisfying the claims of the resulting company's policyholders.
(c)  A mutual holding company may not dissolve or liquidate without the approval of the commissioner.
(d)  A mutual holding company may convert to a stock holding company under this chapter as if the mutual holding company were a mutual insurance 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 B - Organization of Regulated Entities › Chapter 826 - Conversion of Mutual Insurance Company to Stock Insurance Company › Subchapter E. Conversion Through Mutual Holding Company › Section 826.202. Commissioner Powers and Duties; Approval

Sec. 826.202.  COMMISSIONER POWERS AND DUTIES;  APPROVAL.  (a)  The commissioner shall review the proposed plan of reorganization as an alternate conversion plan under Section 826.061.  The commissioner may require as a condition of approval modifications of the proposed plan of reorganization that the commissioner determines necessary to protect the members' interests.
(b)  The commissioner may retain a qualified expert as provided by Section 826.102(e).
(c)  The commissioner has jurisdiction over a mutual holding company organized under this subchapter to ensure that member interests are protected.
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 B - Organization of Regulated Entities › Chapter 826 - Conversion of Mutual Insurance Company to Stock Insurance Company › Subchapter E. Conversion Through Mutual Holding Company › Section 826.203. Applicability of Certain Laws; Incorporation

Sec. 826.203.  APPLICABILITY OF CERTAIN LAWS;  INCORPORATION.  A mutual holding company that results from the reorganization of a domestic mutual insurance company organized under Chapter 883 must be organized under Sections 883.051, 883.052, 883.054, and 883.056.  The articles of incorporation, and any amendments to those articles, of the mutual holding company are subject to approval of the commissioner in the same manner as those of a mutual insurance 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 B - Organization of Regulated Entities › Chapter 826 - Conversion of Mutual Insurance Company to Stock Insurance Company › Subchapter E. Conversion Through Mutual Holding Company › Section 826.204. Membership Interests

Sec. 826.204.  MEMBERSHIP INTERESTS.  (a)  The membership interests of the policyholders of the resulting company become membership interests in the mutual holding company.  Eligible members of the converting company become members of the mutual holding company in accordance with the articles of incorporation and bylaws of the mutual holding company.
(b)  A membership interest in a mutual holding company does not constitute a security as defined by Section 4001.068, Government Code.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
Amended by:
Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 2.30, eff. January 1, 2022.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle B - Organization of Regulated Entities › Chapter 826 - Conversion of Mutual Insurance Company to Stock Insurance Company › Subchapter E. Conversion Through Mutual Holding Company › Section 826.205. Capital Stock Held by Mutual Holding Company

Sec. 826.205.  CAPITAL STOCK HELD BY MUTUAL HOLDING COMPANY.  (a)  In this section:
(1)  "Intermediate holding company" means a holding company that:
(A)  is a subsidiary of a mutual holding company formed to reorganize a mutual insurance company;  and
(B)  directly or through a subsidiary intermediate holding company, owns the resulting company.
(2)  "Majority of the voting shares of the capital stock" means shares of the capital stock of a company that carry the right to cast a majority of the votes entitled to be cast by all of the outstanding shares of the capital stock of the company on all matters submitted to a vote of the shareholders of the company.
(b)  All of the initial shares of the capital stock of the resulting company shall be issued to the mutual holding company.
(c)  The mutual holding company shall at all times own a majority of the voting shares of the capital stock of the resulting company or of an intermediate holding company established to hold the voting shares of the resulting company.  The requirements of this subsection may be satisfied by indirect ownership through one or more intermediate holding companies in a corporate structure approved by the commissioner.
(d)  The mutual holding company or intermediate holding company may not convey, transfer, assign, pledge, subject to a security interest or lien, encumber, or otherwise hypothecate or alienate the majority of the voting shares of the capital stock that is required to be owned under Subsection (c).
(e)  A violation of Subsection (d) is void in inverse chronological order from the date of the conveyance or activity as to the shares necessary to constitute a majority of the voting shares of the capital stock.
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 B - Organization of Regulated Entities › Chapter 826 - Conversion of Mutual Insurance Company to Stock Insurance Company › Subchapter E. Conversion Through Mutual Holding Company › Section 826.206. Conversion of Foreign Mutual Insurance Company

Sec. 826.206.  CONVERSION OF FOREIGN MUTUAL INSURANCE COMPANY.  (a)  On the approval of the commissioner, a foreign mutual insurance company may reorganize in compliance with the requirements of any law or regulation applicable to the foreign mutual insurance company by:
(1)  transferring its members' membership interests into a mutual holding company formed under a procedure analogous to that described by this subchapter;  and
(2)  continuing the corporate existence of the reorganizing foreign mutual insurance company as a foreign stock insurance company subsidiary of the mutual holding company.
(b)  The reorganizing foreign mutual insurance company may remain a foreign company and may be admitted to do business in this state.  A foreign mutual insurance company may also redomesticate in this state by complying with the applicable requirements of Chapter 983.
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 B - Organization of Regulated Entities › Chapter 827 - Withdrawal and Restriction Plans › Section 827.001. Definitions

Sec. 827.001.  DEFINITIONS.  In this chapter:
(1)  "Insurer" means an insurance company or other legal entity authorized to engage in the business of insurance in this state, including a reciprocal or interinsurance exchange, a Lloyd's plan, and a county mutual insurance company.  The term includes an affiliate.  The term does not include a farm mutual insurance company or an eligible surplus lines insurer regulated under Chapter 981.
(2)  "Rating territory" means a rating territory established by the department.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.  Amended by Acts 2003, 78th Leg., ch. 206, Sec. 10.01(a), eff. June 11, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle B - Organization of Regulated Entities › Chapter 827 - Withdrawal and Restriction Plans › Section 827.002. Exemption

Sec. 827.002.  EXEMPTION.  This chapter does not apply to a transfer of business from an insurer to a company that:
(1)  is within the same insurance group as the insurer;
(2)  is authorized to engage in the business of insurance in this state;  and
(3)  is not a reciprocal or interinsurance exchange, a Lloyd's plan, a county mutual insurance company, or a farm mutual insurance company.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.  Amended by Acts 2003, 78th Leg., ch. 206, Sec. 10.02, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle B - Organization of Regulated Entities › Chapter 827 - Withdrawal and Restriction Plans › Section 827.003. Withdrawal Plan Required

Sec. 827.003.  WITHDRAWAL PLAN REQUIRED.  An insurer shall file with the commissioner a plan for orderly withdrawal if the insurer proposes to:
(1)  reduce the insurer's total annual premium volume by 50 percent or more;
(2)  reduce the insurer's annual premium by 75 percent or more in a line of insurance in this state;  or
(3)  reduce in this state, or in any applicable rating territory, the insurer's total annual premium volume in a line of personal automobile or residential property insurance by 50 percent or more.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.  Amended by Acts 2003, 78th Leg., ch. 206, Sec. 10.03, eff. June 11, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle B - Organization of Regulated Entities › Chapter 827 - Withdrawal and Restriction Plans › Section 827.004. Provisions of Withdrawal Plan

Sec. 827.004.  PROVISIONS OF WITHDRAWAL PLAN.  A withdrawal plan filed under Section 827.003 must:
(1)  be constructed to protect the interests of the people of this state;
(2)  indicate the dates on which the insurer intends to begin and to complete the plan;  and
(3)  provide for:
(A)  meeting the insurer's contractual obligations;
(B)  providing service to the insurer's policyholders and claimants in this state;  and
(C)  meeting any applicable statutory obligations, such as payment of assessments to the guaranty fund and participation in an assigned risk plan or joint underwriting arrangement.
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 B - Organization of Regulated Entities › Chapter 827 - Withdrawal and Restriction Plans › Section 827.005. Approval of Withdrawal Plan

Sec. 827.005.  APPROVAL OF WITHDRAWAL PLAN.  (a)  Except as provided by Subsection (b), the commissioner shall approve a withdrawal plan that adequately provides for meeting the requirements prescribed by Section 827.004(3).
(b)  The commissioner may modify, restrict, or limit a withdrawal plan under this section as necessary if the commissioner finds that a line of insurance subject to the withdrawal plan is not offered in a quantity or manner to adequately cover the risks in this state or to adequately protect the residents of this state and policyholders in this state.  The commissioner may by order set the date on which the insurer's withdrawal begins.
(c)  A withdrawal plan is deemed approved if the commissioner:
(1)  does not hold a hearing on the plan before the 61st day after the date the plan is filed with the commissioner;  or
(2)  does not deny approval before the 61st day after the date a hearing on the plan is held.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.  Amended by Acts 2003, 78th Leg., ch. 206, Sec. 10.04, eff. June 11, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle B - Organization of Regulated Entities › Chapter 827 - Withdrawal and Restriction Plans › Section 827.006. Resumption of Writing Insurance After Complete Withdrawal

Sec. 827.006.  RESUMPTION OF WRITING INSURANCE AFTER COMPLETE WITHDRAWAL.  An insurer that withdraws from writing all lines of insurance in this state may not, without the approval of the commissioner, resume writing insurance in this state before the fifth anniversary of the date of withdrawal.
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 B - Organization of Regulated Entities › Chapter 827 - Withdrawal and Restriction Plans › Section 827.007. Penalties

Sec. 827.007.  PENALTIES.  The commissioner may impose the civil penalties under Chapter 82 on an insurer that fails to obtain the commissioner's approval before the insurer:
(1)  withdraws from writing a line of insurance in this state;  or
(2)  reduces the insurer's total annual premium volume by 75 percent or more in any year.
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 B - Organization of Regulated Entities › Chapter 827 - Withdrawal and Restriction Plans › Section 827.008. Restriction Plan

Sec. 827.008.  RESTRICTION PLAN.  (a)  Before an insurer, in response to a catastrophic natural event that occurred during the preceding six months, may restrict writing new business in a rating territory in a line of personal automobile or residential property insurance, the insurer must file a proposed restriction plan with the commissioner for the commissioner's review and approval.
(b)  The commissioner may modify, restrict, or limit a restriction plan under this section as necessary if the commissioner finds that a line of insurance subject to the restriction plan is not offered in this state in a quantity or manner to adequately cover the risks in this state or to adequately protect the residents of this state and policyholders in this state in light of the impact of the catastrophic natural event.  The commissioner may by order set the date on which the insurer's restriction begins.
(c)  A withdrawal plan must be filed and approved under Sections 827.003 and 827.004 if an insurer's decision not to accept new business in a line of personal automobile or residential property insurance results in a reduction of the insurer's total annual premium volume by 50 percent or more.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.  Amended by Acts 2003, 78th Leg., ch. 206, Sec. 10.05, eff. June 11, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle B - Organization of Regulated Entities › Chapter 827 - Withdrawal and Restriction Plans › Section 827.009. Deposit of Securities

Sec. 827.009.  DEPOSIT OF SECURITIES.  Under this chapter, the commissioner may require the deposit of securities in this state in trust in the name of the commissioner if the commissioner determines, after notice and hearing, that there is reasonable cause to conclude that the interests of the people of this state are best served by the deposit.
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 B - Organization of Regulated Entities › Chapter 827 - Withdrawal and Restriction Plans › Section 827.010. Moratorium

Sec. 827.010.  MORATORIUM.  (a)  The commissioner may impose a moratorium of not longer than two years on:
(1)  the approval of withdrawal plans;  or
(2)  the implementation of plans to restrict the writing of new business described by Section 827.008.
(b)  A moratorium under this section may be imposed on plans implemented after the commissioner has published notice of intention to impose a moratorium on plans under Subsection (a)(2).
(c)  The commissioner may annually renew a moratorium imposed under this section.
(d)  To impose or renew a moratorium under this section, the commissioner must determine, after notice and hearing, that a catastrophic event has occurred and that as a result of that event a particular line of insurance is not reasonably expected to be available to a substantial number of policyholders or potential policyholders in this state or, in the case of lines of personal automobile or residential property insurance, in a rating territory.
(e)  The provisions of Chapter 2001, Government Code, relating to contested cases apply to the notice and hearing.
(f)  The commissioner by rule shall establish reasonable criteria for applying the standards for determining whether to impose a moratorium under this section.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.  Amended by Acts 2003, 78th Leg., ch. 206, Sec. 10.06(a), eff. June 11, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle B - Organization of Regulated Entities › Chapter 827 - Withdrawal and Restriction Plans › Section 827.011. Rules

Sec. 827.011.  RULES.  The commissioner shall adopt rules as necessary to enforce 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 B - Organization of Regulated Entities › Chapter 828 - Purchase of Stock for Total Assumption Reinsurance › Subchapter A. General Provisions › Section 828.001. Authority to Purchase Stock for Total Assumption Reinsurance

Sec. 828.001.  AUTHORITY TO PURCHASE STOCK FOR TOTAL ASSUMPTION REINSURANCE.  This code does not affect the right of a life insurance company organized or operating under Chapter 841, 882, or 982 to purchase or contract to purchase all or part of the outstanding shares of another domestic or foreign life insurance company that engages in a similar line of business in order to:
(1)  reinsure all of the other company's business;
(2)  assume all of the other company's liabilities;  and
(3)  take over all of the other company's assets.
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 B - Organization of Regulated Entities › Chapter 828 - Purchase of Stock for Total Assumption Reinsurance › Subchapter A. General Provisions › Section 828.002. Effect on Antitrust Laws

Sec. 828.002.  EFFECT ON ANTITRUST LAWS.  This chapter does not affect in any manner the antitrust laws 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 B - Organization of Regulated Entities › Chapter 828 - Purchase of Stock for Total Assumption Reinsurance › Subchapter A. General Provisions › Section 828.003. Investments of Reinsured Company

Sec. 828.003.  INVESTMENTS OF REINSURED COMPANY.  The investments of a company reinsured under this chapter are subject to Section 824.102 as if the company had been merged or consolidated.
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 B - Organization of Regulated Entities › Chapter 828 - Purchase of Stock for Total Assumption Reinsurance › Subchapter B. Exception to Investment Limitation › Section 828.051. Exception to Limitation on Purchasing Shares of Other Company

Sec. 828.051.  EXCEPTION TO LIMITATION ON PURCHASING SHARES OF OTHER COMPANY.  Subchapters C and D, Chapter 425, do not apply to a purchase or contract described by Section 828.001 if all requirements of this subchapter are met.
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.015, eff. April 1, 2009.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle B - Organization of Regulated Entities › Chapter 828 - Purchase of Stock for Total Assumption Reinsurance › Subchapter B. Exception to Investment Limitation › Section 828.052. Resolution of Intention to Reinsure

Sec. 828.052.  RESOLUTION OF INTENTION TO REINSURE.  The intention to reinsure must be evidenced by a resolution adopted by the board of directors of the purchasing company on or before the purchase of the shares or the execution of a contract to purchase the shares.
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 B - Organization of Regulated Entities › Chapter 828 - Purchase of Stock for Total Assumption Reinsurance › Subchapter B. Exception to Investment Limitation › Section 828.053. Minimum Stock Acquisition

Sec. 828.053.  MINIMUM STOCK ACQUISITION.  The purchasing company shall obtain or seek to obtain at least the number of shares of the other insurance company necessary to vote an approval of the total assumption reinsurance agreement under the laws of the state in which the other insurance company is organized by one or more of the following means:
(1)  initially purchasing or contracting to purchase the shares;  or
(2)  offering to purchase, making a tender offer for, requesting or inviting tenders of, or otherwise seeking to acquire the shares in the open market or 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 B - Organization of Regulated Entities › Chapter 828 - Purchase of Stock for Total Assumption Reinsurance › Subchapter B. Exception to Investment Limitation › Section 828.054. Approval Required

Sec. 828.054.  APPROVAL REQUIRED.  A purchase, offer to purchase, tender offer, request to purchase, or invitation to purchase shares in excess of the limits imposed under Subchapter C or D, Chapter 425, may not be made until it is filed with and approved by the commissioner in accordance with Chapter 823.
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.016, eff. April 1, 2009.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle B - Organization of Regulated Entities › Chapter 828 - Purchase of Stock for Total Assumption Reinsurance › Subchapter B. Exception to Investment Limitation › Section 828.055. Restrictions on Reinsured Company

Sec. 828.055.  RESTRICTIONS ON REINSURED COMPANY.  Following the earlier of the date of the contract to purchase the shares or the date of the commissioner's approval of the purchase, offer to purchase, tender offer, request to purchase, or invitation to purchase the shares, the company the shares of which are being purchased may not purchase or contract to purchase any of its own shares as treasury shares, issue or contract to issue any of its authorized but unissued shares, or make any investments in or loans to the purchasing company or an affiliate of the purchasing company unless the investment or loan is otherwise authorized and approved in advance by the commissioner under Chapter 823.
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 B - Organization of Regulated Entities › Chapter 828 - Purchase of Stock for Total Assumption Reinsurance › Subchapter B. Exception to Investment Limitation › Section 828.056. Required Effective Date of Reinsurance Agreement; Effect of Failure to Meet Required Effective Date

Sec. 828.056.  REQUIRED EFFECTIVE DATE OF REINSURANCE AGREEMENT;  EFFECT OF FAILURE TO MEET REQUIRED EFFECTIVE DATE.  (a)  The reinsurance agreement must take effect on or before December 31 of the second year after the earlier of the year in which the initial purchase of shares is made or the year in which the initial contract to purchase is executed unless the commissioner for good cause shown extends that period.
(b)  If the reinsurance agreement does not take effect within the period finally determined and extended by the commissioner, the purchasing company shall sell or otherwise dispose of the purchased shares that exceed the investment limitations imposed under Subchapter C or D, Chapter 425, within six months of the final effective date.
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.017, eff. April 1, 2009.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle B - Organization of Regulated Entities › Chapter 828 - Purchase of Stock for Total Assumption Reinsurance › Subchapter B. Exception to Investment Limitation › Section 828.057. Prohibition on Use of Purchasing Company's Capital, Surplus, or Reserves

Sec. 828.057.  PROHIBITION ON USE OF PURCHASING COMPANY'S CAPITAL, SURPLUS, OR RESERVES.  Amounts actually paid by the purchasing company for the purchase of shares acquired or obtained under this subchapter may not include the minimum capital, minimum surplus, and policy reserves required by law for the purchasing 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 B - Organization of Regulated Entities › Chapter 829 - Conversion of Reciprocal or Interinsurance Exchange to Stock Company Through Creation of a Mutual Holding Company › Subchapter A. General Provisions › Section 829.001. Definitions

Sec. 829.001.  DEFINITIONS.  In this chapter:
(1)  "Attorney in fact" has the meaning assigned by Section 942.001.
(2)  "Board of directors" means, as to an exchange, the board of directors, board of trustees, subscriber advisory committee, or other governing body appointed or elected by the subscribers of an exchange.
(3)  "Conversion plan" means a plan adopted under this chapter to convert an exchange to a stock insurance company and form a mutual holding company to hold, directly or indirectly, shares of the resulting company.
(4)  "Converting exchange" means an exchange that is converting to a stock insurance company under this chapter.
(5)  "Eligible member" means a member of a converting exchange whose policy is in force on the date that the converting exchange's board of directors adopts a conversion plan.
(6)  "Effective date" means the effective date of a conversion plan in accordance with Section 829.108.
(7)  "Exchange" has the meaning assigned by Section 942.001.
(8)  "Intermediate holding company" means a holding company organized under the laws of this or another state that:
(A)  is a subsidiary of a mutual holding company formed to reorganize an exchange; and
(B)  directly or through a subsidiary intermediate holding company, owns at least a majority of the voting shares of the capital stock of the resulting company.
(9)  "Member" means, as to an exchange, a subscriber of an exchange.
(10)  "Mutual holding company" means a holding company based on a mutual plan and formed in connection with the conversion of an exchange to a stock insurance company under this chapter.
(11)  "Participating policy" means a policy issued by an exchange that grants the policyholder the right to receive policy dividends if declared by the exchange.
(12)  "Resulting company" means a stock insurance company resulting from the conversion of an exchange under this chapter.
(13)  "Subscriber" has the meaning assigned by Section 942.001.
Added by Acts 2007, 80th Leg., R.S., Ch. 412 (S.B. 1056), Sec. 1, eff. June 15, 2007.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle B - Organization of Regulated Entities › Chapter 829 - Conversion of Reciprocal or Interinsurance Exchange to Stock Company Through Creation of a Mutual Holding Company › Subchapter A. General Provisions › Section 829.002. Authority to Convert Through Creation of a Mutual Holding Company

Sec. 829.002.  AUTHORITY TO CONVERT THROUGH CREATION OF A MUTUAL HOLDING COMPANY.  (a)  An exchange may reorganize by converting to a stock insurance company and forming a mutual holding company to hold, directly or indirectly, shares of the resulting company or intermediate holding company in accordance with this chapter.
(b)  A converting exchange may not engage in the business of insurance as a stock insurance company until it complies with the requirements of this chapter.
Added by Acts 2007, 80th Leg., R.S., Ch. 412 (S.B. 1056), Sec. 1, eff. June 15, 2007.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle B - Organization of Regulated Entities › Chapter 829 - Conversion of Reciprocal or Interinsurance Exchange to Stock Company Through Creation of a Mutual Holding Company › Subchapter A. General Provisions › Section 829.003. Rights and Privileges of Resulting Company; Laws Applicable

Sec. 829.003.  RIGHTS AND PRIVILEGES OF RESULTING COMPANY; LAWS APPLICABLE.  Except as provided by this chapter, the resulting company:
(1)  may exercise only the rights and privileges of a stock insurance company; and
(2)  is subject to:
(A)  all of the requirements and rules imposed on stock insurance companies organized under this code; and
(B)  the laws of this state relating to the regulation or supervision of insurance companies.
Added by Acts 2007, 80th Leg., R.S., Ch. 412 (S.B. 1056), Sec. 1, eff. June 15, 2007.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle B - Organization of Regulated Entities › Chapter 829 - Conversion of Reciprocal or Interinsurance Exchange to Stock Company Through Creation of a Mutual Holding Company › Subchapter A. General Provisions › Section 829.004. Mutual Holding Company; Laws Applicable

Sec. 829.004.  MUTUAL HOLDING COMPANY; LAWS APPLICABLE.  (a)  Except as provided by this chapter, a mutual holding company is considered an insurer subject to this chapter and Chapter 883.
(b)  The commissioner has jurisdiction over a mutual holding company organized under this chapter to ensure that member interests are protected.
(c)  The mutual holding company is automatically a party to a delinquency proceeding under Subtitle C, Title 4, involving an insurance company that, as a result of a reorganization under this chapter, is a direct or indirect subsidiary of the mutual holding company.  In any proceeding described by this subsection involving the resulting company, the assets of the mutual holding company are considered assets of the resulting company for purposes of satisfying the claims of the resulting company's policyholders.
(d)  A mutual holding company that results from a reorganization of an exchange must be organized under Sections 883.051, 883.052, 883.054, and 883.056.  The articles of incorporation of the mutual holding company, and any amendments to those articles, are subject to approval of the commissioner in the same manner as those of a mutual insurance company.
(e)  The mutual holding company may not dissolve or liquidate without the approval of the commissioner.
(f)  A mutual holding company formed under a conversion plan is not subject to:
(1)  Article 2.11B, Texas Non-Profit Corporation Act (Article 1396-2.11B, Vernon's Texas Civil Statutes);
(2)  Section B, Article 2.23, Texas Non-Profit Corporation Act (Article 1396-2.23, Vernon's Texas Civil Statutes);
(3)  Section C, Article 2.23A, Texas Non-Profit Corporation Act (Article 1396-2.23A, Vernon's Texas Civil Statutes); or
(4)  Sections 22.158, 22.351, and 22.353(b), Business Organizations Code.
Added by Acts 2007, 80th Leg., R.S., Ch. 412 (S.B. 1056), Sec. 1, eff. June 15, 2007.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle B - Organization of Regulated Entities › Chapter 829 - Conversion of Reciprocal or Interinsurance Exchange to Stock Company Through Creation of a Mutual Holding Company › Subchapter A. General Provisions › Section 829.005. Conflict of Interest

Sec. 829.005.  CONFLICT OF INTEREST.  (a)  Except as provided by a conversion plan approved by the commissioner or by this section, the following individuals may not receive a fee, commission, stock distribution, stock subscription rights, or other consideration, other than that individual's usual salary or compensation for aiding, promoting, assisting, or participating in a conversion under this chapter:
(1)  a director, officer, agent, or employee of a converting exchange or the exchange's attorney in fact; or
(2)  the attorney in fact if the attorney in fact is an individual.
(b)  Subsection (a) does not apply to consideration received in the individual's capacity as a member.
(c)  This section does not prohibit the payment of reasonable fees and compensation to an attorney, accountant, or actuary for professional services performed by that person, without regard to whether the person is also a director or officer of the converting exchange or its attorney in fact.
Added by Acts 2007, 80th Leg., R.S., Ch. 412 (S.B. 1056), Sec. 1, eff. June 15, 2007.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle B - Organization of Regulated Entities › Chapter 829 - Conversion of Reciprocal or Interinsurance Exchange to Stock Company Through Creation of a Mutual Holding Company › Subchapter A. General Provisions › Section 829.006. Limitation on Actions

Sec. 829.006.  LIMITATION ON ACTIONS.  (a)  Except as provided by Subsection (b), an action challenging the validity of or arising out of acts taken or proposed to be taken regarding a conversion plan under this chapter must be commenced not later than the 30th day after the date the conversion plan is approved by the commissioner.
(b)  An action challenging the validity of or arising out of acts taken or proposed to be taken regarding a conversion plan that contemplates a public offering of debt or equity registered under the federal Securities Act of 1933 (15 U.S.C. Section 77a et seq.), or a similar law of a foreign jurisdiction, must be commenced not later than the 60th day after the date the conversion plan is approved by the commissioner.
Added by Acts 2007, 80th Leg., R.S., Ch. 412 (S.B. 1056), Sec. 1, eff. June 15, 2007.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle B - Organization of Regulated Entities › Chapter 829 - Conversion of Reciprocal or Interinsurance Exchange to Stock Company Through Creation of a Mutual Holding Company › Subchapter A. General Provisions › Section 829.007. Sale of Securities

Sec. 829.007.  SALE OF SECURITIES.  (a)  A sale, issuance, or offering of securities under this chapter is exempt from the registration and licensing provisions of The Securities Act (Title 12, Government Code).
(b)  An officer, director, or employee of an exchange, an intermediate holding company, a mutual holding company, or a resulting company who participates in a conversion under this chapter is exempt from the registration and licensing provisions of The Securities Act (Title 12, Government Code).  A person may not receive compensation, other than that person's usual salary or compensation, for services performed under the exemption provided by this subsection.
Added by Acts 2007, 80th Leg., R.S., Ch. 412 (S.B. 1056), Sec. 1, eff. June 15, 2007.
Amended by:
Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171), Sec. 2.31, eff. January 1, 2022.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle B - Organization of Regulated Entities › Chapter 829 - Conversion of Reciprocal or Interinsurance Exchange to Stock Company Through Creation of a Mutual Holding Company › Subchapter B. Mutual Holding Company Structure › Section 829.051. Capital Stock Held by Mutual Holding Company

Sec. 829.051.  CAPITAL STOCK HELD BY MUTUAL HOLDING COMPANY.  (a)  In this section, "majority of the voting shares of the capital stock" means shares of the capital stock of a company that carry the right to cast a majority of the votes entitled to be cast by all of the outstanding shares of the capital stock of the company on all matters submitted to a vote of the shareholders of the company.
(b)  All of the initial shares of the capital stock of the resulting company shall be issued to the mutual holding company or to an intermediate holding company.
(c)  The mutual holding company shall at all times own a majority of the voting shares of the capital stock of the resulting company or of an intermediate holding company.  The requirements of this subsection may be satisfied by indirect ownership through one or more intermediate holding companies in a corporate structure approved by the commissioner.
(d)  Except with the consent of the commissioner, the mutual holding company or intermediate holding company may not convey, transfer, assign, pledge, subject to a security interest or lien, encumber, or otherwise hypothecate or alienate the majority of the voting shares of the capital stock that is required to be owned under Subsection (c).
(e)  An act of the mutual holding company or intermediate holding company that violates Subsection (d) is void in inverse chronological order from the date of the conveyance or activity as to the shares necessary to constitute a majority of the voting shares of the capital stock.
(f)  The remaining minority portion of the voting shares of capital stock of the resulting company, or of an intermediate holding company, may not be assigned, transferred, or pledged to any officer, director or employee of the converting exchange, or persons acting in concert with such persons, without also offering a similar opportunity to participate to all eligible members as required by Section 829.053(g).
Added by Acts 2007, 80th Leg., R.S., Ch. 412 (S.B. 1056), Sec. 1, eff. June 15, 2007.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle B - Organization of Regulated Entities › Chapter 829 - Conversion of Reciprocal or Interinsurance Exchange to Stock Company Through Creation of a Mutual Holding Company › Subchapter B. Mutual Holding Company Structure › Section 829.052. Limitation on Acquisition of Capital Stock

Sec. 829.052.  LIMITATION ON ACQUISITION OF CAPITAL STOCK.  (a)  The conversion plan must provide that a person or group of persons acting in concert, other than the mutual holding company or an intermediate holding company, may not acquire, in a public or private offering or through an exercise of stock subscription rights, more than 10 percent of the capital stock of the resulting company unless the acquisition of the stock or stock subscription rights is approved in advance by the commissioner.
(b)  Subsection (a) does not apply to an entity that purchases and retains at all times a majority of the voting shares of the capital stock of the resulting company as part of the conversion plan approved by the commissioner.
Added by Acts 2007, 80th Leg., R.S., Ch. 412 (S.B. 1056), Sec. 1, eff. June 15, 2007.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle B - Organization of Regulated Entities › Chapter 829 - Conversion of Reciprocal or Interinsurance Exchange to Stock Company Through Creation of a Mutual Holding Company › Subchapter B. Mutual Holding Company Structure › Section 829.054. Subscription Rights; Tax-Qualified Employee Benefit Plan

Sec. 829.054.  SUBSCRIPTION RIGHTS; TAX-QUALIFIED EMPLOYEE BENEFIT PLAN.  The conversion plan may allocate to a tax-qualified employee benefit plan nontransferable subscription rights to purchase not more than 10 percent of the capital stock of the resulting company.
Added by Acts 2007, 80th Leg., R.S., Ch. 412 (S.B. 1056), Sec. 1, eff. June 15, 2007.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle B - Organization of Regulated Entities › Chapter 829 - Conversion of Reciprocal or Interinsurance Exchange to Stock Company Through Creation of a Mutual Holding Company › Subchapter C. Plan Adoption and Approval › Section 829.101. Plan Adoption

Sec. 829.101.  PLAN ADOPTION.  (a)  To convert under this chapter an exchange must adopt a conversion plan consistent with this chapter by the affirmative vote of at least two-thirds of the members of its board of directors or, if the exchange does not have a board of directors, by approval of the attorney in fact.  The proposed articles of incorporation of the resulting company and the mutual holding company must be exhibits to the conversion plan.
(b)  For a conversion plan to take effect:
(1)  the commissioner must approve the conversion plan; and
(2)  the eligible members must approve the conversion plan and adopt the articles of incorporation of the resulting company and the mutual holding company.
Added by Acts 2007, 80th Leg., R.S., Ch. 412 (S.B. 1056), Sec. 1, eff. June 15, 2007.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle B - Organization of Regulated Entities › Chapter 829 - Conversion of Reciprocal or Interinsurance Exchange to Stock Company Through Creation of a Mutual Holding Company › Subchapter C. Plan Adoption and Approval › Section 829.102. Amendments; Withdrawal of Plan

Sec. 829.102.  AMENDMENTS; WITHDRAWAL OF PLAN.  Before a conversion plan takes effect, a converting exchange may amend or withdraw the plan by the affirmative vote of at least two-thirds of the members of its board of directors or, if the exchange does not have a board of directors, by approval of the attorney in fact.  The written consent of the commissioner is required for any amendment to a conversion plan adopted after the commissioner has approved the plan under Section 829.106.
Added by Acts 2007, 80th Leg., R.S., Ch. 412 (S.B. 1056), Sec. 1, eff. June 15, 2007.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle B - Organization of Regulated Entities › Chapter 829 - Conversion of Reciprocal or Interinsurance Exchange to Stock Company Through Creation of a Mutual Holding Company › Subchapter C. Plan Adoption and Approval › Section 829.103. Filing of Plan and Related Documents With Commissioner; Commissioner's Powers and Duties

Sec. 829.103.  FILING OF PLAN AND RELATED DOCUMENTS WITH COMMISSIONER; COMMISSIONER'S POWERS AND DUTIES.  (a)  Not later than the 90th day after the date on which a converting exchange's board of directors adopts a conversion plan, the converting exchange shall file with the commissioner:
(1)  a copy of the conversion plan;
(2)  the form of notices required by Section 829.104;
(3)  the form of proxy to be solicited from eligible members under Section 829.107(a);
(4)  the form of notice required by Section 829.153 to persons whose policies are issued after adoption of the conversion plan but before the effective date of the conversion plan; and
(5)  the proposed articles of incorporation of the resulting company and the mutual holding company.
(b)  The converting exchange shall promptly provide any other information requested by the commissioner that the commissioner considers necessary to consider the conversion plan.
Added by Acts 2007, 80th Leg., R.S., Ch. 412 (S.B. 1056), Sec. 1, eff. June 15, 2007.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle B - Organization of Regulated Entities › Chapter 829 - Conversion of Reciprocal or Interinsurance Exchange to Stock Company Through Creation of a Mutual Holding Company › Subchapter C. Plan Adoption and Approval › Section 829.104. Notice to Eligible Members; Comments

Sec. 829.104.  NOTICE TO ELIGIBLE MEMBERS; COMMENTS.  (a)  The converting exchange shall give eligible members at least 30 days' written notice of the members' meeting to vote on the conversion plan and advising of the members' right to comment on the plan to the commissioner and the converting exchange, including a description of the procedure to be used in making comments.  Notice to the members of the proposed vote on the conversion plan must provide clear and conspicuous language apart from other meeting materials and provide a disclosure statement of the distribution of surplus or stock to directors and officers of the converting exchange, if any.
(b)  If the commissioner determines to hold a hearing on the plan, the commissioner must approve the notice of hearing and notify the converting exchange not later than the 45th day following the first day on which all the documents required under Section 829.103 are filed with the commissioner.  The converting exchange shall send to eligible members the commissioner's notice of the hearing at least 30 days before the date set for the hearing.  The commissioner must approve the content and print layout of the hearing notice before the converting exchange sends notice of the hearing to eligible members.  Notice of the hearing may be made through publication in the Texas Register.
(c)  The notices required by Subsections (a) and (b) may be combined in a single mailing.  The notice or notices must be sent to the member's last known address, as shown on the converting exchange's records.  The notice of the members' meeting must:
(1)  describe the proposed conversion plan; and
(2)  inform the member of the member's right to vote on the conversion plan.
(d)  If the notice of the meeting to vote on the conversion plan is combined with a notice of the converting exchange's annual meeting of members, the notice of the proposed vote on the conversion plan must be clear and conspicuous and set apart from other meeting materials.  A notice that is approved in advance by the commissioner is deemed to be in full compliance with the requirements of this subsection.
Added by Acts 2007, 80th Leg., R.S., Ch. 412 (S.B. 1056), Sec. 1, eff. June 15, 2007.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle B - Organization of Regulated Entities › Chapter 829 - Conversion of Reciprocal or Interinsurance Exchange to Stock Company Through Creation of a Mutual Holding Company › Subchapter C. Plan Adoption and Approval › Section 829.105. Substantial Compliance With Notice Requirements

Sec. 829.105.  SUBSTANTIAL COMPLIANCE WITH NOTICE REQUIREMENTS.  If the converting exchange in good faith substantially complies with the notice requirements of this chapter, the converting exchange's failure to send a member the required notice does not impair the validity of an action taken under this chapter.
Added by Acts 2007, 80th Leg., R.S., Ch. 412 (S.B. 1056), Sec. 1, eff. June 15, 2007.