reglab/statecodes huggingface dataset:
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter B. Formation and Structure of Domestic Companies › Section 841.055. Shares of Stock

Sec. 841.055.  SHARES OF STOCK.  (a)  The shares of stock of an insurance company operating under this chapter may be divided or converted into shares of stock with a par value or shares of stock without par value or into a combination of shares with or without par value.
(b)  Each issued share of stock must be fully paid for and nonassessable.
(c)  Repealed by Acts 2023, 88th Leg., R.S., Ch. 825 (H.B. 1903), Sec. 3(2), eff. September 1, 2023.
(d)  Authorized but unissued shares of stock of an insurance company are not considered capital, stock, or capital stock of the company.
(e)  This section and Sections 841.056 and 841.057 do not impair the charter rights of an insurance company authorized to issue shares of stock with or without a par value before September 6, 1955.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
Amended by:
Acts 2023, 88th Leg., R.S., Ch. 825 (H.B. 1903), Sec. 3(2), eff. September 1, 2023.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter B. Formation and Structure of Domestic Companies › Section 841.056. Requirements for Shares of Stock With Par Value

Sec. 841.056.  REQUIREMENTS FOR SHARES OF STOCK WITH PAR VALUE.  (a)  The shares of stock of an insurance company operating under this chapter that are divided or converted into par value shares, if any, must have a par value of not less than $1 or more than $100.
(b)  Each par value share of stock must be fully paid for before issuance in an amount that is not less than the share's par value.
(c)  When an application for charter or an amendment to the charter authorizing the issuance of shares of stock with a par value is filed, the insurance company shall file with the department a statement under oath stating:
(1)  the total number of par value shares subscribed;  and
(2)  the actual total consideration the company received for those shares.
(d)  Repealed by Acts 2023, 88th Leg., R.S., Ch. 825 (H.B. 1903), Sec. 3(3), eff. September 1, 2023.
(e)  If all of the authorized par value shares of stock are not subscribed and paid for when the charter is granted or the amendment is filed, respectively, the insurance company shall file with the department a certificate authenticated by a majority of the directors stating the total number of par value shares issued and the actual total consideration received for those shares.  The company shall file the certificate not later than the 90th day after the date of issuance of those remaining shares.  The company is not required to file an amendment to its charter or take further action to effect the increase in the capital and surplus of the company.
(f)  The actual consideration received by an insurance company for a par value share constitutes capital to the extent of its par value and the remainder, if any, constitutes surplus.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
Amended by:
Acts 2023, 88th Leg., R.S., Ch. 825 (H.B. 1903), Sec. 3(3), eff. September 1, 2023.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter B. Formation and Structure of Domestic Companies › Section 841.057. Requirements for Shares of Stock Without Par Value

Sec. 841.057.  REQUIREMENTS FOR SHARES OF STOCK WITHOUT PAR VALUE.  (a)  The shares of stock of an insurance company operating under this chapter that are divided or converted into shares without par value, if any, must be equal in all respects.
(b)  An insurance company may issue and dispose of authorized shares without par value for money or for notes, mortgages, and stocks in the form authorized by law for capital stock of insurance companies.  Each share of stock without par value must be fully paid before issuance.  After the company receives payment for a share of stock issued under this section, the share is not subject to additional call or assessment, and the subscriber or holder of the share is not required to make an additional payment with respect to the share.
(c)  The shareholders of an insurance company authorizing shares of stock without par value must pay a total amount of at least $250,000 for the shares before the company is granted a charter or has its charter amended to authorize the issuance of shares without par value.
(d)  When an application for charter or an amendment to the charter authorizing the issuance of shares without par value is filed, the insurance company shall file with the department a statement under oath stating:
(1)  the number of shares without par value subscribed;  and
(2)  the actual consideration the company received for those shares.
(e)  If all of the authorized shares of stock without par value are not subscribed and paid for when the charter is granted or the amendment is filed, respectively, the insurance company shall file with the department a certificate authenticated by a majority of the directors stating the number of shares without par value issued and the consideration received for those shares.
(f)  The insurance company shall file the certificate required by Subsection (e) not later than the 90th day after the date of issuance of those remaining shares.  The portion of the consideration received for shares without par value that is designated as capital by the company's directors, or by the company's shareholders if the charter or articles of incorporation reserve the right to make that determination to the shareholders, constitutes capital and the remainder, if any, constitutes surplus.  The company is not required to file an amendment to its charter or take further action to effect the increase in the capital and surplus of the company.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
Amended by:
Acts 2023, 88th Leg., R.S., Ch. 825 (H.B. 1903), Sec. 2, eff. September 1, 2023.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter B. Formation and Structure of Domestic Companies › Section 841.058. Application for Charter

Sec. 841.058.  APPLICATION FOR CHARTER.  (a)  To obtain a charter for a domestic insurance company, the incorporators must pay to the department the charter fee in an amount determined under Chapter 202 and file with the department:
(1)  an application for charter on the form and containing the information prescribed by the commissioner;
(2)  the company's articles of incorporation; and
(3)  an affidavit made by two or more of the incorporators that states that:
(A)  the minimum capital and surplus requirements of Section 841.054 are satisfied;
(B)  the capital and surplus are the bona fide property of the company; and
(C)  the information in the articles of incorporation is true and correct.
(b)  The commissioner may require that the incorporators provide at their expense additional evidence of a matter required in the affidavit before the commissioner takes further action on the application for charter.
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.020, eff. April 1, 2009.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter B. Formation and Structure of Domestic Companies › Section 841.059. Action by Commissioner and Department After Filing

Sec. 841.059.  ACTION BY COMMISSIONER AND DEPARTMENT AFTER FILING.
(a)  After the charter fee is paid and all items required for a charter under Section 841.058 are filed with the department,  the department shall make or cause to be made a full and thorough examination of the domestic insurance company.
(b)  The domestic insurance company shall pay for the examination under Subsection (a)(2).
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
Amended by:
Acts 2009, 81st Leg., R.S., Ch. 1022 (H.B. 4291), Sec. 8, eff. June 19, 2009.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter B. Formation and Structure of Domestic Companies › Section 841.061. Action on Application

Sec. 841.061.  ACTION ON APPLICATION.  (a)  In considering the application, the commissioner shall determine if:
(1)  the minimum capital and surplus required by Section 841.054 are the bona fide property of the domestic insurance company;
(2)  the proposed officers, directors, and managing executive of the company have sufficient insurance experience, ability, and standing to make success of the proposed company probable; and
(3)  the applicants are acting in good faith.
(b)  If the commissioner determines that the applicant has not met the standards set out by Subsection (a), the commissioner shall deny the application in writing, giving the reason for the denial.  An application may not be granted unless it is adequately supported by competent evidence.
(b-1)  On the applicant's request, the commissioner shall hold a hearing on a denial.  Not later than the 30th day after the date of the applicant's request for a hearing, the commissioner shall request a hearing date.
(b-2)  An interested party may participate fully and in all respects in any proceeding related to the application.  An intervenor has the rights and privileges of a proper or necessary party in a civil suit in the courts of this state, including the right to be represented by counsel.
(c)  If the commissioner does not deny the application under Subsection (b), the commissioner shall approve the application.  On approval of an application, the department shall record the information required by Section 841.058 in records maintained for that purpose.  On receipt of a fee in the amount determined under Chapter 202, the commissioner shall provide to the incorporators a certified copy of the application, articles of incorporation, and submitted affidavit.
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.021, eff. April 1, 2009.
Acts 2009, 81st Leg., R.S., Ch. 1022 (H.B. 4291), Sec. 9, eff. June 19, 2009.
Acts 2009, 81st Leg., R.S., Ch. 1022 (H.B. 4291), Sec. 10, eff. June 19, 2009.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter B. Formation and Structure of Domestic Companies › Section 841.062. Beginning of Corporate Existence

Sec. 841.062.  BEGINNING OF CORPORATE EXISTENCE.  On receipt of the certified copy of documents under Section 841.061(c), the domestic insurance company becomes a body politic and corporate, and the incorporators may complete organization of the company under Section 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 C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter B. Formation and Structure of Domestic Companies › Section 841.063. Organization Meeting

Sec. 841.063.  ORGANIZATION MEETING.  (a)  After receipt of the certified copy of documents under Section 841.061(c), the incorporators shall promptly call a meeting of the domestic insurance company's shareholders.  The shareholders shall:
(1)  adopt bylaws to govern the company;  and
(2)  elect the company's initial board of directors.
(b)  The directors elected under this section serve until directors are first elected under Section 841.153.
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 C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter C. Authority to Engage in Business › Section 841.101. Certificate of Authority Required

Sec. 841.101.  CERTIFICATE OF AUTHORITY REQUIRED.  A domestic insurance company may not engage in the business of insurance in this state, except for the lending of money, without first obtaining from the commissioner a certificate of authority that:
(1)  shows that the company has fully complied with the laws of this state;  and
(2)  authorizes the company to engage in the business of insurance 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 C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter C. Authority to Engage in Business › Section 841.102. Schedule of Assets

Sec. 841.102.  SCHEDULE OF ASSETS.  Two or more officers of the domestic insurance company shall execute and file with the department:
(1)  a sworn schedule of each of the assets of the company exhibited to the department during the examination under Section 841.059 showing the value of the assets;  and
(2)  a sworn statement that the assets are the bona fide, unconditional, and unencumbered property of the company and are worth the amount stated in the schedule.
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 C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter C. Authority to Engage in Business › Section 841.103. Issuance of Certificate of Authority

Sec. 841.103.  ISSUANCE OF CERTIFICATE OF AUTHORITY.  (a)  If the commissioner makes a determination favorable to the applicants on all issues under Section 841.061(a), the commissioner, on compliance with the requirements of Section 841.102, shall issue to the domestic insurance company a certificate of authority authorizing the company to engage in the kinds of business authorized by the company's charter.
(b)  On written request of a domestic insurance company, the commissioner shall provide a certified copy of the company's certificate of authority to the company for each of the company's agents 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 C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter C. Authority to Engage in Business › Section 841.104. Tax Payment Required for Issuance of Certain Certificates of Authority

Sec. 841.104.  TAX PAYMENT REQUIRED FOR ISSUANCE OF CERTAIN CERTIFICATES OF AUTHORITY.  (a)  This section applies to a life insurance company that:
(1)  has previously held a certificate of authority to engage in the business of life insurance in this state;
(2)  ceased to write new business in this state under that certificate of authority;  and
(3)  after ceasing to write new business, continued to collect from residents of this state renewal or other premiums on policies written under that certificate of authority.
(b)  A life insurance company to which this section applies may not obtain a new certificate of authority to engage in the business of life insurance in this state until the company:
(1)  files with the department under oath a report that discloses the gross amount of renewal or other premiums received each calendar year from residents of this state after the period covered by the company's last tax report of gross premium receipts filed under this code;  and
(2)  pays to the state occupation taxes on those premiums.
(c)  The life insurance company shall pay the occupation tax for each year of nonpayment.  The company shall pay the tax for each year at the same rate for that year as a company engaged in the business of life insurance in this state during that year.
(d)  The life insurance company shall remit the penalties for failure to pay the taxes and file required reports when the company pays the taxes and receives a certificate of authority.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 17, eff. April 1, 2005.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter D. Management of Company › Section 841.151. Conducting Shareholders' Meeting

Sec. 841.151.  CONDUCTING SHAREHOLDERS' MEETING.  (a)  At a meeting of a domestic insurance company's shareholders, each shareholder is entitled to one vote for each fully paid up share of stock appearing in the shareholder's name on the company's books, except to the extent that the articles of incorporation increase, limit, or deny voting rights to the holders of the shares of a class of stock as authorized by the Texas Business Corporation Act.
(b)  A shareholder may vote in person or by written proxy.
(c)  At a shareholders' meeting, a quorum is any number of shareholders whose cumulative stock ownership in the domestic insurance company represents a majority of the company's paid up capital stock.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
Sec. 841.152.  BOARD OF DIRECTORS.  (a)  Subject to the bylaws of the domestic insurance company, as adopted or amended by the shareholders or directors, the board of directors has full management and control of the company.
(b)  The board consists of not fewer than five directors.  A director is not required to be a shareholder unless such a qualification is required by the articles of incorporation or bylaws of the company.
(c)  The directors shall keep a full and correct record of the board's transactions.  The shareholders may inspect those records during business hours.
(d)  The directors shall fill a vacancy that occurs on the board or in any office of the company.
(e)  A majority of the board is a quorum.
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 C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter D. Management of Company › Section 841.153. Election of Directors

Sec. 841.153.  ELECTION OF DIRECTORS.  (a)  After a domestic insurance company completes the organization of the company under Section 841.063, the company shall hold an annual meeting of the company's shareholders on the fourth Tuesday in April at the home office of the company to elect the company's board of directors.
(b)  After the directors are first elected under this section, the annual meeting must be held each year as established by the company's bylaws.  The directors serve one-year terms beginning immediately after the election, except as provided by Section 841.154.
(c)  If the shareholders do not elect directors at an annual meeting, the shareholders may elect the directors at a special shareholders' meeting called for that purpose.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
Amended by:
Acts 2021, 87th Leg., R.S., Ch. 380 (S.B. 918), Sec. 3, eff. September 1, 2021.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter D. Management of Company › Section 841.154. Staggered Terms for Directors

Sec. 841.154.  STAGGERED TERMS FOR DIRECTORS.  (a)  Repealed by Acts 2021, 87th Leg., R.S., Ch. 380 (S.B. 918), Sec. 5, eff. September 1, 2021.
(b)  The bylaws of a domestic insurance company may provide that the company's directors, other than initial directors, may be elected to serve staggered terms as provided by this section.
(c)  The company's directors shall be divided into two or three classes, with each class consisting of an equal number of directors to the extent possible.  After the directors are divided into classes:
(1)  the terms of the directors in the first class expire on the first annual meeting date after their initial election;
(2)  the terms of the directors in the second class expire on the second annual meeting date after their initial election;  and
(3)  the terms of the directors in the third class, if any, expire on the third annual meeting date after their initial election.
(d)  At each annual meeting after the directors are first elected, the shareholders shall elect the number of directors whose terms expire on that date.  Directors are elected for:
(1)  staggered two-year terms, if the board is divided into two classes;  or
(2)  staggered three-year terms, if the board is divided into three classes.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
Amended by:
Acts 2021, 87th Leg., R.S., Ch. 380 (S.B. 918), Sec. 4, eff. September 1, 2021.
Acts 2021, 87th Leg., R.S., Ch. 380 (S.B. 918), Sec. 5, eff. September 1, 2021.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter D. Management of Company › Section 841.155. Officers

Sec. 841.155.  OFFICERS.  (a)  A domestic insurance company's directors shall choose one of the directors to serve as the company's president.
(b)  Other officers of the domestic insurance company shall be chosen in accordance with the company's bylaws.  An officer is not required to be a shareholder unless such a qualification is required by the company's articles of incorporation or bylaws.  An officer other than the president is not required to be a director unless such a qualification is required by the company's bylaws.
(c)  The duties and compensation of a domestic insurance company's officers are as stated in the company's bylaws.  If the bylaws do not state the duties or compensation of the officers, the directors shall establish the duties or compensation.
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 C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter D. Management of Company › Section 841.156. Amendment of Charter or Articles

Sec. 841.156.  AMENDMENT OF CHARTER OR ARTICLES.  (a)  The shareholders of a domestic insurance company by resolution may amend the company's charter or articles of incorporation at any shareholders' meeting.
(b)  The amendment and a copy of the resolution certified by the president and secretary of the domestic insurance company shall be filed and recorded in the same manner as the charter.
(c)  An amendment of the charter or articles takes effect when it is recorded.
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 C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter E. Capital and Surplus › Section 841.201. Form of Required Capital and Surplus

Sec. 841.201.  FORM OF REQUIRED CAPITAL AND SURPLUS.  Notwithstanding any other provision of this code, after a charter is granted under this chapter, the domestic insurance company:
(1)  shall maintain the company's minimum capital at all times in a form described by Section 841.054(c);  and
(2)  may invest the company's surplus as provided by this code.
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 C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter E. Capital and Surplus › Section 841.202. Authorized Shares

Sec. 841.202.  AUTHORIZED SHARES.  (a)  At any shareholders' meeting, shareholders of a domestic insurance company whose cumulative stock ownership represents a majority of the capital stock of the company by resolution may increase or decrease the amount of the company's capital stock, subject to this section.
(b)  Capital stock may never be decreased to an amount that is less than the minimum amount of paid-up stock required by Section 841.054.
(c)  Two officers of the domestic insurance company must sign and acknowledge a statement of the increase or decrease.  The acknowledged statement and a certified copy of the resolution shall be filed and recorded in the same manner as the charter.
(d)  For an increase or decrease of capital stock, the domestic insurance company may require the return of the original certificates evidencing the stock in exchange for new certificates.  An issuance of new certificates that results in a transfer of stock is subject to Section 841.254.
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 C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter E. Capital and Surplus › Section 841.203. Company's Repurchase of Stock

Sec. 841.203.  COMPANY'S REPURCHASE OF STOCK.  (a)  A legal reserve life insurance company may purchase in the name of the company outstanding shares of the company's capital stock as provided by the Texas Business Corporation Act.
(b)  A purchase of stock under this section is not considered an investment and does not violate the provisions of this code relating to eligible investments for a legal reserve life insurance company.
(c)  A legal reserve life insurance company that purchases stock under this section shall file with the department not later than the 10th day after the date of the purchase a statement that contains:
(1)  the name of each shareholder from whom the shares were purchased;  and
(2)  the sum of money paid for those 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 C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter E. Capital and Surplus › Section 841.204. Exemption From Required Increase of Capital and Surplus

Sec. 841.204.  EXEMPTION FROM REQUIRED INCREASE OF CAPITAL AND SURPLUS.  (a)  Except as otherwise provided by this chapter, a domestic insurance company that after September 1, 1991, had less than the minimum amount of capital and surplus required for a newly incorporated company under Section 841.054 may continue to transact the kinds of business for which it holds a certificate of authority.
(b)  The insurance company shall immediately increase the amount of its capital to the required amount of capital under Section 841.054 if there is:
(1)  a change in the control of at least 50 percent of the voting securities of the insurance company;
(2)  a change in the control of at least 50 percent of the voting securities of a holding company controlling the insurance company;  or
(3)  a change in control of at least 50 percent by any other method of control if the insurance company or holding company is not controlled by voting securities.
(c)  For purposes of Subsection (b), a transfer of ownership that occurs because of death, regardless of whether the decedent died testate or intestate, may not be considered a change in the control of an insurance company or holding company if ownership is transferred solely to one or more individuals, each of whom would be an heir of the decedent if the decedent had died intestate.
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 C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter E. Capital and Surplus › Section 841.205. Commissioner May Require Larger Capital and Surplus Amounts

Sec. 841.205.  COMMISSIONER MAY REQUIRE LARGER CAPITAL AND SURPLUS AMOUNTS.  (a)  The commissioner by rule or guideline may require a domestic insurance company that writes or assumes a life insurance or annuity contract or assumes liability on or indemnifies one person for any risk under an accident and health insurance policy, or a combination of these policies, in an amount that exceeds $10,000, to maintain capital and surplus in amounts that exceed the minimum amounts required by this chapter because of:
(1)  the nature and kind of risks the company underwrites or reinsures;
(2)  the premium volume of risks the company underwrites or reinsures;
(3)  the composition, quality, duration, or liquidity of the company's investment portfolio;
(4)  fluctuations in the market value of securities the company holds;  or
(5)  the adequacy of the company's reserves.
(b)  A rule adopted under Subsection (a) must be designed to ensure the financial solvency of an insurance company for the protection of policyholders but may not require that the total admitted assets of a company exceed 106 percent of its total liabilities.
(c)  A fraternal benefit society operating under Chapter 885 and a mutual life insurance company operating under Chapter 882 are subject to a rule adopted under this section.
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 C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter E. Capital and Surplus › Section 841.206. Impairment of Capital and Surplus

Sec. 841.206.  IMPAIRMENT OF CAPITAL AND SURPLUS.  (a)  An insurance company incorporated or authorized to do the lines of business authorized in this chapter may not have:
(1)  the company's required capital impaired;
(2)  more than 90 percent of the company's required minimum surplus impaired; or
(3)  the surplus required under Section 841.205 impaired.
(b)  If the commissioner determines that an insurance company's capital or surplus is impaired in violation of this section, the commissioner shall:
(1)  order the company to immediately reduce the level of impairment to an acceptable level of impairment as specified by the commissioner or prohibit the company from engaging in the business of insurance in this state;  and
(2)  begin proceedings as necessary to determine any further actions with respect to the impairment.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
Amended by:
Acts 2005, 79th Leg., Ch. 728 (H.B. 2018), Sec. 11.021, eff. September 1, 2005.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter E. Capital and Surplus › Section 841.207. Actions of Commissioner When Capital and Surplus Requirements Not Satisfied

Sec. 841.207.  ACTIONS OF COMMISSIONER WHEN CAPITAL AND SURPLUS REQUIREMENTS NOT SATISFIED.  If an insurance company does not comply with the capital and surplus requirements of this chapter, the commissioner may order the insurance company to cease writing new business and may:
(1)  place the insurance company under state supervision or conservatorship;
(2)  declare the insurance company to be in a hazardous condition as provided by Subchapter A, Chapter 404;
(3)  declare the insurance company to be impaired as provided by Section 841.206; or
(4)  apply to the insurance company any other applicable sanction provided by this code.
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.022, eff. April 1, 2009.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter F. General Powers, Duties, and Limitations › Section 841.251. Evidence of Expenditures

Sec. 841.251.  EVIDENCE OF EXPENDITURES.  (a)  A domestic insurance company may not make an expenditure of $100 or more unless the expenditure is evidenced by a voucher that:
(1)  is signed by or on behalf of the individual, firm, or corporation that receives the money;  and
(2)  describes the consideration received for the payment correctly.
(b)  For an expenditure for both services and disbursements, the voucher must state the services rendered and disbursement made.
(c)  For an expenditure related to a matter pending before a legislature or public body or a department or officer of a state or government, the voucher must describe both the nature of the matter and the interest of the company in the matter correctly.
(d)  If the domestic insurance company cannot obtain a voucher as required by this section, the expenditure must be evidenced by:
(1)  a paid check;  or
(2)  an affidavit that:
(A)  describes the nature and purpose of the expenditure;  and
(B)  states the reason the voucher was not obtained.
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 C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter F. General Powers, Duties, and Limitations › Section 841.252. Payments to Officers, Directors, and Employees

Sec. 841.252.  PAYMENTS TO OFFICERS, DIRECTORS, AND EMPLOYEES.  (a)  Unless first authorized by a vote of a domestic insurance company's board of directors or a committee of the board that has the duty to authorize the payments, the company may not pay any compensation or emolument in an amount that, when added to any compensation or emolument paid to the person by an affiliated domestic insurance company, exceeds $150,000 in any year to an individual, firm, or corporation, including an officer or director of the company.
(b)  Subsection (a) does not prevent a domestic insurance company from contracting with its agents for the payment of renewal commissions.
(c)  The shareholders of a domestic insurance company may authorize the creation of one or more plans for the payment of pensions, retirement benefits, or group insurance for the company's officers and employees.  The shareholders may delegate to the company's board of directors the power and duty to prepare, effect, finally approve, administer, and amend a plan.
(d)  A mutual insurance company, acting through the company's policyholders, may exercise the same discretion, and has the same powers, privileges, and rights, as are conferred on a domestic insurance company under Subsection (c).
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
Amended by:
Acts 2009, 81st Leg., R.S., Ch. 94 (H.B. 651), Sec. 1, eff. September 1, 2009.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter F. General Powers, Duties, and Limitations › Section 841.253. Life Insurance Company's Payment of Dividends

Sec. 841.253.  LIFE INSURANCE COMPANY'S PAYMENT OF DIVIDENDS.  (a)  A life insurance company may declare or pay a dividend to its:
(1)  policyholders only from the expense loading and profits made by the company;  and
(2)  shareholders only from the company's earned surplus, as defined by the commissioner.
(b)  A life insurance company that is not showing a profit may pay a dividend on its participating policies from the expense loading on those policies.
(c)  A life insurance company may not discriminate between policyholders in paying a dividend from the expense loading under this section.
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 C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter F. General Powers, Duties, and Limitations › Section 841.254. Transfer of Stock

Sec. 841.254.  TRANSFER OF STOCK.  (a)  A domestic insurance company's shares of stock are transferrable on the company's books, in accordance with law and the bylaws of the company, by the owner or the owner's authorized agent.
(b)  Each person who becomes a shareholder by a transfer of shares succeeds to all rights of the former holder of those shares, by reason of that ownership.
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 C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter F. General Powers, Duties, and Limitations › Section 841.255. Annual Statement; Filing Fee

Sec. 841.255.  ANNUAL STATEMENT;  FILING FEE.  (a)  Not later than March 1 of each year, a domestic insurance company shall:
(1)  prepare a statement showing the condition of the company on December 31 of the preceding year; and
(2)  deliver the statement to the department accompanied by a filing fee in the amount determined under Chapter 202.
(b)  The statement must be under oath of two of the domestic insurance company's officers and show in detail:
(1)  the character of the company's assets and liabilities on December 31 of the preceding year;
(2)  the amount and character of business transacted and money received during the preceding year;
(3)  how money was spent during the preceding year;
(4)  the number and amount of the company's policies in force in this state on that date;  and
(5)  the total amount of the company's policies in force on that 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.023, eff. April 1, 2009.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter F. General Powers, Duties, and Limitations › Section 841.256. Business in Separate Departments of Domestic Insurance Company

Sec. 841.256.  BUSINESS IN SEPARATE DEPARTMENTS OF DOMESTIC INSURANCE COMPANY.  A domestic insurance company may not transact more than one of the kinds of insurance business described by Section 841.051(a) unless the company establishes separate departments to transact each kind of 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 C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter F. General Powers, Duties, and Limitations › Section 841.257. Kinds of Business Limited

Sec. 841.257.  KINDS OF BUSINESS LIMITED.  An insurance company authorized to engage in the business of insurance under this chapter or in accordance with Section 982.051 may not accept a risk or write an insurance policy in this state or any other state or country other than:
(1)  a life, accident, or health insurance policy;
(2)  reinsurance under Chapter 493 by a life insurance company authorized to engage in the business of insurance in this state; or
(3)  reinsurance under Chapter 494 by a domestic insurance company.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
Amended by:
Acts 2005, 79th Leg., Ch. 728 (H.B. 2018), Sec. 11.022, eff. September 1, 2005.
Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636), Sec. 2E.024, eff. April 1, 2009.
Acts 2017, 85th Leg., R.S., Ch. 594 (S.B. 1070), Sec. 3.04, eff. September 1, 2017.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter F. General Powers, Duties, and Limitations › Section 841.258. Agents for Company That Ceases Writing New Business

Sec. 841.258.  AGENTS FOR COMPANY THAT CEASES WRITING NEW BUSINESS.  An insurance company that ceases to write new business in this state may maintain in this state agents to collect renewal premiums on outstanding policies the company has written under its certificate of authority.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
Amended by:
Acts 2005, 79th Leg., Ch. 728 (H.B. 2018), Sec. 11.022, eff. September 1, 2005.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter F. General Powers, Duties, and Limitations › Section 841.259. Activities of Directors and Officers

Sec. 841.259.  ACTIVITIES OF DIRECTORS AND OFFICERS.  (a)  A director or officer of an insurance company may not:
(1)  receive money or another valuable thing for negotiating, procuring, recommending, or aiding in a purchase or sale of property by or a loan from the company;  or
(2)  have a pecuniary interest, as a principal, coprincipal, agent, or beneficiary, in a purchase, sale, or loan described by Subdivision (1).
(b)  This section does not prohibit:
(1)  a life insurance company from making a loan to a policyholder in an amount that is not greater than the reserve value of the policy;  or
(2)  a transaction, purchase, sale, or loan approved by the commissioner under Subchapter A of Chapter 805 or 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 C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter F. General Powers, Duties, and Limitations › Section 841.260. Prohibited Commissions

Sec. 841.260.  PROHIBITED COMMISSIONS.  (a)  In this section, "contingent compensation" means a commission or other compensation an insurance company pays to a person that is contingent on:
(1)  the writing or procurement of an insurance policy in the company;
(2)  the procurement of an application for an insurance policy in the company;
(3)  the payment of a renewal premium;  or
(4)  the assumption of an insurance risk by the company.
(b)  A life insurance company that engages in the business of insurance in this state may not, directly or indirectly, pay or contract to pay a contingent compensation to:
(1)  the president, vice president, secretary, or treasurer of the company;
(2)  any other officer of the company, other than an agent or solicitor;
(3)  an actuary of the company;  or
(4)  a medical director or other physician of the company whose duty is to examine risks or applications for insurance for the company.
(c)  This section does not prohibit a plan of compensation to a marketing officer according to the total amount of insurance the insurance company writes or to the total amount of insurance in force with the insurance company during a specified period if:
(1)  the commissioner approves the plan under Subchapter A, Chapter 805;
(2)  the marketing officer is not responsible for underwriting, rating, or otherwise approving the acceptability of insurance risks;  and
(3)  the plan does not compensate the marketing officer according to commissions on individual sales of any insurance product.
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 C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter F. General Powers, Duties, and Limitations › Section 841.261. Causes of Action

Sec. 841.261.  CAUSES OF ACTION.  (a)  A domestic insurance company may bring an action against any person, including a policyholder or shareholder of the company, for any cause related to the company's business.
(b)  A policyholder or an heir or legal representative of a policyholder may bring an action against a domestic insurance company for a loss that accrues on a policy.
(c)  An action enjoining, restraining, or interfering with the prosecution of a domestic insurance company's business may be brought only 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 C - Life, Health, and Accident Insurers and Related Entities › Chapter 841 - Life, Health, or Accident Insurance Companies › Subchapter G. Issuance of Policies › Section 841.302. Limits on Life or Accidental Death Insurance

Sec. 841.302.  LIMITS ON LIFE OR ACCIDENTAL DEATH INSURANCE.  (a)  Until the amount of the capital and surplus of a domestic insurance company is at least $100,000, the company may not insure any one life for more than $20,000 in the event of death from natural causes or more than $40,000 in the event of death from accidental causes.
(b)  If the net capital and surplus of a domestic insurance company is at least $75,001 but less than $100,000, the company, for any policy issued by the company, shall reinsure the amount of the benefit that exceeds $4,000 in the event of death from natural causes and the amount of the benefit that exceeds $8,000 in the event of death from accidental causes.
(c)  If the net capital and surplus of a domestic insurance company is at least $50,001 but less than $75,001, the company, for any policy issued by the company, shall reinsure the amount of the benefit that exceeds $3,000 in the event of death from natural causes and the amount of the benefit that exceeds $6,000 in the event of death from accidental causes.
(d)  If the net capital and surplus of a domestic insurance company is at least $35,001 but less than $50,001, the company, for any policy issued by the company, shall reinsure the amount of the benefit that exceeds $2,000 in the event of death from natural causes and the amount of the benefit that exceeds $4,000 in the event of death from accidental causes.
(e)  If the net capital and surplus of a domestic insurance company is $35,000 or less, the company, for any policy issued by the company, shall reinsure the amount of the benefit that exceeds $1,000 in the event of death from natural causes and the amount of the benefit that exceeds $2,000 in the event of death from accidental causes.
(f)  Benefits under this section must be reinsured with a legal reserve company that is authorized to engage in the business of insurance in this state.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.