By: Wentworth S.B. No. 1598 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the reorganization of a mutual life insurance company. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 SECTION 1. Article 11.01, Insurance Code, is amended by 1-5 adding Section 3 to read as follows: 1-6 Sec. 3. (a) Subject to Article 15.22 of this code, a 1-7 mutual life insurance company organized or operating under the 1-8 provisions of this chapter may reorganize by forming an insurance 1-9 holding company based on a mutual plan and continuing the corporate 1-10 existence of the reorganizing mutual life insurance company as a 1-11 stock insurance company if the commissioner determines that the 1-12 reorganization is fair and equitable to the policyholders of the 1-13 company and approves the proposed plan of reorganization. 1-14 (b) The commissioner shall retain jurisdiction over a 1-15 company that is reorganized under this section. 1-16 (c) A mutual holding company that results from a 1-17 reorganization of a domestic mutual life insurance company 1-18 organized under this chapter must be incorporated under the 1-19 provisions of this code and the Texas Non-Profit Corporation Act 1-20 (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes). The 1-21 articles of incorporation of the mutual holding company and any 1-22 amendments to the articles of incorporation are subject to approval 1-23 by the commissioner. 1-24 (d) A sale, issuance, or offering of securities under this 1-25 section is exempt from the registration and licensing provisions of 2-1 The Securities Act (Article 581-1 et seq., Vernon's Texas Civil 2-2 Statutes). An officer, director, or employee who participates in a 2-3 reorganization under this section is exempt from the registration 2-4 and licensing provisions of The Securities Act (Article 581-1 et 2-5 seq., Vernon's Texas Civil Statutes). A person may not be 2-6 compensated for services performed under the exemption provided by 2-7 this section. 2-8 SECTION 2. This Act takes effect September 1, 2001.