1-1 By: Wentworth S.B. No. 1598 1-2 (In the Senate - Filed March 9, 2001; March 14, 2001, read 1-3 first time and referred to Committee on Business and Commerce; 1-4 April 19, 2001, reported adversely, with favorable Committee 1-5 Substitute by the following vote: Yeas 5, Nays 0; April 19, 2001, 1-6 sent to printer.) 1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 1598 By: Lucio 1-8 A BILL TO BE ENTITLED 1-9 AN ACT 1-10 relating to the reorganization of a mutual life insurance company. 1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-12 SECTION 1. Article 11.01, Insurance Code, is amended by 1-13 adding Section 3 to read as follows: 1-14 Sec. 3. (a) Subject to Article 15.22 of this code, a 1-15 mutual life insurance company organized or operating under the 1-16 provisions of this chapter may reorganize by forming an insurance 1-17 holding company based on a mutual plan and continuing the corporate 1-18 existence of the reorganizing mutual life insurance company as a 1-19 stock insurance company if the commissioner determines that the 1-20 reorganization is fair and equitable to the policyholders of the 1-21 company and approves the proposed plan of reorganization. 1-22 (b) The commissioner shall retain jurisdiction over a 1-23 company that is reorganized under this section. 1-24 (c) A mutual holding company that results from a 1-25 reorganization of a domestic mutual life insurance company 1-26 organized under this chapter must be incorporated under the 1-27 provisions of this code and the Texas Non-Profit Corporation Act 1-28 (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes). The 1-29 articles of incorporation of the mutual holding company and any 1-30 amendments to the articles of incorporation are subject to approval 1-31 by the commissioner. 1-32 (d) A sale, issuance, or offering of securities under this 1-33 section is exempt from the registration and licensing provisions of 1-34 The Securities Act (Article 581-1 et seq., Vernon's Texas Civil 1-35 Statutes). An officer, director, or employee who participates in a 1-36 reorganization under this section is exempt from the registration 1-37 and licensing provisions of The Securities Act (Article 581-1 et 1-38 seq., Vernon's Texas Civil Statutes). A person may not be 1-39 compensated for services performed under the exemption provided by 1-40 this section. 1-41 SECTION 2. This Act takes effect September 1, 2001. 1-42 * * * * *