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78R2938 KCR-D

By:  Seaman                                                       H.B. No. 412



A BILL TO BE ENTITLED

AN ACT

relating to the reorganization of a mutual life insurance company.            
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Chapter 882, Insurance Code, as effective June 
1, 2003, is amended by adding Subchapter P to read as follows:

SUBCHAPTER P.  REORGANIZATION OF CERTAIN MUTUAL LIFE INSURANCE 
COMPANIES INTO INSURANCE HOLDING COMPANIES AND STOCK INSURANCE 
COMPANIES
	Sec. 882.751.  AUTHORITY TO REORGANIZE.  (a)  Subject to 
Chapter 826, a mutual life insurance company organized or operating 
under this chapter may reorganize by forming an insurance holding 
company based on a mutual plan and continuing the corporate 
existence of the reorganizing mutual life insurance company as a 
stock insurance company if the commissioner:
		(1)  determines that the reorganization is fair and 
equitable to the policyholders of the reorganizing company; and
		(2)  approves the proposed plan of reorganization.                     
	(b)  The commissioner shall retain jurisdiction over a 
company that is reorganized under this section.
	Sec. 882.752.  INCORPORATION REQUIREMENTS.  A mutual holding 
company that results from a reorganization of a domestic mutual 
life insurance company organized under this chapter must be 
incorporated under this code and the Texas Non-Profit Corporation 
Act (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes).  
The articles of incorporation of the mutual holding company and any 
amendments to the articles of incorporation are subject to approval 
by the commissioner.
	Sec. 882.753.  SALE OF SECURITIES.  (a)  A sale, issuance, or 
offering of securities under this section is exempt from the 
registration and licensing provisions of The Securities Act 
(Article 581-1 et seq., Vernon's Texas Civil Statutes).
	(b)  An officer, director, or employee who participates in a 
reorganization under this section is exempt from the registration 
and licensing provisions of The Securities Act (Article 581-1 et 
seq., Vernon's Texas Civil Statutes).  A person may not be 
compensated for services performed under the exemption provided by 
this section.
	SECTION 2.  This Act takes effect September 1, 2003.