79R4775 DLF-F
By: Seaman H.B. No. 1746
A BILL TO BE ENTITLED
AN ACT
relating the conversion of certain mutual life insurance companies
to insurance holding companies and stock life insurance companies.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 882, Insurance Code, is amended by
adding Subchapter P to read as follows:
SUBCHAPTER P. CONVERSION OF MUTUAL LIFE INSURANCE COMPANY TO
INSURANCE HOLDING COMPANY AND STOCK LIFE INSURANCE COMPANY
Sec. 882.751. AUTHORITY TO CONVERT. A mutual life
insurance company organized or operating under this chapter may
convert by forming an insurance holding company based on a mutual
plan and continuing the corporate existence of the converting
mutual life insurance company as a stock life insurance company if
the commissioner:
(1) determines that the conversion is fair and
equitable to the policyholders of the converting company; and
(2) approves the proposed plan of conversion.
Sec. 882.752. APPLICATION OF OTHER LAW. Except to the
extent of a conflict with this subchapter, Chapter 826 applies to
conversion of a mutual life insurance company under this
subchapter.
Sec. 882.753. JURISDICTION OF COMMISSIONER. The
commissioner retains jurisdiction over a company that converts
under this subchapter.
Sec. 882.754. INCORPORATION REQUIREMENTS. A mutual
insurance holding company that results from a conversion under this
subchapter must be incorporated under and subject to this chapter
and Chapter 22, Business Organizations Code.
Sec. 882.7545. INCORPORATION REQUIREMENTS: TEMPORARY
PROVISION. Notwithstanding Section 882.754, a mutual insurance
holding company that results from a conversion under this
subchapter must be incorporated under and subject to this chapter
and the Texas Non-Profit Corporation Act (Article 1396-1.01 et
seq., Vernon's Texas Civil Statutes) or Chapter 22, Business
Organizations Code, as applicable. This section expires January 1,
2010.
Sec. 882.755. ARTICLES OF INCORPORATION. The articles of
incorporation of a mutual insurance holding company that results
from a conversion under this subchapter, and any amendments to the
articles of incorporation, are subject to approval by the
commissioner.
Sec. 882.756. SALE OF SECURITIES. (a) A sale, issuance, or
offering of securities under this subchapter 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 of a mutual life
insurance company or a mutual insurance holding company or stock
life insurance company resulting from a conversion under this
subchapter who participates in the conversion 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 receive compensation, other than that person's usual salary
or compensation, for services performed under the exemption
provided by this subsection.
SECTION 2. This Act takes effect September 1, 2005.