CHAPTER 823. INSURANCE HOLDING COMPANY SYSTEMS
INSURANCE CODE
TITLE 6. ORGANIZATION OF INSURERS AND RELATED ENTITIES
SUBTITLE B. ORGANIZATION OF REGULATED ENTITIES
CHAPTER 823. INSURANCE HOLDING COMPANY SYSTEMS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 823.001. FINDINGS AND PURPOSE. (a) It is consistent with
the public interest and the interest of policyholders to permit
insurers to:
(1) engage in activities that would enable the insurers to make
better use of management skills and facilities;
(2) have free access to capital markets that could provide funds
for insurers to use in diversification programs;
(3) implement sound tax planning conclusions; and
(4) serve the changing needs of the public and adapt to changing
conditions of the social, economic, and political environment, so
that insurers are able to compete effectively and to meet the
growing public demand for institutions capable of providing a
comprehensive range of financial services.
(b) The public interest and the interests of policyholders are
adversely affected if:
(1) control of an insurer is sought by persons who would use the
control adversely to the interest of policyholders;
(2) acquisition of control of an insurer substantially lessens
competition or creates a monopoly in the insurance business in
this state;
(3) an insurer that is part of a holding company system is
caused to enter into transactions or relationships with
affiliated companies on terms that are not fair and reasonable;
or
(4) an insurer pays dividends to shareholders that jeopardize
the financial condition of the insurer.
(c) The purpose of this chapter is to promote the public
interest by:
(1) facilitating the achievement of the objectives described by
Subsection (a);
(2) requiring disclosure of pertinent information relating to
and approval of changes in control of an insurer;
(3) requiring disclosure and approval of material transactions
and relationships between the insurer and the insurer's
affiliates, including certain dividends to shareholders paid by
the insurer; and
(4) providing standards governing material transactions between
the insurer and the insurer's affiliates.
(d) It is desirable to prevent unnecessary multiple and
conflicting regulation of insurers. In accordance with this
purpose and except as provided by this chapter, this state shall
exercise regulatory authority under this chapter only with
respect to domestic insurers.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 2E.010, eff. April 1, 2009.
Sec. 823.002. DEFINITIONS. In this chapter:
(1) "Acquiring person" means the person who is acquiring control
of a domestic insurer or on whose behalf control of a domestic
insurer is being acquired.
(2) "Controlled insurer" means an insurer that is controlled
directly or indirectly by a holding company.
(3) "Controlled person" means a person, other than a controlled
insurer, who is controlled directly or indirectly by a holding
company.
(4) "Domestic insurer" includes a commercially domiciled insurer
described by Section 823.004.
(5) "Holding company" means a person who directly or indirectly
controls an insurer. The term does not include the United States,
a state or a political subdivision, agency, or other
instrumentality of a state, or a corporation that is wholly owned
directly or indirectly by the United States, a state, or an
instrumentality of a state.
(6) "Insurer" means any insurance company organized under the
laws of this state, a commercially domiciled insurer, or an
insurer authorized to engage in the business of insurance in this
state. The term includes a capital stock company, mutual company,
farm mutual insurance company, title insurance company, fraternal
benefit society, local mutual aid association, statewide mutual
assessment company, county mutual insurance company, Lloyd's
plan, reciprocal or interinsurance exchange, stipulated premium
insurance company, and group hospital service corporation. The
term does not include the United States, a state, or an agency,
authority, instrumentality, or political subdivision of a state.
(7) "Person" means an individual, corporation, partnership,
association, joint stock company, trust, or unincorporated
organization, or a similar entity or a combination of the listed
entities acting in concert. The term does not include a
securities broker while performing no more than a function that
is usual and customary for a securities broker.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.003. CLASSIFICATION AS AFFILIATE OR SUBSIDIARY. (a) A
person is an affiliate of another if the person directly or
indirectly through one or more intermediaries controls, is
controlled by, or is under common control with the other person.
(b) A person is a subsidiary of another if the person is an
affiliate of and is controlled by the other person directly or
indirectly through one or more intermediaries.
(c) A subsidiary or holding company of a person is an affiliate
of that person.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.004. CLASSIFICATION AS COMMERCIALLY DOMICILED INSURER.
(a) For purposes of this chapter, a foreign or alien insurer
authorized to engage in the business of insurance in this state
is a commercially domiciled insurer if during the period
described by Subsection (b) the average of the gross premiums
written by the insurer in this state is:
(1) more than the average of the gross premiums written by the
insurer in its state of domicile; and
(2) 30 percent or more of the total gross premiums written by
the insurer in the United States, as reported in its three most
recent annual statements.
(b) The period applicable to Subsection (a) is:
(1) the three most recent fiscal years of the insurer that
precede the fiscal year in which the determination under this
section is made; or
(2) if the insurer has been authorized to engage in the business
of insurance in this state for less than the period described by
Subdivision (1), the period for which the insurer has been
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.
Sec. 823.005. DESCRIPTION OF CONTROL; DETERMINATION OF CONTROL.
(a) For purposes of this chapter, control is the power to
direct, or cause the direction of, the management and policies of
a person, other than power that results from an official position
with or corporate office held by the person. The power may be
possessed directly or indirectly by any means, including through
the ownership of voting securities or by contract, other than a
commercial contract for goods or nonmanagement services.
(b) For purposes of this chapter, a person controls another if
the person possesses the power described by Subsection (a) with
regard to the other person.
(c) After providing notice and opportunity for hearing to each
person in interest, the commissioner may determine that,
notwithstanding the absence of a presumption under Section
823.151, a person controls an authorized insurer if the person,
directly or indirectly and alone or under an agreement with one
or more other persons, exercises such a controlling influence
over the management or policies of the insurer that it is
necessary or appropriate in the public interest or for the
protection of the insurer's policyholders that the person be
considered to control the insurer. The commissioner shall make
specific findings of fact to support a determination under this
subsection.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.006. DESCRIPTION OF INSURANCE HOLDING COMPANY SYSTEM.
An insurance holding company system consists of two or more
affiliates, at least one of which is an insurer.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.007. DESCRIPTION OF VOTING SECURITY. For purposes of
this chapter, a voting security is a security or an instrument
that:
(1) has the power at a meeting of shareholders of a person to
vote for or against the election of directors of the person or
any other matter involving the direction of the management and
policies of the person; or
(2) under rules adopted by the commissioner in the public
interest, the commissioner considers to be of similar nature to
that described by Subdivision (1) and considers necessary or
appropriate to treat as a voting security.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.008. STANDARD FOR DETERMINING SURPLUS REASONABLENESS
AND ADEQUACY. (a) In determining whether an insurer's
policyholders' surplus is reasonable in relation to the insurer's
outstanding liabilities and adequate to the insurer's financial
needs, the following factors, among others, shall be considered:
(1) the size of the insurer as measured by its assets, capital
and surplus, reserves, premium writings, insurance in force, and
other appropriate criteria;
(2) the extent to which the insurer's business is diversified
among the different lines of insurance;
(3) the number and size of risks insured in each line of
insurance;
(4) the extent of the geographical dispersion of the insurer's
insured risks;
(5) the nature and extent of the insurer's reinsurance program;
(6) the quality, diversification, and liquidity of the insurer's
investment portfolio;
(7) the recent past and projected future trend in the size of
the insurer's:
(A) policyholders' surplus; and
(B) investment portfolio;
(8) the policyholders' surplus maintained by comparable
insurers;
(9) the adequacy of the insurer's reserves;
(10) the quality and liquidity of investments in subsidiaries
made under Subchapter F; and
(11) the quality of the insurer's earnings and the extent to
which the insurer's reported earnings include extraordinary
items.
(b) The commissioner may treat an investment described by
Subsection (a)(10) as a nonadmitted or disallowed asset for
purposes of Subsection (a) if in the commissioner's judgment the
investment justifies that treatment.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.009. SITUS OF SECURITIES OF DOMESTIC INSURER. For
purposes of this chapter, the situs of the ownership of
securities of a domestic insurer is considered to be in this
state.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.010. DISCLAIMER OF AFFILIATION. (a) A disclaimer of
affiliation with an authorized insurer may be filed with the
commissioner by any person, including the authorized insurer or a
member of an insurance holding company system.
(b) The disclaimer must fully disclose:
(1) all material relationships and bases for affiliation between
the person and the insurer; and
(2) the basis for disclaiming the affiliation.
(c) After the disclaimer is filed:
(1) the insurer is not required to register or report under
Subchapter B because of a duty that arises out of the insurer's
relationship with the person unless the commissioner disallows
the disclaimer, in which event the duty to register or report
begins on the date of the disallowance; and
(2) the person is not required to comply with Sections 823.154,
823.155, 823.159, and 823.160 unless the commissioner disallows
the disclaimer.
(d) The commissioner may disallow the disclaimer only after:
(1) providing to each party in interest notice of and the
opportunity to be heard on the disallowance; and
(2) making specific findings of fact to support the
disallowance.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.011. CONFIDENTIALITY OF INFORMATION. (a) This section
applies only to information, including documents and copies of
documents, that is:
(1) reported under Subchapter B; or
(2) obtained by or disclosed to the commissioner or another
person in the course of an examination or investigation under
Subchapter H.
(b) The information shall be treated confidentially and is not
subject to subpoena. Except as provided by Subsections (c) and
(d), the information may not be disclosed without the prior
written consent of the insurer to which it pertains.
(c) The commissioner may publish all or any part of the
information in the manner that the commissioner considers
appropriate if the commissioner, after giving the insurer and its
affected affiliates notice and an opportunity to be heard,
determines that the interests of policyholders or the public will
be served by the publication of the information.
(d) The commissioner or another person may disclose the
information to any of the following entities functioning in an
official capacity:
(1) an insurance department of another state;
(2) an authorized law enforcement official;
(3) a district attorney of this state;
(4) the attorney general; or
(5) a grand jury.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.012. RULES; PROCEDURES FOR CONSIDERING CERTAIN
DISTRIBUTIONS. (a) The commissioner may, after notice and
opportunity for all interested persons to be heard, adopt rules
and issue orders to implement this chapter, including the
conducting of business and proceedings under this chapter.
(b) The commissioner by rule shall establish procedures to:
(1) promptly consider the prepayment notices reported under
Section 823.053(b);
(2) annually review each reported ordinary dividend paid within
the 12 months preceding the date of the report; and
(3) take appropriate actions authorized by this code.
(c) A procedure established under Subsection (b)(1) must include
consideration of the factors provided by Section 823.008.
(d) A rule or order under this section must be consistent with
this chapter.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.013. MANDAMUS. A person aggrieved by the failure of
the commissioner to act, including making a determination, as
required by this chapter may petition a district court of Travis
County for a writ in the nature of a mandamus or a peremptory
mandamus directing the commissioner to immediately act or make
the determination.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.014. APPLICABILITY OF CHAPTER TO FOREIGN OR ALIEN
INSURER. (a) A foreign insurer that is authorized to engage in
the business of insurance in this state and that is domiciled in
a jurisdiction that has not adopted, by statute or regulation,
controls considered by the commissioner to be substantially
similar to those provided by this chapter:
(1) is subject to this chapter to the same extent as a domestic
insurer; and
(2) on failure to comply with this chapter, is subject to all
remedies, penalties, and sanctions authorized by this code in the
same manner as a domestic insurer, including, after notice and
hearing, the suspension or revocation of the insurer's
certificate of authority to engage in the business of insurance
in this state.
(b) If a jurisdiction adopts controls considered by the
commissioner to be substantially similar to those provided by
this chapter, the commissioner after that adoption may exempt an
insurer domiciled in that jurisdiction from the application of
this section.
(c) Notwithstanding Subsection (a), a foreign or alien insurer
is not subject to this chapter if the commissioner has approved a
withdrawal plan for the insurer under Chapter 827.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.015. EXEMPTION FROM CHAPTER. The commissioner may
exempt from the application of this chapter a commercially
domiciled insurer that the commissioner determines has assets
physically located in this state or an asset-to-liability ratio
sufficient to justify the conclusion that there is no reasonable
danger that the operations or conduct of the business of the
insurer could present a danger of loss to the policyholders of
this state.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Amended by:
Acts 2005, 79th Leg., Ch.
884, Sec. 1, eff. September 1, 2005.
SUBCHAPTER B. REGISTRATION
Sec. 823.051. REGISTRATION BY INSURER REQUIRED. (a) Each
insurer authorized to engage in the business of insurance in this
state that is a member of an insurance holding company system
shall register with the commissioner. The insurer shall register
not later than the 15th day after the date the insurer becomes
subject to registration under this subchapter.
(b) The commissioner for good cause shown may extend the period
for registration under this section.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.052. REQUIRED INFORMATION; REGISTRATION STATEMENT. (a)
To register as required by Section 823.051, an insurer must file
a registration statement with the department.
(b) The registration statement must contain current information
about:
(1) the identity and relationship of each affiliate in the
insurance holding company system of which the insurer is a part;
(2) the capital structure, general financial condition, and
ownership and management of the insurer, the insurer's holding
company, the insurer's subsidiaries, and, if the commissioner
considers the information necessary, any of the insurer's other
affiliates; and
(3) any pledge of stock of the insurer or a subsidiary or
controlling affiliate of the insurer for a loan made to a member
of the insurer's insurance holding company system.
(c) The registration statement must also contain information
about:
(1) each outstanding loan the insurer makes to an affiliate of
the insurer or an affiliate makes to the insurer;
(2) each purchase, sale, or exchange of securities or other
investment between the insurer and an affiliate of the insurer;
(3) each purchase, sale, or exchange of assets between the
insurer and an affiliate of the insurer;
(4) each management and service contract or cost-sharing
arrangement between the insurer and an affiliate of the insurer;
(5) each reinsurance agreement between the insurer and an
affiliate of the insurer that covers one or more lines of
insurance of the ceding company;
(6) each agreement between the insurer and an affiliate of the
insurer to consolidate federal income tax returns;
(7) each transaction between the insurer and an affiliated
financial institution;
(8) each transaction between the insurer and an affiliate of the
insurer that is not in the ordinary course of business;
(9) each guarantee or undertaking, other than an insurance
contract entered into in the ordinary course of the insurer's
business, for the benefit of an affiliate of the insurer that
results in a contingent exposure of the insurer's assets to
liability;
(10) each dividend or distribution to the insurer's
shareholders; and
(11) each transaction between the insurer and an affiliate of
the insurer not specified by this subsection that is subject to
Section 823.102, 823.103, or 823.104.
(d) The information required by Subsection (c) applies only to
agreements in force, relationships subsisting, and transactions
outstanding.
(e) The commissioner shall adopt the format of the registration
statement. In adopting or revising the format, the commissioner
may require information on other matters concerning transactions
between a registered insurer and an affiliate of the insurer.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
157, Sec. 1, eff. September 1, 2007.
Sec. 823.053. REPORTING MATERIAL CHANGES. (a) To keep the
information required to be disclosed in a registration statement
filed under Section 823.052 current, a registered insurer shall
report each material change to the information, including the
addition of information, not later than the 15th day after the
last day of the month in which the insurer learns of the change.
(b) Subject to Section 823.107, each registered insurer shall
report each dividend or distribution made to the shareholders not
later than the earlier of:
(1) the second business day after the date the dividend or
distribution is declared; or
(2) the 11th day before the date of payment.
(c) For purposes of this section, reports are considered to be
made when received by the department.
(d) Reports made under this section are for informational
purposes only.
(e) An insurer is not required to report under this section a
transaction that is approved under Section 823.102 or 823.103.
That approval is considered to be an amendment of the
registration statement filed under Section 823.052 without being
reported under this section.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.054. MATERIAL INFORMATION. (a) Information about a
transaction is not required to be disclosed on a registration
statement filed under Section 823.052 or in a report under
Section 823.053 unless the transaction is considered to be
material under this section.
(b) If the amount of a single transaction or the total amount of
all transactions involving sales, purchases, exchanges, loans or
other extensions of credit, or investments is more than the
lesser of one-half of one percent of an insurer's admitted assets
or five percent of an insurer's surplus, as of December 31 of the
year preceding the date of the transaction or transactions, the
transaction or transactions, respectively, are considered to be
material for purposes of this section.
(c) Each dividend or distribution to shareholders is material
for the purposes of this section.
(d) The commissioner, by rule or order, may provide a standard
that is different from the standard provided by Subsection (b).
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.055. ANNUAL REGISTRATION STATEMENT; SUMMARY OF MATERIAL
CHANGES. (a) In this section, "ultimate controlling person"
means the person in an insurance holding company system who is
not controlled by another person.
(b) Not later than the 120th day after the last day of each
fiscal year of the ultimate controlling person, each registered
insurer in the ultimate controlling person's insurance holding
company system shall file an annual registration statement.
(c) An insurer required to file an annual registration statement
shall also furnish a summary of material changes from the prior
year's annual registration statement as specified by the
commissioner by rule.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
157, Sec. 2, eff. September 1, 2007.
Sec. 823.056. TERMINATION OF REGISTRATION. The commissioner
shall terminate the registration of an insurer that demonstrates
that the insurer has ceased to be a member of an insurance
holding company system.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.057. CONSOLIDATED FILING. The commissioner may require
or permit two or more insurers that are affiliates of each other
and that are required to register under this chapter to file:
(1) a consolidated registration statement; or
(2) a consolidated report amending:
(A) the consolidated registration statement; or
(B) the individual registration statement of each insurer.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.058. ALTERNATIVE REGISTRATION. The commissioner may
permit an insurer authorized to engage in the business of
insurance in this state that is a part of an insurance holding
company system to:
(1) register on behalf of another insurer that is an affiliate
of the insurer and that is required to register under Section
823.051; and
(2) file on behalf of the affiliate all information and material
required to be filed under this subchapter.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.059. EXEMPTIONS. (a) The registration requirement
under Section 823.051 does not apply to a foreign or nondomestic
insurer, other than a commercially domiciled insurer, that is
subject to disclosure requirements adopted by statute or
regulation in the jurisdiction of its domicile that are
substantially similar to the disclosure requirements provided by
this chapter.
(b) The commissioner may require an insurer that is exempt from
registration under Subsection (a) to provide a copy of the
registration statement or other information filed by the insurer
with the insurance regulatory authority of its domiciliary
jurisdiction.
(c) The commissioner, by rule or order, may exempt an insurer,
information, or a transaction from the application of this
subchapter.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.060. VIOLATION OF SUBCHAPTER. The failure to file a
registration statement or an amendment to a registration
statement within the time specified for filing the statement or
amendment, as required by this subchapter, is a violation of this
subchapter.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
SUBCHAPTER C. TRANSACTIONS OF REGISTERED INSURER
Sec. 823.101. STANDARDS FOR TRANSACTION WITH AFFILIATE. (a)
This section applies only to a material transaction between a
registered insurer and an affiliate of the insurer.
(b) The terms of the transaction shall be fair and equitable.
(c) The charges or fees for services performed shall be
reasonable.
(d) The books, accounts, and records of each party to the
transaction shall be maintained so that the precise nature and
details of the transaction are clearly and accurately disclosed.
(e) The expenses incurred and payments received relating to the
transaction shall be allocated to the registered insurer on an
equitable basis in conformity with customary insurance accounting
principles consistently applied.
(f) After a registered insurer pays a dividend or makes a
distribution to a holding company or shareholder affiliate of the
insurer, the insurer's policyholders' surplus shall be reasonable
in relation to the insurer's outstanding liabilities and adequate
to the insurer's financial needs.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.102. NOTICE OF AND COMMISSIONER'S DECISION ON CERTAIN
LARGE TRANSACTIONS. (a) This section applies only to a sale,
purchase, exchange, loan or other extension of credit, or
investment between a domestic insurer and any person in the
insurer's insurance holding company system that involves more
than the lesser of 5 percent of the insurer's admitted assets or
25 percent of the insurer's surplus, as of December 31 of the
year preceding the year in which the transaction occurs.
(b) A person may not enter into a transaction to which this
section applies before the date on which the transaction is
approved under Subsection (c).
(c) A domestic insurer shall notify the commissioner of a
transaction to which this section applies. The commissioner shall
approve or disapprove the transaction in writing not later than
the 90th day after the date of the notification. If the
commissioner fails to act as required by this subsection, the
transaction is considered approved.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.103. NOTICE OF AND COMMISSIONER'S DECISION ON SPECIFIED
TRANSACTIONS. (a) This section applies only to:
(1) a sale, purchase, exchange, loan or other extension of
credit, or investment between a domestic insurer and any person
in the insurer's insurance holding company system:
(A) that involves more than the lesser of one-half of one
percent of the insurer's admitted assets or five percent of the
insurer's surplus, as of December 31 of the year preceding the
year in which the transaction occurs; and
(B) the approval of which is not required under Section 823.102;
(2) a reinsurance agreement, including a reinsurance treaty,
between a domestic insurer and any person in the insurer's
holding company system or a modification of such an agreement;
(3) a rendering of services between a domestic insurer and any
person in the insurer's holding company system on a regular or
systematic basis; or
(4) any material transaction between a domestic insurer and any
person in the insurer's holding company system that is specified
by rule and that the commissioner determines may adversely affect
the interests of the insurer's policyholders or of the public.
(b) Subsection (a)(2) includes a reinsurance agreement that
requires as consideration a transfer of assets from an insurer to
a nonaffiliate and in relation to which the insurer and
nonaffiliate agree that any part of the transferred assets are to
be transferred to one or more affiliates of the insurer.
(c) A domestic insurer shall give to the commissioner written
notice of the insurer's intent to enter into a transaction to
which this section applies before the 30th day preceding the date
of the proposed transaction. The commissioner may authorize a
shorter period of notice under this subsection.
(d) A domestic insurer may not enter into a transaction for
which the insurer gives notice under Subsection (c) if the
commissioner disapproves the proposed transaction during the
period for notice.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.104. PROHIBITION OF ACTION TO AVOID APPLICATION OF
SUBCHAPTER. (a) A domestic insurer may not enter into
transactions with persons in the insurer's insurance holding
company system if:
(1) the transactions are part of a plan or series of similar
transactions; and
(2) the purpose of entering into the transactions is to avoid a
threshold amount provided by Section 823.102 or 823.103.
(b) If the commissioner determines that over any 12-month period
a domestic insurer enters into transactions that violate
Subsection (a), the commissioner may:
(1) consider the cumulative effect of the transactions; and
(2) apply:
(A) Section 823.102 or 823.103; or
(B) sanctions under this code.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.105. TYPE OF AUTHORITY PROVIDED. Nothing in Section
823.102, 823.103, or 823.104 authorizes a transaction that would
violate law that is applicable to an insurer that is not subject
to this subchapter.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.106. STANDARDS OF REVIEW; REASONS FOR DISAPPROVAL. (a)
In reviewing a transaction under this subchapter, the
commissioner shall consider whether the transaction:
(1) complies with the standards provided by Section 823.101; and
(2) may adversely affect the interest of the insurer's
policyholders.
(b) The commissioner shall set forth the specific reasons for
the disapproval of a transaction reviewed under Subsection (a).
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.107. EXTRAORDINARY DIVIDENDS OR DISTRIBUTIONS. (a)
Except as provided by Subsection (b), for purposes of this
section, an extraordinary dividend or distribution includes the
payment of a dividend or distribution of cash or other property,
the fair market value of which combined with the fair market
value of each other dividend or distribution made in the
preceding 12 months exceeds the greater of:
(1) 10 percent, or 20 percent if the insurer is a title insurer,
of the insurer's policyholders' surplus, as of December 31 of the
year preceding the year in which the fair market value is being
determined; or
(2) the net gain from operations of the insurer, if the insurer
is a life or title insurer, or the net income, if the insurer is
another type of insurer, for the calendar year preceding the year
in which the fair market value is being determined.
(b) For purposes of this section, an extraordinary dividend or
distribution does not include pro rata distributions of any class
of securities of the insurer.
(c) An insurer that is required to register under Subchapter B
shall give the commissioner notice of the insurer's intent to
make an extraordinary dividend or distribution to shareholders,
before the 30th day preceding the date of the proposed dividend
or distribution. The commissioner may authorize a shorter period
of notice under this subsection.
(d) An insurer may not make an extraordinary dividend or
distribution for which the insurer gives notice if the
commissioner disapproves the dividend or distribution during the
period for the notice.
(e) A registered insurer may declare an extraordinary dividend
or distribution that is conditional on its approval by the
commissioner. The declaration does not confer any rights on
shareholders before the dividend or distribution may be made
under Subsection (d).
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
SUBCHAPTER D. CONTROL OF DOMESTIC INSURER; ACQUISITION OR MERGER
Sec. 823.151. PRESUMPTION OF CONTROL. (a) Control of an entity
is presumed if:
(1) a person or a person and members of the person's immediate
family, directly or indirectly, own, control, or hold with the
power to vote 10 percent or more of the voting securities or
authority of the entity; or
(2) a person who is not a corporate officer or director of the
entity holds proxies representing 10 percent or more of the
voting securities or authority of the entity.
(b) Control of a Lloyd's plan is presumed if a person is
designated as an attorney-in-fact for the insurer under Chapter
941.
(c) Control of a reciprocal or interinsurance exchange is
presumed if a person is designated as an attorney-in-fact for the
exchange under Chapter 942.
(d) A presumption under this section may be rebutted by a
showing made in the manner provided by Section 823.010 that
control does not exist in fact and that the person rebutting the
presumption is complying with Sections 823. 154, 823.155,
823.159, and 823.160.
(e) For purposes of this section, the members of a person's
immediate family are:
(1) the person's spouse, father, mother, children, brothers,
sisters, and grandchildren;
(2) the father, mother, brothers, and sisters of the person's
spouse; and
(3) the spouse of the person's child, brother, sister, mother,
father, or grandparent.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.152. EMPLOYMENT OF EXPERTS. (a) The commissioner may
employ an attorney, actuary, accountant, or other expert who is
not a member of the commissioner's staff and who is reasonably
necessary to assist in analyzing a merger or acquisition of
control proposed under Section 823.154.
(b) The acquiring person shall pay all reasonable expenses
incurred in connection with the employment of a person under this
section.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.153. CONTROLLER OF DOMESTIC INSURER CONSIDERED DOMESTIC
INSURER. For purposes of this subchapter, any person who
controls a domestic insurer is considered to be a domestic
insurer unless:
(1) the assets of all insurance subsidiaries of the person are
equal to less than 20 percent of the person's consolidated
assets;
(2) the gross revenues, including investment income, of all
insurance subsidiaries of the person are equal to less than 20
percent of the person's consolidated gross revenues; and
(3) the shareholders' equity of all insurance subsidiaries of
the person is equal to less than 20 percent of the person's
consolidated shareholders' equity.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.154. REQUIREMENTS FOR ACQUISITION OR EXERCISE OF
CONTROL OF DOMESTIC INSURER. (a) Before a person who directly
or indirectly controls, or after the acquisition would directly
or indirectly control, a domestic insurer may in any manner
acquire a voting security of a domestic insurer or before a
person may otherwise acquire control of a domestic insurer or
exercise any control over a domestic insurer:
(1) the person shall file with the commissioner a statement that
satisfies the requirements of Subchapter E; and
(2) the acquisition of control must be approved by the
commissioner in accordance with this subchapter.
(b) The acquiring person shall send a copy of the statement
filed under this section to the domestic insurer.
(c) A statement filed under this section must be filed not later
than the 60th day before the proposed effective date of the
acquisition or change of control and is subject to public
inspection at the office of the commissioner.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.202(a),
eff. Sept. 1, 2003.
Sec. 823.155. AMENDMENT OF STATEMENT. If a material change
occurs in the facts contained in a statement filed under Section
823.154, the person required to file the statement shall, not
later than the second business day after the date the person
learns of the change, file with the commissioner and send to the
domestic insurer an amendment stating the change and a copy of
each document and other material relevant to the change.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.156. NOTICE EXPENSES. (a) A person who files a
statement under Section 823.154 shall pay the expenses of mailing
each related notice required by the commissioner.
(b) As security for the payment of the expenses, the person, at
the request of the commissioner or the domestic insurer, shall
file with the commissioner an acceptable bond or other deposit in
an amount determined by the commissioner.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.157. APPROVAL OF ACQUISITION OF CONTROL. (a) The
commissioner shall approve or deny an acquisition or change of
control for which a statement is filed under Section 823.154 not
later than the 60th day after the date the statement required by
that section is filed. The 60-day period may be waived by the
person filing the statement and the domestic insurer. On the
request of either the person filing the statement or the domestic
insurer, the commissioner shall hold a hearing on a denial.
(b) In considering whether to approve or deny, the commissioner
shall consider whether:
(1) immediately on the acquisition or change of control the
domestic insurer would not be able to satisfy the requirements
for the issuance of a new certificate of authority to write the
line or lines of insurance for which the insurer holds a
certificate of authority;
(2) the effect of the acquisition or change of control would be
substantially to lessen competition in a line or
subclassification lines of insurance in this state or tend to
create a monopoly in a line or subclassification lines of
insurance in this state;
(3) the financial condition of the acquiring person may
jeopardize the financial stability of the domestic insurer or
prejudice the interest of the domestic insurer's policyholders;
(4) the acquiring person has a plan or proposal to liquidate the
domestic insurer or cause the insurer to declare dividends or
make distributions, sell any of its assets, consolidate or merge
with any person, make a material change in its business or
corporate structure or management, or enter into a material
agreement, arrangement, or transaction of any kind with any
person, and that the plan or proposal is unfair, prejudicial,
hazardous, or unreasonable to the insurer's policyholders and not
in the public interest;
(5) due to a lack of competence, trustworthiness, experience,
and integrity of the persons who would control the operation of
the domestic insurer, the acquisition or change of control would
not be in the interest of the insurer's policyholders and the
public; or
(6) the acquisition or change of control would violate the law
of this or another state or the United States.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.203(a),
eff. Sept. 1, 2003.
Sec. 823.159. HEARING; TIME OF DETERMINATION. (a) A hearing
under Section 823.152, 823.157, or 823.160 shall be held not
later than the 60th day after the date of the denial.
(b) Not later than the 21st day before the date of the hearing,
the commissioner shall give notice of the hearing to the person
who filed the statement and to the domestic insurer unless the
person and the domestic insurer waive notice.
(c) The person who filed the statement and the domestic insurer
shall provide notice of the hearing in the time and manner
specified by the commissioner to each person designated by the
commissioner.
(d) The acquiring person has the burden of providing sufficient
competent evidence for the commissioner to make the findings
required under Section 823.157.
(e) The commissioner shall make a determination on the
acquisition of control not later than the 60th day after the date
the record of the hearing is closed.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.203(c),
(d), eff. Sept. 1, 2003.
Sec. 823.160. DEADLINE FOR COMPLETION OF ACQUISITION. (a) An
acquisition of control of a domestic insurer must be completed
not later than the 90th day after the date of the commissioner's
order approving the acquisition unless the commissioner on a
showing of good cause for the delay grants an extension in
writing.
(b) An increase in a company's capital and surplus required
under this code because of the change of control of a domestic
insurer must be completed not later than the 90th day after the
date of the commissioner's order approving the change of control
and before the insurance company writes any new insurance
business.
(c) If a deadline under Subsection (a) or (b) is not met, the
person seeking to acquire control of the domestic insurer shall
resubmit the statement required by Section 823.154 and the
commissioner may reconsider approval of acquisition of control
under this subchapter.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.161. INSURER'S DUTY TO NOTIFY. (a) Not later than the
30th day after the date an event requiring notice under this
subchapter occurs, an insurer authorized to engage in the
business of insurance in this state shall notify the commissioner
in writing of the identity of any person who the insurer knows,
or has reason to believe, controls or has taken any action, other
than preliminary negotiations or discussions, to acquire control
of the insurer.
(b) This section does not apply to a foreign insurer that is
subject to disclosure requirements and standards adopted by
statute or regulation in the jurisdiction of the insurer's
domicile that are substantially similar to the requirements and
standards provided by this chapter.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.162. PROHIBITION ON CERTAIN ACTIONS RELATED TO
ACQUISITION OF CONTROL OR MERGER. A person may not effect or
attempt to effect an acquisition of control of or merger with a
domestic insurer unless the commissioner has approved the
acquisition or merger.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.163. RETENTION OF CONTROL. (a) This section applies
only to a domestic insurer that is a controlled insurer,
regardless of when that control was acquired.
(b) A person violates this section if:
(1) the person is a domestic insurer, a person who controls the
domestic insurer, including the insurer's holding company, or an
officer or director of the insurer or controlling person who
violates this chapter or otherwise demonstrates untrustworthiness
affecting the domestic insurer;
(2) the person is a domestic insurer that violates Chapter 15,
Business & Commerce Code, or another antitrust law of this
state; or
(3) the person is a domestic insurer's affiliate that violates
Chapter 15, Business & Commerce Code, or another antitrust
law of this state and whose violation affects the domestic
insurer.
(c) If, after notice and an opportunity for a hearing, the
commissioner determines that a person violates this section, the
commissioner shall issue written findings and an order based on
those findings that directs the person to take appropriate action
to cure the violation. The commissioner shall serve the order and
findings on the person and the affected domestic insurer.
(d) In addition to this chapter, Subchapter C, Chapter 801,
applies to a person who fails to comply with an order under this
section.
(e) The commissioner may require the submission of any
information the commissioner considers necessary to determine
whether retention of control complies with this chapter and may
require, as a condition of approval of the retention of control,
that all or any part of that information be disclosed to the
domestic insurer's shareholders.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.164. EXEMPTIONS FROM SUBCHAPTER. (a) This subchapter
does not apply to a transaction that is subject to:
(1) Subchapter K or L , Chapter 882; or
(2) Section 887.065 or Subchapter J or K, Chapter 887.
(b) This subchapter does not apply to a transaction that is
subject to and complies with:
(1) Chapter 828; or
(2) Subchapter L, Chapter 884.
(c) This subchapter does not apply to a transaction that is
subject to and complies with Sections 824.101 and 824.102 and
Subchapters A and B, Chapter 824, relating to the merger or
consolidation of two or more insurers, until the plan of merger
or consolidation is filed by the domestic insurer with the
commissioner under that chapter. After the plan is filed, the
transaction is subject to this subchapter. The commissioner may
exempt the transaction from this subchapter, other than the
approval provisions of Sections 823.157-823.160, if the
commissioner finds that the materials provided to shareholders
and security holders in connection with the merger or
consolidation, including the notice and proxy statement,
contained reasonable and adequate information, including factual
and financial disclosures and material, relating to that
transaction.
(d) This subchapter does not apply to a transaction that is
subject to Subchapter K, Chapter 884, if the agreement to which
the transaction relates is a total direct reinsurance agreement.
(e) This subchapter does not apply to an acquisition of any
voting security that, immediately before consummation of the
acquisition, is not issued and outstanding by a person who is a
broker-dealer under state or federal securities law if:
(1) the acquisition is solely for resale under a plan approved
by the commissioner;
(2) the resale will not reasonably result in an acquisition of
control; and
(3) before the resale a positive act of control relating to
those shares is not committed.
(f) This subchapter does not apply to an acquisition of a voting
security of a domestic insurer by a person who:
(1) controls the insurer if, after the acquisition, the person
directly or indirectly owns or controls less than 50 percent of
the issued and outstanding voting securities of the insurer; or
(2) before the acquisition, directly or indirectly owns or
controls more than 50 percent of the issued and outstanding
voting securities of the insurer.
(g) This subchapter does not apply to an acquisition of a voting
security of a domestic insurer by a person who, before the
acquisition, directly or indirectly owns or controls at least 10
percent but less than 50 percent of the issued and outstanding
voting securities of the insurer and who, after the acquisition,
directly or indirectly owns or controls 50 percent or more of the
issued and outstanding voting securities of the insurer if:
(1) the person has applied in writing for the exemption; and
(2) the commissioner by order has determined that the
acquisition:
(A) will not jeopardize the financial stability of the insurer;
(B) will not prejudice the interests of the insurer's
policyholders; and
(C) will not adversely affect the public interest.
(h) The commissioner by order may exempt from the application of
this subchapter an offer, request, invitation, agreement, or
acquisition that:
(1) is not made or entered into to change or influence the
control of a domestic insurer and does not have the effect of
changing or influencing that control; or
(2) is not comprehended as within the purposes of this
subchapter.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.165. VIOLATION OF SUBCHAPTER. The failure to file a
statement, amendment, or other material required to be filed
under this subchapter is a violation of this subchapter.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
SUBCHAPTER E. ACQUISITION STATEMENT
Sec. 823.201. ACQUIRING PERSON. (a) A statement required under
Section 823.154 must contain the name and address of the
acquiring person.
(b) If the acquiring person is an individual, the statement must
contain:
(1) the acquiring person's principal occupation or employment;
(2) each material occupation, employment, office, or position
held by the acquiring person during the preceding five-year
period; and
(3) any criminal conviction of the acquiring person, other than
a conviction of a minor traffic violation, during the preceding
10-year period.
(c) If the acquiring person is not an individual, the statement
must contain:
(1) a report of the nature of the acquiring person's business
operations during the preceding five-year period or, if the
acquiring person and any predecessors of the acquiring person
have been in existence for less than five years, during that
shorter period;
(2) a description, complete in all material respects, of any
business the acquiring person intends to begin; and
(3) a list that contains:
(A) the name of each director or executive officer of the
acquiring person, or individual who performs or who is to
perform, functions appropriate to that position; and
(B) for each individual listed under Paragraph (A), the
information required for an individual under Subsection (b).
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.202. CONSIDERATION FOR ACQUISITION. (a) A statement
required under Section 823.154 must contain:
(1) the source, nature, and amount of consideration for the
acquisition of control;
(2) a description of any transaction from which the
consideration for the acquisition of control is obtained; and
(3) the identity of each person providing the consideration.
(b) On request of the person filing the statement, the identity
of a commercial lender who in the ordinary course of business
provides consideration for the acquisition is confidential.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.203. FINANCIAL INFORMATION ABOUT ACQUIRING PERSON. (a)
A statement required under Section 823.154 must contain:
(1) fully audited financial information about the earnings and
financial condition of the acquiring person for the preceding
three fiscal years or, if the acquiring person and any
predecessors of the acquiring person have been in existence for
less than three fiscal years, for that shorter period; and
(2) similar unaudited financial information about the earnings
and financial condition of the acquiring person as of a date not
earlier than the 120th day preceding the date the statement is
filed.
(b) The statement must be accompanied by an affidavit or
certification of the chief financial officer of the acquiring
person stating that:
(1) the unaudited financial information provided under
Subsection (a) is true and correct, as of its date; and
(2) a material change in financial condition, as determined
under Section 823.054, did not occur during the period beginning
on the date of that information and ending on the date of the
affidavit or certification.
(c) If an acquiring person is an individual, the acquiring
person shall provide the personal unaudited financial information
required by the commissioner.
(d) If an acquiring person is an insurer authorized to engage in
the business of insurance in this state and actively engaging in
the business of insurance, the acquiring person may provide
financial statements that conform to the requirements of:
(1) the annual statements of the insurer filed with the
insurance department of the insurer's state of domicile; and
(2) insurance or other accounting principles prescribed by or
authorized under the law and regulations of the state of
domicile.
(e) A statement required under Section 823.154 must contain
additional financial information in the form or substance
required by the commissioner that is material to a finding under
Section 823.157(3).
(f) The commissioner may waive any financial information
required under this section that the commissioner does not
consider to be material.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.204. PLAN FOR FUTURE OF INSURER. A statement required
under Section 823.154 must contain:
(1) any plan or proposal of the acquiring person to:
(A) cause the insurer to pay dividends or make distributions;
(B) liquidate the insurer;
(C) sell any of the insurer's assets;
(D) merge or consolidate the insurer with any person;
(E) make any other material change in the insurer's business or
corporate structure or management; or
(F) cause the insurer to enter into material agreements,
arrangements, or transactions of any kind with any person; and
(2) any oral or written arrangement or agreement between the
acquiring person or an affiliate of the acquiring person and the
domestic insurer entered into during the 12 months preceding the
date of the statement.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.205. VOTING SECURITIES. (a) In this section, "voting
security" means a voting security of a domestic insurer the
acquisition of which requires the filing of a statement under
Section 823.154 as a condition precedent.
(b) A statement required under Section 823.154 must contain:
(1) the number of shares of a voting security that the acquiring
person or an affiliate of the acquiring person proposes to
acquire and the terms of the acquisition;
(2) the amount of each class of a voting security that is
beneficially owned by the acquiring person and by each affiliate
of the acquiring person;
(3) the amount of each class of a voting security the beneficial
ownership of which the acquiring person or an affiliate of the
acquiring person has a right to acquire;
(4) a copy of any written or confirmed description of any oral
agreement, arrangement, or understanding relating to a voting
security and in which the acquiring person or an affiliate of the
acquiring person is involved, including an agreement,
arrangement, or understanding relating to the transfer of any of
the voting securities, joint ventures, loan or option agreements,
puts or calls, guarantees of loans, guarantees against loss,
guarantees of profits, division of losses or profits, or the
giving or withholding of proxies;
(5) a description of each purchase of a voting security,
including the date of purchase, name of the purchaser, and
consideration for the purchase, made during the 12 calendar
months preceding the date of the filing of the statement by:
(A) the acquiring person; or
(B) an affiliate, director, or executive officer of the
acquiring person;
(6) a copy of any written, or a confirmed description of any
oral, recommendation to purchase a voting security made during
the 12 calendar months preceding the date of the filing of the
statement by:
(A) the acquiring person;
(B) an affiliate of the acquiring person; or
(C) a person based on an interview with, or at the suggestion
of, the acquiring person or an affiliate of the acquiring person;
(7) a copy of each tender offer for, request or invitation for
tender of, exchange offer for, or agreement to acquire or
exchange a voting security and any additional distributed
soliciting material relating to that offer, request, invitation,
or agreement;
(8) a copy of any written, or a confirmed description of any
oral, agreement, arrangement, or understanding made with a
broker-dealer relating to the solicitation of a voting security
for tender, and the amount of any compensation, including fees
and commissions, to be paid to a broker-dealer with regard to the
solicitation; and
(9) any additional information the commissioner by rule
prescribes as necessary or appropriate to protect:
(A) policyholders of the insurer whose voting securities are to
be acquired; or
(B) the public.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.206. ADDITIONAL INFORMATION ABOUT ACQUIRING
ORGANIZATION. (a) If the person required to file the statement
under Section 823.154 is a partnership, limited partnership,
syndicate, or other group, the commissioner may require that the
information required for an individual under this subchapter be
given with respect to:
(1) each person who is a partner of the partnership or limited
partnership or a member of the syndicate or group; and
(2) each person who controls a person described by Subdivision
(1).
(b) If the person required to file the statement under Section
823.154 or the person with respect to whom information is
required under Subsection (a) is a corporation, the commissioner
may require that:
(1) the information required under this subchapter be given with
respect to that corporation; and
(2) the information required for an individual under this
subchapter be given with respect to:
(A) each executive officer and director of that corporation; and
(B) each person who is directly or indirectly the beneficial
owner of more than 10 percent of the outstanding voting
securities of that corporation.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.207. OATH OR AFFIRMATION REQUIRED. A statement
required under Section 823.154 must be made under oath or
affirmation.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
SUBCHAPTER F. INSURER'S LOANS TO OR INVESTMENT IN AFFILIATE
Sec. 823.251. DEFINITION. In this subchapter, "securities"
includes common stock, preferred stock, and debt obligations.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.252. GENERAL AUTHORITY RELATING TO AFFILIATES. A
domestic insurer, by itself or in cooperation with one or more
other persons, may organize, acquire, invest in, or make loans to
one or more subsidiaries, and may loan to or invest in
affiliates, as permitted by the provisions of this code governing
investments.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 823.