S.B. No. 449




AN ACT
relating to 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.
______________________________ ______________________________ President of the Senate Speaker of the House
I hereby certify that S.B. No. 449 passed the Senate on April 27, 2005, by the following vote: Yeas 30, Nays 0. ______________________________ Secretary of the Senate I hereby certify that S.B. No. 449 passed the House on May 9, 2005, by a non-record vote. ______________________________ Chief Clerk of the House Approved: ______________________________ Date ______________________________ Governor