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.