CHAPTER 829. CONVERSION OF RECIPROCAL OR INTERINSURANCE EXCHANGE TO STOCK COMPANY THROUGH CREATION OF A MUTUAL HOLDING COMPANY
INSURANCE CODE
TITLE 6. ORGANIZATION OF INSURERS AND RELATED ENTITIES
SUBTITLE B. ORGANIZATION OF REGULATED ENTITIES
CHAPTER 829. CONVERSION OF RECIPROCAL OR INTERINSURANCE EXCHANGE
TO STOCK COMPANY THROUGH CREATION OF A MUTUAL HOLDING COMPANY
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 829.001. DEFINITIONS. In this chapter:
(1) "Attorney in fact" has the meaning assigned by Section
942.001.
(2) "Board of directors" means, as to an exchange, the board of
directors, board of trustees, subscriber advisory committee, or
other governing body appointed or elected by the subscribers of
an exchange.
(3) "Conversion plan" means a plan adopted under this chapter to
convert an exchange to a stock insurance company and form a
mutual holding company to hold, directly or indirectly, shares of
the resulting company.
(4) "Converting exchange" means an exchange that is converting
to a stock insurance company under this chapter.
(5) "Eligible member" means a member of a converting exchange
whose policy is in force on the date that the converting
exchange's board of directors adopts a conversion plan.
(6) "Effective date" means the effective date of a conversion
plan in accordance with Section 829.108.
(7) "Exchange" has the meaning assigned by Section 942.001.
(8) "Intermediate holding company" means a holding company
organized under the laws of this or another state that:
(A) is a subsidiary of a mutual holding company formed to
reorganize an exchange; and
(B) directly or through a subsidiary intermediate holding
company, owns at least a majority of the voting shares of the
capital stock of the resulting company.
(9) "Member" means, as to an exchange, a subscriber of an
exchange.
(10) "Mutual holding company" means a holding company based on a
mutual plan and formed in connection with the conversion of an
exchange to a stock insurance company under this chapter.
(11) "Participating policy" means a policy issued by an exchange
that grants the policyholder the right to receive policy
dividends if declared by the exchange.
(12) "Resulting company" means a stock insurance company
resulting from the conversion of an exchange under this chapter.
(13) "Subscriber" has the meaning assigned by Section 942.001.
Added by Acts 2007, 80th Leg., R.S., Ch.
412, Sec. 1, eff. June 15, 2007.
Sec. 829.002. AUTHORITY TO CONVERT THROUGH CREATION OF A MUTUAL
HOLDING COMPANY. (a) An exchange may reorganize by converting
to a stock insurance company and forming a mutual holding company
to hold, directly or indirectly, shares of the resulting company
or intermediate holding company in accordance with this chapter.
(b) A converting exchange may not engage in the business of
insurance as a stock insurance company until it complies with the
requirements of this chapter.
Added by Acts 2007, 80th Leg., R.S., Ch.
412, Sec. 1, eff. June 15, 2007.
Sec. 829.003. RIGHTS AND PRIVILEGES OF RESULTING COMPANY; LAWS
APPLICABLE. Except as provided by this chapter, the resulting
company:
(1) may exercise only the rights and privileges of a stock
insurance company; and
(2) is subject to:
(A) all of the requirements and rules imposed on stock insurance
companies organized under this code; and
(B) the laws of this state relating to the regulation or
supervision of insurance companies.
Added by Acts 2007, 80th Leg., R.S., Ch.
412, Sec. 1, eff. June 15, 2007.
Sec. 829.004. MUTUAL HOLDING COMPANY; LAWS APPLICABLE. (a)
Except as provided by this chapter, a mutual holding company is
considered an insurer subject to this chapter and Chapter 883.
(b) The commissioner has jurisdiction over a mutual holding
company organized under this chapter to ensure that member
interests are protected.
(c) The mutual holding company is automatically a party to a
delinquency proceeding under Subtitle C, Title 4, involving an
insurance company that, as a result of a reorganization under
this chapter, is a direct or indirect subsidiary of the mutual
holding company. In any proceeding described by this subsection
involving the resulting company, the assets of the mutual holding
company are considered assets of the resulting company for
purposes of satisfying the claims of the resulting company's
policyholders.
(d) A mutual holding company that results from a reorganization
of an exchange must be organized under Sections 883.051, 883.052,
883.054, and 883.056. The articles of incorporation of the
mutual holding company, and any amendments to those articles, are
subject to approval of the commissioner in the same manner as
those of a mutual insurance company.
(e) The mutual holding company may not dissolve or liquidate
without the approval of the commissioner.
(f) A mutual holding company formed under a conversion plan is
not subject to:
(1) Article 2.11B, Texas Non-Profit Corporation Act (Article
1396-2.11B, Vernon's Texas Civil Statutes);
(2) Section B, Article 2.23, Texas Non-Profit Corporation Act
(Article 1396-2.23, Vernon's Texas Civil Statutes);
(3) Section C, Article 2.23A, Texas Non-Profit Corporation Act
(Article 1396-2.23A, Vernon's Texas Civil Statutes); or
(4) Sections 22.158, 22.351, and 22.353(b), Business
Organizations Code.
Added by Acts 2007, 80th Leg., R.S., Ch.
412, Sec. 1, eff. June 15, 2007.
Sec. 829.005. CONFLICT OF INTEREST. (a) Except as provided by
a conversion plan approved by the commissioner or by this
section, the following individuals may not receive a fee,
commission, stock distribution, stock subscription rights, or
other consideration, other than that individual's usual salary or
compensation for aiding, promoting, assisting, or participating
in a conversion under this chapter:
(1) a director, officer, agent, or employee of a converting
exchange or the exchange's attorney in fact; or
(2) the attorney in fact if the attorney in fact is an
individual.
(b) Subsection (a) does not apply to consideration received in
the individual's capacity as a member.
(c) This section does not prohibit the payment of reasonable
fees and compensation to an attorney, accountant, or actuary for
professional services performed by that person, without regard to
whether the person is also a director or officer of the
converting exchange or its attorney in fact.
Added by Acts 2007, 80th Leg., R.S., Ch.
412, Sec. 1, eff. June 15, 2007.
Sec. 829.006. LIMITATION ON ACTIONS. (a) Except as provided by
Subsection (b), an action challenging the validity of or arising
out of acts taken or proposed to be taken regarding a conversion
plan under this chapter must be commenced not later than the 30th
day after the date the conversion plan is approved by the
commissioner.
(b) An action challenging the validity of or arising out of acts
taken or proposed to be taken regarding a conversion plan that
contemplates a public offering of debt or equity registered under
the federal Securities Act of 1933 (15 U.S.C. Section 77a et
seq.), or a similar law of a foreign jurisdiction, must be
commenced not later than the 60th day after the date the
conversion plan is approved by the commissioner.
Added by Acts 2007, 80th Leg., R.S., Ch.
412, Sec. 1, eff. June 15, 2007.
Sec. 829.007. SALE OF SECURITIES. (a) A sale, issuance, or
offering of securities under this chapter 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 an exchange, an
intermediate holding company, a mutual holding company, or a
resulting company who participates in a conversion under this
chapter 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.
Added by Acts 2007, 80th Leg., R.S., Ch.
412, Sec. 1, eff. June 15, 2007.
SUBCHAPTER B. MUTUAL HOLDING COMPANY STRUCTURE
Sec. 829.051. CAPITAL STOCK HELD BY MUTUAL HOLDING COMPANY. (a)
In this section, "majority of the voting shares of the capital
stock" means shares of the capital stock of a company that carry
the right to cast a majority of the votes entitled to be cast by
all of the outstanding shares of the capital stock of the company
on all matters submitted to a vote of the shareholders of the
company.
(b) All of the initial shares of the capital stock of the
resulting company shall be issued to the mutual holding company
or to an intermediate holding company.
(c) The mutual holding company shall at all times own a majority
of the voting shares of the capital stock of the resulting
company or of an intermediate holding company. The requirements
of this subsection may be satisfied by indirect ownership through
one or more intermediate holding companies in a corporate
structure approved by the commissioner.
(d) Except with the consent of the commissioner, the mutual
holding company or intermediate holding company may not convey,
transfer, assign, pledge, subject to a security interest or lien,
encumber, or otherwise hypothecate or alienate the majority of
the voting shares of the capital stock that is required to be
owned under Subsection (c).
(e) An act of the mutual holding company or intermediate holding
company that violates Subsection (d) is void in inverse
chronological order from the date of the conveyance or activity
as to the shares necessary to constitute a majority of the voting
shares of the capital stock.
(f) The remaining minority portion of the voting shares of
capital stock of the resulting company, or of an intermediate
holding company, may not be assigned, transferred, or pledged to
any officer, director or employee of the converting exchange, or
persons acting in concert with such persons, without also
offering a similar opportunity to participate to all eligible
members as required by Section 829.053(g).
Added by Acts 2007, 80th Leg., R.S., Ch.
412, Sec. 1, eff. June 15, 2007.
Sec. 829.052. LIMITATION ON ACQUISITION OF CAPITAL STOCK. (a)
The conversion plan must provide that a person or group of
persons acting in concert, other than the mutual holding company
or an intermediate holding company, may not acquire, in a public
or private offering or through an exercise of stock subscription
rights, more than 10 percent of the capital stock of the
resulting company unless the acquisition of the stock or stock
subscription rights is approved in advance by the commissioner.
(b) Subsection (a) does not apply to an entity that purchases
and retains at all times a majority of the voting shares of the
capital stock of the resulting company as part of the conversion
plan approved by the commissioner.
Added by Acts 2007, 80th Leg., R.S., Ch.
412, Sec. 1, eff. June 15, 2007.
Sec. 829.053. DIRECTORS AND OFFICERS. (a) Except as otherwise
provided by this section, the conversion plan must provide that a
director or officer of the converting exchange, or a person
acting in concert with the director or officer, may not acquire,
without the permission of the commissioner, any shares of the
capital stock of the resulting company, or the shares of the
capital stock of another corporation that is participating in the
conversion plan, before the third anniversary of the effective
date of the conversion. This subsection does not prohibit the
director or officer from:
(1) acquiring capital stock through a broker-dealer;
(2) making purchases through the exercise of stock subscription
rights received under the conversion plan; or
(3) participating in a stock benefit plan permitted by Section
829.054 or approved by the eligible members under Section
829.107.
(b) A conversion plan may provide that the directors and
officers of the converting exchange may receive, without payment,
nontransferable subscription rights to purchase shares of the
capital stock of the resulting company or the shares of the
capital stock of another corporation that is participating in the
conversion plan.
(c) The aggregate number of shares that may be purchased by
directors and officers under Subsection (b) may not exceed:
(1) 35 percent of the total number of shares to be issued for
the resulting company if the total assets of the converting
exchange are less than $50 million;
(2) 25 percent of the total number of shares to be issued for
the resulting company if the total assets of the converting
exchange are more than $500 million;
(3) five percent of the total number of shares to be issued for
the resulting company if the total assets of the converting
exchange are more than $1 billion; or
(4) one percent of the total number of shares to be issued for
the resulting company if the total assets of the converting
exchange are more than $10 billion.
(d) For a converting exchange with total assets between $50
million and $500 million, inclusive, the maximum percentage of
the total number of shares that may be purchased shall be
interpolated from amounts provided under Subsection (c).
(e) A conversion plan must provide that a director or officer of
the converting exchange may not sell stock purchased under the
conversion plan before the first anniversary of the effective
date of the conversion.
(f) Notwithstanding Subsection (e), a conversion plan may
provide for the purchase or redemption of stock in the event that
a director or officer no longer serves as a director or officer
of, or no longer is associated with, the resulting company during
the period described by Subsection (e).
(g) If, as part of the conversion, any director or officer of
the converting exchange, the mutual holding company, or an
intermediate holding company receives more than one percent of
the shares of the capital stock of the resulting company, or
other valuable consideration, which is paid from the surplus of
the converting exchange, each eligible member also is entitled to
receive an amount of the converting exchange's surplus on hand on
the effective date of the conversion computed in the same manner
as the amount received by the director or officer, or as
otherwise provided in the conversion plan approved by the
commissioner.
Added by Acts 2007, 80th Leg., R.S., Ch.
412, Sec. 1, eff. June 15, 2007.
Sec. 829.054. SUBSCRIPTION RIGHTS; TAX-QUALIFIED EMPLOYEE
BENEFIT PLAN. The conversion plan may allocate to a
tax-qualified employee benefit plan nontransferable subscription
rights to purchase not more than 10 percent of the capital stock
of the resulting company.
Added by Acts 2007, 80th Leg., R.S., Ch.
412, Sec. 1, eff. June 15, 2007.
SUBCHAPTER C. PLAN ADOPTION AND APPROVAL
Sec. 829.101. PLAN ADOPTION. (a) To convert under this chapter
an exchange must adopt a conversion plan consistent with this
chapter by the affirmative vote of at least two-thirds of the
members of its board of directors or, if the exchange does not
have a board of directors, by approval of the attorney in fact.
The proposed articles of incorporation of the resulting company
and the mutual holding company must be exhibits to the conversion
plan.
(b) For a conversion plan to take effect:
(1) the commissioner must approve the conversion plan; and
(2) the eligible members must approve the conversion plan and
adopt the articles of incorporation of the resulting company and
the mutual holding company.
Added by Acts 2007, 80th Leg., R.S., Ch.
412, Sec. 1, eff. June 15, 2007.
Sec. 829.102. AMENDMENTS; WITHDRAWAL OF PLAN. Before a
conversion plan takes effect, a converting exchange may amend or
withdraw the plan by the affirmative vote of at least two-thirds
of the members of its board of directors or, if the exchange does
not have a board of directors, by approval of the attorney in
fact. The written consent of the commissioner is required for
any amendment to a conversion plan adopted after the commissioner
has approved the plan under Section 829.106.
Added by Acts 2007, 80th Leg., R.S., Ch.
412, Sec. 1, eff. June 15, 2007.
Sec. 829.103. FILING OF PLAN AND RELATED DOCUMENTS WITH
COMMISSIONER; COMMISSIONER'S POWERS AND DUTIES. (a) Not later
than the 90th day after the date on which a converting exchange's
board of directors adopts a conversion plan, the converting
exchange shall file with the commissioner:
(1) a copy of the conversion plan;
(2) the form of notices required by Section 829.104;
(3) the form of proxy to be solicited from eligible members
under Section 829.107(a);
(4) the form of notice required by Section 829.153 to persons
whose policies are issued after adoption of the conversion plan
but before the effective date of the conversion plan; and
(5) the proposed articles of incorporation of the resulting
company and the mutual holding company.
(b) The converting exchange shall promptly provide any other
information requested by the commissioner that the commissioner
considers necessary to consider the conversion plan.
Added by Acts 2007, 80th Leg., R.S., Ch.
412, Sec. 1, eff. June 15, 2007.
Sec. 829.104. NOTICE TO ELIGIBLE MEMBERS; COMMENTS. (a) The
converting exchange shall give eligible members at least 30 days'
written notice of the members' meeting to vote on the conversion
plan and advising of the members' right to comment on the plan to
the commissioner and the converting exchange, including a
description of the procedure to be used in making comments.
Notice to the members of the proposed vote on the conversion plan
must provide clear and conspicuous language apart from other
meeting materials and provide a disclosure statement of the
distribution of surplus or stock to directors and officers of the
converting exchange, if any.
(b) If the commissioner determines to hold a hearing on the
plan, the commissioner must approve the notice of hearing and
notify the converting exchange not later than the 45th day
following the first day on which all the documents required under
Section 829.103 are filed with the commissioner. The converting
exchange shall send to eligible members the commissioner's notice
of the hearing at least 30 days before the date set for the
hearing. The commissioner must approve the content and print
layout of the hearing notice before the converting exchange sends
notice of the hearing to eligible members. Notice of the hearing
may be made through publication in the Texas Register.
(c) The notices required by Subsections (a) and (b) may be
combined in a single mailing. The notice or notices must be sent
to the member's last known address, as shown on the converting
exchange's records. The notice of the members' meeting must:
(1) describe the proposed conversion plan; and
(2) inform the member of the member's right to vote on the
conversion plan.
(d) If the notice of the meeting to vote on the conversion plan
is combined with a notice of the converting exchange's annual
meeting of members, the notice of the proposed vote on the
conversion plan must be clear and conspicuous and set apart from
other meeting materials. A notice that is approved in advance by
the commissioner is deemed to be in full compliance with the
requirements of this subsection.
Added by Acts 2007, 80th Leg., R.S., Ch.
412, Sec. 1, eff. June 15, 2007.
Sec. 829.105. SUBSTANTIAL COMPLIANCE WITH NOTICE REQUIREMENTS.
If the converting exchange in good faith substantially complies
with the notice requirements of this chapter, the converting
exchange's failure to send a member the required notice does not
impair the validity of an action taken under this chapter.
Added by Acts 2007, 80th Leg., R.S., Ch.
412, Sec. 1, eff. June 15, 2007.
Sec. 829.106. APPROVAL OF PLAN BY COMMISSIONER. (a) The
commissioner shall approve a conversion plan if the commissioner
determines that:
(1) the plan complies with this chapter;
(2) the plan's method of allocating stock subscription rights,
stock transfers, or other value, if any, is fair and equitable;
and
(3) the resulting company would satisfy the requirements
applicable to a domestic stock insurance company for a
certificate of authority on the date of the determination.
(b) Except as otherwise provided by this section, the
commissioner shall approve or disapprove a conversion plan not
later than the 90th day after the first day on which all the
documents required under Section 829.103 are filed with the
commissioner.
(c) The commissioner may extend the time for decision by an
additional 30 days on written notice to the converting exchange.
Except as provided under Subsection (e) or (f), the commissioner
may not extend the time for decision beyond that 30-day period.
(d) The commissioner shall immediately give written notice to
the converting exchange of the commissioner's decision and, if
the commissioner disapproves the plan, a detailed statement of
the reasons for the disapproval.
(e) The commissioner may retain, at the converting exchange's
expense, a qualified expert who is not a member of the
commissioner's staff to assist the commissioner in reviewing
whether the conversion plan meets the requirements for approval
by the commissioner or the value of the distribution of surplus
of the resulting company to the officers and directors of the
converting exchange, if any. If the commissioner retains a
qualified expert under this subsection, the commissioner may
extend the period for decision by an additional 90 days beyond
the initial 90-day period specified in Subsection (b).
(f) If the conversion plan contemplates a public offering of
debt or equity registered under the federal Securities Act of
1933 (15 U.S.C. Section 77a et seq.), or a similar law of a
foreign jurisdiction, the commissioner may extend the period of
time to approve the conversion plan by an additional 180 days
beyond the initial 90-day period specified in Subsection (b).
(g) After giving written notice to the converting exchange, the
commissioner may hold a hearing on whether the conversion plan
complies with this chapter. The converting exchange has the
right to appear at the hearing. Other interested persons have
the right to attend the hearing and comment on the conversion
plan. Notice of the hearing may be made through publication in
the Texas Register in accordance with Section 829.104(b).
Added by Acts 2007, 80th Leg., R.S., Ch.
412, Sec. 1, eff. June 15, 2007.
Sec. 829.107. APPROVAL OF PLAN BY ELIGIBLE MEMBERS. (a) After
notice that complies with this chapter, the converting exchange
may convene a meeting to consider the conversion plan, and any
eligible member entitled to vote on the proposed conversion plan
may vote in person or by proxy at the meeting. Except as
otherwise provided in the bylaws of the converting exchange, each
eligible member may cast one vote.
(b) Adoption of the conversion plan requires the affirmative
vote of at least two-thirds of the votes cast by eligible
members.
Added by Acts 2007, 80th Leg., R.S., Ch.
412, Sec. 1, eff. June 15, 2007.
Sec. 829.108. FILING OF MINUTES, ARTICLES OF INCORPORATION, AND
BYLAWS; EFFECTIVE DATE OF CONVERSION. (a) The converting
exchange shall file with the commissioner:
(1) the minutes of the meeting at which the plan was approved;
and
(2) the articles of incorporation and bylaws of the resulting
company and the mutual holding company.
(b) The converting exchange shall make the filing required by
Subsection (a) not later than the 30th day after the later of:
(1) the date on which the eligible members approve the
conversion plan; or
(2) the date on which the commissioner approves the conversion
plan.
(c) The conversion plan approved by the commissioner takes
effect on the date specified in the articles of incorporation of
the resulting company and the mutual holding company.
Added by Acts 2007, 80th Leg., R.S., Ch.
412, Sec. 1, eff. June 15, 2007.
SUBCHAPTER D. EFFECT OF PLAN; RIGHTS OF MEMBERS
Sec. 829.151. CORPORATE EXISTENCE. (a) On the effective date:
(1) the legal existence of the converting exchange continues in
the resulting company;
(2) all assets, rights, franchises, and interests of the
converting exchange in and to property and any accompanying thing
in action are vested in the resulting company without a deed or
transfer;
(3) the resulting company assumes all the obligations and
liabilities of the converting exchange; and
(4) the power of attorney or other appropriate authorization
granting the attorney in fact the authority to act for the
subscribers of the converting exchange is terminated.
(b) Except as otherwise specified by the conversion plan:
(1) the directors and officers of the converting exchange
serving on the effective date serve as directors and officers of
the resulting company until new directors and officers are
elected under the articles of incorporation and bylaws of the
resulting company; and
(2) the directors of the converting exchange serving on the
effective date serve as directors of the mutual holding company
until new directors are elected under the articles of
incorporation and bylaws of the mutual holding company.
Added by Acts 2007, 80th Leg., R.S., Ch.
412, Sec. 1, eff. June 15, 2007.
Sec. 829.152. MEMBERSHIP INTERESTS. (a) The membership
interests of the policyholders of the resulting company become
membership interests in the mutual holding company. Members of
the converting exchange become members of the mutual holding
company in accordance with the articles of incorporation and
bylaws of the mutual holding company.
(b) A membership interest in a mutual holding company does not
constitute a security as defined by Section 4, The Securities Act
(Article 581-4, Vernon's Texas Civil Statutes).
Added by Acts 2007, 80th Leg., R.S., Ch.
412, Sec. 1, eff. June 15, 2007.
Sec. 829.153. RIGHTS OF MEMBERS WHOSE POLICIES ARE ISSUED AFTER
ADOPTION OF CONVERSION PLAN BUT BEFORE EFFECTIVE DATE. (a) On
issuance of a policy after a conversion plan has been adopted by
the board of directors but before the effective date of the
conversion plan, the converting exchange shall send to each
member to whom a policy is issued a written notice regarding the
conversion plan.
(b) Except as provided by Subsection (c), each member insured
under a property or casualty insurance policy is entitled to
notice under Subsection (a) and shall be advised in a clear and
conspicuous manner of the member's right to:
(1) cancel the policy; and
(2) receive a pro rata refund of unearned premiums.
(c) A member who has made or filed a claim under the insurance
policy is not entitled to a refund under Subsection (b). A
member who has exercised a right provided by Subsection (b) may
not make or file a claim under the insurance policy.
Added by Acts 2007, 80th Leg., R.S., Ch.
412, Sec. 1, eff. June 15, 2007.
Sec. 829.154. EFFECT OF CONVERSION ON POLICIES; SUBSCRIBER
ACCOUNTS. (a) Each policy in effect on the effective date
remains in effect under the terms of that policy, except that the
following rights, to the extent they existed in the converting
exchange in favor of policyholders or members, are extinguished
on the effective date:
(1) any membership and voting rights;
(2) except as provided by Subsection (b) or in the conversion
plan approved by the commissioner, a right to share in the
surplus or profits of the converting exchange; and
(3) any assessment provisions.
(b) The holder of a participating policy in effect on the
effective date of the conversion continues to have a right to
receive dividends as provided by the participating policy.
(c) On the renewal date of a participating policy, the resulting
company may issue to the insured a nonparticipating policy as a
substitute for the participating policy.
(d) All the costs and expenses connected with a conversion plan
shall be paid or reimbursed by the converting exchange or the
resulting company.
(e) If a converting exchange maintains subscriber accounts as
surplus, the subscriber accounts shall continue as surplus in the
resulting company, unless otherwise provided in a conversion plan
approved by the commissioner. Subject to Subsection (f), the
balances of the subscriber accounts are payable to the members to
the extent and in the manner as is provided in the conversion
plan.
(f) The board of directors of the resulting company may reduce
the balances of the subscriber accounts without payment to
members of the mutual holding company who were members of the
converting exchange if the board of directors of the resulting
company determines in the board's discretion that the amounts are
necessary to support the operations of the resulting company.
The board of directors of the resulting company may not, without
the approval of the commissioner, reduce the balance of a
subscriber account under this subsection before the third
anniversary of the effective date.
Added by Acts 2007, 80th Leg., R.S., Ch.
412, Sec. 1, eff. June 15, 2007.