Sec. 887.353. DIVISION OF FUNDS: CERTAIN LIFE INSURANCE CERTIFICATES. (a) This section applies to a life insurance certificate insuring the life of one or more individuals issued:
(1) after December 31, 1965; or
(2) before December 31, 1965, and on which the assessment rate has been increased based on an age other than age on the date the certificate was issued.
(b) To the extent consistent with this subchapter, an association shall divide collected assessments into at least two funds.
(c) An association shall deposit in a mortuary fund a portion of the association's assessments at least equal to the renewal net premium computed at the age of issue or some other advanced age in accordance with the reserve standard adopted by the association. The association may pay from the mortuary fund only:
(1) fund claims under insurance certificates;
(2) dividends to certificate holders as provided by Section 887.064; and
(3) any other expenditures permitted by law.
(d) An association shall deposit in an expense fund the remaining portion of the assessments not deposited under Subsection (c). The association may pay expenses from the expense fund.
(e) This section does not apply to an association operating on an assessment-as-needed basis.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
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