Texas Insurance Code Title 6, Chapter 826 - Conversion Of Mutual Insurance Company To Stock Insurance Company

SUBCHAPTER A GENERAL PROVISIONS

• Texas Section 826.001 - Definitions
  In this chapter: (1) "Conversion plan" means a plan adopted under this chapter to convert a mutual insurance company into a stock insurance company. (2)...
• Texas Section 826.002 - Authority To Convert To Stock Insurance Company
  (a) A mutual insurance company may convert to a stock insurance company. (b) A converting company may not engage in the business of insurance as...
• Texas Section 826.003 - Rights And Privileges Of Resulting Company; Laws Applicable
  Except as provided by this chapter, a resulting company: (1) may exercise only the rights and privileges of a stock insurance company; and (2) is...
• Texas Section 826.004 - Certain Conversions Prohibited
  A mutual insurance company may not convert to a stock insurance company under this chapter if, as a direct result of the conversion, any affiliate...

SUBCHAPTER B CONVERSION PLAN ADOPTION AND REQUIREMENTS

• Texas Section 826.005 - Corporate Existence
  (a) On the effective date of a conversion under this chapter: (1) the corporate existence of the converting company continues in the resulting company; (2)...
• Texas Section 826.051 - Plan Adoption
  (a) To convert to a stock insurance company a mutual insurance company must adopt, by the affirmative vote of at least two-thirds of the members...
• Texas Section 826.052 - General Requirements; Effect Of Conversion On Policies
  (a) Each conversion plan must include the provisions required by this chapter. (b) Each policy in effect on the effective date of the conversion remains...
• Texas Section 826.053 - Sale Of Capital Stock
  A conversion plan must provide that shares of capital stock of the resulting company shall be sold in a private placement, public offering, or an...
• Texas Section 826.054 - Purchase Price Of Capital Stock
  (a) A conversion plan must set the total price of the capital stock in an amount equal to the estimated pro forma market value of...
• Texas Section 826.055 - Limitation On Acquisition Of Capital Stock
  (a) The conversion plan must provide that a person or group of persons acting in concert may not acquire, in the public or private offering...
• Texas Section 826.056 - Directors And Officers
  (a) Except as otherwise provided by this section, the conversion plan must provide that a director or officer of the converting company, or a person...
• Texas Section 826.057 - Rights Of Holder Of Surplus Notes
  A conversion plan must provide that any rights of a holder of a surplus note to participate in the conversion are governed by the terms...
• Texas Section 826.058 - Subscription Rights; General Provisions
  (a) Except for an alternate conversion plan adopted under Section 826.061, each conversion plan must specify the subscription rights of eligible members. (b) The conversion...
• Texas Section 826.059 - 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...
• Texas Section 826.060 - Liquidation Account
  (a) The conversion plan may provide for the creation of a liquidation account for the benefit of members in the event of a voluntary liquidation...

SUBCHAPTER C ADOPTION OF CONVERSION PLAN

• Texas Section 826.061 - Alternate Conversion Plan
  (a) The board of directors may adopt a conversion plan that does not rely in whole or in part on the issuance of nontransferable subscription...
• Texas Section 826.101 - Plan Information Filed With Commissioner; Commissioner Powers And Duties
  Not later than the 90th day after the date on which a converting company's board of directors adopts a conversion plan, the company shall file...
• Texas Section 826.102 - 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...
• Texas Section 826.103 - Amendments; Withdrawal Of Plan
  Before a conversion plan takes effect, a converting company may amend or withdraw the plan by the affirmative vote of at least two-thirds of the...
• Texas Section 826.104 - Notice To Eligible Members; Comments
  (a) Not later than the 10th business day after the date of filing with the commissioner the documents required under Section 826.101, the converting company...
• Texas Section 826.105 - Substantial Compliance With Notice Requirements
  If the converting company in good faith substantially complies with the notice requirements of this chapter, the company's failure to send a member the required...
• Texas Section 826.106 - Insolvent Converting Company; Notice Requirements
  If a converting company is insolvent or, in the judgment of the commissioner, is in hazardous financial condition, its board of directors, by a majority...
• Texas Section 826.107 - Election; Approval Of Plan; Adoption Of Amended Or Restated Articles Of Incorporation
  (a) At a meeting convened to consider the conversion plan, an eligible member entitled to vote on the proposed conversion plan may vote in person...
• Texas Section 826.108 - Filing Of Minutes, Articles Of Incorporation, And Bylaws; Effective Date Of Conversion
  (a) Not later than the 30th day after the date on which the eligible members approve the conversion plan, the converting company shall file with...
• Texas Section 826.109 - Conflict Of Interest
  (a) Except as provided by a conversion plan approved by the commissioner or this section, a director, officer, agent, or employee of a converting company...

SUBCHAPTER D RIGHTS OF MEMBERS ON CONVERSION

• Texas Section 826.110 - Limitation On Actions
  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...
• Texas Section 826.151 - 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...

SUBCHAPTER E CONVERSION THROUGH MUTUAL HOLDING COMPANY

• Texas Section 826.152 - Amendment Of Policies
  A converting company, by endorsement or rider approved by the commissioner and sent to the policyholder, may simultaneously with or at any time after the...
• Texas Section 826.201 - Conversion Through Creation Of Holding Company
  (a) A converting company, on approval by the commissioner, may reorganize by forming a holding company based on a mutual plan and continuing the corporate...
• Texas Section 826.202 - Commissioner Powers And Duties; Approval
  (a) The commissioner shall review the proposed plan of reorganization as an alternate conversion plan under Section 826.061. The commissioner may require as a condition...
• Texas Section 826.203 - Applicability Of Certain Laws; Incorporation
  A mutual holding company that results from the reorganization of a domestic mutual insurance company organized under Chapter 883 must be organized under Sections 883.051,...
• Texas Section 826.204 - Membership Interests
  (a) The membership interests of the policyholders of the resulting company become membership interests in the mutual holding company. Eligible members of the converting company...
• Texas Section 826.205 - Capital Stock Held By Mutual Holding Company
  (a) In this section: (1) "Intermediate holding company" means a holding company that: (A) is a subsidiary of a mutual holding company formed to reorganize...
• Texas Section 826.206 - Conversion Of Foreign Mutual Insurance Company
  (a) On the approval of the commissioner, a foreign mutual insurance company may reorganize in compliance with the requirements of any law or regulation applicable...

Last modified: September 28, 2016