Texas Insurance Code

§ 823.402 — PROHIBITION ON VOTING CERTAIN SECURITIES

IN § 823.402Title 6. ORGANIZATION OF INSURERS AND RELATED ENTITIES · Part B. ORGANIZATION OF REGULATED ENTITIES · Ch. 823. INSURANCE HOLDING COMPANY SYSTEMS · Art. I. LIMITATIONS RELATING TO CONTROLLED INSURERS

Statute text

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(a)A security that is the subject of an agreement or arrangement regarding an acquisition or that is acquired or to be acquired in violation of this chapter or a rule or order under this chapter may not be voted at a shareholders' meeting or counted for quorum purposes. An action of shareholders requiring the affirmative vote of a percentage of shares may be taken as though the security was not outstanding.

(b)An action taken at a shareholders' meeting is not invalidated by the voting of a security to which Subsection (a) applies unless:

(1)the action would materially affect control of the insurer; or

(2)a court of this state invalidates the action.

Legislative history

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.