Texas Insurance Code

§ 885.407 — SOLVENCY

IN § 885.407Title 6. ORGANIZATION OF INSURERS AND RELATED ENTITIES · Part E. MUTUAL AND FRATERNAL COMPANIES AND RELATED ENTITIES · Ch. 885. FRATERNAL BENEFIT SOCIETIES · Art. I. REGULATION OF FRATERNAL BENEFIT SOCIETIES

Statute text

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(a)If a fraternal benefit society reports admissible assets greater than the society's liabilities in an amount that authorizes the commissioner to place the society under regulatory control and the commissioner reasonably believes the society's hazardous financial condition will not be promptly remedied without intervention by the department, the commissioner may order the society to promptly seek and negotiate an agreement to transfer in accordance with this section all benefit members, benefit certificates, assets, and liabilities of the society to another fraternal benefit society. A transfer under this section:

(1)may be by merger, consolidation, assumption, or otherwise;

(2)constitutes an entire novation of each benefit certificate transferred by the society in a hazardous financial condition, and the receiving society is legally and contractually responsible for each transferred certificate;

(3)must conclude before the deadline set by the commissioner;

(4)may be approved by a vote of the majority of the supreme governing body or board of directors of the society in a hazardous financial condition, notwithstanding Section 885.063(a)(2)(C) or any provision of the society's laws to the contrary; and

(5)is subject to approval by the commissioner.

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Legislative history

Acts 2019, 86th Leg., R.S., Ch. 762 (H.B. 1251), Sec. 2, eff. September 1, 2019.