Title IN, Insurance Code

Sec. 886.052. COMPLIANCE WITH LAW REQUIRED. An individual, firm, or corporation may not engage in business in this state as a local mutual aid society or association that pays a death benefit or other benefit and that pays benefits with money provided by assessments made as neces…

Sec. 886.101. GENERAL POWERS OF ASSOCIATION. A local mutual aid association is a body corporate that may sue and be sued in its own name and exercise the other powers and functions specifically granted in this chapter, but not otherwise. Added by Acts 2001, 77th Leg., ch. 1419, S…

Sec. 886.102. APPLICABILITY OF TEXAS NON-PROFIT CORPORATION ACT. (a) Except to the extent of any conflict with this code, the Texas Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes) applies to a local mutual aid association. The commissioner ha…

Sec. 886.103. ARTICLES OF ASSOCIATION, CONSTITUTION, AND BYLAWS. (a) The articles of association of a local mutual aid association must state: (1) the name of the association, which must be distinctly different from other associations operating in the same area; (2) the purpose f…

Sec. 886.104. BENEFITS AUTHORIZED. (a) Except as provided by Subsection (b), a local mutual aid association may provide only for the payment of death benefits. An association may not provide for old age benefits or benefits for accidental injury or sickness. (b) A local mutual ai…

Sec. 886.105. TERRITORIAL LIMITATIONS. (a) A local mutual aid association may conduct business in any county in this state. (b) If the articles of association of an association provide that the association engages in business only in a limited territory, the association may amend…

Sec. 886.106. CONNECTION WITH OTHER ASSOCIATIONS PROHIBITED. (a) A local mutual aid association may not have any connection with another local mutual aid association. (b) An association may not contribute any form of salary or compensation to an executive officer of another assoc…

Sec. 886.107. ANNUAL STATEMENT; FILING FEE. (a) For the filing of each annual statement, the department shall charge the appropriate fee. The fee must be: (1) payable to the department; and (2) deposited in the Texas Department of Insurance operating account. (b) Sections 201.001…

Sec. 886.108. SURETY BOND. (a) A local mutual aid association's officer responsible for the funds of the association shall file with the department a surety bond. (b) The surety bond must be: (1) executed by a surety company authorized to do business in this state; (2) satisfacto…

Sec. 886.109. VOLUNTARY DISSOLUTION. A local mutual aid association may dissolve by vote of the majority of the members at: (1) a regular meeting called by the secretary; or (2) a special meeting called for the purpose of considering dissolution. Added by Acts 2001, 77th Leg., ch…

Sec. 886.110. AUTOMATIC DISSOLUTION. A local mutual aid association is dissolved automatically and forfeits its right to engage in the business of insurance if: (1) the association's membership falls below 25 percent of the maximum value of the policy issued; or (2) the associati…

Sec. 886.701. REVOCATION. Except as otherwise provided by law, the department may revoke the right of a local mutual aid association to engage in the business of insurance in this state only on: (1) the judgment of a court; (2) the filing of articles of dissolution by the members…

Sec. 886.702. GROUNDS FOR DISSOLUTION OR FORFEITURE. (a) In addition to any other penalties imposed on a local mutual aid association or on its members or officers, an association is subject to dissolution and forfeiture of its right to engage in the business of insurance if the …

Sec. 886.703. CRIMINAL PENALTY. (a) A person commits an offense if the person violates this chapter. (b) An offense under this section is a misdemeanor punishable by a fine not to exceed $500. Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.

Sec. 887.001. DEFINITIONS. In this chapter: (1) "Assessment" means any money or thing of value, including premiums, paid in consideration of insurance provided by an insurance certificate. (2) "Association" means an organization subject to this chapter. (3) "Insurance certificate…

Sec. 887.002. PURPOSE. The primary purpose of this chapter and Chapter 888 is to secure to members and the beneficiaries of members the full and prompt payment of all claims, according to the maximum benefit provided under the insurance certificate. Added by Acts 2001, 77th Leg.,…

Sec. 887.003. APPLICABILITY OF CHAPTER. (a) This chapter governs: (1) local mutual aid associations; (2) statewide mutual life associations; (3) life, health, and accident associations; (4) mutual assessment life, health, and accident associations; (5) burial associations; and (6…

Sec. 887.004. INAPPLICABILITY TO CERTAIN ORGANIZATIONS OF MEMBERS OF RELIGIOUS DENOMINATION. This chapter does not apply to an association that: (1) is not operated for profit; (2) is composed only of the members of a particular religious denomination; (3) does not provide insura…

Sec. 887.005. DEPARTMENT OF PUBLIC SAFETY EMPLOYEE MUTUAL ASSOCIATION. Notwithstanding any other provision of this chapter, a mutual association for employees of the Department of Public Safety may provide coverage and benefits to retired officers and employees of that department…

Sec. 887.006. CONSTRUCTION. (a) This chapter does not: (1) enlarge the powers or rights of any association; (2) enlarge the scope of an association's legal or corporate existence; or (3) authorize the creation of any association or corporation to engage in the business of insuran…

Sec. 887.007. DEPOSIT OF FEES. The department shall deposit a fee collected under this chapter to the credit of the Texas Department of Insurance operating account. Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.

Sec. 887.008. INTERPRETATION OF CHAPTER BY COMMISSIONER. If a provision of this chapter appears obscure when applied to health, accident, or disability provisions in an insurance certificate issued by an association authorized to issue health, accident, or disability certificates…

Sec. 887.009. RULES. The commissioner may adopt reasonable rules to implement the purposes of this chapter. Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003. SUBCHAPTER B. GENERAL POWERS AND DUTIES; OFFICERS AND DIRECTORS

Sec. 887.051. BYLAWS. (a) An association shall submit to the department a copy of the association's bylaws. The department shall examine the bylaws and approve the bylaws if they comply with this chapter. The association shall conform the bylaws to this chapter if they are not in…

Sec. 887.052. AMENDMENT OF BYLAWS. (a) A majority of an association's members present at a regular meeting or at a meeting called for the purpose may amend the association's bylaws. (b) An association shall mail to all members notice of any regular or special meeting at which ame…

Sec. 887.053. IMMUNITY. An officer, director, or member of an association is not individually liable because of an insurance certificate issued by the association or a claim arising from an insurance certificate. Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.

Sec. 887.054. FINANCIAL OFFICER; BOND. (a) An association, by resolution entered in its minutes, shall designate an officer to be responsible for handling the association's funds. The president, secretary, or general manager of the association must certify a copy of the resolutio…

Sec. 887.055. BOND REQUIREMENTS FOR CERTAIN PERSONS. (a) In addition to the bond required by Section 887.054 and any other bond required by law, an association shall obtain a separate or blanket surety bond covering each other person who may have access to the association's mortu…

Sec. 887.056. RECOVERY ON BOND. (a) On receipt of information that an officer of an association has violated the terms of a bond under Section 887. 054 or 887.055, the department shall demand from the officer a written explanation of the charge. (b) If after an explanation under …

Sec. 887.057. DEPOSIT. (a) An association shall, through the department, deposit with the comptroller an amount equal to the largest risk assumed by the association on any one life or individual. (b) A deposit under this section must be cash or convertible securities subject to a…

Sec. 887.058. CHANGE OF ASSOCIATION'S NAME. An association may change its name by amending the association's charter if: (1) the association submits the proposed amendment to the department for approval; and (2) the department does not determine that the proposed name is confusin…

Sec. 887.059. BOOKS AND RECORDS. (a) An association shall keep the association's books and records in a form and manner that: (1) accurately reflects the condition of the association or the facts essential to the association's faithful and effective operation; and (2) is acceptab…

Sec. 887.060. ANNUAL STATEMENT. (a) Not later than April 1 of each year, an association shall file with the department a sworn statement of the association's condition on the preceding December 31. (b) A statement under this section must be on a form provided by the department fo…

Sec. 887.061. REPORT ON CONDITION OF ASSOCIATION. The department may require from an association written reports on the condition of the association at any time the department considers advisable. The department may require that a report be verified by the oath of a responsible o…

Sec. 887.062. EXAMINATION. The following provisions apply to an association: (1) Subchapter A, Chapter 86; and (2) Sections 401.051, 401.052, 401.054-401.062, 401.151, 401.152, 401.155, and 401.156. Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003. Amended by: A…

Sec. 887.063. ADMITTED ASSETS. An association may include among its admitted assets, within the assets of the expense fund only, any asset designated as a net asset under Section 841.004. Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.

Sec. 887.064. DIVIDENDS. If the amount of an association's mortuary fund exceeds the amount of reserves required by Subchapter I, the association may pay dividends from the fund to its certificate holders. The amount of the dividends and the method of distribution of the dividend…

Sec. 887.065. MERGER. (a) An association may not merge with another association without the advance approval of the department. (b) The department may grant approval under Subsection (a) only after the department: (1) completely investigates the facts; and (2) determines that the…

Sec. 887.101. CERTIFICATE OF AUTHORITY REQUIRED. (a) Except as provided by Section 887.102, the department shall require an association or person to hold a certificate of authority issued by the department before the association or person may engage in the business of insurance i…

Sec. 887.102. EXEMPT ASSOCIATION; PERMIT. (a) An association is not required to hold a certificate of authority under Section 887.101 if the association: (1) limits its membership to: (A) the employees and the families of employees of a particular designated firm, corporation, or…

Sec. 887.103. REFUSAL OF CERTIFICATE OF AUTHORITY OR PERMIT. (a) An association may not continue to engage in the business of insurance in this state if the commissioner notifies the association in writing of the commissioner's refusal to issue a certificate of authority or a per…

Sec. 887.104. REFUSAL OR REMOVAL FOR UNWORTHINESS OF PUBLIC TRUST. (a) The department may not issue a certificate of authority to an association if the department determines that an officer, employee, or member of the board of directors of the association is unworthy of the trust…

Sec. 887.151. CLASSES OF MEMBERS. (a) An association's constitution and bylaws shall state the number of members to be admitted in a class of the association. (b) An association shall keep the accounts of the classes' mortuary assessments separate. The association may not use the…

Sec. 887.152. QUALIFYING MEMBERSHIP IN ASSOCIATION. (a) An individual must qualify under an association's bylaws to become a member of the association. (b) An association must maintain the qualifying membership at all times. If an association fails to maintain the qualifying memb…

Sec. 887.153. VOTING RIGHTS OF MEMBERS. An association shall permit each member of the association to vote at any periodic meeting or special meeting of the members. Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.

Sec. 887.154. MEMBERSHIP RECORDS. An association shall keep: (1) a complete and correct roster of the association's members, with proper statistical records for determining by age or some other method the proper cost of insurance; (2) accurate records of classes of memberships; a…