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Texas Statutes (Last Updated: January 4, 2014) |
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INSURANCE CODE |
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Title 6. ORGANIZATION OF INSURERS AND RELATED ENTITIES |
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Subtitle B. ORGANIZATION OF REGULATED ENTITIES |
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Chapter 822. GENERAL INCORPORATION AND REGULATORY REQUIREMENTS FOR INSURANCE COMPANIES OTHER THAN LIFE, HEALTH, OR ACCIDENT INSURANCE COMPANIES |
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Subchapter B. FORMATION AND STRUCTURE OF COMPANY |
Sec. 822.055. SHARES OF STOCK WITH PAR VALUE
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(a) An insurance company organized under the laws of this state may authorize the issuance of shares of stock with a par value of not less than $1 or more than $100. The company may increase from time to time the number of shares with a par value by an amendment to the company's charter.
(b) Each par value share of stock must be fully paid before issuance in an amount that is not less than the share's par value. Par value shares issued under this section are not subject to additional call or assessment, and the subscriber or holder of those shares is not required to make an additional payment with respect to those shares.
(c) When an application for charter or an amendment to the charter authorizing the issuance of shares of stock with a par value is filed, the insurance company shall file with the department a statement under oath stating:
(1) the total number of par value shares subscribed; and
(2) the actual total consideration the company received for those shares.
(d) The shareholders of an insurance company authorizing par value shares of stock must in good faith subscribe and fully pay for shares representing at least 50 percent of the total par value of the authorized shares with a par value before the company:
(1) is granted a charter; or
(2) amends its charter to:
(A) authorize the issuance of par value shares; or
(B) increase or decrease from time to time the number of authorized par value shares.
(e) If all of the authorized par value shares of stock are not subscribed and paid for when the charter is granted or the amendment is filed, respectively, the insurance company shall file with the department a certificate authenticated by a majority of the directors stating the total number of shares issued and the total consideration received for those shares. The company shall file the certificate not later than the 90th day after the date of issuance of those remaining shares. The company is not required to file an amendment to its charter or take further action to effect the increase in the capital and surplus of the company.
(f) The consideration received by an insurance company for a par value share constitutes capital to the extent of its par value and the remainder, if any, constitutes surplus.